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Investor
presentation
June 2014
Technology for e.ID & Contactless Solutions
This document has been prepared by ASK (“the Company”) solely for use at this presentation. By receiving this
presentation and taking part to this meeting you acknowledge that you have read the following restrictions.
This document is confidential and is not to be reproduced by any person, nor to be distributed. Certain information contained in this presentation includes
forward-looking statements. Forward-looking statements are not guarantees of future performance of ASK and its actual financial condition, actual results of
operations and cash flows and the development of the industry in which it operates may differ materially from those made in or suggested by the forward-
looking statements contained in this presentation. In addition, even if ASK’s financial condition, results of operations and cash flows and the development of
the industry in which ASK operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not
be indicative of results or developments in future periods. ASK does not undertake, nor does it have any obligation, to provide updates or to revise any
forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation. ASK takes no responsibility for the use of
this information by any person.
The information contained in this presentation has not been subject to independent verification. No representation, warranty or undertaking, express or implied,
is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. The
information set out herein is subject to updating, completion, revision, verification and amendment and such information may change materially. ASK is under
no obligation to keep current the information contained in this presentation and any opinion expressed in them is subject to change without notice. ASK shall
have no liability whatsoever (in negligence or otherwise) for any loss arising from any use of this document or its contents or otherwise arising in connection
with this document. It is not the purpose of this presentation to provide, and you may not rely on this presentation as providing, a complete or comprehensive
analysis of ASK’s financial or commercial position or prospects. A detailed description of the business and financial conditions of ASK and a section “Facteurs
de risques” (“risk factors”) are included in the Prospectus. Copies of the Prospectus are available on the web site of the AMF (www.amf-france.org) and of ASK
(www.ask-contactless.com). This document does not constitute an offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for
any shares of ASK in the United States or any other jurisdiction and nor any part of it shall form the basis of, or be relied upon in connection with, any contract,
commitment or investment decision in relation thereto.
This presentation is directed only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Articles 49(2)(a)
to (d) (“High Net Worth Companies, Unincorporated Associations, etc”) of the Financial Promotion Order, (iii) are persons to whom an invitation or inducement
to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any
shares may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “Relevant Persons”).
This presentation is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or
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Disclaimer
2
132 million cards delivered
since 2001
44 million passports and driving
licences delivered since 2006
103 CITIES IN 27 COUNTRIES
The Technology Behind Secured Documents for
Identity and Mass Transit
Algiers Florence Monterrey San Diego
Atlanta Helsinki Naples San Francisco
Bogota Lisbon Nice Singapore
Brisbane London Orlando Sydney
Cancun Los Angeles Oslo Tel Aviv
Caracas Marseille Panama City Turin
Casablanca Medellin Paris Valencia
Chicago Mexico City Porto …
Denver Miami Pretoria
Dubai Minneapolis Riga
13 COUNTRIES
United KingdomUSA France Israel
Belgium
Greece
Philippines
Ivory Coast Gabon
Lesotho Mozambique
Uzbekistan Sierra Leone
3
AN IPO TO…SOLID ADVANTAGES
ASK, Expert in Secured ‘‘Contactless’’ Solutions
4
GLOBAL REFERENCE
Flagship customers in e.ID:
e-passports for 13
countries to date
including US, UK, France,
Israël and Phlippines
A clear leadership in Mass
Transit : 103 cities in 27
countries including
Atlanta, Dubai, London,
Mexico City, Paris,
Singapore , etc
€40M sales in 2013 (x2 in
4 years)
Unique patented
technology
Seasoned and
Complementary
Management Team
Fast-growing markets
driven by the global
adoption of secured «
contactless » solutions
Strong recurring sales
with existing customers
Strengthen our financial
structure
Acquire US JV’s minority
interests
Finalize our industrial
transformation to meet
industry’s standards
Consolidate our
technological leadership
Expand our sales
coverage
ENTREPRISEINNOVANTE
TECHNOLOGY,
OFFER &
ORGANIZATION
6
CHALLENGES
Secure ‘‘Contactless’’: Sensitive Applications
Related to Individuals
Access Payment
Individual security and personal
data protection:
8% of French people are victims of
identity theft(1) , 300,000 identity theft i.e.
more than car theft and robbery
≈$30bn of identity fraud-related costs in
the United States(2)
Ensure control flow:
1.5 billion controls per year and 5 million
per day in the Paris or Mexico subways
(1) Source: CSA study
(2) Source: insurance companies
Mass Transite.ID
TRADITIONAL TECHNOLOGY
ASK Technology: an Innovative Answer to Security
and Reliability Issues
7
« Copper wire » Antenna
ASK TECHNOLOGY
Unique process: direct connection of the chip on a
silver-ink printed antenna
Reliability
Adaptibility
Security
Industrialization capability
“CONTACTLESS” CARDS
Specific Products & Solutions for Each Market
Governements Mass Transit Operators
E-COVERS AND INLAYS8
Integrators(Gemalto, De La Rue, Giesecke & Devrient,
Oberthur, Morpho/Safran)
EUROPE
Sophia Antipolis (France)
Headquarters + R&D
115 permanent
employees
ASIA
Beijing (China)
Delhi (India)
Joint Ventures
121 permanent
employees
A Global Organization
9
Production capacity:
5m e-covers (passports)
Production capacity:
32m inlays (cards)
5m e-covers (passports)
Production capacity(2):
30m inlays (cards)
11m e-covers (passports)
38m tickets
UNITED STATES
Burlington (Vermont)
Joint Venture
46 permanent
employees
2013 Headcount:
282 permanent
employees
+
164 temporary
workers
(c.80% in India)
(1)
Direct Workforce 115
Manuf. & Engin. 101
R&D 23
Sales & Mark. 18
Admin. 25
(1) Transfer of part of the equipments from India to China
Seasoned and Complementary Management Team
10
Julien ZUCCARELLI,
CEO28 years’ experience in the smart card industry
(Morpho Cards/Safran, Schlumberger, Atos)
Joined ASK in 2014
Fabien GUICHON,
e.ID Director17 years’ experience
(CEA, Morpho Cards/Safran)
Joined ASK in 2008
Patrick SURE,
Contactless Solutions Director27 years’ experience
(Aérospatiale, Matra Space, Morpho
Cards/Safran)
Joined ASK in 2003
Gilles MARTINEZ,
R&D Director20 years’ experience
(Cegelec, Altran Consulting, Archos)
Joined ASK in 2006
Thierry LUCEREAU,
COO30 years’ experience
(CGW, Tekelec composants,
Manhurin Defense)
Joined ASK in 2011
Julie SALAMIERE,
Supply Chain9 years’ experience
(Renault)
Joined ASK in 2011
Sylvain DERMINEUR,
Manufacturing Director10 years’ experience
(JV PSA / Renault)
Joined ASK in 2012
Nathalie GAMBADE,
CFO
24 years’ experience in financial
management
(TES Electronic Solutions, CCA International)
Joined ASK in 2010
Philippe BERTHAULT,
General Secretary, HR Director
15 years’ experience
(Axime/ATOS, Innovatron)
Joined ASK in 1998
e.ID &
CONTACTLESS
SOLUTIONS
12
Electronic Identity Document Market (e.ID)
DRIVERS
Security reinforcement: domestic as well as on
borders (biometry, data protection)
Fluidity of controls
Reliability and document durability
International standardization (ICAO standards)
and regional modernization
TRENDS
Among the 193 UN members, 95 countries
deliver electronic passports
Extension of ‘‘contactless’’ to identity
documents (cards, driving licences, residence
permits, etc.)
ID Cards
Driving Licences
Sources : Frost & Sullivan Contactless e.ID Market, ASK
e.ID INLAY MARKET
(in million units)
Passports
+ 22% / year+ 10% for passports
€129m in 2013 Passeports : €91m
192
253
331
420
500528
2013 2014 2015 2016 2017 2018
Within 7 Years, ASK Has Become a Worldwide
Reference
13
2006
ASK wins the contract to supply e-covers
for Greek ePassports
4.2 million units delivered in 2007 and
2008
Partner: Toppan
2009
ASK starts delivering French ePassports
>15 million units delivered from 2009 to
2013
Partners: Gemalto / Safran-Morpho
2010
ASK wins the RFP for the supply of
British ePassports
10 million units delivered over the
period 2010-2013
Partner: DeLaRue
2012-2013
ASK selected as a supplier of e-covers for
US passports
1.5 million units produced in the US
facility (Burlington, VT) in H2 2013
Partner: Infineon
Customer’s relationship
Validation phase (product /
interoperability)
Multi-year contracts with 2-3 suppliers
Purchase order with suppliers under
contract
Partners
Gemalto, De La Rue, Giesecke &
Devrient, Oberthur Technologies,
Morpho/Safran
14
« Contactless » Cards Market (Contactless Solutions)
DRIVERS
Unified solutions: multi-modality
Solutions for frequent and occasional
passengers
Fluidity of controls & secured solutions
Costs / maintenance of infrastructures
Reliability
TRENDS
> 500 cities with over 1 million citizens
worldwide urban population: 6 billion in 2050
Development of mass transit infrastructure
Growing adoption of ‘‘contactless’’ (cards &
tickets)
Mass transit / banking convergence
Bank Cards
Other (Access, Loyalty, Gaming, etc.)
1 276
1 761
2 270
2 830
3 414
3 859
2013 2014 2015 2016 2017 2018
CONTACTLESS SOLUTIONS MARKET
(in million units)
Sources : ABI Research, ASK
Mass Transit Cards
+ 25% / year+ 11% for mass transit
€1,500m in 2013 Mass transit: €500m
2005-2008
2001-2005
A Clear Leadership in Mass Transit
15
1997 - 2000
ASK creates the dual-card technology in
collaboration with RATP and SNCF to
develop the Navigo card and C.ticket
Top cities: Nice and Amiens
Cards: 10 million units per year
Atlanta, Mexico, Velib’, Singapore e-purse
Tickets: 20 million units per year
Hong Kong, Chicago, Florence, etc.
Olympic Games in Beijing
2013Cards: 26 million units per year
4th contract RATP/SNCF (50% market share)
50 cities in France
London, Dubaï, Oslo, Helsinki, Sydney,
Jerusalem, Miami, Denver, Houston, San
Diego, Bogota, etc.
Cards: 4 million units per year
Paris Navigo Card, Lisbon, San Francisco
Tickets: 6 million units per year
Lisbon, Porto
Partners:
Transdev, Keolis, Xerox-ACS, Thales,
Cubic, Novabase, Peajes, etc.
Customer’s relationship
Validation phase (product /
interoperability)
Multi-year contracts with 2-3 suppliers
Purchase order with suppliers under
contract
FINANCE
ASK’s 3 Development Stages
17
1997 - 2010
Technology development
More than €25m of investments
(R&D and international expansion)
First major contracts wins
Strong growth
€25mSales in 2010
2011 - 2013
Pursued growth
Rationalization and control
Breakeven : positive EBITDA in
2012 and 2013
€40mSales in 2013
2014 - 2017
An IPO to fuel the profitable
growth
2011-2013: Positive Impact of the Reorganization
KEY FIGURES 2011-2013 (€m)
29,9
21,119,4
36,1
24,7
10,8
0,7
39,8
27,1
12,2
-10
0
10
20
30
40
50
2011 2012 2013
1,7
(10,6)
+33%
+28%
-37%
Return to
profitability
Revenue from
Operations
COGS Operating
Expenses(1)
EBITDA(2)
18
(1) Before Depreciation, Amortization and non-recurring items
(2) Income/Loss from operations before depreciation, amortization and exceptional items restated in 2013 from the items described in p20 as these items were linked to extra production costs
which should not recurrently impact ASK’s future results given the targeted ramp-up of the US facility and the transfer of production from India to China.
Investors should refer to Section 4.5.1 of the Prospectus which describes the historical losses of the Company in the financial risk section
2011-2013: Positive Impact of the Reorganization
2011 2012 2013Consolidated data - €k - IFRS
Revenues from Operations 2013
2013 Var.
ASK €39.8m +10%
ASK IntTag €3.8m +61%
ASK TongFang €0.9m +129%
Eliminations €(0.6)m
Group(3) €43.9m +16%
19
€1.2m non-recurring expenses in 2013
Transfer of equipments from India to China
Launch of the US ePasseport
e.ID€14.5m
Contactless Solutions
€25,3m
(1) restated in 2013 from the items described above as these items were linked to extra production costs which should not recurrently impact ASK’s future results given the targeted ramp-up of the
US facility and the transfer of production from India to China.
(2) Income/Loss from operations before depreciation, amortization and non-recurring items
(3) Sales of ASK products by ASK and joint ventures, net of transactions between linked parties
Investors can refer to Section 4.5.1 of the Prospectus which describes the historical losses of the Company in the financial risk section
Revenues from operations 29 874 36 141 39 785
Production costs – variable (22 867) (26 849) (29 999)
Production costs - fixed (12 038) (2 939) (2 811)
Depreciations & Amortisations (4 897) (773) (783)
Restated(1) gross margin (9 928) 5 580 6 192
% -33,2% 15,4% 15,6%
R&D (incl. D&A) (2 816) (2 319) (2 576)
S&M (2 755) (2 226) (1 819)
G&A (1 060) (1 405) (1 290)
Total opex (6 631) (5 950) (5 685)
Other non-recurring incomes and
expenses1 514 (70) (444)
Restated (1) EBIT (15 045) (440) 63
Restated (1) EBITDA(2) (10 618) 689 1 710
Net income (17 023) (913) (1 140)
Capital Employed / Resources Analysis (€k)
(1) Including €4.5m bonds which maturity was extended from March 2014 to 2015
(2) Last 3 years average 20
ANALYSIS
€1.0M of non-current assets financed through capital-lease (classified as other liabilities)
Operating Working capital: c. 23% of revenues from operations (9% after factoring)
CAPEX: c. €0.8m per year(2)
2013 tax loss carry forwards: €57m, o/w €3.3m activated in 2013
€45k of cash and €644k of unused overdrafts (May 31, 2014)
9 302
3 716
4 616
Non-current
assets
Other current
assets
Working capital
Cash and cash
equivalent
238
Equity
Debts with affiliated
Bonds(1)
Grants and subsidies
Factor
Other financial debts
Other liabilities405
153
Capital Employed
Resources
504
6,512
2,529
5,871
1,898
Consolidated data as of 31/12/13 - €k - IFRS
STRATEGY
An IPO to…
22Amounts presented based on the mid-range pricing less the impact of the offsetting debts with ASK and some of its financial shareholders
BOOST GROWTH INITATIVES
Finalize industrial transformation to meet industrys’ standards (automation
and production scaling-up)
Consolidate technological leadership through doubling R&D capacity
(strengthening of the R&D team and launch of new products)
Expand S&M coverage in key markets (Europe, the US and Latin America)
€12.3m
CONSOLIDATE FINANCIAL STRUCTURE
Anticipated reimbursement of bonds held by Kreos Capital (€4.6M) and
Siparex (€2.7M)
ACQUIRE US JV’S MINORITY INTERESTS
Acquistion of the stake owned by ASK’s partner in ASK IntTAG LLC ($4.8m)
Refinancing of shareholders’ loan ($1.7m)
€4.9m
€7.3m
SALES EVOLUTION
(ASK +Joint Ventures) - €m
€100m in 2017
Sustainable Profitable Growth as an Ambition
23
2009 2013
22.6
43.9
x2
STRATEGIC PLAN
Identity: 2-3 new countries / year for passport + deployment
of electronic driving license in the US
Mass transit: 3 major cities / year + replication of the French
deployment (50 cities) in targeted countries (Portugal,
Mexico, UK, Italy, etc.)
Mass transit: personalization (increase in the value chain)
Mass transit: ramp-up of ‘‘contactless’’ tickets
Hybrid cards: mass transit / banking
ADDITIONAL OPPORTUNITIES
Mass transit applications for smartphones
‘‘Contactless’’ payment cards (innovations, protection
against fraud)
OUR STRENGHTS
Key Success Factors
Unique and renowned patented technology
Best worldwide references in e.ID and leadership in Mass Transit
Industrial transformation already underway to meet industry’s
standards
Seasoned and complementary management team
Recurring revenue base thanks to visibility with existing clients
Fast-growing markets driven by the global adoption of secure
« contactless »
24
OFFERING AND
CALENDAR
Listing : NYSE Euronext Paris (Euronext Compartiment C)
Indicative pricing : €7.70 - €9.30 per share
Offering Structure
Global Offering (OPO) including public offering to retail in France
and global placement to Institutional Investors
2,941,176 new shares to be issued as a capital increase within the
IPO without Priority Subscription Right
A maximum of 441,176 additional new shares in case the Extension
Clause is fully exercised
A maximum of 507,352 additional shares issued by the Company
and sold by historical shareholders in case the Greenshoe is fully
exercised, with a maximum of 269,058 shares to be sold by
Cosette International Ltd. and Siparex Proximité Innovation through
the Greenshoe
Gross amount of the transaction
Around €25.0m on a mid-range indicative price basis, i.e. €8.50
€28.7m in case the Extension Clause is fully exercised
€33.1m in case the Extension Clause and the Greenshoe is fully
exercised (€30.9m for the company, considering shares to be sold
by Cosette International Ltd. and Siparex Proximité Innovation)
Contemplated Transaction
26
Bank syndicate
Global coordinator, Lead Manager &
Sole Bookrunner
Co-lead Manager,
Placement Syndicate Member
Legal advisors
Auditors
Financial communication
ENTREPRISEINNOVANTE
SHAREHOLDING POST-IPO (fully diluted)
Manage-ment &
employees
Otherindividuals
Public
SHAREHOLDING PRE-IPO (fully diluted)
Manage-ment &
employees
Other individuals
Shareholding Structure & Governance
86%
12%
2%
27
Financial
investors
57%
8%
1%
Financial
investors
34%
Assuming 100% subscription and excluding extension clause and
greenshoe impact
Indicative Timetable
28
AMF visa on the prospectus
Announcement of IPO terms
Opening of the subscription period
Closing of the subscription period
Offer price determined and investor allocation
Shares issued
Settlement and delivery
Beginning of trading on Euronext
Deadline for the exercise of the Greenshoe
End of the stabilization period
11 June 2014
12 June 2014
25 June 2014
26 June 2014
1 July 2014
2 July 2014
26 July 2014
2260 route des Crêtes
06560 Valbonne
France
www.ask-contactless.com
30
Management Board
Philippe GEYRES,
ChairmanFormer CEO of Oberthur Card Systems
Former EVP of STMicroelectronics (consumer
& telecom)
Terrence ANNAMUNTHODOPermanent Representative of Equimax
Investments
Investment Advisor of the « Securities and
Futures » Commission in Hong Kong
Léon SEYNAVEPermanent Representative of Troismer
Director at De Persgroep NV
Michel DESBARDPermanent Representative of BlueSky
Capital
Founder of BlueSky Capital
Former Chairman & CEO at Matra
Semiconducteurs
Bruno MOREAUPermanent Representative of Cosette International
Ltd.
Co-Founder of ASK in 1997
Former Head of Development at Innovatron
Valéry HUOTInnovation Capital Permanent
Representative
Former Manager of a CDC secondary fund
Former Head of the ‘‘Bureau de
financement des PME au Trésor’’
30
GOVERNANCE
As of the date of admission of its shares on the regulated market of Euronext Paris, the Company will comply with the recommendations of Middlenext Code, except for the
recommendation to appoint two independent members to its management board. The Company intends to appoint two independent directors: a first independent member will
be appointed within the twelve months following the listing of its shares, and a second independent member no later than 24 months after the listing of its shares.
20132013
EQUITY 153
NON-CURRENT LIABILITIES 5,436
o/w Financial debt 5,031
CURRENT LIABILITIES 22,028
o/w Payables 7,441
o/w Financial debt(1) 6,412
o/w Factoring 5,871
TOTAL LIABILITIES 27,616
NON-CURRENT ASSETS 8,332
o/w deferred tax assets 1,301
o/w Investments in associates 1,661
CURRENT ASSETS 19,285
o/w Inventory 5,690
o/w Trade Receivables 10,254
o/w Other Receivables 3,102
o/w Cash & Cash equivalents 238
TOTAL ASSETS 27,616
Consolidated Balance Sheet
31
Consolidated data - €k - IFRS Consolidated data - €k - IFRS
(1) Including €4.5m bonds which maturity was extended from March 2014 to 2015
KEY AREAS
PROJECT-DRIVEN APPROACH
Strategy Tailored for each Area
32
United States
Latin America
Asia - Pacific
Consolidate our position (largest ePasseports markets – France & UK – Belgium, Greece,
etc.)
Apply to Italy, Portugal and the UK our “capillarity” strategy, successfully implemented in
France (over 50 cities)
Ramp-up of passport volume
Take advantage of our unique position at Federal level, at State level (4 driving licences -
Michigan, Minnesota, Vermont, Washington) and at City level (12 public mass transit
networks)
Achieve our ePassport ambitions (Brazil, Chile and Colombia)
Speed up our “capillarity” strategy successfully implemented since Mexico (4 cities in Mexico,
3 cities in Colombia)
Expand on the basis of our successes in Uzbekistan, Philippines, Australia (Sydney,
Brisbane), Singapore
Capitalize on our industrial presence in China
Europe
Capitalize on our references (5 countries and 5 major cities) and on our showcase in Dubaï
(mass transit)MEA
33
ASK Selected for the US ePassport
Start of mass production: June 2013
1.5 million e-covers
delivered in H2 2013(1)
(1) Sales invoiced by ASK IntTag
CONTEXT
Largest program of electronic passport in the world
≈10 million ePassports issued per year
First discussions in 2004
ISSUES & CHALLENGES
High level of security
Performance requirements: resistance, durability (10 years)
« Chinese wall » between the different steps: Chip, OS,
Antenna, Booklet (GPO)
ASK SOLUTION
ASK technology (silver-ink based e-covers) shortlisted for
the first time in December 2004
End of 2008: launch of the Burlington factory (formerly IBM
premises) where chips for ePassports are produced
2010: partnership with Infineon (chip SLE78), specific tests
2012 : Infineon-ASK et Gemalto-SMARTRAC selected for a
5-year contract (3 million units / year for ASK)
34
4 million cards delivered
in 2013
ASK: An Answer to Mexico’s Urbanization Challenge
CONTEXT
Mexico City: 8th city in the world - 21 million
citizens
Reorganization of the public mass transit network
in 2005
2 ticketing systems (bus and subway)
simultaneously implemented
ISSUES & CHALLENGES
Find a solution for subscribers / occasional
passengers
Same card frequently recharged (low purchasing
power)
Improve security and speed
ASK SOLUTION
Calypso standard (RATP) selected
for subscribers
2005: Launch of Metrobus, ‘‘contactless’’
rechargeable card
2012: Interoperability of Metrobus, which can be
used as a city card on the Federal District network
