Highlights 2014 Year of Ramp-Up

Transcription

1 Highlights 2014 Year of Ramp-Up Sales.. Organisational.. Financial.. Sales August NEXT Biometrics Sensors certified by Microsoft Sales August Signing of Distributor Agreement in Brazil DuoDigit Organisation August Hire of VP Sales EMEA Sales July First Notebook Design Win TIER 2 Sales July sensors shipped in June Sales June Signing of Distributor Agreement in the US Fulcrum Biometrics Financial June Successful completion of the IPO NOK 192 mill raised Financial June FOXCONN invests in NEXT Biometrics and supports upcoming IPO Sales June FOXCONN and NEXT to explore multiple opportunities of co-operation Sales May sensor unit order from China Organisation May Svenn-Tore Larsen, Brita Eilertsen and Inger B. Ørstavik to join NEXT Board Sales April sensor unit order from India Sales April Strategic Partner Agreement Update 3 years contract Organisation March NEXT hires Charles Ng as VP Sales Americas- Opens office in Silicon Valley Sales March NEXT receives first order from India Other February NEXT joins the FIDO Alliance Sales January Leading Chinese System Integrator places purchase order Organisation January NEXT names Knut Stålen as new CFO Sales January Integration unit order for new mass market segment Other January Launch of Web site in English and Chinese 1

2 NEXT BIOMETRICS GROUP ASA H August 26 th -2014

3 H NEXT Biometrics Group ASA 1. Update technology & positioning 2. Market Trends & Sales status 3. Status ramp-up mass production 4. Financials 5. Outlook 6. 3

4 Attractive technology enabling cost advantages.. NEXT modules meet the pricing requirements of all major present and targeted applications 1 The sensing principle The Active Thermal Principle is based on transfer of heat from sensor into finger ridges and valleys The production process The advantage of polysilicon Module level competitiveness The unique simplicity of the NEXT pixel designs allows for mass production using standard display fab processes Manufacturing in such LTPSfabs is done at very high yields and at a fraction of comparable competitors costs The sensor level competitiveness together with the NEXT ASIC allow for manufacturing of complete modules at very low cost levels 840 sensors per sheet manufactured NEXT s production cost is 70 80% LESS than alternatives of the same quality 4

5 About fingerprinting..and size.. No substitute for sensor size... FINGERPRINTING IS ABOUT UNIFORM CAPTURE AND COMPARISON OF A STATISTICALLY ROBUST NUMBER OF UNIQUE FEATURES IN THE HUMAN FINGER MINIMUM FEATURE MATCH REQUIREMENT IN A COURT OF LAW = OVERLAP OF 8-12 MINUTIA POINTS THE ACTIVE AREA OF THE NEXT SENSOR IS 201 mm2 * THIS SIZE OFFERS A HIGH LEVEL OF SECURITY AND CONVENIENCE FOR A VERY HIGH %-AGE OF A POPULATION SECURITY AND CONVENIENCE ARE BY NATURE OPPOSITE FORCES REDUCED SENSOR SIZE = REDUCED SECURITY AND/OR CONVENIENCE WITH TOLERANCES FOR REAL LIFE OCCURANCES OF WORN, WET, DRY, DIRTY AND DAMAGED FINGERS 5 MINIMUM SENSOR SIZE USED BY QUALITY DEPENDENT SYSTEM INTEGRATORS WORLD WIDE = 148 mm2 (with a frame for finger placement guidance) LAWS OF NATURE APPLY: NOT REALISTIC TO COMPENSATE FOR SMALL SIZES BY «FIXES» IN ALGORITHMS, ETC.

6 ..uncompromised security and convenience.. Competitive landscape Convenience focused small formats Formats offering both convenience & security 30 mm 2 Format offering medium level of convenience at low level of security mm 2 New low cost formats targeted for launch in 2014 and mm 2 Smallest sensor area ever sold in volumes to mass market system integrators 201 mm 2 Size defined in collaboration with major world players in payments and public ID 230 mm 2 No.1 in silicon area sensor markets 10 mill+ sold (and used) FIPS approved 6 Source: Company market view and intelligence

7 at lower prices in all segments.. Competitive landscape Convenience focused small formats Formats offering both convenience & security Traditional markets USD USD 5-8 USD Smartphones, Tablets, Notebooks Source: Company market view and intelligence USD 5-7 (expected) USD 4-5

8 and with stronger IP Approved patents, trade secrets, structure of mass production industry Active thermal conductivity Capacitive sensing A unique principle owned and controlled by NEXT Not close to or overlapping with competition 8 Source: Company market view and intelligence

9 a 4 th Significant competitive advantage.. Significantly lower pricing 70%-80 cheaper than same size silicon sensors 20-35% cheaper than new tiny area (poorer performance sensors) Uncompromised security & convenience Polysilicon technology allows robust sizes at low cost NEXT not forced to reduce size to stay price competitive Clean IP NEXT owns and controls the Active Thermal Principle No close competitors No overlap with others.. Flexibility of integration The NEXT module design allows low cost and fast adoptions to customer integration needs at module level Increases NEXT markets further.. A handful of variations under development 9

10 Size of addressable markets Total size of relevant part of key market segments in million units.. Traditional markets Smartphones & Tablets Notebooks & Accessories New NEXT-enabled markets Total potential addressable market Higher 2 billion units + annually level in 2016 security segments NEXT aims to be a leading provider in all stronghold & segments 10 Source: Company market view and intelligence Competitiveness: = very good = good = medium = poor

11 Relative competitiveness and NEXT positioning Low-end segments Traditional markets Smartphones & Tablets Notebooks & Accessories New NEXT-enabled markets ID centric Price sensitive Lower level security segments Higher level security segments 11 Source: Company market view and intelligence Competitiveness: = very good = good = medium = poor

12 Relative competitiveness and NEXT positioning High-end segments Traditional markets Smartphones & Tablets Notebooks & Accessories New NEXT-enabled markets ID centric Price sensitive Lower level security segments Higher level security segments NEXT aims to be a leading provider in all stronghold & segments 12 Source: Company market view and intelligence Competitiveness: = very good = good = medium = poor

13 Time to market High level of security & convenience NEXT started volume delivery in June 2014 Medium level of security & convenience Competitors targeting launch of new sensors later 2014 and in 2015 Low level of security & convenience Existing sensors already available No significant changes influencing NEXT Q2/Q : Only Apple, Fingerprint Cards, and NEXT will be shipping quality area sensors in volumes Source: Company market view and intelligence

14 Sales processes Traditional sensor markets Lead time and dynamics of sales processes per segment X leads Start Samples System integration Start Samples System integration Volume shipments = x leads * hit-rate * 1-10 k per month STATUS PR JUNE 9th customer engagements 25+ have received first samples 9 have ordered system integration volumes* 2 have place volume purchase orders * Inclusive the first two signed 3-year agreements STATUS PR AUGUST 21 st on-going customer engagements - 14 have received final samples - 20 requests specialized samples (1-3 months) - 11 have received system integration units - 4 have placed volume purchase orders - Order reserves for 2014 = units.. Jan Feb March April May June July Aug Sept Oct Nov Dec Q1-15 Q2-15 Q

15 Sales processes NEXT-enabled sensor markets Lead time and dynamics of sales processes per segment STATUS PR JUNE 9th in customer engagements 3 have received first samples 1 have ordered system integration volumes STATUS PR AUGUST 21 st on-going customer engagements - 3 have received final samples - 3 requests specialized samples - 2 have received system integration units - 1 prototype final product has been completed X leads Start Samples Prototypes Pilot runs Start Samples Prototypes Pilot runs Volume shipments = x leads * hit-rate * 5k-250 k per month Jan Feb March April May June July Aug Sept Oct Nov Dec Q1-15 Q2-15 Q

16 Sales process smartphones, tablets and notebooks Lead time and dynamics of sales processes per segment STATUS PR JUNE 9th customer engagements 8 have received first samples 2 have ordered system integration volumes * * First prototype phone project STATUS PR AUGUST 21 st on-going customer engagements - 10 have received samples - 4 have received system integration units * - First DesignWin Notebooks * inc first prototype phone project x leads Start Samples Prototypes Design wins Pilot runs Start Samples Prototypes Design wins Pilot runs Volume shipments 16 Jan Feb March April May June July Aug Sept Oct Nov Dec Q1-15 Q2-15 Q3-15

17 Notebooks, Tablets & Smartphones 1 st Design Win Notebooks - Asian TIER 2 Flagship model - To ship in Q1-15 Publishes with product launch in 2015 Microsoft Certification - Windows 7 & Windows No 3 among area sensors that can be integrated in the device - Among these - first player to meet mass market targeted pricing. FOXCONN Processes - Smartphones - Tablets - Others 17

18 VP Sales EMEA Starts working September 28 th 2014 A highly respected fingerprint sensor industry resource 10 years + experience within these markets Will target Europe, Middle East and Africa Americas Asia EMEA 18

19 Status ramp-up mass production Sensor Sensor coating ASIC Module & Assembly Component. Pipeline PO of 1 mill units placed Delivery in Sept/Oct 3 rd party coating meets meets targets 2 million ASICs in production 2 mill to be delivered in 2014 Capacity of 600 k + from Sept to Dec. Capacity 2015 Unlimited capacity 1.8 mill units per month Fast access to increase Unlimited capacity Sharp ramp-up of capacity for NEXT expects to have a quarterly production capacity of more than 5 million modules in Q1-2015

20 Status ramp-up mass production Sensor Sensor coating ASIC Module & Assembly 1.8 mill per month < 10 cents per sensor 20

21 Continuously working towards reduced module cost Q production cost 0% -10% -20% 1 COST DOWN Q2-2014: - Reduced number of components - ASIC volume discount - Coating volume discounts -30% 2-40% -50% -60% COST DOWN Q3-2014: - ASIC volume discounts - Coating line expansion 5 COST DOWN Q3-2015: - ASIC process change - Volume related reductions Target 2015 production cost -70% -80% -90% 3 COST DOWN Q4-2014: - ASIC size reduction - Delivery of coating tool 4 COST DOWN Q2-2015: - Sensor volume milestone price down (contracted) -100% NEXT targets a production cost for complete sensor modules below USD 3 for volume shipments by year-end

22 P&L statement Condensed consolidated interim P&L statement Comments Amounts in NOK Q Q H H-2013 YEAR 2013 Operating revenue Other operating revenue Total revenue Payroll expense Other operating expenses Total operating expenses EBITDA Depreciations and amortizations Operating revenue NOK 682K in Q2 from delivering sensors. Operating expenses increased to NOK 17.8 million Q2 compared to NOK 14.8 mill in Q1. One-offs and ramp up costs in Q2 of NOK 6.6 mill compared to NOK 4.0 mill in Q1. Options expenses increased to NOK 1.3 million in Q2 compared to NOK 0.5 million in Q1 EBIT Net financial items Net profit (loss) for the period H1-14 figures are unaudited H1-14 figures are unaudited

23 Balance sheet Consolidated balance sheet Comments Amounts in NOK Patents Machinery and office equipment Financial assets Total non-current assets Inventory Accounts receivables Other receivables Total receivables Accounts receivables of NOK 682K in Q2 from delivering sensors. Cash and cash equivalents of NOK million by the end of Q2 compared to NOK 44.3 mill by the end of Q1 and NOK 0.2 million by the end of the first half of Inventory of NOK 16.3 million in Q2, compared to NOK 12.2 in Q1. Cash and cash equivalents Total current assets Total assets Share capital Share premium-reserve Other paid-in capital Retained earnings Total equity Other non-current provisions Other non-current debt Total non-current liabilities H1-14 figures are unaudited Accounts payable Public duties payable Other current liabilities Total current liabilities Total liabilities Total equity and liabilities

24 Cash Flow Statement Condensed interim Cash Flow Comments Amounts in NOK Q Q H H-2013 YEAR 2013 Profit (loss) before taxes Share based remuneration Depr. and Amort Change in working capital Net Cash from op. act Purchase of tangible assets Net cash from inv. act Proceeds non-current debt Share issue net of expenses Net cash financing NEXT consumed NOK 50.4 million in the first half of 2014 compared to NOK 2.1 million in the first half of In the first half of 2014 NOK 20.4 million was increase in working capital compared to a reduction in working capital of NOK 7.5 million in the first half of Gross proceeds from the IPO in Q2 was NOK million. Net proceeds of NOK million. Translation differences Net change in cash flow Opening cash balance Closing cash balance H1-14 figures are unaudited H1-14 figures are unaudited

25 Outlook and ambitions Unchanged Expects to produce and ship more than 500,000 complete modules in 2014 Targets 2014 Expects a normalized monthly OPEX to be around USD 0.5 million (not including volume ramp-up and option costs) Expects to deliver more than 10 million units during 2015 Targets 2015 Seize leading positions in several market segments Reach a cost level of less than USD 3 per complete module unit by end of 2015 Use of proceeds from IPO The planned volume ramp-up, the gradual build-up of working capital 4-5 targeted market expanding and cost reducing projects 25 UNCHANGED SINCE MARCH 2014