operations update

OperationsUpdate

Isaac Angel

Executive Vice President, Global Operations

Supply Chain Overview

Supply Chain Model & Benefits

• Build to Stock and Build to Order model

• Fulfillment model: DC shipments and direct to customer shipments

• Hybrid model of manufacturing

• Capabilities to rapidly respond to customer requirements

• Overriding dedication to quality of products

• Build a diverse portfolio of technologies — barrier of entry

• Constant re-engineering to retain the leadership position

• New product intros

• State of the art e-SCM tools & systems

• Global capacity

PLAN SOURCE MAKE DELIVER SUPPORT

W O R L D C L A S S P E O P L E

Integration Highlights

Merge CapitalizeIntegrate

• Investments– Oracle 11i upgrade– Inventory investment– NURIT capacity expansion

• Consolidate and simplify– Closed 4 factories and 5 DC’s

• Expanded our in-house manufacturing by 60%

• Largest provider of wireless product in the payment industry

• Focus on demand planning competence– Service level is linked to our ability to plan

2007 Overview

• Successfully merged two different Supply Chains into one cohesive team

• Launched 13 NEW products this year

• Production of over 500K payment systems per quarter

• Implemented (just) Oracle 11i Advanced Planner Module with teams located in US, Singapore and Israel

– Done by employees who didn’t know each other 12 months ago!

• Supply NURIT 8020 turn key out of Brazil

• Completed PCI transition within the product portfolio

Simply the most powerful and nimble Supply Chain

in the payment industry … Undisputed

2008 Plans

• Implementation of ATP – Available to Promise technology

• Continued consolidation of sites

• Focus on Fill Rate improvement (>95%) and lead-time reduction to customers

• Plan and invest to build scale for $2B enterprise

PlanPlan InvestInvest+ ConsolidateConsolidate+

PCI PED

• Challenges

• Inventory

• PCI PED deadline

• Forecast/projections

Ensuring safe handling of sensitive informationand improve cardholder confidence

R&D Overview

R&D Global Footprint

Honolulu

Sacramento

San Jose

Mexico City

ClearwaterMiami

Atlanta

Sao Paolo

Buenos Aires

Paris

WarsawLondon

Bangalore

Singapore

TaipeiHong Kong

Manila

DallasBeijing

SavannahTel AvivSpain

ItalyToronto

New York

Russia

India

Turkey

Australia

Dublin

Product Design Centers Platform Software Development Centers Application Development Centers

Worldwide over 700 personnel developing system solutions

R & D Investment

Note: Hypercom 2006 figures per Morgan Keegan; Ingenico 2006 figures per Merrill Lynch; Ingenico 2003 – 2006 figures converted using exchange rate of US$ 1 = 0.784 Euros

Note: Financials above reflect FYE October 31 for VeriFone and LTM June 30 for Lipman.

$33

$42

$56

$61

$24$27 $28 $27

$44$41

$52

$34

$0

$10

$20

$30

$40

$50

$60

$70

2003A 2004A 2005A 2006A

R&

D S

pe

nd

($

in

mm

)

VeriFone

Hypercom

Ingenico

R&D Integration Highlights

People

• Senior Management

• Program Management

• Dev & Tech Support

• ISS & PAYware teams

Products

• PINpad1000SE (PCI)

• TMS applications

• NextGen Products

Technologies

• NextGen Platform

• PCI 2.0 Platform

• Contactless Platform

Business Process

• PLC Development Process & Sign-off

• Custom Project Process & Sign-off

2007 Overview

• PCI-PED, PCI-EPP, PCI-UPT, PCI-DSS

• EMV level 1 and 2, PBOC 2.0, CB 5.2

• MasterCard TQM and PTS

• Regional Bank/Processor(Class B, Class A, etc)

• Regional Security associations(Interac, CC, Currence, ZKE,SAKO-I, ep2, ETSL, APCA, NETS, EPSCO, PCEC)

Industry Certifications

VeriFone EMV Solutions

• EMV Hardware (L1) compliance on all platforms

– Vx, Nurit, MX, SC 5000, Verix, Smart 5000, OpenPay, Secura, Xplorer, Xtreme

• EMV Software (L2) compliance on all EMV platforms

– Vx, Nurit, MX, SC 5000, Verix, Smart 5000, OpenPay, Secura, Xplorer, Xtreme

• EMV L1 and L2 certifications planned for all new smart card products

– New Vx, Verix, SC 5000, MX modules planned with additional requirements for Canada (EMV Interac compliance); Custom modules for China and France

• MasterCard Terminal Quality Management (TQM)

– Label maintained on all EMV products

FY 2007 – Major Releases

Q1’07

V5 terminal

SC5000 Vx/NURIT PTS

China RoHS

Qx 720

OP 4100

VisualPayments

31 Customs

Q2’07

Vx570 ISDN

NURIT 293

MX870 EMV

FOPT

OTS

(IPCharge)

51 Customs

Q3’07

Vx 510 (PCI)

Vx 610 (PCI)

V5 PINPad

NURIT 2930

NURIT 8400

MX850

MX830

PC Charge 5.7

IP Charge 1.2

69 Customs

Q4’07

Vx 810

Vx 670 (BT)

NURIT 8020 (PCI)

PINpad1000SE

QX110W/T/D

RiTA 3.03

75+ Customs

FY2008 Plan – Solutions

• Product line enhancements

• Integrated & modular contactless

• Expanded communication options

• Platform architecture consolidation

• PCI 2.0 architecture & certifications

• Custom & sustaining projects

• New ECR & UPT system solutions

Payment / Integrated Systems

FY2008 Plan - Systems

• PAYware Merchant, PrePAY, Link, and CMS enhancements & regional customizations

• RiTA Server, IP Charge enhancements

• PC Charge 6.0 release & updates

• VeriFone Managed Services, Rapid Application Development (RADD) Tools

• VeriCentre & NCC enhancement releases

• PCI DSS compliance for all relevant products & services

Enterprise Systems

Mandates

PCI & PABP

Unmatched PCI approved portfolio!

• 27 product models PCI PED approved

• 3 payment applications PABP approved

• 1 payment service CISP approved

Challenges (2008)

• PCI 2.0 architecture, design, and certification for new PEDs & EPPs

• Visa PABP mandates & certifications for new Payment Applications

Oct 1, 2007 PCI EPP (for all newly deployed EPPs)

Jan 1, 2008 PCI PED (for all newly deployed PEDs)

Apr 1, 2008 PCI 2.0 (for all newly submitted PEDs & EPPs)

Jul 1, 2008 PABP certification required on all new payment applications

Jul 1, 2010 All POS PEDs in use must be certified (Visa PED or PCI PED)

Wireless Leadership

NURIT 8000

Vx 670

Vx 610

• Industry leading product portfolio

– NURIT 8000, Vx 670, Vx

610

• Leading wireless technologies

– GPRS, CDMA, Wi-Fi, Bluetooth

• Total solution & services

– Systems, software, gateway, airtime, deployment

– ON THE SPOT Managed for PATT (IPCharge)

• Worldwide network certifications

Thank You!