Thales Sa · EURONEXT:HO
Thales Sa — Merger or Acquisition (July 2023)
25 slides from Thales Sa's merger presentation, Jul 25, 2023
Slide 1: Proposed acquisition of Imperva
Proposed acquisition of Imperva CREATING A WORLD-CLASS CYBERSECURITY LEADER www.thalesgroup.com
Slide 2: Transaction highlights
Transaction highlights Agreement to acquire Imperva, a leading US-based data and application security provider, from Thoma Bravo, subject to regulatory approvals Rare opportunity to create a world-class premium cybersecurity leader Imperva ideally positioned on the fast-growing data and application
Slide 3: Contemplated transaction details
Contemplated transaction details Transaction Proposed acquisition of 100% of Imperva share capital from Thoma Bravo description - 2022 sales of $496m - Sustained double digit top line growth, ~20% EBIT margin in 2027 Closing expected by beginning of 2024, subject to regulatory approvals Transaction
Slide 4: Cybersecurity: a very attractive market and a critical enabler for all Thales businesses
Cybersecurity: a very attractive market and a critical enabler for all Thales businesses Global cybersecurity market (a) Global security protection Aerospace $bn products identity Digital 198 Data +10% Sovereign 136 2022 sales: Defense & protection +11% ~€1.5bn Security Products products Services +9
Slide 5: Transforming DIS into a world-class cybersecurity leader
Transforming DIS into a world-class cybersecurity leader Strongly expanding Accelerating Materially increasing civil cybersecurity sales growth EBIT potential Total Addressable Market 2022, $bn Sales, €bn EBIT, €m +60% +6-7% +380 organic CAGR 36 ~900(b) 5.4 to 5.5 (b) 22 +13% 3,6 520 ~16.5% 2022-26
Slide 6: Imperva: uniquely positioned on data and application security
Imperva: uniquely positioned on data and application security 6
Slide 7: Imperva: leading global data and application security provider
Imperva: leading global data and application security provider 2022 revenue by segment Leading global provider of cybersecurity software solutions 39% 61% Focused on data and application security Data $496m Application security security Founded in 2002 Based in San Mateo, CA 1,400+ employees 2022 re
Slide 8: Addressing some of the fastest growing market segments
Addressing some of the fastest growing market segments Data security Application security Solutions to understand which data is more sensitive Solutions to protect applications after they and to enforce the necessary data protection get deployed, and the data they use and governance capabilities Mai
Slide 9: Recognized leader in both data and application security
Recognized leader in both data and application security Data security: KuppingerCole Leadership Compass ApplicationGartner security: Gartner Magic Magic Quadrant Quadrant for WAAP 2022 for WAAP (a) Overall Challengers Leaders Leader Imperva Follower Imperva Challenger Selected [Imperva] awards 3x Wi
Slide 10: Imperva: positioned for sustained long term growth and cash generation
Imperva: positioned for sustained long term growth and cash generation Robust software business model Sales growth Compelling products and technologies Double Highly recurring revenue model digit High growth, high EBIT margin +8% Structurally high free cash-flow margin US business at scale, with hig
Slide 11: A highly complementary combination
A highly complementary combination 11
Slide 12: Establishing a world-class cybersecurity product portfolio
Establishing a world-class cybersecurity product portfolio protecting the most critical enterprise assets Identity Data Applications Customer Identity & Hardware Security Data discovery Web App. Firewall Access Management Modules & classification Data security Workforce Identity & Encryption DDoS pr
Slide 13: Creating the global benchmark data security platform
Creating the global benchmark data security platform Identity Data security platform Applications A B C Customer Identity & Hardware Security Data discovery Access Management Web App. Firewall Modules & classification Workforce Identity & Data security Encryption DDoS protection Access Management go
Slide 14: Run rate pre-tax cost and revenue synergies estimated at $110m
Run rate pre-tax cost and revenue synergies estimated at $110m $50m run-rate cost synergies, Expected ramp-up of synergies achieved by 2028 $m, EBIT impact SG&A savings on full perimeter Procurement cost reduction ~110 Real estate footprint optimization ~100 ~70 Revenue $60m EBIT impact of revenue s
Slide 15: Building a world-class global cybersecurity leader with a comprehensive range of products
Building a world-class global cybersecurity leader with a comprehensive range of premium products and solutions Key pro forma metrics Global security products • Data security ~€2.4bn(a) sales in 2024 • Application security Double digit organic growth • Identity & Access management Reported EBIT marg
Slide 16: Major expansion of civil cybersecurity Total Addressable Market
Major expansion of civil cybersecurity Total Addressable Market $bn +60% Market 2022-26 CAGR 36 +13% Market 2022-26 CAGR 8 Data & OneWelcome 12 application security +14% +10% 22 2 3 +10% 4 Identity & Access 12 Management +13% +10% 9 Premium cybersecurity 12 +10% +10% 9 services (EMEA, APAC) Current
Slide 17: Significant enhancement of DIS financial profile
Significant enhancement of DIS financial profile DIS pro forma 2024 sales mix DIS sales and EBIT margin(b) 27% Banking & €bn +6-7% organic Payment CAGR D&S civil 5.4-5.5 cybersecurity business(c) ~4.5 44% 2024 sales(a) 3.6 ~16.5% Global ~€4.5bn 13% cybersecurity Mobile solutions connectivity 14.4% 1
Slide 18: Significant value creation
Significant value creation 18
Slide 19: Significant value creation for Thales shareholders
Significant value creation for Thales shareholders Attractive transaction multiples Value creative to Thales Enhancing DIS financial profile $3.6bn Enterprise Value, net of tax assets(a) Significant medium-term adjusted Implied EV/2024E sales multiple: 6.1x EPS accretion Implied EV/2024E EBIT post-s
Slide 20: Acquisition in line with disciplined capital deployment framework
Acquisition in line with disciplined capital deployment framework Pro forma 2024E net debt/EBITDA leverage ~0.7x(a) Rapid deleveraging anticipated Solid investment grade profile maintained Confirmation of attractive distribution and capital allocation policy Confirmation of target dividend pay-out r
Slide 21: Key takeaways
Key takeaways Rare opportunity to build a global leader in data and application security, driving very significant synergies Structurally Creation of a world-class premium higher quality cybersecurity leader portfolio Transaction significantly accretive to Sustainable shareholder value DIS financial
Slide 22: Appendix
Appendix THALES
Slide 23: Tripling addressable market in data and application security
Tripling addressable market in data and application security Thales data & application security Total Addressable Market $bn x3 Entering application Broadening data security product security market 12 range thanks to C Imperva 3 B 5 4 A Current TAM with TAM Imperva TAM 2022-26 +10% +15% +18% +14% CA
Slide 24: Definition of non-GAAP measures and other remarks
Definition of non-GAAP measures and other remarks Rounding of monetary amounts In the context of this presentation, the amounts expressed in millions of euros or dollars are rounded to the nearest million. As a result, the sums of the rounded amounts may differ very slightly from the reported totals
Slide 25: Contact
Contact Thales investor relations 6, rue de la Verrerie 92190 Meudon France [email protected] This presentation contains certain forward-looking statements. Although Thales believes that its expectations are based on reasonable assumptions, actual results may differ significantly from these forward