Next Biometrics Group Asa · OSL:NEXT
Next Biometrics Group Asa — Q2 2018 Earnings Presentation
21 slides from Next Biometrics Group Asa's earnings presentation, Aug 20, 2018
Slide 1: Proven Fingerprint Sensor Technology for Advanced Authentication
Proven Fingerprint Sensor Technology for Advanced Authentication www.nextbiometrics.com 1
Slide 2: Disclaimer
Disclaimer This presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current expectations, estimates and projec
Slide 3: NEXT Company Overview
NEXT Company Overview Fingerprint Solutions that are Secure, Accurate and Easy-to-Use >4m 1bn Founded 2004; IPO 2014 Cost-efficient Worldwide mass-production of fingerprint sensor market >4 million sensor large-size, rigid and >1 billion units modules shipped to-date flexible sensors Positioned for
Slide 4: Q2 2018 Highlights
Q2 2018 Highlights • Revenue of NOK 25.6 million, up from NOK 23.3 million in Q1-18 • Gross margins of 26%, up from 19% in Q1-18 and -4% in Q4-17 • Aadhaar hardware certification represents significant achievement in Government ID market • Strengthened sales and marketing organization now in place •
Slide 5: Delivering on Gross Margin Improvement
Delivering on Gross Margin Improvement Gross margin 26.0 % 19.0 % Gross margin of 26% in Q2 2018 • Second consecutive quarter with positive gross margin • Up from 19% in Q1 -4.0 % -4.0 % -6.0 % Drivers for margin improvement -10.0 % Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 • New ASIC • Improved yields an
Slide 6: Significant Breakthrough in Government ID Segment
Significant Breakthrough in Government ID Segment Hardware certification for sales into India’s Aadhaar government ID program • Received in May • Initial revenue expected in Q4 2018 • Ramp of volumes and revenue in 2019 First orders for fingerprint readers received early August • In line with the co
Slide 7: Building India Organization to Drive Growth
Building India Organization to Drive Growth Local subsidiary created in India • Responsible for developing product features specifically for India • Building NEXT’s presence and recruiting local talent Leveraging experienced and well-connected The world’s biggest Government ID program sales team wit
Slide 8: A Clearly Defined Plan for Growth in India
A Clearly Defined Plan for Growth in India Aadhaar hardware certification enables NEXT to accelerate sales activity into India NEXT Product Roadmap for India • First step: sell “Scallop” (3023-U) fingerprint readers (initial orders received) Product: Expected time to market: • Second step: sell sens
Slide 9: Enhancing Global Sales and Marketing Capabilities
Enhancing Global Sales and Marketing Capabilities Alain Faburel - Chief Sales and Marketing Officer - NEXT Biometrics www.nextbiometrics.com 9
Slide 10: Multi segment strategy, Smart Card vision
Multi segment strategy, Smart Card vision Smart Card Government ID • Unique positioning • Demonstrated technology • Products delivered in millions Notebook Access control Smart Card opportunities • ~3 billion cards banking only, an immense market • Contactless trend but still 43% contact only by 202
Slide 11: Revenue and Gross Margin Development
Revenue and Gross Margin Development Profit and loss • Increased Q2-18 revenue vs. recent Q2 Q3 Q4 Q1 Q2 1H 1H quarters NOK million 2017 2017 2017 2018 2018 2017 2018 Revenue 24.0 25.4 24.7 23.3 25.6 48.1 48.9 • Shipments of the new sensor module to the Tier-1 U.S. notebook customer COGS 25.5 26.4 2
Slide 12: OPEX Discipline Maintained while Increasing R&D Activities
OPEX Discipline Maintained while Increasing R&D Activities R&D related vs non-R&D related OPEX* NOK million (excl. cost of options ) 60 Non-R&D R&D • Non-R&D related payroll and other OPEX stable over recent quarters 50 40 • R&D related payroll and OPEX increased reflecting higher activity 31 30 22
Slide 13: Private Placement Provides Growth Financing
Private Placement Provides Growth Financing Balance sheet Cash flow development NOK million NOK million 27 Liabilities -41 49 113 Cash -3* 109 113 Receivables 33 195 Equity Inventory 29 Non-current 47 Cash at period Operations Investing Financing / Cash at period start Tranche 2 end * Includes licen
Slide 14: Targeting Markets that Leverage Large Size Cost Benefit
Targeting Markets that Leverage Large Size Cost Benefit Smart Card Government ID #1 priority Certification of existing products; Expanding sensor portfolio Notebook Access control Stay strong Leverage existing and relevant portfolio through distribution channel www.nextbiometrics.com 14
Slide 15: Smart Card Early Adoption: Closed Loop and Contact Cards
Smart Card Early Adoption: Closed Loop and Contact Cards Closed loop and contact cards: early programs in smart cards • Fragmented market • NEXT flexible sensors well suited for these opportunities • Customer designs continuing to progress Payment card programs will ramp later in the biometric smart
Slide 16: Smart Card Customer Tactilis Starts End-User Shipments
Smart Card Customer Tactilis Starts End-User Shipments Initial shipments underway of Smart Cards featuring Tactilis smart card with NEXT’s unique sensor technology NEXT sensor* • First units based on rigid sensors • Flexible sensors to be included Follows opening of Tactilis’ Smart Card factory in M
Slide 17: The Transformation of NEXT Biometrics
The Transformation of NEXT Biometrics R&D Focus Growth Investments Accelerate Growth and Outperformance 2015 2016 2017 2018 2019 2020 Established Core Creating Foundation Scaling Technology for Growth the Business Created unique large Strengthened operations and R&D Ramp Smart Card flexible sensor s
Slide 18: Q2 Summary and outlook
Q2 Summary and outlook Achievements Increased gross margin More than 4 million sensors shipped Delivering on our Smart Card product roadmap Aadhaar hardware certification, first orders received Outlook (3-9 months) Shipments in Smart Card and Government ID markets Increased number of new smart card
Slide 19: NEXT BIOMETRICS
NEXT BIOMETRICS One Touch. One You. NEXT Biometrics
Slide 20: Appendix
Appendix 8/20/2018 www.nextbiometrics.com 20
Slide 21: Investing for Growth: Smart Card and Government ID R&D
Investing for Growth: Smart Card and Government ID R&D Total operating expenses NOK million 80 Payroll Other OPEX COGS • Payroll increase since Q2-17 reflects 70 • Increased R&D activities with focus on Smartcards and government ID 60 18.9 26.5 25.6 18.8 • Full impact of R&D recruitments in Q1 50 25
NEXT Biometrics Group — Q2 2018 Earnings Presentation on 6ix