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EXCITE TECHNOLOGY SERVICES LTD — AGM Information 2015
Nov 17, 2015
64894_rns_2015-11-17_a0fe4e43-7021-4920-8dc2-8b668616636e.pdf
AGM Information
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ASX ANNOUNCEMENT | COVATA LIMITED
2015 AGM Chairman’s Address and Additional Material
18 November 2015 – Presented by Charles Archer, Covata Limited (ASX:CVT) Chairman
Good
morning
ladies
and
gentlemen.
I
am
Charles
Archer,
the
Chairman
of
the
Company.
On
behalf
of
my fellow
directors,
I
am
pleased
to
welcome
you
to
the
2015
Covata
Limited
Annual
General
Meeting.
I
would
like
to
take
a
moment
to
briefly
reflect
on
Covata’s
first
year
as
a
publicly
listed
company.
When
we
listed
this
company
just
over
a
year
ago,
we
set
out
a
clear
go
to
market
strategy
that
would
let
us commercialise
our
technology
and
transform
it
into
an
in-‐demand
software
solution
for
enterprise
and government
customers
looking
to
securely
share
and
store
data.
We
set
out
to
grow
the
business
into
overseas
markets
and
we
have
done
this
successfully
through
a number
of
key
partnerships
in
Europe
and
the
United
States.
At
the
same
time,
we
have
achieved
strong success
in
our
home
market,
through
our
historical
roots
of
working
with
the
Australian
Government.
Looking
back
on
the
past
year,
our
achievements
have
paved
the
way
for
what
is
surely
to
be
a
very
exciting year
ahead.
In
the
coming
year,
we
anticipate
continued
growth
across
our
two
business
arms,
Safe
Share through
Telco’s/MSP’s
and
the
Covata
Platform,
and
exciting
new
opportunities
to
come
out
of
our
growing presence
in
San
Francisco.
We
have
been
clear
about
our
focus
on
building
out
a
strong
global
foundation
upon
which
we
can significantly
ramp
the
distribution
and
use
of
our
software.
Where
possible
we
endeavour
to
disclose
to
the market
information
pertaining
to
our
growing
customer
base.
Being
a
cyber
security
company
with enterprise
and
government
customers
means
that
we
operate
in
arguably
the
most
highly
regulated, security
conscious
and
stringently
diligent
sectors
–
and
from
my
decades
at
the
FBI,
I
can
assure
you
that the
success
this
company
has
achieved
in
this
space
in
the
last
12
months
is
no
small
feat.
We
are
also
highly
conscious
about
not
adversely
affecting
the
company’s
position
with
unnecessary
"noise" and
remaining
clear
and
consistent
with
our
communications
to
the
market.
We
do
however
anticipate
that in
this
coming
year
a
number
of
very
exciting
activities
will
reach
optimal
maturity,
to
share
with shareholders
and
the
broader
market.
I
work
closely
with
our
CEO
Trent,
the
other
board
members
and
our
executive
management
team
and
am genuinely
proud
of
the
accomplishments
achieved
to
date,
and
excited
by
the
opportunities
we
have
coming
©2015 Covata Limited or its affiliates
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down
the
pipeline.
I
would
like
to
acknowledge
our
valued
employees
who
continue
to
work
hard
for
the Company.
Thank
you
to
those
shareholders,
who
have
been
with
us
from
the
beginning,
and
welcome,
to
those
who have
joined
us
more
recently.
As
option
and
shareholders
ourselves,
we
remain
entirely
committed
to driving
the
future
success
of
the
Company.
I
will
now
pass
over
to
Trent,
to
give
an
in-‐depth
business
update
before
we
continue
with
the
formal proceedings.
-
-‐
Continue
with
AGM
formal
proceedings
-‐ -
-‐
CEO
Update
Attached
Below
-‐
Media and Investor Relations:
Nikki Parker
Vice President Growth and IR
Covata +1 (571) 353-4273
About Covata
Covata enables true ownership and control over your data in the cloud and over mobile services. We deliver data-centric security solutions without compromising simple usability, providing true end-to-end security. Your data is always protected wherever it may travel – inside your network, beyond the domain, to mobile devices and to the cloud – with granular access controls that extend to external users, view-only restrictions, real-time revocation and complete visibility and auditability.
Own Your Data, control your data and choose where it is stored – with complete assurance that it is protected and secure. For further information please visit Covata.com.
©2015 Covata Limited or its affiliates
Covata Limited 2015 Annual General Meeting
Sydney, Australia
18 November 2015
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Disclaimer
The purpose of this presentation is to provide background information to assist readers in obtaining a general understanding of the Company’s proposals and objectives. It is not and should not be considered as an offer or invitation to apply for or purchase any securities of the Company or as a recommendation or inducement to make an offer or invitation in respect of securities in the Company. No agreement to subscribe for the securities of the Company will be entered into on the basis of this presentation.
This presentation is not a disclosure document under Australian law or under any other law. Accordingly, this document neither purports to be exhaustive nor contain all of the information which any reader or prospective investor may require to make an investment decision and it does not contain all of the information which would otherwise be required by Australian law or any other law to be disclosed in a prospectus.
Readers must not rely on this presentation but make their own independent assessment and seek and rely upon their own independent taxation, legal, financial or other professional advice. This presentation is not intended to constitute financial product advice and does not take into account individual or group investment objectives, taxation situation, financial situation or needs.
No representation or warranty, express or implied, is given as to the fairness, accuracy, completeness, correctness, reliability or adequacy of any statements, estimates, opinions or other information, or the reasonableness of any assumption or other statement contained in this presentation (any of which may change without notice), or the likelihood of achievement or reasonableness of forecasts or prospective statements (if any) contained in the presentation. Forecasts and prospective statements are by their nature subject to significant uncertainties and contingencies. Forecasts or prospective statements contained in this presentation (if any) have been based on current expectations about future events and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from the expectations described.
Readers should make their own independent assessment of the information and take their own independent professional advice in relation to the information and any proposed action to be taken on the basis of the information. To the maximum extent permitted by law, the Company and its professional advisors and their related bodies corporate, affiliates and each of their respective directors, officers, partners, employees, advisers and agents and any other person involved in the preparation of this presentation disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence) for any direct or indirect loss or damage which may arise or be suffered through use of or reliance on anything contained in, or omitted from, this presentation.
Neither the Company nor its advisors have any responsibility or obligation to inform the reader of any matter arising or coming to their notice after the date of this presentation document, which may affect any matter referred to in the presentation.
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Contents
Section 1 Corporate Overview
Section 2 Changing Security & Investment Landscape
Section 3 The Covata Solution Section 4 Go-to-Market Strategy Section 5 Telco & MSP Channel Section 6 OEM Channel & the Covata Platform Section 7 Corporate Summary
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Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7
Corporate Overview Changing Security Landscape The Covata Solution Go-to-Market Strategy Telco & MSP Channel OEM Channel & the Covata Platform Corporate Summary
- Covata Corporate Vision Covata arms global enterprises with the tools they need to fight cyber crime and safeguard their key asset – their data. By leveraging the power of the Covata Platform, businesses and government organizations all over the world can protect, share and store their corporate data – any time and from anywhere.
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Covata Limited Company Snap Shot
Market Statistics
ASX Code CVT Listing Price (10 Nov, 2014) A$0.20 Share Price (13 November, 2015) A$0.21 52 Week Range A$0.17-$0.68 Avg. Volume 1,179,425 Market Capitalisation (13 November, 2015) A$89m
Company Statistics Company Founded August, 2007 Options and Warrants Outstanding 68,596,146 Ordinary Shares on Issue 428,479,895 Channel Partners Signed (Date) Macquarie Telecom 12 February, 2015 Deutsche Telekom T Systems 18 March, 2015 Cisco 24 April, 2015 Colt Technology Services 2 July, 2015
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0.8
0.6
0.4
0.2
0
Jan ‘15 Mar ‘15 May ‘15 Jul ‘15 Sep ‘15
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ASX Data
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Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7
Corporate Overview Changing Security Landscape The Covata Solution Go-to-Market Strategy Telco & MSP Channel OEM Channel & the Covata Platform Corporate Summary
The Traditional Approach of Network or Perimeter Level Security is Broken Leaving Organisations Vulnerable to Attack
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Alarms Alerts
Internet Firewalls Enterprise Firewalls Internet
Activity Monitoring
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Security at the network or perimeter level leaves individual data files vulnerable. This approach also makes it difficult to control the security and integrity of data when sharing information outside of an organisation.
High profile hacks including Target and JP Morgan highlight that a new approach is necessary.
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Section 1
Section 2 Section 3 Section 4 Section 5 Section 6 Section 7
Corporate Overview Changing Security Landscape The Covata Solution Go-to-Market Strategy Telco & MSP Channel OEM Channel & the Covata Platform Corporate Summary
Covata Patented Approach
Covata has developed a disruptive approach to IT security.
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Key Management & Encryption +
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The Core attributes of the Covata Platform are tying together Key Management, Identity and Policy as a unified service.
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Data
Centric
Security
Identity +
Policy +
Flexible Architecture
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Covata
Platform
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Key Management & Encryption
Covata gives safe passage of any data types shared between devices. Seamless encryption empowers today’s digital workforce to securely collaborate in a dynamic global work environment.
Policy Driven Control
Covata lets you maintain full insight, access and control of data while serving critical even knowledge to the security ecosystem for complete and real-time management and audit of secured data.
Identity Management
Covata Integrates identity as a key piece of the business process to ensure businesses provide right access, to the right people, at the right time.
Flexible Architecture
Covata is an agnostic, lowfootprint, service-based technology that easily integrates into any security ecosystem, business process, or workflows; with open APIs to build custom security services for today’s sharing needs and for the future of Social and IoT.
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Patents and Certifications Awarded
The Covata Platform has had substantial investment and various versions of the Covata Platform have been awarded a number of prestigious IT certifications and granted patents in key jurisdictions.
-
Independent certifications provide customers with assurance that the technology is of a high standard.
-
Versions of the Covata Platform have been independently certified by US and Australian organisations.
-
Covata’s core patent has been granted in key jurisdictions including the US, Australia, Singapore and New Zealand. Covata also has an additional three patents pending.
-
Patents and Certifications provide government, system integrators, resellers and OEM partners with an assurance that the Covata Platform:
-
Provides a high level of security protection
-
Can be integrated to comply with strict government security regulations if required
-
Is a significant market advantage as it is a considerable investment in both time and money for competitors to acquire these credentials.
Security Certifications Awarded:
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FIPS 140-2 Level, Design Assurance Level 3
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FIPS-197 Advance Encryption Standards256
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Common Criteria EAL 4+
Certified Common Criteria EAL4+
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DSD Cryptographic Evaluation
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Client Validation
A combination of long-standing Government customers and industry partner due diligence validates the Covata Platform and Safe Share product. Long-standing Government Customers (3+ Years)
Australian Goverment ATO (US IRS equivalent)
Australian Government Department of Finance & Deregulation (US Dept. of Commerce equivalent)
Industry Partners (Extensive Due Diligence Performed) Macquarie Telecom Competitor Comparison
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T-Systems 300 page criteria check list
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Cisco 6 month due diligence
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The Covata Platform
The Covata Platform is relevant and valuable to every business type, in every industry, where data security is required.
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User Level
Safe Client
Share Application
API API
Business Covata Business
Process Platform Process
API API
Cloud/Mobile Legacy Systems
Systems Level
Product
Platform
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Secure File Sharing on Any Device
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Covata Safe Share leverages the capabilities of the Covata Platform to provide an Enterprise File Sharing and Synchronisation (EFSS) solution to security conscious business and government clients around the world, distributed through the global Managed Service Provider, Cloud and Telco Markets.
Safe Share provides business users with an IT sanctioned drop box for the secure distribution of files. Safe Share combines usability with government grade security.
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Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7
Corporate Overview Changing Security Landscape The Covata Solution Go-to-Market Strategy Telco & MSP Channel OEM Channel & the Covata Platform Corporate Summary
Commercialisation Strategy
Covata has identified three key commercialization channels which will provide scalability and diversity of revenue streams.
Go-To-Market Channels
Telcos and Managed Service Providers
Original Equipment Government Manufacturers Clients (OEM)
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Timeline of Major Events and Announcements
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Q3FY 2014 Q4FY 2015 Q1FY 2016 Q2FY 2016
8 Government November 11, 2015
December 11, 2014 March 18, 2015 July 2, 2015 Agencies and Cisco Update Launch
AGM Departments Signed Event Announced
November 10, 2014 February 10, 2015 March 26, 2015 August 2, 2015 October 1, 2015 November 18, 2015
Exceeded Telco Annual General
Bay Area Office
Announced User Targets Meeting
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Covata’s Global Business Structure
-
-The Company operates two distinct business arms:
-
Safe Share channel distribution
-
Covata Platform integration partners
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Monthly User Transaction Based
Covata Platform
Licensing Licensing
Key-as-a-Service
/Covata Inside
Safe Share
Govt Telco/MSP OEM
Additional Additional Additional Additional
Govt Govt Telco’s OEM’s
Australian TBA UK TBA US European European Financial
Government Government Government Enterprise Services Sector
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Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7
Corporate Overview Changing Security Landscape The Covata Solution Go-to-Market Strategy Telco & MSP Channel OEM Channel & the Covata Platform Corporate Summary
Take Safe Share into the Global Telco and MSP Market
Total Addressable Market (TAM) is very large.
Rank Company
Market Value USD
| 1 | China Mobile Lt | 281.02 Bn |
|---|---|---|
| 2 | Verizon Communications Inc | 201.39 Bn |
| 3 | AT&T Inc | 170.50 Bn |
| 4 | Vodafone GroupPLC | 89.40 Bn |
| 5 | Deutsche Telekom AG | 83.45 Bn |
| 6 | SoftBank Corp | 76.85 Bn |
| 7 | Nippon Telegraph & Telephone Group | 76.58 Bn |
| 8 | NTT DOCOMO Inc | 76.21 Bn |
| 9 | America Movil SAB de CV | 73.37 Bn |
| 10 | Telefonica SA | 71.95 Bn |
| 11 | KDDI Corp | 64.65 Bn |
| 12 | China Telecom CorpLtd | 59.30 Bn |
| 13 | Telstra Corp Ltd | 57.72 Bn |
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Covata Safe Share Telco Model
-Covata partners with leading Telco’s and MSPs to distribute Safe Share to enterprise and government clients
-
-Covata enters into a revenue share arrangement with these partners
-
-Due to declining revenue from infrastructure, Telco’s and MSPs are incentivised to use in demand Over-The-Top-Services to derive revenue
-Covata supports its channel partners to sell seats through to their enterprise customers and drive adoption within organisations
-Covata has developed sales and marketing collateral for key regions and business verticals which fast tracks the sales and activation process once channel partners have been signed
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Covata
Sign
Telco/OEM
Activate
Enterprise Customer
Enable
End Users
End Users Revenue
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Covata’s Global Business Structure + Multiple Customer Verticals = Diversified Global Revenue + Reduced Risk Covata is an emerging ASX Listed technology company with the majority of its growth to occur offshore. Covata has identified target regions within Europe, Asia and Latin America where there is a clear demand for highly secure in-country (global Telco’s) hosted solutions that enable data sovereignty – attributes Covata Safe Share supports.
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Operating the Telco business arm in these regions exposes the product to large scale enterprise customers who operate in a variety of financial and capital markets. The diversity of its customer base, in both location and business category, allows for stability as the company begins its high growth trajectory.
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Telco & MSP Q1 FY16 Partner Update
-More than 10 active enterprise and government customers
-Target average price per end user per month earned by Covata after all reseller partner commissions is $3AUD, yet actual average net revenue per end user per month achieved in Q1 FY16 exceeded $3AUD. Average net revenue per end user is a result of many other pricing inputs and will vary by region, and by country within a region.
-The majority of the seats signed in Q1FY16 were signed in late September on a 12 month minimum contract. This represents paid user growth exceeding 500% from the previous quarter.
-Billing to cash receipt is typically a 30-90 day cycle depending on the reseller partner.
-The 1,961 paid users represent an annual run rate exceeding $98,000 or $73,000 from 1 October through to 30 June 2016.
Results Q1 FY16 No of Active Telco 3 and MSP Partners Actual No. of Seats 1 961 , Mgmt Target 800 - 1 200 ,*
- *Covata operates on a July 1 – June 30 Financial Year, in accordance with standard ASX reporting guidelines
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Telco Partner Update
- Collateral and sales material completed and translated
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-
European Account Management teams trained
-
Telesales Campaign successfully executed
-
Strong pipeline with large scale enterprise customers across a range of industries including airline, government, manufacturing, insurance, automotive etc
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-
Covata Safe Share rebranded as Macquarie Telecom SigBox and distributed over secure gateway to the Australian Federal Government
-
13 Government departments and agencies signed
-
Activation campaigns underway to support rapid end user adoption
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-
Colt led press release announcing partnership July 2nd
-
Covata Safe Share available on new Financial Services Extranet
-
Marketing material and collateral completed
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- Telco Q2 FY16 End User Seat Pipeline
-The Company is targeting 120k Enterprise Seats by the end of FY16. -There are over 50 opportunities (enterprises) in the pipeline from the “Prospect to Trial” stage as we entered Q2.
-These opportunities are in Europe and Australia through 3 Telco partners. -These opportunities collectively have an identified number of paid end users well exceeding managements Q3 targets.
-The opportunities in the pipeline are spread across varied industries including: airline, government, manufacturing, automotive, banking/finance, insurance, technology and FMCG. This reinforces our focus on a diversified business model.
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Telco and MSP Global Business Development Pipeline
- -Business Development underway with key industry experts in target regions of Latin America, Asia and Europe.
-Trial instances deployed in more than 3 leading Telco’s in these key regions. -Business development underway with major Telco’s and leading MSPs in more than 8 countries.
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Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7
Corporate Overview Changing Security Landscape The Covata Solution Go-to-Market Strategy Telco & MSP Channel OEM Channel & the Covata Platform Corporate Summary
OEM Business Model ‘The Covata Inside Solution’
The Covata Inside solution for datacentric security easily transforms each data transaction into a ‘safe haven,’ that ensures data ownership and control, while integrating into existing workflows and environments.
IT platform [it plat-fawhm] Spell Syllables Synonyms Examples Word Origin
noun
Covata Inside allows organisations to continue to freely and securely access, use and share their data, inside and outside the firewall.
-
In computers, a platform is an underlying computer system on which application programs can run.
-
A platform is any base of technologies on which other technologies or processes are built.
-
A very valuable software component which forms the core or base upon which new software can be created using APIs.
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The Value of the Covata Platform
The Covata Platform has the ability to underpin multiple products to bring a data security element to a number of industries and types of companies.
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San Francisco Office to Drive OEM Business
-Covata announced that it will fast track its commitment to the OEM channel and the Cisco Agreement by establishing a team of 6-8 full time employees in a San Francisco office.
-
An office has been found in Downtown San Francisco with hiring underway. -The creation of this team supports our commitment to the 10 year contract with the Fortune 100 technology company and our dedication to expanding the OEM channel. -The team will be focused on the Covata Platform, to further enable initiatives in Cloud and the Internet of Everything (IoE) security, supporting growth in Cisco and future partners. The “Covata Inside” strategy will see the Covata Platform augmented to be able to underpin global tech initiates.
-
Covata expects its investment in the Bay Area will generate a 4-5 times return on investment in the next 12 months, through quality deals with our current and future OEM partnerships.
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Covata Platform Key-as-a-Service Transaction Based Pricing Model
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One key to one file encryption and decryption service provided by the Covata Platform Cloud as information is rapidly sent and received by people or internet connected devices.
This service enables any software developer or vendor to secure individual pieces of data and pay per transaction from an independent audited service.
By providing this service as a “cents in the dollar” transaction it creates a (Low Cost + High Volume) = High Revenue Business Model.
Covata Encryption/ Decryption Service
Person or Machine Information sent or received $ Covata Encryption/ Decryption Service
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----- Start of picture text -----
Information
sent or
received
Person or
$
Machine
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Covata Platform: Key-as-a-Service
A home IoE gateway sending lots of bits of different information to a number of different big data cloud aggregators is one way to illustrate the Covata Key-as-a-Service. Cisco forecasts 10.5 billion machine to machine connected devices by 2019, of which 48% are in the home, including home automation, home security and video surveillance, connected white goods, and tracking applications.
Identified IoE Business Models have Key Service Transactions being charged between one dollar and three cents, depending on how often customers generate and use keys and how they are stored.
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The Covata Platform Key-as-a-Service is under NDA with current OEM partners and further details will be provided in the first half of 2016.
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The Future of IoE and Cloud Security A Cisco and Covata Initiative
The Company will launch its Covata Key-as-a-Service initiative and publicly outline the strategic partnership between Cisco and Covata in Sydney on February 3, 2016 at an invitation only executive event.
California based Cisco executive Pankaj Srivastava, VP Solutions and Platforms, will join Covata CEO Trent Telford to deep dive into the future of IOT and Cloud for Cisco and the role data centric security will play in its global initiatives.
This global launch will be a precursor to a public campaign to be launched at RSA 2016 at the end of February in San Francisco.
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Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7
Corporate Overview Changing Security Landscape The Covata Solution Go-to-Market Strategy Telco & MSP Channel OEM Channel & the Covata Platform Corporate Summary
Capital Requirements
-Whilst the Company is rapidly evolving over the next two quarters, Management and the Board consistently monitor the cash position of the company.
-Board and Management are currently evaluating a number of strategic capital options for the Company.
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Key Takeaways
} Modest market cap of sub $100m with potentially significant valuation upside. } New Telco/MSP partnership discussions progressing in key jurisdictions. } Existing partnerships (OEM/Telco/MSP/Govt) poised to deliver in first half 2016. } The number of high profile breaches continue to rise driving demand for data centric security solutions.
} Covata’s two business arms create a strong global business with diversified revenue and customer base. } The Covata Platform service is building a high volume transaction based service for the future of IoE and Software Defined Networking.
} Covata presents an opportunity to invest in a next generation cyber security company. } Research from Fosters and Moelis has set price targets of A$0.58 and A$0.70, respectively.
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Contact Nikki Parker VP Growth and Investor Relations +1 571 353 4273 [email protected]
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Safe Share, a product to help solve the immediate threat of data breaches.
-
The Covata Platform, the data
-
security solution to underpin an interconnected world.
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