Next Biometrics Group Asa · OSL:NEXT
Next Biometrics Group Asa — Q1 2018 Earnings Presentation
17 slides from Next Biometrics Group Asa's earnings presentation, 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: Q1 2018 Highlights
Q1 2018 Highlights • Revenue of NOK 23.3 million vs NOK 24.7 million in Q4-17 • Positive gross margin of 19%, up from negative 4% in Q4-17 • Raised NOK 120 million in gross proceeds to fund growth • Passed 4 million sensors shipped • Management team reorganized to strengthen manufacturing and scalab
Slide 5: Delivering on Gross Margin Target
Delivering on Gross Margin Target Gross margin Gross margin of 19% in Q1 2018 19.0 % • First-ever positive quarterly gross margin Drivers for margin improvement -6.0 % -4.0 % -4.0 % • New ASIC -10.0 % Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 • Improved yields and scaling impact • New segments with higher gross
Slide 6: First Revenue with positive gross margin
First Revenue with positive gross margin Profit and loss Q1 Q2 Q3 Q4 Q1 NOK million 2017 2017 2017 2017 2018 • Q1-18 revenue little changed vs. Revenue 24.1 24.0 25.4 24.7 23.3 recent quarters COGS 26.5 25.5 26.4 25.6 18.8 Gross profit (2.4) (1.6) (1.0) (0.9) 4.5 • Gross profit improvements accordin
Slide 7: Maintaining Operating Expense Discipline
Maintaining Operating Expense Discipline Total operating expenses NOK million • Payroll increases since Q1-17 Payroll Other OPEX COGS reflects the increased R&D activities with focus on Smartcards and government ID 26.5 25.6 • Payroll expenses are flattening out, 18.8 25.5 26.4 but will be impacted
Slide 8: Private Placement Provides Growth Financing
Private Placement Provides Growth Financing Balance sheet Cash flow development NOK million NOK million 24 Liabilities 51 Cash 109 109 66 160 Receivables 30 190 80 Equity -37 Inventory 27 0 Non-current 49 Cash at Operations Investing Financing / Cash at Tranche 2 Adjusted period start Tranche 1 peri
Slide 9: 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 10: Strengthening manufacturing and product development
Strengthening manufacturing and product development • Dan Cronin • Ravi Jagannath • Zehira Sitbon-Dadon appointed Chief hired as SVP of assumed responsibility for Operating Officer Operations Sales & Operations • Previously EVP of Engineering • Previously employed at Planning • Tasked with integrati
Slide 11: 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 11
Slide 12: Continued Progress on Customer- and Development Projects
Continued Progress on Customer- and Development Projects Smart card with flexible sensor* • Official opening of Tactilis’ smart card factory in Malaysia in early April • Projected capacity of 5 million cards annually • Additional capacity expansions planned • Multiple projects in process based on NE
Slide 13: Delivering on Smart Card Development Roadmap
Delivering on Smart Card Development Roadmap NB-4410: Biometric module for Smart Cards • First samples new biometric module for contact-based smart cards shipped to select customers in May • Shipped to 7 customers with which NEXT has worked closely with over time • Ease of integration – connect modu
Slide 14: Passed First Hurdle Towards Contactless Smart Card Solution
Passed First Hurdle Towards Contactless Smart Card Solution • Successful test of contactless solution • NEXT’s smart card module performed all biometric functions powered only by contactless reader • Reliable and consistent performance achieved • Low-power, secure and wireless processing of biometri
Slide 15: Development of FAP20 sensor for Government ID market on track
Development of FAP20 sensor for Government ID market on track • Progressing with the FAP20 government grade sensor • FAP20 represents the globally preferred sensor size • Expected to start sampling in Q4-18 Standard Size (sq mm) Image quality Use cases Open to new PIV or India UIDAI India Aadhaar
Slide 16: Q1 Summary and outlook
Q1 Summary and outlook Achievements Achieved positive gross margin Established financial runway to break even 4 million sensors shipped Delivering on our smart card product roadmap Outlook Continued progression for India certification Integration in multiple customer smart card projects Sample FAP20
Slide 17: NEXT's Winning Strategy
NEXT’s Winning Strategy Technology and cost Targeting advantage High Growth Markets Proven Track Record Financial Focus and Discipline www.nextbiometrics.com 17
NEXT Biometrics Group — Q1 2018 Earnings Presentation on 6ix