T.Kendall Hunt Founder, Chairman and CEO VASCO, the Full-Option, All-Terrain Authentication Company November 2009
Forward Looking Statements <ul><li>Statements made in this presentation that relate to future plans, events or performance...
Corporate Information
Corporate Profile <ul><ul><li>Global company with worldwide HQ in the United States and international  HQ in Switzerland <...
VASCO, the Full Option, All-Terrain Authentication Company   <ul><li>VASCO’s Mission is to authenticate the world </li></u...
Full Option: Products Authentication appliances Combines Identikey with a wide variety of Internet communication solutions...
All terrain <ul><li>All terrain = all applications/ technologies </li></ul><ul><li>VASCO’s products are used in over 50 ap...
VASCO’s Success Story: Full Years 2003 – 2008
2003-2008: Revenue from Banking and Enterprise & Application Security Markets CAGR: 44% CAGR: 36% CAGR VASCO 2003 -2008: 42%
Net Cash and Working Capital
<ul><ul><li>Revenue: $69.8 million  - 33%* </li></ul></ul><ul><ul><li>Gross Margin as a % of Revenue: 70.0%  - 0.4 pts* </...
The current business climate in banking <ul><li>Dust is settling after financial crisis </li></ul><ul><li>Banks are cautio...
Sustainable, Repeatable Revenue Model Typical Bank Customer Purchase Timeline In a Stable Environment    E.g. bank has 10...
VASCO’s Strategies
General Strategy <ul><li>Banking: To offer banks and other financial institutions a full array of authentication products ...
VASCO’s Evolution <ul><li>Until 2005:  VASCO = “token company”.  </li></ul><ul><li>Since 2005: VASCO = a software company,...
Authentication Market in Users Source: VASCO  Million Users  One user can access multiple applications  CAGR Software Auth...
Re-defining Our Approach Moving forward <ul><li>With Authentication Services, VASCO expects that it will be able to tackle...
Authentication  End-to-End
VASCO Application Security Customers
Application Security Verticals in VASCO’s scope <ul><li>E-gaming (market leader) </li></ul><ul><li>Insurance </li></ul><ul...
Redefining Our Approach Moving forward When we move to  Authentication Services , VASCO’s technologies (engineering) will ...
VASCO’s Outlook for the Future
Key Growth and Profitability Factors <ul><li>Overall growth will be strongly correlated to the growth in the use of the In...
<ul><li>NASDAQ: VDSI </li></ul>
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Vasco Investor Presentation 11 2009

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Vasco Investor Presentation 11 2009

  1. 1. T.Kendall Hunt Founder, Chairman and CEO VASCO, the Full-Option, All-Terrain Authentication Company November 2009
  2. 2. Forward Looking Statements <ul><li>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 forward-looking statements (1) are identified by use of terms and phrases such as “expect”, “believe”, “will”, “anticipate”, “emerging”, “intend”, “plan” , “could”, “may”, “estimate”, “should”, “objective” and “goal” and similar words and expressions, but such words and phrases are not the exclusive means of identifying them, and (2) are subject to risks and uncertainties and represent our present expectations or beliefs concerning future events. </li></ul><ul><li>VASCO cautions that the forward-looking statements are qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. I direct your attention to the company’s filings with the securities and exchange commission for a discussion of such risks and uncertainties in this regard. </li></ul>
  3. 3. Corporate Information
  4. 4. Corporate Profile <ul><ul><li>Global company with worldwide HQ in the United States and international HQ in Switzerland </li></ul></ul><ul><ul><li>Listed on Nasdaq: VDSI </li></ul></ul><ul><ul><li>Leading supplier of strong authentication and e-signature solutions and services specializing in Internet security applications </li></ul></ul><ul><ul><li>Over 9,000 customers in 100+ countries, including almost 1,350 financial institutions </li></ul></ul><ul><ul><li>Revenue compound annual growth rate of 42% over 5-year period through 2008 </li></ul></ul><ul><ul><li>27 consecutive profitable quarters through Q3 2009 allowing VASCO to finance its organic growth and acquisitions </li></ul></ul>
  5. 5. VASCO, the Full Option, All-Terrain Authentication Company <ul><li>VASCO’s Mission is to authenticate the world </li></ul><ul><li>VASCO’s Vision: </li></ul><ul><li>The Full Option, All Terrain authentication company </li></ul><ul><ul><li>VASCO combines all authentication technologies on one and unique platform </li></ul></ul><ul><ul><li>VASCO’s products can be used in unlimited vertical applications </li></ul></ul><ul><ul><li>VASCO secures people all over the world </li></ul></ul><ul><ul><li>VASCO sees authentication as a crucial application surrounded by other services and applications </li></ul></ul>
  6. 6. Full Option: Products Authentication appliances Combines Identikey with a wide variety of Internet communication solutions Digipass A suite of over 50 multi-application client e-signature software products Digipass Plus: Authentication Services Combines all VASCO products and solutions in an outsourced service offering. VASCO also offers related services under the DigipassPlus label, such as Fraud Detection and Analysis and the brand new VASCO Video Training. Authentication server Combines the VACMAN core authentication platform with full server functionalities Core authentication platform Combines all authentication technologies on one unique platform
  7. 7. All terrain <ul><li>All terrain = all applications/ technologies </li></ul><ul><li>VASCO’s products are used in over 50 applications </li></ul>E-banking E-brokerage Online gaming Automotive E-government Healthcare B-to-B E-commerce Social Security Education Publishing Industry
  8. 8. VASCO’s Success Story: Full Years 2003 – 2008
  9. 9. 2003-2008: Revenue from Banking and Enterprise & Application Security Markets CAGR: 44% CAGR: 36% CAGR VASCO 2003 -2008: 42%
  10. 10. Net Cash and Working Capital
  11. 11. <ul><ul><li>Revenue: $69.8 million - 33%* </li></ul></ul><ul><ul><li>Gross Margin as a % of Revenue: 70.0% - 0.4 pts* </li></ul></ul><ul><ul><li>Operating Income: $8.0 million - 70%* </li></ul></ul><ul><ul><li>Operating Income as a % of Revenue: 11.5% -13.8 pts* </li></ul></ul><ul><ul><li>Net Income: $7.0 million - 67%* </li></ul></ul><ul><ul><li>Fully-Diluted Earnings Per Share: $0.18 - 67%* </li></ul></ul><ul><ul><li>1,057 new customers in YTD Q3 2009 </li></ul></ul><ul><ul><ul><li>151 banks </li></ul></ul></ul><ul><ul><ul><li>906 Enterprise Security Customers </li></ul></ul></ul><ul><ul><li>* Compared to YTD Q3 2008 </li></ul></ul>Summary Results YTD Q3 2009
  12. 12. The current business climate in banking <ul><li>Dust is settling after financial crisis </li></ul><ul><li>Banks are cautious with regards to new projects </li></ul><ul><li>VASCO has a large installed base that provides a source of sustainable, repeatable revenues </li></ul><ul><li>Rise in number of Requests for Proposals </li></ul><ul><li>Internet banking is the most cost effective business for financial institutions </li></ul>
  13. 13. Sustainable, Repeatable Revenue Model Typical Bank Customer Purchase Timeline In a Stable Environment  E.g. bank has 100 K electronic banking customers at start (year 1) Roll-out for 100,000 units: Pilot 3-4 Months Year 1 Year 2 Year 3 Year 4 Year 5 40K 55K 60K 20K 15K Year 6 65K Initial Roll-Out Organic Growth of Application Second Roll-Out NOTE: Individual roll-outs might differ materially from this example
  14. 14. VASCO’s Strategies
  15. 15. General Strategy <ul><li>Banking: To offer banks and other financial institutions a full array of authentication products and services (Full Option) </li></ul><ul><li>Enterprise: To take our existing authentication products to the enterprise (i.e., companies) for employee remote or network security (directly and through our channel) </li></ul><ul><li>Application: To take our existing authentication products to other applications where security is required </li></ul><ul><li>Services: Develop and provide an authentication services platform and product offering. </li></ul>
  16. 16. VASCO’s Evolution <ul><li>Until 2005: VASCO = “token company”. </li></ul><ul><li>Since 2005: VASCO = a software company, specializing in authentication, with hardware as an add-on to the software. </li></ul><ul><ul><li>Results of a successful business mix : </li></ul></ul><ul><ul><ul><li>large quantities to the banking market with low margins </li></ul></ul></ul><ul><ul><ul><li>increased penetration of the enterprise security market and expansion into the application security market (i.e., vertical markets of applications outside of banking) -- small and medium quantities sold with high margins </li></ul></ul></ul><ul><ul><ul><li>increase in non-hardware revenues at high margins </li></ul></ul></ul><ul><li>3. Next step is to expand product offering to include a service offering. This will allow our business mix to grow even stronger and grant VASCO the opportunity to add even more applications. </li></ul>
  17. 17. Authentication Market in Users Source: VASCO Million Users One user can access multiple applications CAGR Software Authentication Market: 18% CAGR Hardware Authentication Market: 48%
  18. 18. Re-defining Our Approach Moving forward <ul><li>With Authentication Services, VASCO expects that it will be able to tackle markets for which the current software offering is seen as too expensive for their needs and create additional sources of recurring revenue. </li></ul><ul><li>We plan to position this strategy as follows: </li></ul><ul><ul><li>Authentication end-to-end </li></ul></ul><ul><ul><ul><li>Banking </li></ul></ul></ul><ul><ul><ul><li>Enterprise Security </li></ul></ul></ul><ul><ul><ul><li>Application Security </li></ul></ul></ul><ul><ul><li>Authentication Services </li></ul></ul>
  19. 19. Authentication End-to-End
  20. 20. VASCO Application Security Customers
  21. 21. Application Security Verticals in VASCO’s scope <ul><li>E-gaming (market leader) </li></ul><ul><li>Insurance </li></ul><ul><li>Healthcare </li></ul><ul><li>Education </li></ul><ul><li>… </li></ul><ul><li>Competence center per vertical in order to enhance leadership </li></ul>
  22. 22. Redefining Our Approach Moving forward When we move to Authentication Services , VASCO’s technologies (engineering) will be threefold:
  23. 23. VASCO’s Outlook for the Future
  24. 24. Key Growth and Profitability Factors <ul><li>Overall growth will be strongly correlated to the growth in the use of the Internet for risk-based transactions. </li></ul><ul><li>VASCO has a growing base of customers that provide a sustainable, repeatable source of revenues. </li></ul><ul><li>Gross margins are expected to be stable as the benefits of the more non-hardware revenues will offset the margin pressure on hardware devices. </li></ul><ul><li>Operating margins will continue to be strong as a result of VASCO’s operating model. </li></ul>
  25. 25. <ul><li>NASDAQ: VDSI </li></ul>

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