Safe Harbour Statement

Transcription

1 Management Presentation May, 2013

2 Safe Harbour Statement This presentation contains certain forward-looking statements, which relate to future events or the Company s future performance, that include terms such as will, intend, anticipate, could, should, may, might, expect, estimate, forecast, plan, potential, project, assume, contemplate, believe, shall and similar terms. These statements involve known and unknown risks, uncertainties and other factors that are beyond the Company s control, which may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Absolute believes the expectations reflected in these forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in, or incorporated by reference into, this presentation should not be unduly relied upon. These statements speak only as of the date of this presentation or as of the date specified in the documents incorporated by reference into this presentation. This presentation may contain forward-looking statements pertaining to expectations which include, but are not limited to: (a) a continuing need for laptop data protection, theft recovery services and computer lifecycle management solutions in difficult economic times; (b) the continued successful integration of recently-acquired products and technologies; (c) an increase in computer refresh/replacement cycles; (d) the attainment of certain sales and cash flow targets and company performance; (e) increased adoption, or attach, rates of the Company s lifecycle management, computer tracking, and computer theft recovery solutions; (f) the ability of the Company to successfully execute on its growth strategies, including attracting new distribution partners; (g) continuation of embedded firmware support from its current and anticipated PC OEM partners; (h) the demand for its products continuing to increase; (i) stable currency valuations and a sufficiently stable and healthy global economic and business environment; (j) the ability of the Company to access and gain traction in international markets and that such markets are growing as anticipated; and (j) other expectations, intentions and plans contained in this document that are not historical fact. With respect to forward-looking statements contained in this presentation, the Company has made a number of assumptions. The key assumptions underlying the aforementioned forward-looking statements are that: (a) the data security and endpoint lifecycle management markets will converge, and Absolute will be able to capitalize on this shift as a result of its recent acquisitions and an expanded product and feature set; (b) worldwide computer shipments will continue to grow, and Absolute will benefit from this trend through increased sales as a result of our investments in global sales and marketing and PC OEM partnerships; (c) our expiring subscription ratio will improve as a result of an increase in computer shipments; (d) our investments in future growth of the business will generate returns as the worldwide computer market rebounds; (e) Absolute will be able to continue to add new products and features on a global scale; and (f) Absolute will expand its portfolio of intellectual property, including patents. Certain or all of the forgoing assumptions may prove to be incorrect which could negatively impact the Company s business and the anticipated results discussed herein. The Company s actual results could differ materially from those anticipated in these forward-looking statements as a result of substantial known and unknown risks and uncertainties, certain of which are beyond the Company s control. Such risks and uncertainties include, without limitation: risks associated with increased competition from other producers; the impact of general, economic conditions in Canada, the United States and overseas; industry conditions, changes in technology, changes in laws and regulations (including the adoption of new privacy and data collection laws and regulations) and changes in how they are interpreted and enforced; changes in federal and provincial tax laws and legislation; the lack of availability of qualified personnel or management; fluctuations in foreign exchange or interest rates; stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof; and obtaining required approvals of regulatory authorities. Readers are cautioned that the foregoing list of risks to the Company s performance is not exhaustive and reference is made to the items under Risk Factors in the Company s Annual Information Form for the year ended June 30, All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this presentation are made as at the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. 2

3 About Absolute Software Global Reach: Headquarters Vancouver BC, offices Austin TX, Reading UK and Kuala Lumpur MA Next-generation endpoint security and management solutions across PC and Mac laptops, desktops, Ultrabooks, tablets (Windows, ios and Android) and smartphones Software as a Service (SaaS) infrastructure monitoring over 6 million devices Over 30,000 commercial and 650,000 consumer customers Strategic partnerships with leading OEMs 32 patents, 121 patents in process Absolute has successfully managed & secured mobility for 20 years 3

4 Mobility Is Accelerating ~1 million smartphones are activated daily ~100 million tablets shipped in % use personal devices for work ~50 Million Apps are downloaded daily ~200 million corporate laptops shipped in 2012 Devices are converging Smartphone/ Tablet/PC Mobility is driving a paradigm shift in IT 4

5 IT Is Converging PAST FUTURE IT Security $8.7b IT Service Management $1.5b Client Management Tools $2.5b Enterprise Mobility Management $0.5b Limited integration Highly integrated from a single console managing many connected devices 5

6 Industry Analysts Now Recognize This Trend Business buyers and consumers are now starting to see smartphones, tablets, and PCs as a single continuum of connected devices separated primarily by screen size" "Each of these devices is primarily used for data applications and different individuals choose different sets of screen sizes in order to fit their unique needs Bob O Donnell, IDC Program Vice President for Clients and Displays. March

7 Mobility Spectrum Absolute Supports All Smart Connected Devices Vendors that predetermine markets as PC and Tablets are destined to fail Ranjit Atwal, Carolina Milanesi, March 12, 2013: Gartner Webinar: Challenging Conventional Thinking 7

8 Absolute Solutions Governance Provide industry best visibility and control over all devices and data Risk Management Receive alerts, remotely secure a device, recover and delete data Compliance Prove that devices and data were secure at point of risk or at end of life Intelligent Accurately detect software inventory to avoid fines and identify unauthorized apps Automated Automate time-consuming IT processes Cross-Platform Use a single console to manage & secure computers, tablets, smart phones Certified ITSM Prove compliance, system audits, and avoid penalties with 11 ITILcertified processes Federated Data Build business intelligence using organizational data within the configuration management database Service Delivery Track performance and ensure delivery of established service level agreements Powered by the Absolute Persistence Platform 8

9 Absolute s Persistence Platform Shipped on over 1 billion devices since 2005 OEM Persistence Wins 9

10 Recent Announcement Global Partnership With Samsung April 3/13 Samsung will embed Absolute s persistence technology into the firmware of Samsung GALAXY devices (smartphones and tablets) as a feature of Samsung KNOX (new enterprise security platform), which will be launched later this year. Demonstrates leadership position in mobile device management Opens large and rapidly growing distribution channel/partnership Expands addressable market Completes spectrum of smart connected device coverage Model and approach consistent with that used in PC market starting in 2005 Initial sales impact expected in commercial market in F2014 Longer-term consumer opportunity 10

11 Partner Strategy for Accelerating Growth Resellers & Distributors Accelerate VAR channel go-to-market plan In-Country International expansion Alliances Continue to expand alliances 11

12 Key Growth Support Initiatives GRC Positioning Tablet & Smartphone Persistence Target Audience: Corporate/Healthcare Computrace provides foundational support for GRC Prove compliance and mitigate risk Geo Expansion EMEA LATAM APAC Ongoing Technology Innovation Mobile Content Management Mobile App Management Unified Web UI Cloud and On Premise for All 12

13 Absolute Business Model Sales Contracts Paid in advance with 27 month average term. Recorded on balance sheet and recognized monthly as revenue under GAAP. High quality recurring revenue stream: 80% of annual revenue is from opening balance sheet. Stable customer base with 75-80% of commercial bookings from existing customers. Key performance measure and indicator of future revenue and cash flow. Strong recurring sales Cash From Operating Activities True measure of profitability as majority of operating expenses are directly related to current period Sales Contracts. Key valuation metric Solid track record of cash generation 13

14 Quarterly Sales Contract Growth $US millions Education market has driven historic seasonality. 14

15 Deploying Cash Share Buyback and Dividend $US millions Initial dividend set at $0.05/Q ($2.1M) First dividend payment made Feb 2013 ~ 7 years of dividend payments on balance sheet ABT has generated positive CFOA for 35 consecutive quarters 15

16 Deploying Cash Acquisitions LANrev (rebranded Absolute Manage) Dec 2009: Entry to $2.5b Client Management Tools market Expands service offering $9.6 million cash payment plus 3-year earn-out ($2.5 million + 500,000 shares) $4.0 million tax savings expected from transaction LiveTime (rebranded Absolute Service) Nov 2012: Entry to $3.0b IT Service Management market Addresses the one shortfall Gartner identified in Absolute Manage offering $8.0 million cash payment, $6.0 million earn-out over 3 years (cash / stock) Future Tuck-In Acquisitions: Add technology/features to existing service platform Proven ability to integrate and commercialize acquired technologies Evaluating opportunities that are similar in size/structure to prior transactions 16

17 Financial Market Overview Trading Snapshot Shares Outstanding: 41.7M (basic Mar 31, 2013) Market Cap (TSX:ABT): $285M ($6.84 per share May 7, 2013) Return of Capital: Quarterly cash dividend $0.05 per share 11.5M shares repurchased since 2008 total investment of $45M Analyst Coverage: 9 research analysts Financial Snapshot Cash and Investments: $61.3M (Mar 31, 2013) Debt: No debt Sales Contracts / Revenue: $88.7M / $75.6M (F2012) CFOA / EBITDA: $18.9M / $11.7M (F2012) Employees: 388 North America, Europe, Asia / Latin America 175 Sales and Marketing 17

18 Key Investment Highlights Next-generation endpoint security and management solutions across PC and Mac laptops, desktops, Ultrabooks, tablets (Windows, ios and Android) and smartphones Unique persistence firmware technology that has shipped embedded in over 1 billion devices worldwide Solution set at the epicenter of market convergence for Enterprise Mobility Management, Client Management Tools, Security and IT Service Management Leader and investor of the mobile theft protection market, featuring musthave remote data deletion and investigative functionality 20 years of technology development 32 patents, 120 patents in process Powerful, cash generative business model supports investments to fuel organic growth, future potential tuck-in acquisitions and returning cash to shareholders via a dividend/share buyback +$10 billion market opportunity 18

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