11425 zetes annual report 2013 en our strategy light

All the colours of the world unite in the eye in a unique way. _ INTRODUCING BIOMETRICS TO SOCIETY

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ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING IN TODAY ZETES ANNUAL REPORT CONNECTING WHAT MATTERS

STRATEGY Creating value for our customers is what drives Zetes' strategy. We achieve this by answering complex problems to provide our customers with enhanced productivity, quality and data integrity.

A detailed understanding of the business process challenges facing our customers, combined with correct use of technology, lie at the heart of Zetes' value proposition.

Standing out from one’s competitors and maintaining a market leading position require major investments, which must be identified with a clear-sighted approach and implemented in accordance with our long-term vision.

Goods ID: a coherent approach In Goods ID, optimizing the supply chain is a central customer concern. At every level, companies face the challenge of maintaining the fluidity of transactions and optimizing their use of resources.

In response to these requirements, Zetes has segmented its business offering into six solutions that resolve the need for goods traceability. To achieve this, Zetes combines software and hardware to create solutions that facilitate the collection and transmission of information from ‘shop floor’ areas to company data processing systems. Given the frequent similarity of problems that occur from one company to the next, Zetes is concentrating its development efforts on solutions that address the fundamental needs that exist at every step in the supply chain, from production, warehousing, transportation and logistics, to direct sales in retail outlets.

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

Zetes is also investing in developing integration tools, which enable clients to simplify the project management of solutions implementation, in particular by removing difficulties linked to system incompatability.

The company believes this new approach will enable it to achieve two key business goals. Firstly, by strengthening relationships with existing customers and secondly, by convincing new companies, in particular multinationals looking for standardization, consistency and cost rationalization, of its strong capabilities.

The division's focus responds to a changing market and enables Zetes to maintain its lead role as ‘the supply chain traceability experts’.

People ID: a good mix of two contract models In People ID, Zetes sees a particularly profitable future in "Build and Operate' contracts, which it will secure to balance the flow of income into the Group.

Traditionally, Zetes has brought together key devices and processes, on a turnkey

basis, to enable governments to capture and safeguard its citizens’ biographic and biometric data and produce the required identity and travel documents.

Here, remuneration is generally a function of the number of documents issued and although these contracts rarely generate substantial income in the first year, they provide a regular flow of income to the division in the medium and long term."Build and Transfer" projects, on the other hand, are implemented over shorter periods and respond to an urgent customer request. In this case, Zetes again supplies a complete infrastructure, but transfers

Enterprise applications ERP/WMS/TMS

Goods

Wired & wireless networks

Front end communication Complementary application logic

National register AFIS system

People

Physical Identification & data capture Linking the physical and digital worlds

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Digital (Secure) data communication

Host system integration

STRATEGY

it onto the customer and assists with implementation. The level of contribution made for this type of contract is higher, but less regular than a "Build and Operate" contract. Our Group objective therefore is to have a good mix of the two contract types in order to generate a sustainable flow of revenues from People ID. Compared with larger competitors in the authentication sector, Zetes relies on its excellent reputation, built as a result of a growing number of successfully executed projects, to increase market share.

A backbone for the two divisions At the Group level, Zetes' strategy is based on three strategic pillars, each of which are reinforced with five levers that give extra traction to the Group's positioning.

Strategic pillars Strong specialization Zetes remains focused on traceability within the supply chain. To this issue, Zetes brings extensive knowledge of computer systems and builds bridges between the physical and digital worlds. Its command of this area makes the company a partner of choice for customers seeking the best solution to a specific need.

Zetes also specializes in systems for issuing and managing identity and travel documents that are subject to national and international legislation (states, European Union, etc.) and private regulations (ICAO standards in the air travel sector).

Complementary activities Although they address different markets, goods identification and people ID are highly complementary activities. This

complementarity expresses itself as shared identification and data security technologies and in the mobility of solutions. It enables Zetes to utilise existing knowledge held in different divisions to create synergies that enable it to propose innovative solutions to both commercial and governmental organisations.

"Attentive to the needs of business and working closely with customers, Zetes is well placed to become a preferred technology partner."

Europe and Africa Zetes still sees many opportunities in Europe related to regulatory constraints, a growing need for traceability and the constant search for productivity gains.

Rich in raw materials and with fast growing and migratory populations, Africa is also a market with a high demand for auto-ID solutions in the future. The two continents therefore remain priority areas for Zetes and will allow it to sustain its growth levels.

Strategy levers Group solutions Solutions developed by the company itself are an essential component of Zetes’ strategy. These allow a targeted approach by market and provide greater flexibility during implementation.

Innovation and synergies The synergy between Zetes’ various divisions and teams within the group allow the company to remain at the forefront of developments in the sector. Exchanges can take place both across market sectors, between technologies and internationally.

departments or with different solution types.

Maximizing competences Customer contact and service quality are essential elements of the Group's success. In this way our employees can accumulate valuable experience, which is then transfered into the solution sets and becomes a catalyst for further team innovation.

Stability Diversification into different markets reduces dependence on any one sector.

Government contracts are for example less sensitive to economic cycles than business investment. Similarly, certain sectors in the supply chain may slow down while others experience growth or are subject to strict traceability regulations.

The same applies to geographic diversification. Recurring revenues also contribute to the stability of the Group: Zetes enjoys a guaranteed revenue base through its long-term contracts and extensive range of services.

Relationships of trust Attentive to the needs of business and working closely with customers, Zetes is well placed to become a preferred technology partner. This confidence can multiply the number projects available from a single organization, within different

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