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cyan AG Company Presentation October 2018
cyan management
Peter Arnoth Markus Cserna Michael Sieghart
CEO CTO CFO
▪ CEO of cyan AG ▪ CTO of cyan AG ▪ CFO of cyan AG (since 10/2017)
▪ CEO of cyan Security Group ▪ CTO of cyan Security Group ▪ Petrus Advisers, London, Partner and
(since 10/2011) (since 10/2011) CFO (2010-2017)
▪ Member of the Board, E-Plus ▪ CEO of cyan Research & Development ▪ Wiener Privatbank SE, Member of the
Mobilfunk (until 1/2007) (since 04/2014) Board (2013/14)
▪ T-Mobile Austria, Head of Sales ▪ CTO and Founder of cyan Networks ▪ Deutsche Bank AG, Managing Director
(until 2006) Software (since 03/2006) (1997-2009)
2
cyan group highlights
Company overview Key customers (cyan)
▪ cyan is a leading European cyber security provider that caters especially to
Mobile Network Operators (MNOs), Mobile Virtual Network Operators
(MVNOs) and Financial Services Companies
▪ cyan’s unique white-labeled solutions help its clients to provide first-class
cyber security to their own customer base (B-2-B-2-C) and thus to generate
additional revenues
▪ cyan bought I-New, a leading OSS/BSS platform provider, in July 2018 to
create a one-stop-shop for MNOs/MVNOs Key customers (I-New)
▪ cyan will significantly benefit from I-New`s substantial client base, MNOs MVNOs
international support and operation centers and will realize synergies of up to
€9m by end of 2019
▪ cyan together with I-New expects to achieve sales of €35m and an EBITDA
of €20m in 2019
3
Mobile phone usage
Mobile phones have become an important part of our daily lives.
Financial
transactions
5bn people worldwide.....
Social Media Payment-
...use a cell phone. Smartphones do more method
than half of the world's Internet connections.
Unique mobile subcribers worldwide
Control of
There will be 5.7bn mobile subscribers by 2020. E-commerce
alarm systems
Music
SIM cards in use
By 2020, the use of SIM cards worldwide will increase
to 9.7bn
More and more areas of applications for mobile phones
will keep being developed in the future!
4
Potential cyber-threats
Examples of potential cyber threats
Cryptominer
Pop-up web browser
Scam
Bad Content Fraud
Violence and pornography
Financial and
cyan contributes to: payment
transactions
✓ Give customers the Social Media E-mail
security they need
Identity Theft Phishing
✓ Supply security from Credit card theft Phishing e-mails
a trustworthy source
for your own E-commerce Music
customers
Control of
✓ Help swiftly in the alarm systems
event of a claim Ransomware
Clickjacking
Malicious code in
Data encryption hidden buttons
Malware
Worms, trojans, viruses
5
cyan – industry solutions
We provide specific security solutions to a divers customer base to make their business safer
Fin. services & Gaming &
Industry MNOs/FNs MVNOs
insurers
Governments IoT Producers
Entertainment
• No downloads and • Cost savings for • Embedded security • Digital security and • Making data • Safe gambling
easy to use MVNO (In-App) to supply safety for all transparent • Additional revenue
security for • Safer Surfing sec. through citizens • Safe in-car • Competition-
customers propositions trusted partners • Impulse for political network monitoring
USPs • Extremely scalable (banks, insurance, agenda of a certain
fin-techs) country
• Personal security
• Net-Integrated • Optimization • In-App Security • Personal Security • Webfilter for data • In-App security
Security Feature • Personal Security • Kids Protection, privacy • Webfilter for data
• In-App Security • In-App Security Anti Theft My SOS, • Monitoring of privacy
Products (on-top) (on-top) My SOS Geo Fencing webtraffic • Big Data
• Personal Security • Personal Security • Web-threats sourcing
(on-top) (on-top) detection
6
Sourcing
Analysis
with +200 IT centers
Methods
Data 23 proven cyan
+550bn data analysis methods
requests monthly
Manpower
80k hours human
manpower per year
Co-operations 4h worldwide update
Additional security
sources and partners
> 250m
database
We are cyan. entries
7Outstanding simplicity & mass market ability
Due to our understanding for tailored solutions, we provide easy scalable security
High
Network
Degree of simplicity
integrated
Device
Enterprise Browser
VPN
Low
Low High
Mass market ability
8cyan & I-New strategic synergies
In July 2018, cyan acquired 76.8% shares in I-New from Novomatic and subsequently
4.8% from former management; today, owning a total stake of 81.6%
.
Fast growing security enabler for MNO´s, MVNO´s, banks,
insurance groups, gaming and betting platforms, IoT, ...
+40 MVNO networks with +5.5m endconsumers
Network Own
Security MVNO´s
Endpoint +100 IT CRM
Security experts solutions
B2b BSS
firewalls billing platform
Global operation & support centers
Global security network with +200 IT-centers
9cyan & I-New: product portfolio is a perfect fit
Global operations and support centers and +100 IT-experts for integration and growth
Banks /
Services MNOs MVNOs others *)
insurers
New and existing clients
Marketing & Sales
participate from ...
Endpoint security
Network security
perfect product & process
Endconsumer marketing portfolio for additional revenues
MVNOs operating and outstanding cost savings
CRM
Billing
IT-Integration
IT-Operation global man-power for enabling
Security Research the growth by increasing quality
IT development
*Betting platforms, I-Car Wifi, IoT, etc.
10cyan & I-New: 9 steps for more profit
Revenue synergies, upselling & cross-selling potential plus OPEX-optimization
Step Program step Synergies On-top revenue Cost savings
1 Fast rollout of platform integrated data optimization ✓ ✓
2 Common product portfolio - marketing tools for sales ✓ ✓
3 Revenue push by offering security product to whole customer base ✓ ✓
4 Sales - common resources and one lead mangement ✓ ✓
5 IT/NT - optimization processes, benchmarking, operations ✓ ✓
6 Finance – integration of accounting and controlling ✓ ✓
7 CI/CD strategy (long term) ✓
8 Global setting of support centers ✓
9 Information & communication (IR and internal) ✓
11cyan & I-New: perfect fit with powerful synergies
Synergies Description
▪ Cross-selling: cyan offering to I-New clients (e.g. data volume optimization)
▪ Cross-selling: I-New offering to cyan clients (e.g. outsourcing)
Revenues
▪ Establish new offerings (e.g. outsourcing bundled with data compression at competitive price point)
▪ Materialize pipeline (e.g. substantial leads with a strong revenue potential)
▪ Operational savings (e.g. support centers Brno, Sopron)
Expenses ▪ Leverage of I-New sales force for cyan (less FTE build-up needed at cyan)
▪ Cost management at I-New (e.g. expensive contractors being a part of the Novomatic Group)
▪ Tax loss carry forward of €20.8m available – can most likely be used post-acquisition within transfer pricing
Tax
mechanisms to best-utilize tax loss carry forward
12MVNO Industry
Key challenges
B2B USP’s
▪ Easy integration into MVNO platforms
DATA CONSUMPTION ▪ Direct saving of data costs (wholesale)
Mobile data volume grows significantly with
up to 50% growth in selected markets year-
on-year.
▪ Market proposition enhanced with privacy surfing
▪ Huge contribution to EBITDA – fair revenue share
with cyan licensing model
LOW ARPU*
declining because of competition which
results in lower retail prices and the lack of
adding additional services.
DIFFERENTIATION
Sure, every MVNO has it’s own focus and
offer, but at the end of the day is it only about B2C USP’s
mobile data? Why not thinking of other
USP’s?
▪ Privacy protected surfing with security against
EBITDA trackers and malicious ads
The result of high costs and low ARPU’s due to
high competition, is a declining EBITDA or even ▪ Faster loading of web sites and apps
the lack of growth rates.
▪ Less data consumption
13
* Average revenue per usercyan data stream optimization
Proof-of-concept Mexico
• Test results over 6 months from Flash Mobile on Telefonica network
• Mid educated market
• Up to €1m EBITDA contribution with only 86k customers in 3 years
-5% -12% -20%
72.857 Section 1 Section 2 Section 3
69.023
929
2.555 348 63.833
4.718 472 58.643
4.718 472
Total phishes tracker TCP / SSL Legal suspicious TCP / SSL Clean clean TCP / SSL Ad-free
traffic / overheads traffic ads overheads traffic ads overheads traffic
GB overall
14Challenges of the cyan – security as a
banking industry must for your business
DIGITAL Banking Security
TRANSFORMATION ▪ Transaction security core
Due to the on-going shift from
stationary to digital business competence by finance
industry
REGULATIONS Personal Security
Payment service directives as the
recently established PSD2 have a
strong impact on processes
Banking ▪ Safety for customers
Trans- data (e.g. phishing
action
attacks, identity theft,..)
DIFFERENTIATION
The financial industry constantly
seeks for disruptive services and Device Protection
USPs within its regulations
▪ Safety for customers
device (antivirus)
UPCOMING FINTECHS
Next generation of banking business Big Data
is just around the corner. The ▪ Sourcing of marketing tools
answer for the upcoming fintechs is
the credibility and responsibility of
and regulatory instances
traditional banks for their customers. 15cyan security for online banking applications
Overview of functionalities and architecture
SECURITY PRE-CONDITIONS Banking today…
▪ Payment
▪ Account details
SDK for security features ▪ Transfer
included in banking App
▪ P2P etc.
SDK has no access to BANKING + cyan
customer account data
and transaction data! Customer gets
mobile banking +
security solution
SECURITY FEATURES from “my” trusted
bank!
▪ Realtime-Protection for
Phishing / Malware
▪ Antivirus Scanner
▪ Identity Check
16EU LEX 2015/2366 Security
Regulatory Technical Standards (RTS) on strong customer authentication (SCA)
XS2A is the access to customer accounts for payment
In January 2018 PSD2 service providers and fin-techs such as:
went into effect ▪ Payment Card Issuers
▪ Payment authentication
▪ Digital payments
▪ Money transfer and savings
18 months later RTS
will come into force
(i.e. Q3 2019) Banks have to provide customer account information
to payment service providers but require explicit
approval from the customer
SCA & XS2A are must Payment service providers have to provide SCA as
haves for banks well with min. two-factor authentication
17PSD2 Online banking 4 factor auth.
Security measures to protect customers devices & the SCA with additional factor
4th cyan factor:
InApp protection
Current factors: ▪ Phishing & fraud
Biometric characteristic such as Inherence prevention
3rd a fingerprint, voice or iris pattern ▪ Identity checks
factors & more features
tokens, smartphones, ID’s,
2nd SIM or smart cards Possession factors
User names,
1st passwords or PINs Knowledge factors
18cyan – global rollout after IPO
We reach for global security with our worldwide presence since 04/2018
19cyan AG – share price graph and estimates
Conservative estimate of cyan AG’s key financials
2018 2019
Sales >€20m >€35m
EBITDA >€7m >€20m
20cyan AG – shareholder structure
Free Float/Others Alexander Schütz
25% 20%
Total shares
8,394,923 Apeiron Investment
Group Ltd
19%
Management*
9%
Infinitum Ltd.
13%
Tansanit Stiftung
13%
*held by Alexander Schütz and Infinitum
21Disclaimer
The information contained in this presentation does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in
the United States, Australia, Canada, or Japan or in any other jurisdiction in which such offer or sale would be unlawful. The securities referred to in
the presentation have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or under any
applicable securities laws of any state, province, territory, county or jurisdiction of the United States, Australia, Canada, or Japan. Accordingly, unless
an exemption under relevant securities laws is applicable, any such securities may not be offered, sold, exercised, transferred, delivered or
distributed, directly or indirectly, in or into the United States, Australia, Canada, or Japan or any other jurisdiction if to do so would constitute a
violation of the relevant laws of, or 401012011.1\NN06 7 require registration of such securities in, the relevant jurisdiction.
In member states of the European Economic Area (“EEA”) other than Germany, the presentation is only addressed to and directed at persons who
are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC and any amendments thereto) and
any relevant implementing measures in the relevant member state of the EEA.
In the United Kingdom, the presentation is directed at and/or for distribution only to (i) investment professionals falling within article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”), or (ii) high net worth companies falling within
article 49(2)(a) to (d) of the Order (all such persons are collectively referred to herein as “relevant persons”). The securities referred to in the
Presentation are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged
in only with, relevant persons. Any person who is not a relevant person should not act or rely on the Presentation or any of its content.
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