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1 | www.insidesecure.com August 28, 2017 Amedeo D’Angelo, President & CEO Richard Vacher Detournière, GM & CFO Inside Secure Meontrust Acquisition Entering Security-as-a-Service Market
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www.insidesecure.com
August 28, 2017
Amedeo D’Angelo,
President & CEO
Richard Vacher Detournière,
GM & CFO
Inside SecureMeontrust AcquisitionEntering Security-as-a-Service Market
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DisclaimerThis presentation and the information it contains are not intended to constitute, and should not be construed as an offer to sellor a solicitation to buy or subscribe to any Inside Secure securities, in any jurisdiction. Any public offering of Inside Securesecurities would be made by means of a prospectus previously approved by the AMF that contains detailed information aboutInside Secure. The disclosure, distribution and publication of this presentation may be restricted by law in certain jurisdictionsand persons into whose possession any document or other information referred to herein comes should inform themselvesabout and comply with any such restrictions. Inside Secure takes no responsibility for any violation of any restrictions by anyperson.This presentation contains certain forward-looking statements relating to the business of Inside Secure, which shall not beconsidered per se as historical facts, including the ability to manufacture, market, commercialize and achieve marketacceptance for specific projects developed by Inside Secure, estimates for future performance and estimates regardinganticipated operating losses, future revenues, capital requirements, needs for additional financing. In addition, even if the actualresults or development of Inside Secure are consistent with the forward-looking statements contained in this press release,those results or developments of Inside Secure may not be indicative of their in the future. In some cases, you can identifyforward-looking statements by words such as "could," "should," "may," "expects," "anticipates," "believes," "intends,""estimates," "aims," "targets," or similar words. Although the management of Inside Secure believes that these forward-lookingstatements are reasonably made, they are based largely on the current expectations of Inside Secure as of the date of thiscommunication and are subject to a number of known and unknown risks and uncertainties and other factors that may causeactual results, performance or achievements to be materially different from any future results, performance or achievementexpressed or implied by these forward-looking statements. In particular, the expectations of Inside Secure could be affected by,among other things, uncertainties involved in unexpected regulatory actions or delays related notably to building and operatingpermits and renewable support policies, competition in general or any other risk and uncertainties developed or identified in anypublic documents filed by Inside Secure with the the Autorité des marchés financiers – the “AMF”), included those listed inchapter 4 “Risk factors” of the 2016 registration document (“document de reference”) filed with the AMF on March 28, 2017under number D.17-0244. In light of these risks and uncertainties, there can be no assurance that the forward-lookingstatements made in this communication will in fact be realized. Notwithstanding the compliance with article 223-1 of the GeneralRegulation of the AMF (the information disclosed must be “accurate, precise and fairly presented“), Inside Secure is providingthe information in these materials as of this communication, and disclaims any intention or obligation to publicly update or reviseany forward-looking statements, whether as a result of new information, future events, or otherwise.
©Inside Secure 2017. All Rights Reserved. Inside Secure,® Inside Secure logo and combinations thereof, and others areregistered ® trademarks or tradenames of Inside Secure or its subsidiaries. Other terms, logos and product names may betrademarks of others.
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Agenda
Inside Secure Strategic Focus
Transaction Rationale
Meontrust Overview
Q & A
Appendix
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Agenda
Inside Secure Strategic Focus
Transaction Rationale
Meontrust Overview
Q & A
Appendix
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Inside Secure:A successful transformation
• Refocused on core security software and technology licensing
• Successful sale of loss-making semiconductor business
Completed strategic
transformation
Solid execution of the strategy starting to bear
fruit
• Right-sized operating cost base• Achieved profitability on core business:
24.6% of FY 2016 EBITDA margin from continuing operations(1) (-22.8% in FY 2015)
• Strengthened liquidity and financial position
• Sound growth on core business (+35%(2) in 2016)• Increasing needs for advanced and evolving
security in an always more connected world
Positive underlying
business trends
ü
ü
ü
(1) Definitions of continuing operations in Appendix(2) Excluding semiconductor business and NFC patent licensing
2016: a pivotal year 2017: geared for growth
Pure-play software and technology licensing company
Uniquely positioned to
meet the evolving security
needs for a connected world
Target growth in new license revenue and sustainable profitability
Inside Secure – August 28, 2017
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Inside Secure strategy:geared for growth and sustainable profitability
Application protection:leverage momentum on
mobile banking and mobile payment (HCE)
Drive business development on securing the IoT
Pursue sustainable growth on content protection software
Pursue monetization of NFC patent
portfolio through licensing program
Sustainable long-term growth and operating leverage
4
1
Consolidate Inside Secure existing positions
Increasing share of wallet of existing customers
Target potential acquisitions
to enrich security solutions and customer base
3
2
5
Enlarge security solutions offer
Inside Secure – August 28, 2017
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A value accretive M&A strategy
Enrich product offer to leverage customer base
Directly complementary to
Inside Secure product offering
üSame type of
customers and distribution
channels
Sound financials (breakeven/profitable
company)
Ability to integrate smoothly within
Inside Secure
ü ü ü
Reinforce company’s technology leadership on
security
Strict investment criteria
Increase company coverage to enhance
commercial discussions with industry blue chip
customers
Inside Secure – August 28, 2017
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Agenda
Inside Secure Strategic Focus
Transaction Rationale
Meontrust Overview
Q & A
Appendix
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l Inside Secure enters Security-as-a-Service market with the acquisition of Meontrust
l A significant step in accelerating the deployment of Inside Secure strategy:
Meontrust’s unique strong authentication technology reinforces and complements Inside Secure’s comprehensive solutions in mobile banking & payment authentication and digital content protection;Meontrust’s Security a Service (SECaaS1) business offering demonstrates the potential to augment other Inside Secure products with service based offerings;Strengthens Inside Secure’s portfolio of solutions to address the significant market opportunity of PSD21 (payment services directive);Offers short-term upselling opportunities with Inside Secure’s current customers.
Transaction Rationale
1) Definitions in Appendix
Inside Secure – August 28, 2017
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Transaction RationaleTransaction considerations
l Acquisition of 100% shares of Meontrust OY, a Finnish company
l All-cash transaction for a consideration of up to EUR 5 million,
l Including, marginally, an earn-out payable in 2019 and 2020 subject to completion of certain business targets for the acquired business.
Inside Secure – August 28, 2017
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Agenda
Inside Secure Strategic Focus
Transaction Rationale
Meontrust Overview
Q & A
Appendix
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Meontrust Overviewl Founded in 2010, based in Helsinki, Finland
l Robust IP portfolio, with 19 patents granted & pending
l Develops and markets security solutions that facilitate deployment of strong customer two-factor authentication, compatible with PSD2 specifications
l Commercial deployments in entertainment, financial, insurance, and telecom markets
l Client component across all mobile platforms, available as an SDK, a white-label app, and a branded app
l Server component available as an on-premise product or hosted cloud solution
Inside Secure – August 28, 2017
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Drivers for Strong Authenticationl Authentication drives revenue:
50% of users have frequently abandoned online payments due to authentication problems1Service providers experience 30% increase in online service portal usage after
deployment of effective passwordless authentication2
l New legislations are demanding increased security and strong authentication
PSD2 – strong authentication for online paymentsGDPR – major fines for customer data breacheseIDAS – digital signatures for cross border transactionsECB – recommendations mandate strong authentication for Internet payments
l World is going mobile but requires omnichannel experience
l Legacy authentication is slow, clumsy, and expensive
l Consumers expect fast user experience and biometrics
1Ponemon Institute, April 2013,
2MePIN Telecom customer, February 2017
Inside Secure – August 28, 2017
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Meontrust Solution
Auth APIE-banking, 3DS,
Wallet, E-commerce, Customer Care, etc
Authenticate and authorize with a digital signature
MePIN server
PKI
Access anywhere
Inside Secure – August 28, 2017
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Meontrust Deployment Options
MePIN library
Customer'smobile app
Customerbranded ID app
MePIN SDK
or
Client
Server
On-premise Mixed(hosted PKI)
Fully hosted
or or
or
Inside Secure – August 28, 2017
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Target Markets l Financial
Fraud increasingly targeting online and mobile paymentsPSD2 and similar international legislation requiring financial institutions to deploy
strong two-factor customer authentication
l TelecomMNOs highly motivated to provide value-added servicesGSMA MobileConnect initiative establishing telcos as identity and authentication
brokers
l EntertainmentConsumers migrating to OTT servicesClunky authentication holding back smart TV solutionsPassword sharing impacting service revenue
l The multifactor authentication market as a whole is expected to grow to USD 12.5 Billion by 2022, at a CAGR of 16%1
The serviceable available market associated with facilitating strong authentication deployment by banks and telcos is expected to grow to USD 134 Million by 20222
1MarketsandMarkets, 2016,
2Inside Secure analysis, based on analyst reports
Inside Secure – August 28, 2017
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Expected Synergiesl Meontrust solution to rely on Inside Secure Application Protection
technology for differentiated client security
l Meontrust Security-as-a-Service expertise applicable across existing Inside Secure product lines in entertainment, financial, and silicon IP
l Inside Secure financial customers buying mobile payment solutions motivated by legislation and customer demand to deploy strong authentication
l Inside Secure entertainment customers buying content protection solutions of mobile and smart TV platforms are looking for authentication solutions to improve their customer experience
1Ponemon Institute, April 2013,
2MePIN Telecom customer, February 2017
Inside Secure – August 28, 2017
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Agenda
Inside Secure Strategic Focus
Transaction Rationale
Meontrust Overview
Q & A
Appendix
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Agenda
Inside Secure Strategic Focus
Transaction Rationale
Meontrust Overview
Q & A
Appendix
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About…lAbout Security-as-a-Service (SECaaS)
SECaaS is a business model in which a service provider integrates their security offering into a corporate infrastructure on a subscription basis or “pay-per-use” more cost effectively than most individuals or corporations can provide on their own, when total cost of ownership is considered
lAbout PSD2PSD2 (Payment Services Directive) was approved by the European Parliament and is coming into effect in 2018 with the main objectives of securing e-payments and expanding the financial services ecosystem within the EU and for global companies operating into and out of the EU. The PSD2 mandates the use of Strong Customer Authentication (SCA) to manage transactions between banks and new financial institutions, ensuring consumers’ data and finances remains secure while opening financial markets to innovation and new services.
Inside Secure – August 28, 2017
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Meontrust Flexible Authentication
Mobile PKI+ biometrics
FIDOU2F/UAF
Mobile & HW TOTP
SMSOTP
PaperOTP
High security+ high usability
Legacy users+ fallback optionsSingle unified API
Inside Secure – August 28, 2017
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Investor informationContacts
Inside SecureCorporate communications
Loic HamonEVP Corporate development & [email protected]
Inside SecureInvestor relations
Richard Vacher DetournièreGM & CFO
Financial calendarQ3 2017 revenue October 20, 2017
www.insidesecure.comwww.insidesecure-finance.com
