Senetas Corporation Limited · ASX:SEN
Senetas — FY2018 Earnings Presentation
41 slides from Senetas's earnings presentation, Aug 27, 2018
Slide 1: Senetas Corporation Limited 2018 Full Year Results
For personal use only Senetas Corporation Limited 2018 Full Year Results – 27 August 2018 © 2018 Senetas Corporation Slide 1
Slide 2: FY18 Highlights
FY18 HIGHLIGHTS • Record revenue of $18.97m – up 8% For personal use only • Strong growth in product sales – up 39% • PBT of $4.44m and PAT $1.96m (after $1.36m impairment to carrying value of an unlisted investment) • PBT excluding the impairment at top end of guidance $5.8m up 10% • Strong balance
Slide 3: FY18 Highlights
FY18 HIGHLIGHTS For personal use only • Initial sales of the 100Gbps encryptor – 2 customers successfully implemented the 100Gbps encryptor in their networks in FY18 (and an additional new customer early in FY19) • Market launch of virtualised (software based) encryption solutions via Gemalto and AD
Slide 4: Priorities for FY19
PRIORITIES FOR FY19 For personal use only • First sales of virtualised (software based) encryption products – initial customer trials underway • Gemalto adoption of SureDrop into its product portfolio • Drive further sales of 100Gbps encryptor building on FY18 momentum and additional sales early in
Slide 5: Priorities for FY19
PRIORITIES FOR FY19 For personal use only • Complete development of new hardware encryptors with transport layer interdependence across Layers 2, 3 and 4 to significantly expand addressable market for those products • Achieve new European certification • Further enhance partner relationships – new p
Slide 6: Outlook
OUTLOOK For personal use only • Continuation of revenue growth into FY19 • Strong sales pipeline for core product range • Growing demand for 100Gbps encryptors – additional sales to a new customer already in FY19 • Initial sales of virtualised (software based) encryption products expected in FY19 •
Slide 7: Outlook
OUTLOOK For personal use only • Slower growth in maintenance revenue will continue as SONET encryptors are replaced by lower cost Senetas Ethernet encryptors over time • Strong growth from traditional hardware business with Layer 2, 3 & 4 capabilities and cyber security software business making more
Slide 8: Key Financials
KEY FINANCIALS For personal use only © 2018 Senetas Corporation Slide 8
Slide 9: FY18 Key Financials
FY18 KEY FINANCIALS Full year ended 30 June 2018 FY18 $000’s FY17 $000’s Change For personal use only Revenue from ordinary activities 18,971 17,591 8% Gross profit 15,414 13,948 11% Other income 2,491 2,441 2% Profit before tax from ordinary activities 5,799 5,264 10% Writedown of unlisted investme
Slide 10: Strong Balance Sheet & Positive Cash Flow
STRONG BALANCE SHEET & POSITIVE CASH FLOW For personal use only NET ASSETS $’000 CASH AND CASH EQUIVALENTS $’000 23,552 23,258 21,483 20,848 18,526 20,091 15,902 13,093 9,026 6,805 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 © 2018 Senetas Corporation Slide 10
Slide 11: Operational Update
OPERATIONAL UPDATE For personal use only © 2018 Senetas Corporation Slide 11
Slide 12: Sales Update
SALES UPDATE For personal use only • Underlying Gemalto product sales up 39% • Sales growth reflects strengthening of Gemalto relationship and growth in underlying demand for encryption solutions • Key customers contributing strongly to sales growth for 1-10Gbps encryptors • Orders for 100Gbps encry
Slide 13: Sales Update
SALES UPDATE For personal use only • As previously advised – maintenance revenue moderated as a key customer continued to transition from Senetas SONET products to cheaper Senetas Ethernet products • FY18 maintenance revenue was 39% of total revenue – lower than FY17 • Sales of virtualised (software
Slide 14: Research & Development
RESEARCH & DEVELOPMENT For personal use only • R&D spend in FY18 up slightly over FY17 • European certification underway with potential to drive new sales opportunities from later in FY19 • Custom algorithm continues to progress through local certification – customer funded development but significa
Slide 15: Research & Development
RESEARCH & DEVELOPMENT For personal use only • Virtualised (software based) encryption solutions launched in FY18 included transport Layer interdependence (Layers 2, 3 & 4) - first time in a Senetas product • Launch of transport Layer interdependence capability in Senetas hardware devices is expecte
Slide 16: Virtualised (Software Based) Encryption
VIRTUALISED (SOFTWARE BASED) ENCRYPTION For personal use only • Virtualised (software based) encryption solutions launched independently by ADVA and Gemalto in the second half of FY18 • Senetas has 2 strong and independent routes to market – adding cyber security software business to existing hardwa
Slide 17: Virtualised (Software Based) Encryption
VIRTUALISED (SOFTWARE BASED) ENCRYPTION For personal use only • Ongoing development of the solution continues to expand its use cases • Current multi-Layer (2, 3 & 4) capable solution can operate successfully in complex large- scale networks and private Cloud environments • FY19 R&D focus includes e
Slide 18: SureDrop
SUREDROP • Gemalto – Senetas’s global distributor – has commenced promotion of SureDrop For personal use only among some of its customers • A number of customer trials are underway in the APAC market - others expected as Gemalto’s product take-up gains momentum • Product differentiation lies in secu
Slide 19: Detailed Financials
DETAILED FINANCIALS For personal use only © 2018 Senetas Corporation Slide 19
Slide 20: Trading Revenues ($'000)
TRADING REVENUES ($’000) For personal use only United States Other Australia and New Zealand 18,920 18,971 Europe 17,591 EBITDA 15,907 10,950 61% Product sales revenue (up from 54% in FY17) FY14 FY15 FY16 FY17 FY18 © 2018 Senetas Corporation Slide 20
Slide 21: Operating Cash Flows
OPERATING CASH FLOWS Year ended 30 June 2018 FY18 $000’s FY17 $000’s Change For personal use only Receipts from customers 19,739 17,215 15% Tax paid net of R&D tax refund (414) 210 (297%) Payments to suppliers & employees (14,538) (16,192) (10%) Operating cash flows 5,201 1,700 206% Investing cash f
Slide 22: Balance Sheet Remains Strong
BALANCE SHEET REMAINS STRONG Year ended 30 June 2018 FY18 $000’s FY17 $000’s Change For personal use only Cash and cash equivalents 23,258 20,091 16% Trade and other receivables 6,529 5,401 21% Unlisted equity investments 1,893 2,227 (15%) Total assets 35,968 31,704 13% Trade and other payables (1,9
Slide 23: Unlisted Investments
UNLISTED INVESTMENTS For personal use only © 2018 Senetas Corporation Slide 23
Slide 24: DeepRadiology Inc
DEEPRADIOLOGY INC For personal use only DeepRadiology has not yet achieved FDA approval for its technology and the company has therefore missed milestone and projected revenue targets. Given the level of uncertainty surrounding the carrying value of the investment the board has resolved to write dow
Slide 25: Smart Antenna Technologies Ltd (SAT)
SMART ANTENNA TECHNOLOGIES LTD (SAT) For personal use only Following an additional investment during the second half of FY2018 the investment in SAT is carried on the balance sheet at $1,892,941 million. This investment is performing to expectations and its carrying value reflects fair value at bala
Slide 26: EON Reality Inc (EON)
EON REALITY INC (EON) For personal use only The EON investment currently has a carrying value of zero on Senetas’s balance sheet and will continue to do so until a liquidity event such as a capital raising or the planned IPO provides the Senetas Board with an independent valuation of the investment.
Slide 27: About Senetas
ABOUT SENETAS For personal use only © 2018 Senetas Corporation Slide 27
Slide 28: For personal use only
Senetas is a global leader in the For personal use only development of advanced encryption technologies. Our solutions are designed to protect data in motion for a wide range of commercial, government and defence applications. © 2018 Senetas Corporation Slide 28
Slide 29: For personal use only
For personal use only © 2018 Senetas Corporation Slide 29
Slide 30: Global Distribution and Support
GLOBAL DISTRIBUTION AND SUPPORT For personal use only Senetas CN Series hardware encryptors and CV Series virtual encryptors are distributed and supported internationally by Gemalto under its SafeNet brand; within the US Federal Government by SafeNet Assured Technologies, and throughout Australia an
Slide 31: The Threat Landscape
THE THREAT LANDSCAPE For personal use only Senetas protects data in motion against: © 2018 Senetas Corporation Slide 31
Slide 32: Applications
APPLICATIONS For personal use only Data centre interconnect, Cloud computing, SaaS Big data analytics back-up and disaster recovery and managed service providers Real-time CCTV network SCADA industrial control Branch office, point-to- transmitted data & critical infrastructure point networks network
Slide 33: CN Series Hardware
CN SERIES HARDWARE For personal use only CN4000 Series CN6000 Series CN9000 Series © 2018 Senetas Corporation Slide 33
Slide 34: Multi-Certified
MULTI-CERTIFIED For personal use only Senetas CN Series encryptors include the added security assurance of certification by leading international independent testing authorities as suitable for government and defence use. FEDERAL INFORMATION COMMON NATO PROCESSING CRITERIA CLASSIFICATION STANDARD EA
Slide 35: High-Assurance
HIGH-ASSURANCE For personal use only © 2018 Senetas Corporation Slide 35
Slide 36: Crypto-Agile
CRYPTO-AGILE For personal use only Full separation of crypto- security duties Policy based on MAC address or VLAN ID Compatible with external sources of entropy Full data sovereignty customisation & control Field-programmable FPGA encryption engine Support for AES 128 & 256 bit algorithms Quantum-re
Slide 37: Maximum Performance
MAXIMUM PERFORMANCE 10MBPS – 100GBPS For personal use only AES128/256 BIT KEYS LATENCY < 2 MICROSECONDS 99.999% UPTIME GCM, CFB, CTR ENCRYPTION MODES © 2018 Senetas Corporation Slide 37
Slide 38: Senetas CV1000 Virtualised Encryption
SENETAS For personal use only CV1000 VIRTUALISED ENCRYPTION The first virtualised network function (VNF) providing Transport Independent Mode encryption, designed for large scale, extended data networks. © 2018 Senetas Corporation Slide 38
Slide 39: For personal use only
For personal use only All the convenience of a drop-box, plus end-to-end encryption security and 100% data location control © 2018 Senetas Corporation Slide 39
Slide 40: Senetas Customers
SENETAS CUSTOMERS For personal use only © 2018 Senetas Corporation Slide 40
Slide 41: Thank You
THANK YOU For personal use only www.senetas.com © 2018 Senetas Corporation Slide 41