CORPORATE PRESENTATION NOV 2017
1. PRESENTATION VALID AT A GLANCE READY FOR A FULLY CONNECTED WORLD Founded in 1957: 60 years keeping up with an ever-changing world Listed Company: Bovespa since 2006 2016 Net Revenues: R$1.7 billion 16 countries: 6,000 employees Global Top 10: Identification of people, things and transactions 450 million microchips: Deployed in 2017 One size does not fit all: Tailor-made solutions and long-term relationships 1/28
1. PRESENTATION VALID AT A GLANCE READY FOR A FULLY CONNECTED WORLD 60% + of market share: ID documents in Brazil 22 million units in 2016 5th largest SIM card producer globally 404 million units in 2016 Top 10 largest producers of financial cards globally 224 million units in 2016 (Smart Cards + Magnetic stripe Cards) 40% of the revenues outside Brazil 2/28
2. GLOBAL PRESENCE FOOTPRINT GLOBAL PRESENCE CREATES TECHNOLOGICAL SYNERGIES DENMARK RUSSIA USA SPAIN CHINA MEXICO PANAMA UNITED ARAB EMIRATES INDIA COLOMBIA INDONESIA SINGAPORE BRAZIL ARGENTINA SOUTH AFRICA MAURITIUS ISLANDS 3/28
3. OUR HISTORY KEEPING UP WITH AN EVER CHANGING WORLD ORGANIC GROWTH AND ACQUISITIONS CREATE A COMBINED RANGE OF TECHNICAL SOLUTIONS INDUSTRIALIZATION ERA INFORMATIZATION ERA DIGITAL TRANSFORMATION ERA CONNECTIVITY ERA HIGH SECURITY PAPER SECURE PRINTING IDENTIFICATION SERVICES CARDS MOBILE SIM CARDS DATA IOT MULTI CHANNEL BLOCK CHAIN 1957 1990 2000 2020 1957 1993 2006 2007 2010 2010 2012 2013 2015 2017 Start of Valid s operation in Brazil (Thomas de La Rue). American Banknote acquires Thomas de La Rue. Benchmark in Brazil for the secure issue of documents. IPO/Bovespa. Payment Solutions in Argentina. Valid rebrands and becomes a Corporation with widely held stock. Valid begins its operations in Europe. Valid starts Payment Solutions in the USA. Valid expands its presence in the US and starts in the secure identification market. New acquisitions solidifies Valid s presence in Europe/Asia. Entrance in the IoT universe through the acquisition of a stake in Cubic Telecom. 4/28
4. FINANCIALS DATA FINANCIALS STEADY GROWTH FOR A LONG PERIOD OF TIME EQUALS ADAPTATION TO CHANGES NET REVENUE R$MM 1637 1724 ADJUSTED EBITDA R$MM 267 307 279 679 706 757 874 937 1175 1296 113 124 166 146 175 200 221 223 420 462 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 5/28
5. MANAGEMENT EXPERIENT MANAGEMENT TEAM OUR SUCCESSFUL BUSINESS STRATEGY HAS BEEN DEVELOPED AND IMPLEMENTED UNDER THE HIGHEST LEVEL OF GOVERNANCE CORPORATION No Controlling Shareholder, No Shareholders Agreemen. Inserted in Bovespa s Novo Mercado, the highest level of Corporate Governance: 100% common shares and 100% tag along. PRESIDENT Sidney Levy VICE-PRESIDENT Marcílio Marques Moreira BOARD MEMBER Cláudio Almeida Prado SHAREHOLDERS BOARD OF DIRECTORS BOARD MEMBER André Luiz Oda BOARD MEMBER Luiz Maurício Leuzinger COUNCIL MEMBER Diogo Lisa Figueiredo BOARD MEMBER Regis Lemos de Abreu Filho FISCAL COUNCIL COUNCIL MEMBER Vanderlei Dominguez da Rosa BOARD MEMBER Bruno Constantino dos Santos COUNCIL MEMBER Murici dos Santos BOARD MEMBERS Majority are Independent, variety of skills and experiences. TOP MANAGEMENT In average, 13 years in the Industry. ID COO (LATAM) Zênio Rimes ID COO (USA) Michael Fox US Transactions COO Alberto Hernandez AUDIT COMITEE Digital Certificate COO Marcio Nunes CEO Carlos Affonso Seigneur d Albuquerque Brazil & Argentina Transactions COO Daniel Impieri EXECUTIVES GROUP EMEA, APAC & LATAM Transactions COO Salvador Cabrera REMUNERATION COMITEE CFO and IRO Rita Carvalho CHRO Patrícia Piñeiro Global Supply Chain Sven Janssen 6/28
6. BUSINESS UNITS BUSINESS UNITS IN 2016 CONVERGENCE OF TECHNOLOGIES 4% Digital Certification 4% Digital Certification 19% Payment 29% 25% Mobile NET REVENUE 44% Payment Mobile ADJUSTED EBITDA 27% Identity 49% Identity 7/28
THE SECURE SIDE OF INNOVATION
6. BUSINESS UNITS IDENTITY CERTIFICATIONS: DENATRAN, DMV WASHINGTON, STATES OF SÃO PAULO, RIO DE JANEIRO, MINAS GERAIS AND OTHER 10 STATES. MAIN REGIONS SOLUTIONS Driver s License Brasil ( CNH ) ID Card Brasil ( RG ) Water Stamps Security printing DMV cards Track & Trace stamps Full service including personnel, systems and over the counter MAIN CLIENTS Transit authorities Federal Police Tax authorities Identification users REVENUES R$MM 230 259 298 351 377 430 462 USA Brazilian States: São Paulo, Rio de Janeiro, Minas Gerais and other 10 states USA: Washington Other countries: Different forms of civil ID. BRAZIL 2010 2011 2012 2013 2014 2015 2016 Volume of documents in 2016 (units): 22 million 10/28
6. BUSINESS UNITS IDENTITY ID TRENDS Bundle Services more data services, SW and integrated solution One Stop Shops (Card/Back office/front Office, Mobile, Data) Traction in Mobile & Biometrics - Physical documents migrating to digital - Improvement of security technology Smart Cities Track and trace solutions increase globally reduction of blackmarket / avoid fraud / increase tax revenues VALID 2017-2020 New traceability solutions New USA states Mobile ID solutions Expansion fiscal stamps 11/28
6. BUSINESS UNITS MOBILE CERTIFICATIONS: 5th LARGEST SIM CARD GLOBAL SUPPLIER MAIN REGIONS SOLUTIONS SIM Card production and customization Statement printing and delivery esim (Embedded SIM) Subscription Management MAIN CLIENTS Mobile Network operators worldwide REVENUES R$MM 308 440 USA MEXICO PANAMA COLOMBIA BRAZIL ARGENTINA DENMARK SPAIN UNITED ARAB EMIRATES RUSSIA SOUTH AFRICA CHINA INDIA INDONESIA SINGAPORE MAURITIUS ISLANDS 164 213 185 204 185 2010 2011 2012 2013 2014 2015 2016 Global Market Share: 7.5% 5th largest SIM Card global supplier Volume of SIM Cards in 2016 (units): 404 million 12/28
6. BUSINESS UNITS MOBILE MOBILE TRENDS Contract periods will likely remain Move to embedded will not happen overnight. Time will ensure ecosystem players are able to move smoothly from removable to embedded SIMs esim will be the engine of IoT growth and MNO (Mobile Network Operators) will lead this process VALID 2017-2020 Internet of Things (IoT) Chips everywhere esim and Subscription Management Platform Automotive Solutions New regions 5G
6. BUSINESS UNITS PAYMENT CERTIFICATIONS: VISA, MASTERCARD, AMERICAN EXPRESS AND EUROPAY MAIN REGIONS SOLUTIONS Chip cards Mobile Banking Magnetic Cards Statements printing Personalization RFID tags Gift Cards Data Marketing Data Analytic Transportation Cards MAIN CLIENTS Financial Institutions Retailers Public Transportation Companies REVENUES R$MM 363 403 408 590 696 845 758 USA COLOMBIA BRAZIL ARGENTINA 2010 2011 2012 2013 2014 2015 2016 Volume of Smart Cards, Magnetic stripe Cards, Contactless + RFID and Gift Cards in 2016: 392 million units 15/28
6. BUSINESS UNITS PAYMENT PAYMENT TRENDS Tokenization IoT devices IoT (connected cars, kitchen appliances, smart houses, etc) Use of the Blockchain technology Virtual cards security enhancement Contactless payments or wearable devices M2M and APIs secured by biometrics security VALID 2017-2020 Explore new regions Implementation of proprietary operating system (OS) Expand mobile banking platform Track & Trace RFID / logistics and healthcare Certified for China market/valid China Inc.
6. BUSINESS UNITS DIGITAL CERTIFICATION CERTIFICATIONS: GOVERNMENT REGULATORS MAIN REGIONS SOLUTIONS E-CPF for individuals E-CNPJ and SSL solutions for companies Electronic credentials for the Internet virtual signatures Public Key Infrastructure MAIN CLIENTS Corporations Individuals Unions Tax authorities REVENUES R$MM 53 64 BRAZIL 29 38 2013 2014 2015 2016 Market share: 15% 17/28
6. BUSINESS UNITS DIGITAL CERTIFICATION VALID 2017-2020 Expand retail network Blockchain - Smart Contracts Cloud services Mobile ID solutions Small companies going digital GOVERNMENT REGULATORS
7. NEW PRODUCTS WHERE ARE WE HEADING TO? SECURITY IN A FULLY CONNECTED WORLD Data Services Internet of Things (IoT) + Track & Trace (T&T) Subscription Management Public Key Infrastructure (Digital Certification) e-licenses Embedded SIM Digital Payment 19/28
7. NEW PRODUCTS VALID ROLE Integrate converging technologies Create sustainable business cases Continue to serve solid institutions
READY FOR A FULLY CONNECTED WORLD
ATTACHMENTS
ATTACHMENTS CONSOLIDATED NET REVENUE EBITDA & EBITDA MARGIN NET INCOME DIVIDENDS CONSOLIDATED NET REVENUE R$MM ADJUSTED EBITDA R$MM CONSOLIDATED NET INCOME R$MM DIVIDENDS R$MM and PAYOUT RATIO %
ATTACHMENTS DEBT PROFILE NET DEBT/EBITDA TOTAL GROSS DEBT NET DEBT & NET DEBT/EBITDA R$MM AND X TOTAL GROSS DEBT R$MM (ACCRUED UNTIL 09/30) GROSS DEBT IN R$ R$MM (ACCRUED UNTIL 09/30) GROSS DEBT IN $ $MM (ACCRUED UNTIL 09/30)
ATTACHMENTS IDENTITY NET REVENUE EBITDA & EBITDA MARGIN VOLUME NET REVENUE R$MM ADJUSTED EBITDA & MARGIN R$MM AND % VOLUME MM
ATTACHMENTS MOBILE NET REVENUE EBITDA & EBITDA MARGIN VOLUME NET REVENUE R$MM ADJUSTED EBITDA & MARGIN R$MM AND % VOLUME MM
ATTACHMENTS PAYMENT NET REVENUE EBITDA & EBITDA MARGIN VOLUME NET REVENUE R$MM ADJUSTED EBITDA & MARGIN R$MM AND % VOLUME MM
ATTACHMENTS DIGITAL CERTIFICATION NET REVENUE EBITDA & EBITDA MARGIN VOLUME NET REVENUE R$MM ADJUSTED EBITDA & MARGIN R$MM AND % VOLUME MM
Carlos Affonso S. d Albuquerque CEO and IRO Rita Carvalho CFO and IRO www.valid.com/ri ri@valid.com + 55 21 2195-7200 Rafael Neves IR, M&A and Planning Manager Eduarda de Castro Miguel IR Analyst Milena Rosa IR Analyst