Slide 1: Investor Summit 2010
Exhibit 99.1 VASCO Data Security Investor Summit 2010 T. Kendall Hunt, Chairman & CEO Jan Valcke, President & COO Clifford Bown, EVP & CFO New York, February 18, 2010
Slide 2: Forward Looking Statements
Forward Looking Statements VASCO Data Security Statements made in this presentation that relate to future plans, events or performances are forward-looking statements within the meaning of Section 21e of the Securities and Exchange Act of 1934 and section 27a of the Securities Act of 1933. These for
Slide 3: Agenda
Agenda VASCO Data Security • VASCO Corporate Info • Results 2009: recap • Guidance 2010 • Strategy: Organic growth (end-to-end) The next step • Q&A
Slide 4: VASCO Corporate Info
VASCO Data Security VASCO Corporate Info
Slide 5: Corporate Profile
Corporate Profile VASCO Data Security • Global company with HQ in US and Europe and Operational HQ in Europe • Listed on Nasdaq: VDSI • A leading software company, specializing in Internet security • Almost 9,500 customers in 100+ countries, including approximately 1,400 banks • Fast growing market
Slide 6: VASCO Worldwide
VASCO Worldwide VASCO Data Security VASCO Offices VASCO sales presence
Slide 7: Results 2009: recap
VASCO Data Security Results 2009: recap
Slide 8: Results Q4 2009
Results Q4 2009 VASCO Data Security • Revenue: $ 31.9 million (+10 %)* • Operating Income: $ 5.4 million (+ 197 %)* • Net income: $ 5.6 million ( +100 %)* • Gross Margin: 70% • Earnings Per Share: $ 0.15 per fully diluted share (+100%) * Compared to Q4 2008
Slide 9: Results Full Year 2009
VASCO Data Security Results Full Year 2009
Slide 10: Results Full Year 2009
Results Full Year 2009 • Revenue: $ 101.7 million ( - 24 %)* • Operating Income: $ 13.4 million ( - 52 %)* • Net income: $ 12.6 million ( - 48 %)* • Gross Margin: 70% • Earnings Per Share : $ 0.33 per fully diluted share ( - 48%)* Compared to Full Year
Slide 11: VASCO's Success Story 2003-2009
VASCO’s SUCCESS STORY 2003-2009 $22,866 $29,893 $54,579 $76,062 $119,980 $132,977 $101,695 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 Sales (000's ) $1,123 $5,552 $10,953 $18,942 $30,893 $28,137 $13,413 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Operating Income (00
Slide 12: VASCO's Success Story 2003-2009: Total New Customers
VASCO’s SUCCESS STORY 2003-2009 Total New Customers
Slide 13: New banking customers
400 300 200 100 New banking customers 2003 2004 2005 2006 2007 2008 2009 2500 2000 1000 500 New non-banking customers @> VAS? 2003 2004 20052006 2007 2008 2009
Slide 14: VASCO Revenue 2008-2009
VASCO REVENUE 2008-2009 Banking Revenue 2008-2009 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Q1 Q2 Q3 Q4 Non-banking revenue 2008-2009 $0 $2,000 $4,000 $6,000 $8,000 $10,000 Q1 Q2 Q3 Q4
Slide 15: VASCO Revenue 2008-2009
VASCO REVENUE 2008-2009 $0 $10,000 $20,000 $30,000 $40,000 Q1 Q2 Q3 Q4 Total Revenue 2008-2009
Slide 16: Evolution sales 2001 vs 2009
Evolution sales 2001 vs 2009 94% 74% 26% 6% $21,331 $1,359 $74,900 $26,800 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 Evolution Sales 2001-2009: Banking vs. ES Banking Enterprise Security
Slide 17: VASCO's Strong Business Mix
VASCO’s Strong Business Mix Small volume High margin High volume Lower margin Success in times of recession and beyond
Slide 18: Conclusions
CONCLUSIONS 1. VASCO’s defensive strengths : profitable strong worldwide business large installed customer base excellent business mix (GM 70%) a solid balance sheet no long-term debt healthy cash position 2. Evolution non-banking markets: VASCO grew 11% in non-banking segment despite a decline of 2
Slide 19: Conclusions
CONCLUSIONS 3. Evolution banking market: We believe the decline in banking business is over Time to grow again 4. VASCO is a stronger company after the crisis than it was before
Slide 20: Guidance 2010
Guidance 2010
Slide 21: Guidance Full Year 2010
Guidance Full Year 2010 We are offering guidance that • Full-year 2010 revenue will grow from 15% to 20% over full-year 2009. • Full-year 2010 operating income will range between 5% to 10% of revenue.
Slide 22: Questions & Answers
Questions & Answers
Slide 23: Strategy: End-to-end authentication
Strategy: End-to-end authentication
Slide 24: Successful evolution of the company
Successful evolution of the company • Up to 2005: VASCO sells DIGIPASS (hardware) tokens to banks Due to success: margins under pressure • Challenge: How to grow gross margin? • Solution: diversification in products, markets, business mix
Slide 25: Successful evolution of the company
Successful evolution of the company • Beginning in 2006 – now VASCO announces “ Full option, all - terrain authentication ” VASCO becomes a Software Company higher margins VASCO sells outside of the banking market more sales and higher margins • End-to-End authentication With VACMAN Controller, IDEN
Slide 26: VASCO Business Model
VASCO Business Model • End-to-End Authentication Direct sales Indirect Sales
Slide 27: Direct sales model
Direct sales model VASCO’s success in the banking market showed that we need to work with competence centers for other vertical markets A competence center coordinates all marketing (lead generation) activities and other support for sales for worldwide applications that have a potential of more than
Slide 28: Direct sales model
Direct sales model Development of Competence Centers Applications: • Financial institutions (e-banking, brokerage, insurance) • Gaming & Gambling • E-Government • SaaS & ASP Marketing: Summits, events where customers talk to prospects (immature markets) VASCO TRUSTED CLUB: customer events in mature
Slide 29: Direct Sales: 2010 investments
Direct Sales: 2010 investments Investments in 2010 • Banking: higher presence in key geographic markets • Higher investment in new non-banking competence centers • Recruitment of additional sales staff • Creation of an Advanced Development Team
Slide 30: Indirect sales: distributors & resellers
Indirect sales: distributors & resellers • REMOTE ACCESS SECURITY is VASCO’s first entry point Employee security: remote users. Bundling strategy. • ENTERPRISE SECURITY (large corporations) Employee security for all employees. Internet and network applications (7 to 1). Authentication end-to-end • A
Slide 31: Indirect sales model
Indirect sales model • Remote Access Security All distributors & resellers Indirect sales Managed by Distribution Managers • Enterprise Security prospects (large corporations) Selected resellers, integrators and solution partners Indirect sales with direct touch Managed by Channel Managers • Applica
Slide 32: Indirect sales: 2010 investments
Indirect sales: 2010 investments Investments in 2010 • Extra hires in Sales, Engineering and Business Development to support the growth in ES & B2B • Extra Marketing budget for ES & B2B compared to 2009
Slide 33: Indirect sales: conclusions
Indirect sales: conclusions Conclusions • More sales per customer • Very good recurrent business • Strong product portfolio • Competition focuses less on authentication market • Excellent execution strategy • 2010: substantial increase in investments
Slide 34: The next step
The next step How to tackle online applications previously out of our reach?
Slide 35: The next step: DIGIPASS as a Service (DaaS)
The next step DIGIPASS as a Service (DaaS)™ On Demand Identity and Transaction Security
Slide 36: DIGIPASS as a Service (DaaS)
DIGIPASS as a Service (DaaS)™
Slide 37: DIGIPASS as a Service (DaaS) platform
DIGIPASS as a Service (DaaS) Client Platform Employees Consumers DaaS Platform Business Application Consumer Application
Slide 38: DIGIPASS as a Service: potential sources of income
DIGIPASS as a Service: potential sources of income Potential revenue streams 1. Activation Code: one-time membership fee 2. Monthly Service Fee: Access to the DaaS platform basic version of anti-virus, firewalls… is for free advanced versions need to be paid aXsGUARD Gatekeeper product suite 3. ID S
Slide 39: Who pays VASCO?
Who pays VASCO? • For employee security: Employer, corporation pays Activation Code, Monthly Service Fee & ID Security Fee • For consumer security: Consumer pays Activation Code, Monthly Service Fee & ID Security Fee For some applications, application owner will pay Activation Code, Monthly Service
Slide 40: Long Term Strategy: Client platform
Long Term Strategy: Client platform • DIGIPASS Embedded Security Solution (DESS) strategy for client platforms: Integrating DIGIPASS on hardware devices & software platforms • Solution Partners for applications: Solution Partners integrate VACMAN Controller in existing Applications. Over 100 partner
Slide 41: Conclusion
Conclusion DIGIPASS as a Service (DaaS)™ On Demand Identity and Transaction Security
Slide 42: Questions & Answers
Questions & Answers