Leader in identification solutions - February 10th, 2021
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Leader in identification solutions
|1
To be the European leader and a world leading
provider of secure technologies in:
Our strategic ▪ access control and mobility
vision ▪
▪
tracked movement of equipment and products
brand & document protection
▪ specialty payment cards
Paragon ID designs, develops and delivers solutions based on RFID technology, including the platforms and
software necessary for their deployments.
Dual expertise: technological and industrial, Paragon ID is unique in its combination of research, design,
manufacturing, industrialization and solution integration capabilities.
Our targets: manufacturers, integrators and operators, generally in a B2B2C model, worldwide.
|2
Management
team
Clem Garvey Sebastien Chavigny Konstantinos Lagios
CEO CFO Chief Commercial Officer
|3
Our
resources
Human Capital Intellectual Capital Industrial Capital Financial Capital
An international team with
Technological R&D A unique industrial set-up Financial performance
highly qualified staff
30th June 2020
• Antenna design
• 5 secure production sites (France,
Breakdown of permanent staff • Development of innovative RFID UK, USA & Romania) • €108 M sales – stable despite the
products
health crisis which has hit the world
• Development of new • Overall control of the production in March 2020
24%
France manufacturing processes chain
45% UK
• EBITDA1 stable with a rate (EBITDA1
9% USA • Strong patents Portfolio
Romania • 400 million RFID products / turnover) of 7,3%
22%
IT and electronic R&D manufactured each year • Nearly €4,4 million worth of
investments in the financial year
• Operating systems • Latest generation RFID Inlay ended June 30th, 2020.
Highly qualified employees who have • Blockchain, algorithms, secure production machines
accumulated over the years encryption
recognized industrial, technological • Mobile app & software
and R & D expertise in their markets. (1)
Operating income before depreciation,
• Database management amortization and non-recurring items.
|4
4
Our key numbers Our values Our strengths
Year 2019-2020
Respect Our clients
+€108 m €8,4 m+
Sales EBITDA
Responsibility Our international footprint
Teamwork
550 8+ Our technological expertise
colleagues sites
Innovation A track-record of
5
successful acquisitions
Security &
150 Cities 4 billion+ Environment
Supplied with Journeys enabled Our industrial know-how
access control
solutions
|5
Our 4 key markets
Electronic Transport &
Identification (eID) Smart Cities
Contactless solutions Access control
for secure identification solutions in cities and
documents public transport
Traceability & Brand Payments
Protection
To ensure the Gift & payment cards
traceability of products and components for
and fight against specialised payment
falsification and cards (metal)
counterfeiting
|6
A dynamic Acquisitions over the last 3 Years
external
growth
strategy
Smart Cities
Sales
€108 M
Sales
Traceability
€101 M
Sales 2018-20
€75 M Payment
AMATECH
Sales 2017-18
RFID
€36 M DISCOVERY
ASK
2015-16 THAMES
Ticketing activity
TECHNOLOGY
of MAGNADATA
2010-11 Participation in
Acquisition of RFID inlay AIRWEB
BEMROSEBOOTHequipment from
IER
2000
Creation
|7
Locations
▪ 5 secure production sites for a complete control of the
production process
• France (Argent sur Sauldre)
• United Kingdom (Hull)
INDUSTRIAL
• United Kingdom (Essex)
• Romania (Bucharest)
• USA (Burlington) ▪ Commercial coverage organised in 3 regions:
COMMERCIAL
• EMEA – Asia
▪ 2 R&D centres in Europe (Sophia-Antipolis & Ireland)
• United Kingdom – Australia
▪ 1 software development site (Milton Keynes) |8
• America
Our
USPs
|9
A unique
know-how and
industrial capacity
| 10A strong
development
strategy in smart
technologies
A long-term investment strategy
in the latest equipment
dedicated to the production of
RFID products
François Gauthier
GM EMEA
| 11Our
development
| 12Business
development
team
Konstantinos Lagios Bertrand Brault
CCO Marketing & Bus Dev
Christophe Peix Enu Waktola Arron Duddin Mustafa Lotya
Smart Cities Track & Trace Smart Technologies Payment
| 13Smart ▪ 150+ cities worldwide use
our solutions
cities
▪ Strategic supplier of some of
the largest cities
– Paris, Cairo, New York,
London
▪ The leading mobile ticketing
solution in France (airweb)
| 14Track &
trace
▪ 1st RFID Inlay manufacturer in Europe
▪ 1st RFID Ticket manufacturer in Europe
▪ #1 largest RFID company in Europe today
that is fully integrated with RFID inlays,
RFID Labels and RFID Tickets.
| 15eID
▪ 24 countries have already chosen our silver
ink technology - developed and patented by
Paragon ID
▪ Development towards a « eDatapage » with
ultra-thin polycarbonate
| 16Payment
▪ Over 250 million cards manufactured per
year delivered
to over 60 countries (Thames)
▪ Payment cards, gift cards, loyalty cards
▪ New environmentally friendly range
▪ Components for specialized payment cards
(metal cards)
▪ Licences for “contactless metal cards”
technology (AmaTech)
| 17Our
clients
Transport, Logistics Industry & Agri Loyalty Finance
Retail Public Transport Automotive Health & Pharma eID
& Aviation
Paris
London
Sydney
New York
Singapore
Milan | 18Our
financial
strength
| 19Full year profit and loss statement
Stabilized Revenue
Consolidated Profit & Loss (12 months) 30/06/2020 30/06/2019
Revenue 107 898 107 959
The group generated 7% Organic Growth in the first
semester and was anticipating a full year organic growth at
EBITDA - Earning before Income Tax, Depreciation & 7 861 8 252 5% before the health crisis hit our markets, in particular the
Amortization 7,3% 7,6%
transport and eID activities.
Depreciation and Amortization -8 384 -5 748
Other Non Current Result -2 952 -2 281 Profitability was impacted by restructuring costs and
Operating Result -3 475 223 investments planned to support the Revenue Growth
Financial Result -2 345 -1 987 expected before the Covid Crisis.
Other and Taxes 90 215
Amortization increase was mainly driven by the
Net Result -5 730 -1 549
implementation of IFRS 16 related to the accounting of the
finance leases.
EBITDA : Current operating income before (i) depreciation and amortization, and (ii) calculated charges related to
share-based payments
| 20Consolidated balance sheet
Current assets & liabilities
Consolidated Balance Sheet (12 months) 30/06/2020 30/06/2019 ▪ Cash increase due to the grant of a guaranteed loan from the
Goodwill 50 066 49 713 French State (PGE) for €15m
Intangible Assets 12 645 11 516
Other Non Current Assets 21 348 16 044 ▪ Social debt deferral following states’ measures to help
Non Current Assets 84 059 77 273 treasury of the companies during the Covid Health Crisis.
Inventory/ receivables and other current assets 29 934 31 890
Cash & Equivalent 21 219 8 607 ▪ Deferred payment of €2.1m also considered in debt for
Current Assets 51 153 40 497 Thames Acquisition
Total Assets 135 212 117 770
Non-current assets & liabilities
Equity 31 458 26 207
financial Debt 45 464 39 806
Other 3 209 3 991 ▪ Increase of “Other Non Current Assets” due to the
Non Current Liabilities 48 673 43 797 implementation of the IFRS 16 related to the accounting of
the finance leases (+€4.7m) and Thames’ acquisition.
Current Financial Debt 10 969 7 508
Other Current Liabilities 44 112 40 258
Total Current Liabilities 55 081 47 766 ▪ Debt : Bond Conversion in equity for €10m & €15 m of the
Total Liabilities 135 212 117 770 guaranteed loan from the French State (PGE)
▪ Financial debt increase was mainly due to the
implementation of the IFRS 16 related to the accounting of
the leases (€4,3m)
| 21Strengthening of Paragon ID balance sheet in February 2020
▪ February 2020, two transactions occurred:
(i) Capital increase by private placement with cancellation of
subscription priorities in the amount of €0.5 M
(ii) Conversion of Grenadier Holdings Plc. Bond in the amount of €10 M
▪ Share price for these transactions : €35 per share issued
▪ Corresponding decrease of €10M in related parties' loans
o The conversion of the bond will stop related interest expenses :
o €0.8 M on the fiscal year 2018/19 and €0.4 M on the 1st half
2019/20
▪ Overall strengthening of the equity by €10.5M
| 22Shareholders & stock market information
Stock Market information
Shareholders structure of the group • Euronext Paris (comp. C)
st
In number of Shares – January 31 , 2021 • ISIN : FR0013318813 - Mnémo : PID
• Share price : €26.00 (on 05/02/2021)
• Market Capitalization : €51 M (on 05/02/2021)
15,6%
Financial Agenda 2020/21
3,4% • 2020/21 Half-year results 30/03/2021
Grenadier Holdings Ltd.
• 2020/21 Q3 turnover 05/05/2021
1 965 337 LBO France Gestion
• 2020/21 Q4 turnover 22/07/2021
Shares
Flottant • 2020/21 Yearly results 26/10/2021
81,0%
Financial analysts
Louis-Marie de Sade
Baptiste de Leudeville
| 23Our
corporate
governance
| 24Corporate governance
Board of Directors
As a quoted company with a full listing on Euronext,
Paragon ID SA operates to the strictest corporate
governance standards. Ultimate responsibility for
the Company’s performance and compliance rests
with its Board of Directors, which is comprised as
follows (L to R in photograph):
• Laurent Salmon, CFO and member of the board
Paragon Group
• Dominique Durant des Aulnois, Secretary General
to PID and shareholder in Paragon Group
• Lis Astal, Senior Independent Director
• John Rogers, Chairman of Paragon ID SA and
Director Paragon Group
Paragon Group • Alyna Wnukowsky, Independent Director
LBO France Gestion
• Valéry Huot, LBO France Gestion
Independent
| 25Covid-19
Covid update
Strategy & perspectives
| 26COVID-19 : Update | First implemented measures
Health and security Protection of the Business
Protect our employees’ health and Minimize the impact of the situation on
avoid the spread of the virus our business and our clients
▪ Implementation of strict health rules on all of the ▪ Objective: not to shut our production sites
Group’s sites
▪ Our activities are directly linked to the operation of
▪ Measures to facilitate social distancing essential industries:
o Reduction of the number of people present on the sites o Labeling for the food and pharmaceutical industries
at the same time. o Contactless cards for public transport and payment
o Closure of changing rooms and canteens o Production of secure identification documents
o Shortening of shift hours to prevent employees from
crossing paths in the workspace ▪ We remain at the service of our customers during
this particular difficult period
| 27COVID-19 : Latest update (1/2)
Transport & Smart Cities Traceability & Brand
Protection
The lock-down affects the activity of many clients, in
particular for the mass transit sector Growth in asset tracking activities
Decrease in order levels or postponements from
transport operators
e.ID
Identification documents Payment
High revenues for the licences for metal cards (high
Substantial decline in demand for components demand in the recent months)
Thames Card Technology : Growth
| 28COVID-19 : Latest update (2/2)
Industrial measures implemented:
▪ Slow down in production, in order to align with the drop in demand
▪ Implementation of part-time or long-term partial activity measures
Partial activity (supported by government measures) dynamically deployed with
adaptation of resources, according to the workload at the plant, from one week to the next
Departure of more than a hundred employees between Thames and BBP
Thames Card currently at 100% production
Significant reduction in staff
Staff reduction of around 40%
Factory activity considered critical to national security
| 29COVID-19 : update | Short term perspectives
▪ Highly evolutive situation and uncertain duration:
difficult to quantify with precision the effects on
the activity
▪ Major impact on the last four months of the
2019/20 financial year, then in the first quarters
of 2020/2021
▪ Paragon ID benefits from a balance sheet
position which allows it to confidently approach
this troubled environment
PGE of € 15m (balance sheet on June 30, 2020)
▪ Full financial support of the Paragon Group,
primary shareholder of Paragon ID (78.4% of the
capital), confirmed at the Board of Directors’
meeting on October 30, 2020
| 30First-half 2020/21 revenues down -28%
▪ -37% on a like-for-like basis and at constant
Revenue evolution exchange rates
In €M -28%
▪ Due to the Covid-19 context, Transport & Smart
56.3
Cities and e-ID continues to suffer
▪ Transport & Smart Cities: 31% of total turnover H1
2020/21 (vs. 58% au H1 2019/20)
40.7
-28% ▪ eID : 8% of total turnover H1 2020/21(vs. 8%)
-28%
29.5
26.8 ▪ Limited decline in the Traceability & Brand
21.4 Protection business: -10%
19.3
▪ 31% of total turnover H1 2020/21 (vs. 25%)
▪ Payment division continues its sustained
T1 T2 S1 development: +21% proforma half-year growth
▪ 29% of total turnover H1 2020/21 (vs. 8%)
2019/20 2020/21
| 31COVID-19 : update | perspectives
Short-term Mid-term Long term
Slow return of transport users Strong interest in
Transport Significant drop in the use of Paragon ID’s offers to
urban transport Sustained demand for accelerate the deployment of
& Smart Cities contactless the latest technologies
Growth in agribusiness and Economic consequences of Back to normal.
pharmaceuticals
Traceability & the health crisis
Acceleration of the
Brand Protection Significant drop elsewhere Deployment of RFID modernization of the supply
(aeronautics and automotive) technologies in hospitals chain
e.ID Growth in demand for identity documents
Borders’ closures
Identification documents Demand for new products and technologies
Retail rebound with programs Growth of NFC payments
Decline in "Retail" cards linked to the online channel
Payment Strong growth in contactless Interest in metal
Strong growth in NFC payment cards
payment payments
| 32Our key strategic focus per activity
Transport & Smart Cities Traceability & Brand Protection
Develop our “Platform as a Service Ticketing” offer: Take a unique position in the UHF RFID market
offer a complete public transport solution to small Develop our asset tracking and geolocation solutions in
and medium-sized towns healthcare (RFID Discovery)
e.ID Identification documents Payment
Maintain our positions across the Atlantic: American Commercialize our intellectual property in
passport (tender in progress) and driving license contactless metal payment cards
Continue to improve the industrial process Manufacture components for specialized payment
cards as well as our own metal payment cards
| 33www.paragon-id.com
Thank you Let’s continue our journey –
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