Slide 1: Interim Results Presentation for the Six Months Ended 31 January 2016
INTERIM RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 JANUARY 2016 12 April 2016
Slide 2: Disclaimer
DISCLAIMER The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. This presentation doe
Slide 3: Interim Results Highlights
INTERIM RESULTS HIGHLIGHTS • Decision to convert the Company’s worldwide licensing agreement with The Dow Chemical Company (“Dow) to non-exclusive gives the Company greater control to pursue multiple routes to market in the display industry • The capacity of Nanoco’s plant in Runcorn continues to be
Slide 4: Display Strategy
NANOCO*: DISPLAY STRATEGY
Slide 5: Overview of Dow Contract Changes
OVERVIEW OF DOW CONTRACT CHANGES What’s changed • Non-exclusive licence – Nanoco can license technology or sell product to anyone, anywhere • Royalty rate reduced • Earn out eliminated • Nanoco service resource requirement reduced What’s not changed • Dow’s commitment to Nanoco’s CFQD® technology •
Slide 6: Strategic Considerations
STRATEGIC CONSIDERATIONS Advantages of moving to non-exclusive Continued strong relationship with Dow who have built a world leading CFQD® manufacturing plant and are focused on supplying world leading display makers Regain control over roll out of Nanoco technology Multiple partners bringing
Slide 7: Display Strategy
DISPLAY STRATEGY Old New Nanoco Nanoco Technology Technology Technology $ Royalty $ Royalty $ Royalty Product CFQD $ Potential Film Dow Dow Licensee Coater Product Product Product Product Product CFQD CFQD CFQD CFQD CFQD $ $ $ $ $ OEM OEM OEM OEM OEM • High royalty from single licensee • Multi
Slide 8: Display Business
NANOCO*: DISPLAY BUSINESS
Slide 9: Global QD Display Forecast
GLOBAL QD DISPLAY FORECAST (Millions of units) 2015 2016 2017 2018 2019 2020 Quantum dot market forecast 1.9 5.6 12.7 20.0 29.0 40.7 Growth rate 201.70% 124.80% 57.40% 45.00% 40.50% By application (Volume) (Millions of units) 2015 2016 2017 2018 2019 2020 TV 1.4 4.4 10.0 15.1 20.1 24.5 Monitor 0.4 0
Slide 10: Global QD Display Forecast by TV Size
GLOBAL QD DISPLAY FORECAST QD TV display market forecast by size (Volume) 25 20 Millions of units 15 10 5 0 2015 2016 2017 2018 2019 2020 >70 inch 0.0 0.0 0.1 0.3 0.4 0.4 60~69 inch 0.4 0.9 1.8 2.4 3.2 3.9 50~59 inch 0.8 2.3 5.1 7.5 9.9 11.9 40~49 inch 0.1 1.1 3.0 5.0 6.7 8.3 Source: IHS Quantum Dot
Slide 11: Display Market Trends Favour CFQD
DISPLAY MARKET TRENDS FAVOUR CFQD® • Samsung begins to aggressively promote Quantum Dot TVs from launch at CES 2015 and further promotion at CES 2016. 2015 sales of CFQD® TV estimated to be c. 1m QD TVs • Samsung QD TVs all contain cadmium free quantum dots • Environmental legislation in Europe and
Slide 12: Clear Benefits for Our LCD Customers
CLEAR BENEFITS FOR OUR LCD CUSTOMERS Better Colour Gamut Energy Efficient Minimal Process Change • Much improved colour • Narrow bandwidth = more • Uses existing LCD saturation light extraction through colour manufacturing infrastructure • Improved colour filters • Uses existing LCD supply enhanceme
Slide 13: CFQD Film on Back Light Unit
CFQD® FILM ON BACK LIGHT UNIT Red & Green CFQD® ready for processing into film Finished 55 inch CFQD® films CFQD® films assembled onto edge lit LCD backlight 13
Slide 14: Dow Production
DOW PRODUCTION Dow’s Cheonan 3 Facility in Korea – cadmium free quantum dot manufacturing site • The new Dow facility will enable mass production of cadmium free quantum dots to meet customers’ requirements and product launch • Capacity to support millions of large TVs • Facility is operational and
Slide 15: RoHS Update
RoHS UPDATE • On 20th May 2015, European Parliament voted 618 to 33 to reject the Commission proposal to extend the RoHS exemption for Cadmium QDs in display and lighting products • The Commission response has been to repeat a full technical review • The legality of Cadmium QD displays in the interi
Slide 16: Lighting Business
NANOCO*: LIGHTING BUSINESS
Slide 17: Lighting Business
LIGHTING BUSINESS • Initial lighting sales have commenced • Focusing on niche applications within lighting where CFQD® Quantum Dots can offer advantages • Develop Technology Demonstrators to show the full potential of CFQD® Quantum Dots • License design package to interested customers for them to ma
Slide 18: CFQD Lighting Applications
CFQD® LIGHTING APPLICATIONS • Specific wavelengths for specific crops, even light distribution to ensure even growth • Market Size: $1.9 billion by 2020 [MarketsandMarkets 07/2015] • High CRI, cool white panel light • High quality light for office & retail purposes • Addressable Market Size: c.$700m
Slide 19: CFQD Lighting Applications
CFQD® LIGHTING APPLICATIONS • Green colour emission according to British Standards. Red LED shining through Green Film indicating that Escape route is dangerous. • Market Size: $500m [Strategies in Light (SIL) 02/2014] • Specific wavelengths to suit skin types and treatment schedules, even light dis
Slide 20: Lighting Value Chain
LIGHTING VALUE CHAIN 4 3 2 1 1. CFQD® quantum dots 2. CFQD® quantum dots resin 3. CFQD® quantum dots film 4. CFQD® quantum dots Linear Lighting 20
Slide 21: Other Applications
NANOCO*: OTHER APPLICATIONS
Slide 22: Life Science Application
LIFE SCIENCE APPLICATION • Cancer imaging represents a significant opportunity for Nanoco • Proof of principle studies in conjunction with University College London have been successful and the work is ongoing • World leading team in the use of QDs in life science applications • Following proof of p
Slide 23: CFQD Life Sciences
CFQD® LIFE SCIENCES Source: University of Michigan Medical School Colour coded image Lateral flow Cellular Labelling Flowcytometry QDs = brightness + photo stability + narrow emission + single light excitation 23
Slide 24: Solar: CIGS Thin Films
SOLAR: CIGS THIN FILMS • High performance printable Nanoparticle ink technology for CIGS thin film PV • Low cost production technology enabling market penetration: <0.33 $/W for 16% CIGS module • Current performance: 17% active area efficiency achieved in R&D – world leading for solution processed C
Slide 25: Solar: Roadmap
SOLAR: ROADMAP PCE(Lab scale) 20% 22% PCE(30x30 cm) 15% 18% Pilot PCE(Full panel) 16+% Production Scoping partners/collaborators for scale up phases 25
Slide 26: Interim Financials
NANOCO*: INTERIM FINANCIALS
Slide 27: Financial Highlights – Overview
FINANCIAL HIGHLIGHTS – OVERVIEW 6 months to 6 months to 31 January 31 January Year to 2016 Change 2015 31 July 2015 £’000 £’000 £’000 £’000 Revenue 290 (1,322) 1,612 2,029 R&D Spend 2,939 216 2,723 5,580 EBITDA (5,601) (2,340) (3,261) (8,077) Loss after tax (5,237) (2,092) (3,145) (8,975) Cash & sho
Slide 28: Financial Highlights – Income Statement
FINANCIAL HIGHLIGHTS – INCOME STATEMENT 6 months to 6 months to 31 January 31 January Year to 2016 Change 2015 31 July 2015 £’000 £’000 £’000 £’000 Revenue 290 (1,322) 1,612 2,029 Cost of sales (151) 46 (105) (316) Gross profit/(loss) 139 (1,368) 1,507 1,713 R & D costs (2,939) (216) (2,723) (5,580)
Slide 29: Financial Highlights – Cash Flow
FINANCIAL HIGHLIGHTS – CASH FLOW 6 months to 6 months to 31 January 31 January Year to 2016 Change 2015 31 July 2015 £000 £’000 £’000 £000 Loss for the period (5,237) (2,092) (3,145) (8,975) Adjustment for non-cash items (364) (248) (116) (28) Operating outflows before (5,601) (2,340) (3,261) (9,003
Slide 30: Financial Highlights – Balance Sheet
FINANCIAL HIGHLIGHTS – BALANCE SHEET At At 31 January 31 January At 2016 Change 2015 31 July 2015 £000 £’000 £’000 £000 Tangible fixed assets 1,668 (746) 2,414 2,062 Intangibles (patents) 2,068 365 1,703 1,821 Cash & short term 18,273 8,923 9,350 24,311 deposits Other current assets 1,087 277 810 1,
Slide 31: Conclusion
NANOCO*: CONCLUSION
Slide 32: Conclusion
CONCLUSION • The move with Dow to non-exclusive will significantly de-risk the business and opens up new opportunities to monetise the Company’s technology • Dow facility producing CFQD® products and sampling customers • Runcorn capacity enhanced through process improvements • Lighting business stra
Slide 33: Nanoco Overview
NANOCO*: NANOCO OVERVIEW
Slide 34: Company Overview
COMPANY OVERVIEW • A world leader in the development, manufacture and supply of fluorescent, heavy-metal-free semi- conducting materials called CFQD® quantum dots and other nano-particles (e.g. CIGS) • Nanoco has developed partnerships with leading global electronics and chemical companies in order
Slide 35: Company Overview
COMPANY OVERVIEW Business model Partnership Licence Revenue Material Sales Nanoco works in close collaboration with Licence revenue from Nanoco’s licensee, Nanoco supplies materials to companies developing quantum dot The Dow Chemical Company in the customers in the, lighting, solar and life based p
Slide 36: Nanoco's Patented Technology
NANOCO’S PATENTED TECHNOLOGY • Quantum dots are a platform technology • Unique “seeding process” developed enabling the mass production of quantum dots • World leader in heavy metal free quantum dot technology (CFQD® quantum dots) • Extensive & growing patent portfolio (ca. 400 patents and patent ap
Slide 37: Key Markets Are Large
KEY MARKETS ARE LARGE High CRI Biological imaging Application LCD backlighting Thin film solar LED lighting In-vivo & in-vitro diagnostic Water soluble CFQD® quantum dots Technology CFQD® quantum dots CFQD® quantum dots film CIGS nanomaterials Functionalized CFQD® CFQD® quantum dots resin quantum do
Slide 38: Value Creation
VALUE CREATION 1) CFQD® 2) CFQD® 3) CFQD® 4) CFQD ® quantum dots quantum dots + quantum quantum dots Resin dots/Resin in product device CORE BUSINESS CORE BUSINESS Developing & Ensuring Nanoco’s CFQD® CFQD® quantum dots Nanoco’s near term manufacturing heavy-metal quantum dots work in are incorporat
Slide 39: Key Partnerships / Route to Market
KEY PARTNERSHIPS / ROUTE TO MARKET Display Lighting Solar Life Sciences Key partners 11 display OEMs: • Korea: 2 • China: 4 USA Photo- • Taiwan: 2 therapy • Japan: 2 • USA: 1 Company Route to market • Licence with Dow • Direct sales of • UK Grant funded • UK Grant funded for display CFQD materials i
Slide 40: Appendices
NANOCO*: APPENDICES
Slide 41: The Board
THE BOARD Anthony Clinch – Non Executive Chairman • 20 years private equity experience with CVC Capital Partners, Rolls Royce, experienced industrialist and financier Michael Edelman – CEO • Led spin-out of Nanoco from University of Manchester • GE / Bayer JV, founded www.yet2.com Europe, commercial
Slide 42: Risk Factors
RISK FACTORS • Technical milestones: Customers’ requirements are challenging and may take more time and resource to be achieved and may not be achieved at all • Costs: Manufacturing costs could be higher than anticipated • Timing: It may take longer for Nanoco’s technology to be adopted • Intellectu
Slide 43: Nanoco Group PLC
Nanoco Group PLC 46 Grafton Street, Manchester, M13 9NT, United Kingdom, Tel: +44 161 603 7900, Fax: +44 161 603 7901 Mail: info@nanocotechnologies.com www.nanocogroup.com 43