NYSE / NASDAQ Dubai: CSR. China Security & Surveillance Technology, Inc.

Transcription

1 NYSE / NASDAQ Dubai: CSR China Security & Surveillance Technology, Inc.

2 1 Safe Harbor Statement This presentation includes certain statements that are not descriptions of historical facts, but are forward-looking statements. Such statements include, among others, those concerning our expected financial performance and strategic and operational plans, our future operating results, our expectations regarding the market for surveillance and safety products, our expectations regarding the continued growth of the surveillance and safety market, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause our actual results to differ materially from those anticipated, expressed or implied in the forward-looking statements. These risks and uncertainties include, but not limited to, the factors mentioned in the ''Risk Factors'' section of our Annual Report on Form 10-K for the year ended December 31, 2008, and other risks mentioned in our other reports filed with the Securities Exchange Commission, or SEC. The words ''believe,'' ''expect,'' ''anticipate,'' ''project,'' ''targets,'' ''optimistic,'' ''intend,'' ''aim,'' ''will'' or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward- looking statements. The Company assumes no obligation and does not intend to update any forward-looking statements, except as required by law.

3 2 Company Leading Security & Safety Solution Provider in China Established in 2001 September 2005: OTCBB via a reverse merger October 2007 : New York Stock Exchange (Symbol: CSR) October 2008 : NASDAQ Dubai (Symbol : CSR) Customers mainly include governmental entities and commercial entities Largest homegrown security company

4 3 The Industry Drivers Global incidents have fuelled concerns Improve general public safety Risk management Asset protection Pollution detection Environmental changes Home protection Remote surveillance, alarm and intrusion detection

5 4 Key Drivers in China PRC s security market reached RMB111 billion (US$16 billion) in Market estimated to exceed RMB200 billion ( US$29 billion) by Safe City projects cover 660 cities. Estimated to be about $25 billion over 5 10 years.

6 5 CSST Leading Integrated Security One Stop Shop Wide Distribution Network Comprehensive Product Portfolio Leadership Position Qualification & Recognition Well Capitalized

7 6 Overall Strategy Phase 1 Phase 2 Phase 3 Higher Margins Recurring Revenues Greater Visibility

8 7 Products Camera Solutions Recording & Data Storage Solutions Display Solutions Intruder Detection & Access Control

9 8 Current Target Markets Transportation/Public Areas Gov t Traffic monitoring Bus stations Airports Shopping centres Parks Tourist destinations Government buildings Customs agencies Courts Police stations Prisons Sea ports Commercial/Residential Others Commercial buildings Banks Hotels Shopping malls Residential estates Railways Industrial applications Entertainment venues Exhibition halls

10 CSST Safe City Projects Coverage 9

11 10 Competition Only telecom operators & international players are competitors Higher quality of service International players focus in Tier 1, CSST focuses in Tier 2 & 3 Price less sensitive Higher quality of service CSST competes with local system integrators Brand name and creditability are important Small retail shops Very price sensitive Relatively lower quality Numerous competitors 15,000 to 18,000 vendors. 80% have less than US$10 million annual revenues

12 11 Recognitions Member of Beijing Security & Protection Industry Association Vice-Director of China Security Association Recommended Vendor for Safe City Construction Shenzhen Hi-tech Enterprise Award Best Security Company of Guangdong Province Regional Top 200 Small and Midsize Companies Kunming Safe City Project Completion Award

13 12 Financials Revenue (in USD M) Adjusted Net Income (in USD M) % 96.4 Q1, 2008 Q1, % 14.7 Q1, 2008 Q1, million As of March 31, 2009 * Non-GAAP disclosure: Adjusted for non-cash expenses such as depreciation & amortization, non-cash employee compensation and redemption accretion on convertible notes.

14 13 Sales Analysis Q Revenue by Customers Commercial = 54% Governmental = 46% 54.0% Q Revenue by Components Installation = 77.7% Manufacturing = 15.9% Distribution = 6.4% 77.7% 46.0% Commercial Governmental Installation Manufacturing Distribution 15.9% 6.4%

15 14 Revenue Analysis Revenue Organic Growth (% of Revenue) Q Q % % 85% 89% 90% Q Q Notes: Figures in USD millions : GHP Horwath

16 15 Income Analysis Gross Profit Net Income Q Q * Q Q GAAP NI Non-GAAP NI Notes: Figures in USD millions : GHP Horwath 2007 non-gaap net income excludes the one time gain on disposal of land use rights and properties 2007 adjusted EPS excludes the one time gain on disposal of land use rights and properties Q Q GAAP EPS $ 0.85 $ 0.91 $ 0.72 $ 0.11 $ 0.04 Adjusted EPS $ 0.89 $ 1.20* $ 1.67 $ 0.32 $ 0.30

17 16 Balance Sheet & Guidance Balance Sheet Highlights Guidance USD M Q1, 2009 FY, 2009 Key Items Key Items Cash and Cash Equivalents $72.5 Revenue (USD M) $600 - $630 Working Capital $241.9 Adjusted Net Income (USD M) $108 - $113.4 Total Assets $616.0 Adjusted EPS (USD) $ $2.26 Total Debt $174.6 Total Equity $313.1

18 17 Board Members Guoshen Tu Terence Yap Runsen Li Peter Mak Robert Shiver Chairman & CEO Vice Chairman & CFO Independent Director Independent Director Independent Director Founder of CSST EMBA of Peking University MBA of Chinese University of Hong Kong BBus Finance & Accounting (Australia) Director of Science and Technology Committee of MPS Over 40 years security experience Financial expert, 17 years experience in Big 4 Rich experience in Asian leading enterprises 30 years security experience Presently serves in TC Energy Holdings and The Shiver Group LLC., Aerwav Holdings Inc. 18

19 18 The Road Ahead Internationalization Service Focus Segmentation

20 Internationalization 19

21 20 Internationalization Objectives Expand to other growing security markets Middle East Asia India Africa Raise internal standards International standards VS Chinese standards Forcing internal improvements and upgrades Increase recognition Not only in China, but globally CSST s main focus will still be within the China market but we can t ignore the global growth opportunities

22 21 Internationalization Dubai Listing The Benefits Increase profile First Chinese company First NYSE company Expand shareholder base Long-term shareholders European & Middle Eastern Market expansion Expansion of business operations to the Middle East region

23 22 Internationalization International Partnerships Technology Thermal imaging Data storage Wireless solutions Long term growth strategy Ensure that CSST continually improves and remains relevant Strength through partnership Cooperation is the key to overseas expansion

24 Service Focus 23

25 24 Service Focus First professional security service provider First level alarm response Recurring revenue business model Front End (Client Premises) Detection & Alarm notifications Back End (CSST s NMC) Monitoring system First level response Technical assistance Data management First level response Escalation to police or appropriate bureau Public Security Bureau Second level police response Emergency response Police response

26 Segmentation 25

27 26 Segmentation Consolidation Strategy Step 1 : Market Consolidation Vertical and horizontal acquisitions Add technology, brands & expand product portfolio Step 2 : Internal Integration Economies of scale HR integration Grouping of common business processes and manufacturing functions Integration of Group Step 3 : Segmentation Divisional management Enhance productivity and efficiencies Strategic equity participations or separate listings Manufacturing Distribution Software Installation & Service Education

28 27 Segmentation Manufacturing Division One of the largest security related equipment manufacturers in China Manufacture the key components in the security sector (DVR, camera systems, control access, intruder alarm, display systems, etc) Located within the Shenzhen Industrial Park (Approx. 800,000 Sqm) Address the increasing domestic and global demands for security products To expand OEM export opportunities Possible separate listing or strategic equity partnership to fuel further growth

29 28 Segmentation Installation & Service Division Security system installation and integration services (government & corporate) Monitoring and other security related services Key business focus for CSST (similar to ADT, Brinks, SECOM, PONE) Banking facilities with China Construction Bank, SPD, ICBC, IBM Global Financing (Asia) IBM Global Financing (Asia)

30 29 Segmentation Distribution Division Distribution of security related products throughout China Act as the distributor for our own brands as well as other international brands and Chinese brands via specialised retail outlets (similar to ADI, SECOM, etc) More than 150 branch offices and distribution points throughout China Appointed by leading international brands to be distributor in China

31 30 Segmentation Software Division Security software platform provider TsingVision Security management software Jinlin Traffic management software Powerful, user friendly software platforms will be increasingly important as the market matures and as more cameras and systems are deployed Intelligent software will simplify data management and the processing and interpretation of raw data Possible separate listing and/or strategic partnerships to fuel growth (TsingVision)

32 31 Segmentation Education Division First professional security institute in China Work jointly with the government to improve standards of the security personnel in China (currently there are more than 7 million security guards with no formal training or skills) Official contractor for the security guard training for Shenzhen Public Security Bureau Offer courses and professional certificates and on-going training programs (programs offered will be endorsed by the government) Located in Shenzhen (HTZ s previous factory)

33 32 Summary The Road Ahead The LEADING Security Solution Provider 33