Next Biometrics Group Asa · OSL:NEXT
Next Biometrics Group Asa — Q3 2018 Earnings Presentation
22 slides from Next Biometrics Group Asa's earnings presentation, November 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: Enabling the NEXT Waves of Security Critical Applications
Enabling the NEXT Waves of Security Critical Applications 5m 1bn Founded 2004; IPO 2014 Cost-efficient Rapidly growing mass-production of fingerprint sensor market >5 million sensor large-size, rigid and >1 billion units modules shipped to-date flexible sensors Positioned for leadership Proven biome
Slide 4: Q3 2018 Highlights
Q3 2018 Highlights • Revenue of NOK 30.2 million, up from NOK 25.6 million in Q2-18 • Gross margin of 30%, up from 26% in Q2-18 • Strengthened sales and marketing team • NEXT sensors selected for three smart card pilots through Tactilis (Q4-18) • Smart card market position strengthened with Infineon
Slide 5: Delivering on Gross Margin Improvement
Delivering on Gross Margin Improvement Gross margin Gross margin of 30% in Q3 2018 26 % 30 % • Third consecutive quarter with positive gross margin 19 % • Up from 26% in Q2 Drivers for margin improvement (4 %) (4 %) • New ASIC Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 • Improved yields and scaling impact Accumu
Slide 6: Short-term Impact from Aadhaar Uncertainty
Short-term Impact from Aadhaar Uncertainty Short-term uncertainty in India • Supreme court ruling • 2019 Election • Transition from Level 0* to Level 1** Long-term market fundamentals remain robust • Reduced near-term market potential • Will impact short term government ID revenue and cash-flow • Lo
Slide 7: Revenue and Gross Margin Development
Revenue and Gross Margin Development Profit and loss 20% increased revenues in Q3-18 vs. YTD YTD recent quarters Q3 Q4 Q1 Q2 Q3 Q3 Q3 NOK million 2017 2017 2018 2018 2018 2017 2018 • Shipments of the new sensor module to the Revenue 25.4 24.7 23.3 25.6 30.2 73.5 79.1 Tier-1 U.S. notebook customer CO
Slide 8: 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 ) Non-R&D related payroll and other OPEX 60 stable over recent quarters Non-R&D R&D 50 R&D related payroll and OPEX stabilized at 40 level reflecting a higher activity •
Slide 9: Balance Sheet & Cash flow development
Balance Sheet & Cash flow development Balance sheet Cash flow development NOK million NOK million 23 Liabilities 71 (41) Cash 0 0 33 113 Receivables 155 Equity 28 Inventory 71 Non-current 47 Cash at period Operations Investing Financing Cash at period start end www.nextbiometrics.com 9
Slide 10: 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 10
Slide 11: Government-Grade Cards: Selected for three smart card pilots
Government-Grade Cards: Selected for three smart card pilots Tactilis has signed LOI for three smart card pilots with a global organisation • Based on NEXT’s large-area biometric sensors • Validates BSoC technology for three different applications • Expect to start pilot in Asia in Q1 2019 • Additio
Slide 12: Payment Smart Card – Building a leading position
Payment Smart Card – Building a leading position Payment schemes Smart card makers Issuer - Banks Global Payment Engaging with all participants in the global payment ecosystem Regional Payment Deploying Biometric Reference Platform to regional and local payment card customers Closed Loop/Multifuncti
Slide 13: Delivering fast time to market: payment smart card eco-system
Delivering fast time to market: payment smart card eco-system Joint reference platform with Infineon* technologies • All elements needed to design and manufacture a biometric contact-based payment smart card • Available to card issuers, governments, system integrators and card makers • Enables NEXT
Slide 14: Smart Card Roadmap Aligned With Market Development
Smart Card Roadmap Aligned With Market Development Expected smart card segment infliction point Retail banking payment Estimated smart card revenue/volume development – TAM (Total addressable market) cards Government Grade / Mass market Financial inclusion payment cards Enterprise cards Government G
Slide 15: Navigating Aadhaar and New Opportunities in India
Navigating Aadhaar and New Opportunities in India Constitutional support for Aadhaar and approval for public programs Aadhaar ruling • Government applications and branch banking unaffected by ruling Impact* per subsegment • Limits private companies’ access to use Aadhaar, telecom barred Government E
Slide 16: Increased Segmentation of Access Control Market Opportunity
Increased Segmentation of Access Control Market Opportunity Targeting applications that provide the best High Value combination of value and volume Identity Access • Discovery of several new attractive use-cases Management • Increased long-term market potential Health Care • Upside identified in bio
Slide 17: Secure Payments Require Large Sensor and Ease of Use
Secure Payments Require Large Sensor and Ease of Use Biometric-enabled POS devices created to enable high- Tysso POS security payment transactions NEXT’s large sensors are ideally suited providing the required level of security and convenience Opportunities developing across smart card, government I
Slide 18: All-time High Notebook Shipments in Q3
All-time High Notebook Shipments in Q3 Gross margin now exceeding 30% US Tier 1 shipments expected to continue over the next 12 months • Number of platforms using NEXT sensors likely to decline Fujitsu shipments expected to increase in 2019 • Number of platforms using NEXT sensors likely to increase
Slide 19: 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 rigid Strengthened operations and R&D Ramp Smart Card and flexibl
Slide 20: Outlook
Outlook Volume shipments of high-end Smart Cards Entry in payment Smart Card market Ramp India sales Establish strong position in growing POS market Sample FAP20, new high-end government sensor, in Q4-18 Focus on Smart Card related R&D Gross Margin to increase and OPEX to flatten out www.nextbiometr
Slide 21: One Touch. One You.
One Touch. One You. NEXT Biometrics www.nextbiometrics.com 21
Slide 22: Appendix
Appendix 11/12/2018 www.nextbiometrics.com 22
NEXT Biometrics Group — Q3 2018 Earnings Presentation on 6ix