Slide 1: Senetas 2016 Full Year Results
For personal use only SENETAS 2016 FULL YEAR RESULTS 29 August 2016
Slide 2: Agenda
For personal use only AGENDA 1. Highlights 2. Financial Overview 3. Operational Review 4. Outlook
Slide 3: Highlights
For personal use only HIGHLIGHTS
Slide 4: HY16 Highlights
HY16 HIGHLIGHTS For personal use only • Record Net Profit Before Tax despite large increase in R&D spend • Operating revenue increased 19% • Good growth in both sales and maintenance revenue • Strong unleveraged balance sheet and continued growth in cash balance • All new product development project
Slide 5: Financial Overview
For personal use only FINANCIAL OVERVIEW
Slide 6: FY2016 Financial Overview
FY2016 FINANCIAL OVERVIEW For personal use only Year ended 30 June 2016 FY16 FY15 $000’s $000’s Change Revenue from ordinary activities 19,341 16,207 19% Gross profit 16,112 13,449 20% Other income (R&D tax incentive) 2,097 1,653 27% Profit before tax 7,022 6,021 17% Tax expense (1,803) (2,005) 10%
Slide 7: Significant Positive Trend on Key Metrics
SIGNIFICANT POSITIVE TREND ON KEY METRICS For personal use only TRADING REVENUE PROFIT BEFORE TAX #039;000 #039;000 7,022 19,341 6,021 16,207 11,038 2,458 7,685 (893) Jun 13 Jun 14 Jun 15 Jun 16 Jun 13 Jun 14 Jun 15 Jun 16 NET ASSETS RETURN ON EQUITY #039;000 18,526 39% 36% 33% 13,093 9,026 6,071 (14%) Jun 1
Slide 8: Key Drivers of Profit Growth
KEY DRIVERS OF PROFIT GROWTH For personal use only FY16 Profit Before Tax v FY15 Profit Before Tax #039;000 1,150 444 1,863 (470) 7,022 (1,432) 6,021 (554) FY 2015 Profit sales revenue maintenance cost of sales R&D rebate R&D expenditure other FY 2016 Profit before tax revenue before tax 7 © Senetas Co
Slide 9: Operating Cash Flows
OPERATING CASH FLOWS For personal use only Year ended 30 June 2016 FY16 FY15 Change $000’s $000’s Receipts from customers 19,929 19,217 4% R&D tax rebate net of income tax paid 323 1,386 (77%) Payments to suppliers & employees (14,230) (11,307) (26%) Operating cash flows 5,193 9,577 (46%) Investing
Slide 10: Balance Sheet
BALANCE SHEET For personal use only As at 30 June 2016 FY16 FY15 Change $000’s $000’s Cash and cash equivalents 20,848 15,902 31% Trade and other receivables 5,927 4,043 47% Total assets 29,474 22,392 32% Trade and other payables (1,973) (2,068) 5% Income / company tax payable (1,863) (1,252) (49%)
Slide 11: Operational Review
For personal use only OPERATIONAL REVIEW
Slide 12: FY16 Operational Review
FY16 OPERATIONAL REVIEW For personal use only Strong growth in commercial sales more than offset slower sales to key government customers • Commercial sector sales growth driven by key North American customers • Commercial customers now represent over 50% of Senetas operating revenue • Stronger than
Slide 13: Gemalto Relationship
GEMALTO RELATIONSHIP For personal use only Gemalto / SafeNet integration now largely complete • Significant executive restructure – new executive team now in place with key executives promoted from within SafeNet. • Split of US Federal Government business into separate entity. • Noticeable increase
Slide 14: Research & Development Update
RESEARCH & DEVELOPMENT UPDATE For personal use only 100Gbps Encryptor • Certification process underway and customer testing to commence shortly – expected to be completed before the end of calendar 2016 • Precise timing of commercial release is subject to certification and component availability • A
Slide 15: Outlook
For personal use only OUTLOOK
Slide 16: 2017 Priorities
2017 PRIORITIES For personal use only • A highly innovative and responsive R&D capability remains at the core of Senetas’ business – continuing to develop new products to meet emerging customer needs including faster, ‘high density’ hardware and software solutions, and custom products to suit unique
Slide 17: Competitive Environment
COMPETITIVE ENVIRONMENT Senetas has the most certifications and is the only global player in Layer 2 high assurance encryption For personal use only Layer 2 – Ethernet Layer 1 Optical Layer 3 IP Sec End to End MACSec IEEE High Assurance Low Assurance CISCO Senetas/Gemalto (Global) CISCO CISCO Junipe
Slide 18: Key Demand Drivers
KEY DEMAND DRIVERS For personal use only Demand for Senetas products will be driven by a number of key factors: 1. Customers replacing redundant hardware – effective life cycle of 5- CN6100 – carrier grade 10G high assurance encryptor 7 years 2. Growth in data volumes across Layer 2 networks 3. Tech
Slide 19: Summary and Outlook
SUMMARY AND OUTLOOK For personal use only • Record FY16 PBT driven by growth in sales to commercial customers • Gemalto integration of SafeNet now largely complete with improved sales focus evident in the second half of FY16 • Key R&D projects remain on track – R&D expenditure in FY17 is expected to
Slide 20: Appendix
For personal use only APPENDIX
Slide 21: Appendix – R&D Rebate
APPENDIX – R&D Rebate For personal use only R&D rebate and tax expense consequences for Senetas should its annual operating revenue exceed $20 million in future years Operating revenue below $20m per annum • Currently Senetas receives a tax rebate from the Australia Government for eligible R&D expen
Slide 22: Disclaimer
DISCLAIMER For personal use only • THIS PRESENTATION ("PRESENTATION") HAS BEEN PREPARED BY SENETAS CORPORATION LIMITED (“SENETAS“ OR “THE COMPANY”) FOR THE SOLE PURPOSE OF PROVIDING GENERAL AND BACKGROUND INFORMATION ON THE COMPANY. • NOTHING CONTAINED IN THIS PRESENTATION IS OR SHOULD BE RELIED UPO