Corero Network Security plc · LSE:CNS
Corero Network Security — FY2011 Earnings Presentation
28 slides from Corero Network Security's earnings presentation, March 2012
Slide 1: Corero Network Security plc 2011 Results
Corero Network Security plc 2011 Results Strictly Private and Confidential
Slide 2: Contents
Contents 1 Introduction 2 Financials 3 Corero Network Security 4 Corero Business Systems 5 Summary Appendices 1
Slide 3: Background
Background • Corero Network Security plc (“Corero”) is listed on AIM (CNS:LN) • Two operating businesses: Corero Network Security (CNS) and Corero Business Systems (CBS) • CNS – Buy and build network security strategy announced in July 2010 (strategy validated by continuing strong growth in market)
Slide 4: Structure
Structure Corero Network Security plc Board Non-exec Chairman: Jens Montanana Executive Director: Andrew Miller Non-exec Directors: Richard Last and Stephen Graham Andrew Miller Group COO (also responsible for finance and M&A) Corero Group Services Ltd Group FC & Company Secretary Small finance team
Slide 5: Contents
Contents 1 Introduction 2 Financials 3 Corero Network Security 4 Corero Business Systems 5 Summary Appendices 4
Slide 6: 2011 Operating Highlights
2011 Operating Highlights • Acquired Top Layer Networks, Inc. since rebranded Corero Network Security • Launch of industry first network-layer and application-layer DDoS defence system – Won Info Security's Global Excellence Award for 2012 – Best Security Products and Solutions for Enterprise (Large
Slide 7: 2011 Profit & Loss Highlights
2011 Profit & Loss Highlights • Revenues £11.3m (2010: £3.0m) – CNS revenue £6.9m – CBS revenue £4.4m, up 45% on 2010 • Operating profit* £287,000 (2010: £333,000) • Adjusted loss** before tax £260,000 (2010: loss £32,000) • Loss per share 2.75p (2010: loss from continuing operations 0.68p) * before
Slide 8: P&L Summary
P&L Summary Continuing Acquired Total Total 2011 2011 2011 2010 • 2011 includes 10 months of CNS £’000 £’000 £’000 £’000 • Acquisition costs Revenue 4,393 6,872 11,265 3,020 and severance Cost of sales (857) (1,699) (2,556) (593) payments Gross profit 3,536 5,173 8,709 2,427 associated with Gross pr
Slide 9: Segmental P&L Summary
Segmental P&L Summary 12 months to 31-Dec-11 12 months to 31-Dec-10 CNS* CBS Central Total CBS Central Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Revenue Product and license revenue 3,042 1,233 4,275 556 556 Professional services 152 1,266 1,418 699 699 Support 3,678 1,894 5,572 1,765 1,765 6,8
Slide 10: Net Assets and Cash Flow Highlights
Net Assets and Cash Flow Highlights • Strong cash position of £4.3m at year-end – Excludes £4.3m cash raised in March 2012 • Net cash at year end £0.6m, net of: – CNS 8% Loan Notes £3.4m issued to vendors of Top Layer including interest rolled up (repayment March 2014) – CNS term loan £0.2m (current
Slide 11: Contents
Contents 1 Introduction 2 Financials 3 Corero Network Security 4 Corero Business Systems 5 Summary Appendices 10
Slide 12: CNS Overview
CNS Overview • Network security solutions – appliance with annuity services Intrusion Prevention Systems (IPS) – included as a “Visionary” in Gartner Dec 2010 IPS Magic Quadrant Distributed Denial of Service (“DDoS”) Defense System (DDS) – launched Q4 2011 • Target market – Mid-Large Enterprise cust
Slide 13: 2011 CNS Sales Highlights
2011 CNS Sales Highlights • Sales order intake $12.0m (2010: $11.7m ) – Small increase over 2010 - encouraging given churn in the sales team post the acquisition and the international team mostly coming on board in the second half of 2011 – Average value per customer $47,000 (2010: $32,000) • Increa
Slide 14: IPS and DDS Solutions – The First Line of Defense
IPS and DDS Solutions – The First Line of Defense IPS Solution • Protection for enterprise gateways, data centers, remote access VPN landing points and internal network applications • Differentiated 3 Dimensional Protection: firewall filtering, DDoS defense, and deep packet inspection • Delivers low
Slide 15: Contents
Contents 1 Introduction 2 Financials 3 Corero Network Security 4 Corero Business Systems 5 Summary Appendices 14
Slide 16: CBS Overview
CBS Overview • Operates as a stand-alone business • Supplies finance (“Resource Financials”) and business systems (“Resource EMS”) software solutions principally to UK education market – Resource Financials & HR – finance and HR management solution delivering web- enabled and workflow controlled bus
Slide 17: Contents
Contents 1 Introduction 2 Financials 3 Corero Network Security 4 Corero Business Systems 5 Summary Appendices 16
Slide 18: Summary
Summary • Network security market forecast to continue to grow strongly fueled by – Escalating real cyber crime and cyber war threats – Economic disruption and associated costs as cyber attacks multiply – Growing security compliance and business continuity requirements • CNS well positioned for grow
Slide 19: Contents
Contents 1 Introduction 2 Financials 3 Corero Network Security 4 Corero Business Systems 5 Summary Appendices 18
Slide 20: Net Assets Summary
Net Assets Summary 31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-10 £’000 £’000 £’000 £’000 Assets Liabilities Non-current assets Current liabilities Goodwill 12,144 509 Trade and other payables (2,824) (739) Acquired intangible assets 3,008 5 Borrowings (176) - Capitalised development expenditure 1,484 591
Slide 21: Cash Flow Summary
Cash Flow Summary 2011 2010 2011 £’000 £’000 £’000 Loss before taxation (1,428) (92) Cash flows from investing activities Adjustments for: Acquisition of subsidiaries (2,283) Amort'n of acquired intangible assets 576 7 Purchase of intangible assets (38) Amorti'n of capitalised development costs 201
Slide 22: DDoS Opportunity – Existing Solutions Not Sufficient
DDoS Opportunity – Existing Solutions Not Sufficient • Over-provision bandwidth and CPU cycles – Never-ending escalation – Not cost effective “We had even dropped evaluation units from two – Still does not protect against application-layer attacks vendors in place but neither of them could stop all
Slide 23: CNS Proven Three Dimensional Protection
CNS Proven Three Dimensional Protection Protection against Protection against Protection against DDoS Attacks Undesired Access Malicious Content IN OUT Logged Good Traffic Events Blocked Forensic Data Bad Traffic Attacks & Analysis A4
Slide 24: IT Decision-maker Survey on DDoS Attacks
IT Decision-maker Survey on DDoS Attacks A 2012 survey of 300 UK and US-based IT decision-makers reveals: • One in three organisations (31%) has suffered one or more Distributed Denial of Service (DDoS) attacks in the last 12 months • More than half (53%) of companies surveyed were concerned about p
Slide 25: Online & Campus Higher Education Provider
Online & Campus Higher Education Provider Problem: Inability to defend against an active DDoS Attack using next generation firewall technology • Current security infrastructure unable to stop massive DDoS attack • Customers/students unable to access the site • IT Security wanted an additional layer
Slide 26: Arcade Game Distributor
Arcade Game Distributor Challenge: Increase security to stop malware, viruses and denial of service attacks and ensure far flung network availability • Anti-virus software was insufficient • Malware, viruses and other malicious content were highly disruptive to the business which relies heavily on t
Slide 27: Leading Online Gaming Site
Leading Online Gaming Site Problem: Provide uninterrupted online access to thousands of online gaming customers • Dissatisfied with current IPS vendor protecting their core network • Needed to add protection for web services • Required strong DDoS protection Solution: High performance 10GbE systems
Slide 28: Thank You
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