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INSIDE Secure Overview

Barclays Capital, New York, March 23-24, 2015

Richard Vacher Detournière, GM & CFOLoïc Hamon, SVP Corp. Dev. & Communication

March 2015

| - INSIDE Secure Investor PresentationMarch 152 |

DISCLAIMER

This communication does not constitute an offer to purchase or exchange or the solicitation of an offer to sell or exchange anysecurities of INSIDE Secure.

This communication contains certain statements that are neither reported financial results nor other historical information and otherstatements concerning INSIDE Secure. These statements may include financial projections and estimates and their underlyingassumptions, statements regarding plans, objectives and expectations with respect to future operations, events, products and servicesand future performance. Forward-looking statements are generally identified by the words "expects", "anticipates", "believes","intends", "estimates" and similar expressions. These and other information and statements contained in this communicationconstitute forward-looking statements for purposes of applicable securities laws. Although management of the company believes thatthe expectations reflected in the forward looking statements are reasonable, investors and security holders are cautioned thatforward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict andgenerally beyond the control of the company, that could cause actual results and developments to differ materially from thoseexpressed in, or implied or projected by, the forward-looking information and statements, and the company cannot guarantee futureresults, levels of activity, performance or achievements. Factors that could cause actual results to differ materially from thoseestimated by the forward-looking statements contained in this communication include, but are not limited to: trends in semiconductorand wireless communication markets; the company's ability to develop new technology and the effects of competing technologiesdeveloped and expected intense competition generally in the companies' main markets; profitability of expansion strategy; challengesto or loss of intellectual property rights; ability to establish and maintain strategic relationships in its major businesses; ability todevelop and take advantage of new products and software; future acquisitions and investments; the ability of the company's tointegrate acquired businesses, activities and companies according to expectations; the ability of the company to achieve the expectedsynergies from acquisitions; and changes in global, political, economic, business, competitive, market and regulatory forces.Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. The forward-looking statements contained in this communication speak only as of the date of this communicationand the company are under no duty, and do not undertake, to update any of the forward-looking statements after this date to conformsuch statements to actual results, to reflect the occurrence of anticipated results or otherwise except as otherwise required byapplicable law or regulations.


Financial Overview

Market Overview and Vision

Overview and Solutions

AGENDA

Q&A

Appendix


Financial Overview



AGENDA

Q&A

Appendix

| - INSIDE Secure Investor PresentationMarch 155

Mobile Security Secure Transactions

FROM MOBILE COMPUTING TO THE IOT WORLD, BILLIONS OF CONNECTED DEVICES NEED TO BE TRUSTED

1,000,000

100,000

10,000

1,000

100

10 2000 20202010

Dev

ice/

Use

rs (

MM

in L

og S

ales

)

1 Billion Units

Mobile Internet

Internet of Things

10 Billion Units

100 Billion Units

A unique market opportunity

INSIDE Secure is organized around two

divisions

Computing & Communication


ADD-ON SECURITY METHODS HAVE FAILED

!

39% cite security and privacy as top barriers to IoT investments

$6.1B estimated annual cost of piracy to studios

$100M projected cost of Sony's hacking scandal

of consumers won’t use digital wallets due to security concerns

Mobile banking Trojans grew by 56% in 2014

Content providers enforcing security requirements

1 billion records breached in 2014

US senators demand laws to protect cars

46%


� Your Android smartphone may look innocent. But when compromised by malware, it can illegally watch and impersonate you, participate in dangerous botnet activities, capture your personal data, and even steal your money

MULTIPLE RISKS FACING SMARTPHONE


� In response to today’s “Internet of Everything”, wher e billions of devices must be trusted, Security is fundamental ly re-shaping:

� Internet security is at the edge of an important cr ossroads, from the world of “connected security” to “embedded security”, where only true protection lies.

� Security is moving from a world where any device/ob ject was considered “secure” when connected to a smart card -- to a world of security embedded at the heart of the system, at th e heart of the main processor of the device.

� INSIDE Secure’s mission is to Drive security innova tion to meet demands of new Mobile and “Internet of Everything” age by design ing, developing and selling embedded security systems in order to prote ct transactions, content, and communication.

INSIDE SECURE’S VISION AND MISSION


�From connected world to a world of Embedded security world

� Security need to the tightly embedded at the heart of any system, at the heart of the main processor of the device (e.g. Smartphone, IoT Device, etc)

�Security Architectures and Certification Schemes need to be re-invented.

THE WORLD OF SECURITY IS CHANGING

User

Application

Operating System

Hardware


SECURITY AT THE HEART OF THE SYSTEM

Peer Device

Strong User Authentication

Secure Execution Environment

Strong Cloud/Peer Auth./Communication

SECURE IPs for COMPONENTS

• CRYPTO-CELLS• PACKET• ENGINES• RNGS

SECURE TAMPER PROOF CHIPS

• EMBEDDED SECURE ELEMENT

• JAVACARD OS• APPLETS

APPLICATION PROCESSOR

• SAFEZONE• SECURITY

TOOLKITS• DATA

ENCRYPTION

PLATFORM OS(Android, iOS, etc)

• EMBEDDED DRM• EMBEDDED VPN• MATRIX SSE

APPLICATIONSEND-to-END

• DRM CLIENT• VPN CLIENT• MATRIX SSL• MATRIX HCE

Provided by INSIDE Secure

Cloud services


� VaultIP helps silicon platform providers comply with stringent US government security standards while avoiding high costs and go-to-market delays of certification.

CRITIAL MILESTONE: AVOID GO -TO-MARKETS DELAYS OF CHIP SECURITY CERTIFICATION

FIPS 140-2 PRE-CERTIFICATION ADVANTAGECertification Timeline

TRADITIONAL CERTIFICATIONCertification Timeline

VS

REDUCECERTIFICATION

COSTS BY75%

Uses NIST sub-1 revalidation

All documents necessaryfor certification are included

CERTIFIED IP 1 month 12 month

EnterFIPS

CMVP

EnterFIPS

CMVP


Financial Overview



AGENDA

Q&A

Appendix


A WORLD LEADER IN EMBEDDED SECURITY FOR MOBILE AND CONNECTED DEVICES

Revenue CAGR 2010 – 2014:

+13% per annum

$125.4M revenue in 2014, generated through the sale /

licensing of secure microcontrollers (HW), HW IP

and software

An IPR portfolio in excess of700 patents

350 employees with European & U.S.

development centersServing more than 100

blue chip customers on growing and diversified end-

markets

INSIDE Secure are shipping in 300m devices per year

Supportive reference shareholders: Bpifrance (7.1%) and GIMV (12.5%)


PAYMENT AND MOBILE BANKING

� The broadest security offering for payment technologies from Smartcard to Virtual Payment Card for Mobile Devices.

� Leveraging over 20 years of Experience to meet the evolving Security and Certification needs of the traditional and emerging Payment markets like HCE Mobile Payment.


ENTERPRISE SECURITY AND SECURE ACCESS

� Helping Enterprises and Governments Secure access to critical information for Employees from anywhere.

� INSIDE Secure brings traditional Enterprise VPN solutions, Security tokens and addresses demand for mobility such as Bring-Your-Own-Device through certified Cryptography, Authentication, and Secure Protocols

� INSIDE Toolkits Solution offer the highest level of interoperability to both device and networking OEMs.


CONTENT PROTECTION AND ENTERTAINMENT

� Enabling Secure Content access and protecting rights anywhere, at anytime, and from any Device.

� Allowing Broadcasters, Content Owners, Mobile Operators to provide a variety of purchasing and consumption models for Premium Multimedia Content to Consumers.

� Industry Leaders such as BBC, HBO, AT&T, SKY, Orange and over 80 companies already use INSIDE DRM solutions.


SECURE IOT AND BRAND PROTECTION

� Identifying Objects and Securing Communications to enable the Internet of Things and Brand Protection

� Anticipating and bringing best-fit Security to the fast growing Objects to Objects market by addressing needs for Authentication, Secure Communication, Information protection and User Privacy.

� Protecting Brands by offering Anti-counterfeiting, Secure Traceability and Unique Identification of the Object while enabling Consumer Marketing Value-Added Services.


INSIDE SECURE STRATEGY IS FOCUSED ON 2 STRATEGIC AND 2 TACTICAL GROWTH DRIVERS

Leverage and monetize NFC IP technologyand IPR licensing

Extend positionin the fast growing

market of security for mobile applications

Supportthe migration

to EMV in the US

Drive business development of the

anti-counterfeiting and secure IoT markets

Mobile Security Secure Transactions


A STRONG BASE OF BLUE CHIP CUSTOMERS AND PARTNERS

100+ BLUE CHIP CUSTOMERS PARTNERSHIPS


A DEMONSTRATED TRACK RECORD OF ACQUISITIONS

September 2010 December 2012 April 2014

Unique expertiseon securing applications

on mobile platformsand on secure technologies

in embedded softwareand hardware IP

Expand portfolioof solutions of Mobile

Security division: obfuscation, white box cryptography, “software

secure element”

Acquire security expertise for microcontrollers with

highest certification levels

Successful integration of acquisitions over the las t 4 years enriches INSIDE Secure expertise and offering


STREAMLINED, EFFICIENT ORGANIZATION WITH GLOBAL FOOTPRINT


� The World of Security is changing from “Connected” security to “Embedded” security

� Security needs to be integrated at the heart of your system…

� There are architectural and certification challenges ahead!

� All Security is a living process:

� Choose your solution carefully…

� Choose your partners even more so…

� INSIDE Secure’s mission is to Drive security innovation to meet demands of new Mobile and “Internet of Everything” age by designing, developing and selling embedded security systems in order to protect transactions, content, and communication.

TAKE AWAYS


INVESTMENT CASE

Strong position in selected niche markets with high growthpotential and significant barrier to entry

Business model of IP and products, providing flexibility and leverage

Sound balance sheet with disciplined cash management

A uniquely positioned leader to addressthe fast-growing market opportunity of the security “New Frontier”

History of innovation fuelling an extensive IP portfolio

Unique positioning on embedded secure hardware, softwareand IP solutions


Financial Overview



AGENDA

Q&A

Appendix


� Consolidated revenue of $125.4 million in 2014 with fundamentally different product mix compared with 2013

� Strong growth in adjusted* gross margin to 59% of revenue vs. 39% in 2013, as a consequence of the strategic repositioning

� Adjusted operating profit of $8.1 million vs. a loss of $3.0 million in 2013

� Third consecutive half-year of positive adjusted operating profits and EBITDA

� Metaforic integration completed, with encouraging business momentum

� First success of strategy of monetization of the Groups’ NFC technology and patents (new license agreement with Intel in June 2014, LG/France Brevets patent licence agreement in August 2014)

2014 KEY HIGHLIGHTS

* Definition in Appendix


FY 2014 REVENUE

in thousands of US$

12 months 2014

12 months 2013

% Change annual

Mobile Security 57 938 73 797 -21%

Secure Transactions 65 391 80 827 -19%

Unallocated 2 033 - -

Total Revenue 125 362 154 623 -19%

FY 2014 revenue down 19% but with a fundamentally different product mix andwith higher margins, in line with the Group strategic repositioning

Revenue from embedded security solutions gradually replacing the sales ofNFC connectivity component

Total Revenue 125 362 154 623 -19%


SUCCESSFUL EXECUTIONOF STRATEGIC REPOSITIONING

Revenue split by nature (in m$)

122(79%)

67(53%)

33(21%)

59(47%)

2013 2014

Revenue from licences,

royalties, development and

maintenance

Revenue from sale of products

(Chip based)

Adjusted gross margin trend

37,9% 39,8%

58,9% 59,8%

H1 2013 H2 2013 H1 2014 H2 2014

High-value products and SW and IP model driving pro fitability

(ie les $)


ADJUSTED INCOME STATEMENT

in thousands of US$

12 months 2014

12 months 2013

Revenue 125 362 154 623

Cost of sales (adjusted) (50 963) (94 363)

Adjusted Gross profit 74 399 60 260

in % of revenue 59,3% 39,0%

R&D expenses (adjusted) (33 201) (31 903)in % of revenue -26% -21%

Selling & marketing expenses (adjusted) (20 530) (20 477)in % of revenue -16% -13%

General & administrative expenses (adjusted) (12 419 ) (10 570)in % of revenue -10% -7%

Other (losses)/gains, net (adjusted) (128) (261)

Total adjusted operating expenses (66 278) (63 212)

Adjusted operating income 8 121 (2 952)in % of revenue 6,5% -1,9%

24% increase in adjusted gross profit:anticipated revenue contraction offset by improvement in adjusted gross margin

Absence of R&D expenses capitalized on the balance sheet in 2014 vs 2013 and lower research tax credit

Positive impact of 2013 restructuring plan but partly offset by the integration of Metaforicin the Group

Revenue 125 362 154 623

Adjusted operating incomein % of revenue

81216,5%

(2 952)-1,9%


MOBILE SECURITY

(6 676)

11 525

2013 2014

73 797

57 938

2013 2014

Adjusted operating income (in $m)Revenue (in $m)

20%

(21%)

(9%)

X% = Adjusted operating incomeas a % of revenue

• Decrease in sales due to discontinuation of NFC sales to BlackBerry• Sharp increase in gross margin from 49.4% to 89.2% reflecting a more favorable

product mix• Third half-year in a row of adjusted operating profit


5 895

(5 309)

2013 2014

SECURE TRANSACTIONS

Adjusted operating income (in $m)Revenue (in $m)

(8%)

(19%)

7%

X% = Adjusted operating incomeas a % of revenue

• Decline in revenue due to continued erosion of legacy EMV and ID business in Europe

• Progressive ramp-up of new product lines in connected devices and IoT• Slight decrease in adjusted gross margin to 31.6% (-100bps)

80 827

65 391

2013 2014


FY 2014 CASH FLOW

(1.5)

(6.4)

(12.9)

(1.7)

0

10

20

30

40

50

60

40.28.4

Net income excluding non-

cash itemsMetaforic

acquisition

Change in working capital

OtherRepayable advance

Capital expenditure

s

Restructuring cash outlays

36,3

7,2

Significant inventory reduction ($5.3 million) along with increased factoring ($5.7 million) off-setting other working capital items.

Cash generated by operationsfinancing significant investments and

leaving end of year cash position well-preserved

Dec. 31, 2013

Dec. 31, 2014

In millions of US$


28 840

13 716

1 196

34 454

24 623

STRONG BALANCE SHEET

In $ ‘000

-

12 132

90 698

As of December 31, 2014

PP&E and intangible assets

Other non-current assets

Working capital

Net cash *

Equity

Other liabilities

Assets Equity & liabilities

12 893

13 580

9 919

(29 756)

Other receivables (net)

Inventories

Trade & other payables

Trade receivables

Goodwill

9 710 Research tax credit (net of financing)

(2 630) Unearned revenues

12 217

3 192

Mobile Security

Secure Transactions

102 829 102 829

* Definition in Appendix


� Win customers in mobile and connected devices with our embedded security solution approach

� Get first significant commercial success in mobile banking and HCE MPayment thanks to our unique offering (derived from Metaforic acquisition )

� And: (i) ramp up volumes in the US and countries adopting EMV;(ii) sign new licensees with NFC patents program through France Brevets

OUTLOOK 2015 - CONFIRM POSITIVE IMPACT OF STRATEGIC REPOSITIONING

Our Vision:• In response to today’s “Internet of Everything”, where billions

of devices must be trusted, Security is fundamentally re-shaping:• Internet security is at the edge of an important crossroads, from the world of

“connected security” to “embedded security”, where only true protection lies.• Security is moving from a world where any device/object was considered

“secure” when connected to a smart card -- to a world of security embedded at the heart of the system, at the heart of the main processor of the device.


Financial Overview



AGENDA

Q&A

Appendix


DEFINITIONS

Adjusted measures� Certain financial measures and performance indicators are presented on an adjusted basis. These indicators are

not defined under IFRS; they should be considered to be supplementary information, not substitutable for any other indicators of operating and financial performance that are strictly accounting measures, such as those presented in the Group's consolidated financial statements

� Adjusted gross profit is defined as gross profit before (i) the amortization of intangible assets and masks related to business combinations, (ii) any potential goodwill impairment, (iii) share-based payment expense and (iv) non-recurring costs associated with restructuring and business combinations carried out by the Group.

� Adjusted operating income/(loss) is defined as operating income/(loss) before (i) the amortization of intangible assets and masks related to business combinations, (ii) any potential goodwill impairment, (iii) share-based payment expense and (iv) non-recurring costs associated with business combinations carried out by the Group.

� EBITDA is defined as adjusted operating income before depreciation, amortization and impairment losses not related to business combinations.

Net cashis defined as cash at hand, cash equivalents and short-term investments, the net amount of derivatives, less finance lease liabilities, bank overdrafts and bank loans, and deferred payments due in connection with business combinations. Debt related to the financing of research tax credit (CIR) claims with a maturity equivalent to the CIR claims they finance are not taken into account since they are intended to be extinguished upon repayment by tax authorities of CIR claims.


RECONCILIATION FROM ADJUSTED TO IFRSFY 2014

in thousands of US$

2014 Adjusted

Business combination

Sharebased payments

Other non-recurring costs

2014 IFRS

Revenue 125 362 - - - 125 362

Cost of sales (50 963) (11 932) (43) - (62 938)

Gross margin 74 399 (11 932) (43) - 62 424


R&D expenses (33 201) (1 770) (123) - (35 095)

Selling & marketing expenses (20 530) - (283) - (20 813)

Genaral & administrative expenses (12 419) - (108) - (12 527)

Other (losses)/gains, net (128) 3 890 - 159 3 921

Operating income 8 121 (9 812) (557) 159 (2 089)

in % of revenue 6,5% -1,7%

Revenue 125 362 - - - 125 362

operating incomein % of revenue

8 1216,5%

(9 812) (557) 159 (2 089)-1,7%


in thousands of US$

2013 Adjusted

Business combination

Sharebased payments

Other non-recurring costs

2013 IFRS

Revenue 154 623 154 623

Cost of sales (94 364) (11 953) (71) (106 389)

Gross margin 60 259 (11 953) (71) - 48 235


R&D expenses (31 903) (1 869) (181) - (33 953)

Selling & marketing expenses (20 477) - (171) - (20 648)

General & administrative expenses (10 570) - (132) - (10 702)

Other (losses)/gains, net (261) (599) - (9 838) (10 698)

Operating income (2 952) (14 421) (555) (9 838) (27 766)

in % of revenue -1,9% -18,0%

RECONCILIATION FROM ADJUSTED TO IFRSFY 2013

Revenue 154 623 - - - 154 623

operating incomein % of revenue

(2 952)-1,9%

(14 421) (555) (9 838) (27 766)-18,0%


INVESTOR INFORMATION

INSIDE Secure

Corporate

communication

Géraldine Saunière

Marcom Director

+33 (0) 4 42 39 33 01

[email protected]

Brunswick

Financial communication

Jérôme Biscay

+33 (0) 1 53 96 83 83

[email protected]

INSIDE Secure

Investor relations

Richard Vacher Detournière

GM & CFO

[email protected]

Financial Calendar

Q1 2015 Revenue April 30, 2015

www.insidesecure.com

http://www.insidesecure-finance.com

CONTACTS

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