SecureLink Safely Enabling Business · Safely Enabling Business Management Team Strengthened with...

Safely Enabling Business www.securelink.net

SecureLinkSafely Enabling Business

Pareto Securities Nordic Corporate Bond Conference

Stockholm, 21st March 2019

Safely Enabling Business www.securelink.net2

Disclaimer

Important informationThis Presentation (the "Presentation”) has been produced by SL Bidco B.V. (the "Issuer" or "SecureLink"”, and together with its subsidiaries, the "Group" or"SecureLink Group") in connection with the SL Bidco B.V. Senior Secured Callable Bond Issue 2018/2023 (the "Bonds", ISIN: NO0010814189). For the purposesof this disclaimer, references to the Presentation shall be deemed to include references to this document, the presenters’ speeches, the question and answersession and any other related verbal or written communications. By attending or reading the Presentation, you agree to be bound by the following limitations inrelation to the existence of the Presentation and all information (including, without limitation, any projects, targets, estimates or forecasts) or opinions containedherein. The Presentation is not intended to be an offer, a solicitation of any offer to buy or sell any of the Bonds or any other securities, nor should it beconsidered as legal, financial or tax advice in relation to the same.

The Presentation may contain forward-looking statements, which reflect the expectations of the Group regarding its future operational and financialperformance. Forward-looking statements are statements that are not historical facts and may be identified by words such as “anticipate”, “believe”, “continue”,“estimate”, “expect”, “intends”, “may”, “should”, “will” and similar expressions. Although any forward-looking statements contained in the Presentation reflect theGroup’s management’s current beliefs based upon information currently available to the management and upon assumptions which the management believesto be reasonable, actual results may differ materially from those stated in or implied by these forward-looking statements. These factors should be consideredcarefully and readers should not place undue reliance on any forward-looking statements. Except as required by law, the Group undertakes no obligation, andspecifically declines any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events orotherwise. Unless otherwise stated, the Presentation is provided as at the date of this Presentation, does not purport to be comprehensive and is subject tochange without notice.

The financial information as included in this presentation, is unaudited. For the purposes of this document, EBITDA, a measurement used by management tomeasure operating performance, represents operating profit before amortisation and impairment of goodwill and other intangible assets, depreciation ofproperty, plant and equipment, and before exceptional expenses. EBITDA includes 100% of ZionSecurity N.V.’s EBITDA, although SecureLink only owns 60% ofthe shares of ZionSecurity N.V. Financial Information is based on IFRS or on Historic GAAP, if specifically indicated in the Presentation. Historic GAAP is appliedfor management reporting purposes and is based on the local GAAP of all SecureLink entities, applicable at the time of acquisition by SecureLink, consistentlyapplied in the period of ownership by SecureLink.

The recipient acknowledges that it will be solely responsible for its own assessment of the market position and credit worthiness of the Group. The recipient willbe required to conduct its own analysis and accepts that it will be solely responsible for forming its own view of the potential future performance of the Group,its business and the Bonds. None of the Group or its respective parent or subsidiary undertakings or any such person’s directors, officers, employees, advisorsor representatives shall have any liability whatsoever arising directly or indirectly from the use of this Presentation, including but not limited to any liability forerrors, inaccuracies, omissions or misleading statements in this Presentation.

The content of this Presentation is not to be construed as legal, credit, business, investment or tax advice. The recipient should consult with its own legal, credit,business, investment and tax advisers to receive legal, credit, business, investment and tax advice.

Risk factors. An investment in the Bonds involves a high level of risk. Several factors could cause the actual results, performance or achievements of the Groupto be materially different from any future results, performance or achievements that may be expressed or implied by statements and information in thisPresentation. There may also be a limited secondary market for the Bonds which may result in a substantial liquidity risk. Should one or more of these risks oruncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Presentation. Pleaserefer to the SecureLink Financial Statements for a non-exhaustive description of certain risk factors associated with the Group and the Bonds.


Management Team Strengthened with new CEO

3

Leadership Team

• CFO of SecureLink since April 2015

• Served as CFO for Wegener and Truvo

• More than 30 years of experience in financial operations for companies in several industries

• MSc in Economics from the University of Antwerp

Marc Goegebuer, Chief Financial Officer

• COO of SecureLink since January 2017

• Served as the CEO of CoreSec, acquired by SecureLink in 2016

• Prior to joining Coresec, Johan served as an Area Manager for Swedish IT services company, AddPro for 11 years

• Business degree from IHM Business School

Johan Andersson, Chief Operational Officer

Source: Investcorp

Thomas Fetten, Chief Executive Officer

• CEO of SecureLink since March 2018

• More than 15 years experience in IT Services industry

• Served as COO for Getronics, Director of IBM in Europe and US

• MBA from the University of Mannheim


Professional consulting services

Security assessments, security infrastructure design

and roadmap

Additional project based initiatives

Services53%

Product Solutions

47%

200,8230,3 245,9 252,4

23,3 25,7 23,0 24,3

2015A 2016A 2017A 2018A

Revenue EBITDA

Introduction to SecureLink

4

A leading provider of cybersecurity solutions to businesses and institutions across Europe

Outsourcing the full responsibility of network

security to SecureLink

Managed security services (MSS)

Solutions and services Current Revenue split

Pro forma revenue and adj. EBITDA(²)Key highlights

~680Employees(1)

~2,100Customers

14Offices

8Countries

~50%Contracted revenue

~90%Recurring revenue

Notes: (1) Full-Time Employees as of December 2018; (2) Pro forma financials including full contribution from Zionsecurity (Acq. 2015), Coresec (Acq. 2016), Nebulas (Acq. 2016) and iT-Cube (Acq. Jan 2017);

Product solutions

Tailored hardware and software solutions

(e.g. firewalls, e-mail security)

Customer relationship initiated, comfortable

margins

Maintenance support services

24/7 service desk, on-site engineer intervention

Recurring value-added business, high margins

Recurring value added business, superior margins

Strong focus on up-selling to increase share of MSS

5CybersecurityDefence Centres

25,000Devices monitored

10 trillionLogs per year

EURm

Professionalconsulting services

25%

MaintenanceSupport services

58%

MSS15%

Other2%


Key historical eventsRapid growth accelerated by a successful buy & build strategy

Notes: (1) Pro forma financials including full contribution from Zionsecurity (Acq. 2015), Coresec (Acq. 2016), Nebulas (Acq. 2016) and iT-Cube (Acq. Jan 2017)

Incorporated in 2003, focussing on security

gateways for Firewall/VPN and

LAN/WLAN projects

Acquisition of SecureLabs(Pentesting)

Launch of SecureLink Netherlands to secure

presence in the fast growing Benelux

marketIndufin, a Benelux

PE investor, acquired 40% of

SecureLink and the Company was

integrated into one legal structure

Winner of the award for

fastest growing company in NL

20122008 2010 2013 2014 20152003 2016 2017

Launch of managed security services:

development of own monitoring application which was integrated

into the offering

Majority investment in

Raido (cloud and virtualisation

solutions)

Expanding Cybersecurity

Defence Centre (CDC)

Selected in Deloitte FAST500 EMEA list

Acquisition of ZIONSECURITY

Acquisition of Coresec

Acquisition of iT-Cube

Acquired by Investcorp

Acquisition of

2018

1 10 18 3749 57

77143

246 252

124

87

Launch of SecureLink China to secure its presence

in Asia

Revenue, reported (EURm)

Pro forma revenue adjustments(1)

Inte

grat

ion

an

d H

arm

on

isat

ion

Portfolio

Operations

IT

People

Marketing

5


Pan-European cyber security provider

6

Local presence ensuring a consistent and high-quality service offering in each market

Regional officesCDC (Cybersecurity Defence Centre)

HQ, Sliedrecht

United Kingdom

London office

46 employees

Belgium

2 offices

160 employees

Training facility

Netherlands

Sliedrecht

131 employees(2)

1 CDC

Germany

3 offices

69 employees

1 CDC

London

Notes: Offices in Sliedrecht (NL), Malmö (SE), Stockholm (SE), Gothenburg (SE), Antwerp (BL), Nivelles (BL), London (UK), Frankfurt (GE), Augsburg (GE) Münich (GE), Copenhagen (DE), Oslo (NO), Shanghai (CN); (1) Enterprise defined as customers with >1,000 FTE; (2) Includes Group employees

China

1 office

12 employees

1 CDC

Current revenue split

Denmark

2 offices

25 employees

Sweden

3 offices

222 employees

2 CDC

Norway

1 office

17 employees


SecureLink is a full-service security partner

7

Focused and specialised CyberSecurity system integrator and managed services provider

Maintenance support services Managed Security Services (MSS)

• SecureLink provides support and maintenance services to customers

• Vendors typically outsource support and maintenance

• Source of recurring revenue

• Maintenance contracts are normally signed on annual or multi-year agreements and are often pre-paid at the start of the contract period

• Service examples: 24/7 service desk, on-site engineer interventions, hardware repair and replacement, back-up of devices and software upgrades


• Professional services involve consultancy and training, typically on a project basis

• The first step is normally a risk and security assessment to determine the appropriate security measures

• SecureLink develops a strategy on behalf of the customer and sets up the infrastructure design and roadmap for implementation

• The process is concluded once the solution has been implemented and staff has received all necessary training to run the system

• Managed services involve outsourcing the cybersecurity to SecureLink

• Typically contracted on a multi-year basis

• SecureLink takes on the overall prevention, detection and response duties for the customers’ network security set-up and the customers have read-only access

• SecureLink’s infrastructure was significantly strengthened by the Swedich acquisition, enabling the Group to offer MSS in all geographies

Product solutions

• SecureLink offers hardware and software solutions, tailored to the customers’ individual security needs

• Prices and discounts are negotiated directly with vendors¹

• Software is typically sold on a subscription base, while hardware is sold on a one-off basis

• Core network maintenance

• IT analytics

Strong focus on up-selling to increase share of MMS

Notes: (1) “Vendors” refers to providers of security software and hardware throughout the presentation. Does not include Other Revenue.

13% / 3%

47% / (1%)

31% / 2%

8% / 42%

Revenue split / growth (2018A)


The cybersecurity market is large, growing and complex

8

Total global market by segment, 2020F (EUR) Market by region (EUR)¹

Notes: (1) Approximate market size by region; Estimated CAGR from 2015-2020e; (2) Rest of the World includes Eastern Europe, Emerging Asia/Pacific, Eurasia, Middle East & Africa, Sub-Saharan AfricaSource: Bain analysis, IDC, Gartner

SecureLink offers tailored services across the complex and diverse B2B cybersecurity market

Content

VPN

IDP

Firewall & UTM

Co

nte

nt

AntimalwareProactive endpoint risk management

Access & info protection

Server security

Security suites

Co

nsu

mer

Privileged access

Pro

visi

on

ing

Au

then

tica

tio

nSi

ngl

e si

gn-o

n

Forensic and incident

investigation

Vulnerability - Device

Po

licy

and

co

mp

lian

ceV

uln

erab

ility

-A

pp

licat

ion

SIEM

Network

Endpoint

IAM

SVM

Content

Managed Security Services (MSS)

Advisory• Security strategy &

planning• Enterprise assessment

• Risk assessment

• Compliance audit• Architecture analysis &

review• Incident response

Education & training• Awareness programs,

tech training, security certification

Integration• Security

architecture design (network focused)

• Integration of security architecture (product focused)

• Integration of security architecture (third party focused)

• Performance testing

• Security system migration

• Knowledge transfer

100%

60

80

40

20

0

14bn

Network

3bn 9bn 8bn 12bn 24bn 21bn 17bn6bn

Endpoint IAM SVM Hosted MSSPlan BuildManage

9% 6% 3% 7%12% 20% 11%8% 6%CAGR

(’15-’20)

Product Solutions Services

Solutions and services offered by SecureLink

Advisory Integration

2015 2020F

Western EuropeCAGR 6%

NorthAmericaCAGR 9%

Mature AsiaCAGR 8%

RoW²CAGR 7%

~110bn

~75bn


An end to end security portfolio

SECURITY INSIGHT


• Threat prevention• Core network services (DDI)• E-mail security• Datacentre visualisation

Pivotal position in the value chain

10

Focused and specialised CyberSecurity system integrator and managed services provider

High

Product solutions


Maintenance and support services

Managed security services (MSS)

Hardware

• Firewalling• Proxy appliances• Routing/switching/MPLS• E-mail security• Enterprise WAN/LAN, VPN• Core network services (DDI)

Software

SecureLink’s tailored solutions and services are paramount to customers’ data protection as threats are becoming increasingly

complex

Combining people, process & technology

Research & development

• R&D is mostly conducted by vendors to develop new hardware and software solutions

• SecureLink utilises all the newest technological advancements

• However, SecureLink develops own CDC solutions and applications to be used in conjunction with vendor products

Advise & Architect

Design &Implement

Operate &Support

Detect &Respond

Input from vendors SecureLink’s value-add Prevention, Detection & Response


297

345 355380

2015A 2016A 2017A 2018A

Success attributable to highly talented workforce

11

Focus on talent management Vendors Accreditations

• Attracting and retaining the right people with the right skills is crucial to the company’s future success

- The company has thus carefully developed a hiring plan to support growth objectives of the business and expansion of the current staff base

• Regular team events, staff excursions and other corporate/after-work happenings assure top morale

• Led by a strong management team with vast amount of experience

- The majority of the management team has been in cybersecurity since its inception

- High entrepreneurial spirit and external focus

• A strong corporate culture leading to a first-in-class service provider

- Results orientation

- Focus on details, differentiation and innovation

- Happy staff serving happy customers

• Pan European presence enhances ability to attract and retain talent

Focus on educating and retaining talent

Notes: (1) 2017 Global Information Security Workforce Study, Frost & SullivanSource: Frost & Sullivan, Cybersecurity Ventures

Clear talent development plan

Extensive training through the SecureLink Engineering Academy and external certification training

Strong incentive scheme through variable compensation elements

Stepwise promotions plan to motivate and retain high achievers

SecureLink has a proven track record of attracting talent

Service operating personnel

230technical certifications

from top 3 vendors

448sales certifications

from top 3 vendors


Overview

0

50

100

150

200

250

300

2015PF 2016PF 2017A 2018A

Highly diversified across industries and geographies

12

Limited customer concentration with the top 10 customers amounting to 21% of revenue

Low customer dependency

Diversified base of blue-chip and SME customers

2018 Revenue split by size and industry

Enterprise SME

Revenue (EURm)• Base of ~2,100 customers operating in a variety of industries and geographies

• Low customer concentration with the top 10 customers contributing between 21% and 26% of total revenue since 2015

• Through the acquisition of Coresec, Nebulas and iT-Cube SecureLink has diversified its client base and achieved both growth and diversification synergies

• The largest customer industry is financial services, which typically require complex security solutions due to the sensitive nature of data and vulnerability to theft

• Stronghold in the enterprise segment in the UK and Scandinavia

• Benelux stronghold SMB and public entities, with an increased focus on enterprises going forward

• Average revenue from customers of €117.3k in 2018A increasing from €116.5k in 2017A

Companies with more than 1,000 employees

Companies with 500 - 1,000 employees

International presence with complex security needs

Significant up-selling potential

Strong customer relationships with the opportunity to grow together with the customer

Top 10 customers Remaining customer base

26%25%

21%

Size Industry

Enterprise66%

SME34%

Financial Services

14%

Retail7%

Public Sector15%

TMT 15%

Healthcare8%

Business Services

5%

Manufacturing8%

Other28%

21%

1,775 1,951 2,111 2,148

No. of customers


SecureLink’s ultimate goal is always to up-sell to MSS…

Focus on up-selling all products and services to MSSComprehensive up-sell strategy from “SecurePrevent” to fully fledged managed services

Professional services: consulting and implementation

DEPTH OF SERVICE

VA

LU

E T

O S

EC

UR

EL

INK

Support services:service desk, dedicated engineers

Performance monitoring: IT analytics

Managed services:remote assistance

Managed security services: full responsibility for security infrastructure


Belgian hospital

Customer challengeIn need of a secure solution to manage their explosive growth in data

Delayed network response putting the quality of services at risk

• SecureLink was in charge of the entire design and installation of the network in the data centre

• Satisfied with the result, the customer invited SecureLink to manage their full Network / Security Infrastructure

• Design, Deployment and Operations of Secure Workplace

Revenue (EURm)

Large Swedish retailer

Customer challenge

Global footprint together with rapid

growth both in stores and e-commerce

Compliance with PCI-DSS

Compliance with GDPR in Europe and RoW

• Long-standing relationship dating back to 2002

• Professional Services

• Support Services

• SecurePrevent

• SecureDetect

• SecureRespond

Revenue (EURm)

Swedish industrial

Customer challengeProtecting sensitive information from hacker attacks and leaks

Protecting OT / IOT infrastructure

• Started as smaller assignment for Professional Services before rapidly expanding to replace existing outsourcing partner on Security Operational Services

• Services now provided:

- Professional Services

- Support Services

- SecurePrevent, SecureDetect and SecureRespond Services

Proven track record of upselling MSS solutions to large clients with complex needs

14

Revenue (EURm)

11,39,8

17,0

13,0

2015 2016 2017 2018

0,0 0,0 0,3

5,8

2015 2016 2017 2018

0,1

0,9

3,2

4,6

2015 2016 2017 2018

Customer Case #1 Customer Case #2 Customer Case #3


74

241

Probability weighted funnel Unweighted funnel

Future performance backed by contract base & sales funnel

15

Revenue forecast is supported by a solid contract base and a strong funnel of new opportunitiesAt start of 2019 EUR 103m revenue contractually secured;

A further EUR 74m sales expected from existing funnel

Comments

Strong LTM order intake(1)

• Going into 2019, > 60% of revenues are contractually secured / covered by the sales funnel

• EUR 103m or 37% of revenues from existing backlog and service contracts

• SecureLink is constantly working with prospective customers and has a solid order funnel of EUR 241m going into 2019

• Based on historical success rates, SecureLink expects EUR 74m of revenue from identified opportunities

• 2018 order intake at same level as prior year, despite exceptional order from #1 customer in 2017 and more conservative measurement (renewals and multi-year contracts)

Notes: (1) Order intake represents the full value of all orders booked in a given period of time (including full value of maintenance contracts booked, irrespective of the duration and renewal amounts of some contracts)

EURm EURm

Solid sales funnel

EURm

24,0

74,0 9,0

74,0 181,0

Deferred Revenue Contract Renewal Backlog WeightedSalesFunnel

Revenue outlookat Begin Year

22% 22%

20% 21%

24% 23%

6% 7%3% 4%

14% 11%

9% 10%1% 1%

2017A 2018A

BE NL SE DK NO UK GE Other

239 238

3x sales cover


Partnerships with the leading cybersecurity vendors

16

Strict vendor selection criteria focusing on ratings, gross margin potential and ease of integration

Top-level accreditation and sales statuses

Trusted partnerships with proven vendor loyalty

• SecureLink has a strong position in the European market and is the only partner for some vendors in certain countries

• Strict vendor selection criteria focusing on ratings, gross margin potential and ease of integration with MSS solutions

• SecureLink enjoys premium partnership status and priority access with all suppliers, giving access to specialised vendor helpdesks that only highest level vendor certified engineers can access

• Strong vendor independence with multiple strategic vendors in the portfolio, and additional vendor partnerships used on an ad-hoc basis

• Ability to leverage best practices, accreditations and rebate transparency across geographies

Share of purchase per vendor

Diversified vendor exposure

Selected vendors and partners

Largest vendor only 16% of purchases

PAN-European partnerships with strategic vendors and MSSP partners

+400Technical accreditations

Highest partner status level with old, Elite or equivalent statuses with key vendors

+600Sales accreditations

Source: Company websites

16%

13%

7%

7%7%5%4%

3%2%

2%

Other; 34%


80,3 97,6 101,2 105,7

77,6 79,9

92,0 92,0

29,6

37,9 31,8 29,1

13,3

14,9 20,9 25,6

200,8

230,3245,9 252,4

-

50,0

100,0

150,0

200,0

250,0

300,0

2015PF 2016PF 2017PF 2018 A

SecureLink Coresec Nebulas IT Cube

76,4 88,1 94,8 105,7

40,7

95,592

14,3

31,5 29,118,3

25,6

76,4

143,1

240,1252,4

2015A 2016A 2017A 2018A

SecureLink Coresec Nebulas IT Cube

SecureLink reported revenue (EURm)

Significant growth both organically and through buy & buildRevenue has tripled since Investcorp acquisition, organic growth strong at 8% (10% in constant currency)

Notes: (1) Pro forma financials including full contribution from Zionsecurity (Acq. 2015), Coresec (Acq. 2016), Nebulas (Acq. 2016) and iT-Cube (Acq. Jan 2017)

Revenue has grown significantly from acquisitions… …supported by organic growth

Pro forma adjusted revenue(1) (EURm)

• SecureLink has grown its revenue >3.3x since Investcorp acquired the business in 2015

• The strong growth has been achieved through a combination of acquisitions and organic growth

• 4 acquisitions made since 2015 included in the pro forma figures, latest acquisition completed in January 2017 (iT-Cube)

• Organic growth in all major regions, including Sweden, the UK and Benelux, cumulating in a CAGR of 8% in 2015–18 timeframe

• The growth was driven both by an increase in the number of customers and by increased customer penetration

- Increased scope and value of services offered once the customer relationship progresses

- In constant currency CAGR in 2015–18 timeframe was 10%

17


47%

41%

12%

100%

Revenue fromexisting customers

(Contracted)

Revenue fromexisting customers

Revenue from newcustomers

Total

206 215 223

2431 29

230246 252

90% 87% 88%

2016A 2017A 2018A

Repeat Customers New Business Recurring Revenue

Strong contracted baseline and ~90% recurring business

18

Great revenue visibility through persistently high customer retention and recurring revenue

Notes: (1) Based on invoiced revenue only; (2) Numbers based on customer data from Benelux, Sweden & UK

Segment in % of revenue

Growing share of services revenues

53% services

Breakdown of revenue streams (2)

% of 2018 revenue

EURm

• Loyal and sticky customer base has resulted in a persistently high share of recurring revenue

- Stickiness driven by an increased focus on subscription based services and customer penetration across geographies and business units

• Consistently growing customer retention, with retention rates of 87-90% over the last three years

• High customer satisfaction

- Long-standing customer relationships with both SMB and enterprises

- Strong customer relationships is a key driver of SecureLink’s high share of reorders and subscription renewals

- Satisfied customers often extend the scope of services handled by SecureLink, resulting in a growing revenue stream from high margin services over time

Strong revenue visibility(1)

50% 49% 47%

29% 31% 31%

14% 13% 13%

6% 6% 8%1% 1% 1%

2016A 2017A 2018AProduct solutions Maintenance services

Professional consulting services MSS

Other


(1,6)

(5,1)

(2,6)23,0

8,1

2,5 24,3-

EBITDA 2017A Revenue solutions Revenue services Direct Cost Sales Cost G&A EBITDA 2018A

Commercial initiatives reflected in 2017-18 EBITDA bridge

19

EBITDA bridge 2017A to 2018A Comments

• EBITDA has been positively impacted by increased revenues and a positive gross margin impact

• Higher gross margin has been driven by an increased share of revenues from services

- Recurring revenue profile with multi-year contracts

- Provides increased revenue visibility going forward

• Gross margins have also been positively impacted by better pricing terms with vendors

- The combined group has stronger bargaining power with vendors than any stand-alone entity

• The new commercial strategy has involved hiring new sales personnel and incentive based salaries

• The recurring nature of the revenue increase is expected to far outweigh the increased sales and marketing cost over the next years

• G&A cost was reduced through an initial integration program

• Business model geared towards benefitting from operational leverage with significant future margin expansion potential

• Investments relating to the integration of Coresec, Nebulas and iT-Cube are underway and SecureLink expects to benefit from increased operational leverage going forward

EURm

Revenue increase across service

segments of ~6% p.a. due to strong market demand

resulting in upselling to

existing customers as well as new

winsHighest growth rate in service

Gross margin I increase from

42.1% in 2017 to 42.9% in 2018,

driven by a more attractive

product mix and improved pricing

terms

Gross Margin II has decreased slightly from

29.2% in 2017 to 29.1% in 2018 Increased costs

from sales force (2.6m)

Proceeds of business growth reinvested in sales force expansion and overhead support

Notes: (1) Effects from cost initiative distributed pro-rata between Sales & marketing and G&A

(1) (1)


24,3 21,7

(179,0)

(26,3)

(23,1) (2,3)

252,4

0,3 (0,3)

Revenue 2018A Direct Cost Sales &Marketing

G&A Other EBITDA NWC Capex Freeoperationalcash flow

High cash conversion driven by low NWC and CAPEX

20

Cash flow bridge 2018A

EURm

Comments

1. Low NWC requirements

• Vendor payment terms more favourable than customer payment terms

• The majority of service agreements are invoiced on an annual basis upfront

• SecureLink’s service contracts include multi-year contracts often paid upfront to obtain highest discount levels and resulting in negative NWC

• Contracts are trending towards a subscription based model, resulting in a slightly increased NWC (albeit still negative), but significantly improved revenue visibility

2. Minimal CAPEX

• Asset light business with minimal capital tied up in equipment

• The company develops internal software applications to be used as part of MS and MSS

• ~EUR 1m of CAPEX relates to PPE and spare parts inventories

• Normalized CAPEX levels expected at ~EUR 3m p.a.

3. Positive cash conversion trend going forward

• Steady NWC and lower CAPEX expected to have a net positive effect for SecureLink’s future cash generation

90% cash conversion

Cash conversion of 90% in 2018A sets target going forward

10% margin


SecureLink adopted IFRS as of 2018Impact mainly from changes in revenue recognition

21

Interim Financial Statements - Unaudited Financial Information

2018 Mgmt Accounts

Adjustments 2018 IFRS

2017 IFRS

% Var to PY

Product 118,0 (1,3) 116,7 119,7 -1,4%

Support Services 77,4 (2,5) 74,9 71,6 8,1%

Professional Services 34,0 (0,3) 33,7 31,6 7,7%

MSS 20,7 20,7 14,6 42,2%

Other 2,3 2,3 2,6 -16,5%

Revenue Total 252,4 (4,1) 248,3 240,1 5,1%

GM I 108,2 (1,5) 106,7 101,7 6,4%

GM I % 42,9% 43,0% 42,4% 0,5%

S,G & A (83,9) 0,6 (83,3) (80,4) 4,4%

EBITDA 24,3 (0,9) 23,4 21,3 13,9%

EBITDA % 9,6% 9,4% 8,9% 0,7%

Income Statement EURm

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