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Senetas Corporation Limited · ASX:SEN

Senetas — FY2017 Earnings Presentation

40 slides from Senetas's earnings presentation, Aug 28, 2017

Slide 1: Security without compromise
For personal use only Security without compromise © 2017 Senetas Corporation Slide 1
Slide 2: FY17 Highlights
FY17 Highlights • FY17 profit before tax within the guidance range announced on 6 February For personal use only 2017 • Strong growth in maintenance revenue – now 46% of total revenue following strong encryptor sales growth in prior periods • Customer network upgrades had a significant impact on key
Slide 3: FY18 Outlook
FY18 Outlook For personal use only • Positive outlook for earnings growth in FY18 • Strong sales pipeline for existing product and the new 100G and custom algorithm products will generate sales for the first time in FY18 • Commercial deployments of Suredrop are expected to commence in FY18 • Further
Slide 4: Key Financials
Key Financials For personal use only © 2017 Senetas Corporation Slide 4
Slide 5: FY17 Key Financials
FY17 Key Financials Year ended 30 June 2017 FY17 $000’s FY16 $000’s Change For personal use only Revenue from ordinary activities 17,591 18,920 (7%) Gross profit 13,948 15,691 (11%) Other income 2,441 2,517 (3%) Profit before tax 5,264 7,022 (25%) Tax expense (2,385) (1,803) 32% Net profit after tax
Slide 6: Trading Revenues (

#039;000)

Trading Revenues ($’000) For personal use only United States Decrease in sales revenue Other due to disruption in ordering Australia and New Zealand from US enterprise 18,920 customers Europe 17,591 EBITDA 15,907 10,950 46% maintenance revenue (up from 37% of total revenue in FY16) FY14 FY15 FY16 FY

Slide 7: Drivers of FY17 Profit Movement

Drivers of FY17 Profit Movement For personal use only Strong growth in maintenance R&D expenditure slightly lower post revenue resulting from strong the large step up in R&D spend in prior period sales growth FY16 for 100G development 7,022 1,119 426 5,264 (414) (440) (2,448) Higher cost of sales re

Slide 8: Strong Balance Sheet & Positive Cash Flow

Strong Balance Sheet & Positive Cash Flow For personal use only NET ASSETS $’000 CASH AND CASH EQUIVALENTS $’000 FY17 total reduced by investment in unlisted entities of 21,483 $2.2m 20,848 18,526 20,091 15,902 13,093 9,026 6,805 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 © 2017 Senetas Corporation Sli

Slide 9: Growth Opportunities

Slide 10: Ultra-High-Speed 100Gbps Ethernet Encryptors

Ultra-High-Speed 100Gbps Ethernet Encryptors For personal use only • The market for 100Gbps is growing and are expected to account for 50% of data centre activity by 2019 • Senetas’ new range of 100Gbps encryptors support complex, ultra-fast network topologies; enabling 100% security for Big Data, 1

Slide 11: Custom Encryption Services & Algorithms

Custom Encryption Services & Algorithms For personal use only • Encryption algorithm can be chosen or provided by the client • Customer testing and certification process have commenced • Initial sales are expected late in 1H FY18 © 2017 Senetas Corporation Slide 11

Slide 12: Software-Defined Encryption

Slide 13: Layer Encryption only solves part of the problem

Layer 2 Encryption only solves part of the problem For personal use only • Senetas hardware encryptors target high assurance Layer 2 networks (head office network, and data centre links) • However, need for these Layer 2 products to also communicate with Layer 3 & 4 (the internet, remote offices) •

Slide 14: Senetas SDN-Compatible Virtualised Encryption

Senetas SDN-Compatible Virtualised Encryption For personal use only • The introduction of a virtualised encryptor opens up Layer 3 (e.g. the internet) and more Layer 2 markets • Virtualised encryptor designed to deliver 30% performance improvement over existing solutions • Senetas is working with a

Slide 15: Making The Most Of Growing Technologies

Making The Most Of Growing Technologies For personal use only • Software-Defined Networking (SDN) is an emerging Global SDN 2020 architecture that is dynamic, manageable, cost-effective, and adaptable Market Value1 $13B • These qualities make SDNs ideal for the high-bandwidth, dynamic nature of toda

Slide 16: Other Security Solutions

Slide 17: Growth Via Strategically Aligned Opportunities

Growth Via Strategically Aligned Opportunities For personal use only Strict criteria govern new opportunities • Aligned with its core capabilities; leveraging encryption, security and networking skills, Senetas has received significant interest in those capabilities from several organisations • Tech

Slide 18: Case Study: SureDrop Acquisition

Case Study: SureDrop Acquisition For personal use only Secure file sharing and syncing solution for enterprise and government SureDrop provides all the usability, familiarity and convenience of a dropbox-type file sharing and collaboration application plus robust, state of the art security.  Expand

Slide 19: Other, Non-Core Assets

Slide 20: Unlisted Investments: EON Reality Inc.

Unlisted Investments For personal use only EON Reality Inc. • EON Reality Inc. (EON) is world leader in Augmented and Virtual Reality based knowledge transfer for industry and education, based in California • Minority (preferred stock with cumulative dividend) investment US$2m made in 2000 • Value w

Slide 21: Unlisted Investments: DeepRadiology

Unlisted Investments For personal use only DeepRadiology • Autonomous radiology scan interpretation and reporting system which uses medical machine learning and artificial intelligence - awaiting US FDA approval • Cybersecurity is atop concerns for patient records • Senetas invested US$1m and the in

Slide 22: Unlisted Investments: Smart Antenna Technologies

Unlisted Investments For personal use only Smart Antenna Technologies • SAT has patented smart antenna technology • Consolidates the multiple antennas found in mobile devices into a lower cost, more efficient single antenna • Target markets are mobile devices, laptops and IoT • Senetas has a 6% equi

Slide 23: Detailed Financials

Slide 24: Operating Cash Flows

Operating Cash Flows Year ended 30 June 2017 FY17 $000’s FY16 $000’s Change For personal use only Receipts from customers 17,215 18,599 (7%) R&D tax concession net of tax paid 210 401 (48%) Payments to suppliers & employees (16,192) (14,230) 14% Operating cash flows 1,700 5,193 (67%) Investing cash

Slide 25: Balance Sheet Remains Strong

Balance Sheet Remains Strong As at 30 June 2017 FY17 $000’s FY16 $000’s Change For personal use only Cash and cash equivalents 20,091 20,848 (4%) Trade and other receivables 5,401 5,927 (9%) Unlisted equity investments 2,227 - - Total assets 31,704 29,474 8% Trade and other payables (1,393) (1,973)

Slide 26: The Breach Landscape

Slide 27: For personal use only

Slide 28: An Evolving Breach Landscape

An Evolving Breach Landscape For personal use only 1.4 Billion 59% DATA RECORDS COMPROMISED IN 2016 1,792 BREACH INCIDENTS REPORTED IN 2016 BREACHES MOTIVATED BY IDENTITY THEFT 86% 68% INCREASE IN RECORDS COMPROMISED FROM 2015 BREACHES CARRIED OUT BY MALICIOUS OUTSIDERS © 2017 Senetas Corporation Sl

Slide 29: High-Assurance Encryption – Secure The Breach

High-Assurance Encryption – Secure The Breach For personal use only 4% In 2016, just 4% of breaches involved encrypted data When high-assurance encryption is used: • Data is rendered useless to the attacker • The risks of data manipulation or input of rogue data are eliminated Cyber-criminals are in

Slide 30: Senetas Solutions

Slide 31: Not All Encryption Solutions Are Created Equal

Not All Encryption Solutions Are Created Equal Senetas encryptors provide certified, high-assurance network security and maximum For personal use only network and application performance, without compromise. They are specifically designed for today’s high-speed data networks. Multi-Certified High-As

Slide 32: Multi-Certified

Slide 33: High-Assurance

Slide 34: Crypto-Agility

Slide 35: Experience

Slide 36: Best-of-Breed Solutions

Best-of-Breed Solutions For personal use only Networking Solutions Collaboration Hardware Software Secure File Encryption Encryption Sharing Current Layer 2 Virtual Encryptor SureDrop Encryption Products © 2017 Senetas Corporation Slide 36

Slide 37: Trusted By Tier Global Customers

Trusted By Tier 1 Global Customers For personal use only Senetas has a global distribution, sales, marketing and support footprint. More than 80% of sales are outside the ANZ region. Blue-chip customers across 37 countries: • Leading enterprise and global Cloud service providers • International bank

Slide 38: Customers In Over Countries

Slide 39: Global Distribution & Support

Global Distribution & Support For personal use only Senetas encryptors are supported and distributed globally by Gemalto under its SafeNet Identity and Data Protection Solutions brand. Senetas has established partnerships with some of the world’s leading technology companies: © 2017 Senetas Corporat

Slide 40: Thank You

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