Slide 1: Third quarter 2018 Earnings presentation
Third quarter 2018 Earnings presentation 19 October 2018
Slide 2: Disclaimer
Disclaimer This presentation (the "Presentation") has been produced by poLight ASA (the "Company") exclusively for information purposes. This Presentation has not been approved, reviewed or registered with any public authority or stock exchange. Further to the aforementioned, this presentation is th
Slide 3: Today's agenda
Today’s agenda Presenting Dr. Øyvind Isaksen • Key events Chief Executive Officer Dr.Isaksen has been CEO in poLight since August 2014. He has • Introduction to poLight previously held several CEO positions, most recently in the publicly listed company Q-Free ASA, which he left January 2014 after 7
Slide 4: Key events
Key events • Successful initial public offering and listing on the Oslo Stock Exchange • Positive development for ongoing smartphone proof-of-concept (PoC) studies • Progress with potential barcode- and AR* customers • Increased interest for TLens® technology from sectors requiring small high-qualit
Slide 5: poLight at a glance
poLight at a glance Background and description Geographical footprint • Developer of unique photographic lens for use in the mobile, barcode, augmented reality and other Horten Norway Tampere Finland markets Lyon France Korea Shenzhen • Founded in 2005 and has since build state-of-the-art China Taiw
Slide 6: History
History Key milestones TLens is based on Ignis Display Ignis Display First attempt to STMicroelectronic Internal Numerous of PoC´s kicked off Ignis’ soft polymer formed to develop changed name develop s chosen as MEMS product customer test - smartphone, material intended display and lens to poLight
Slide 7: poLight's technology well suited for several applications
poLight´s technology well suited for several applications Smartphone Barcode Augmented Reality (AR) Other • Large addressable market, billions • Evolving from 1D laser to 2D • Augmented reality expected to be • New opportunities emerging and of cameras produced for the imaging barcode readers “the n
Slide 8: Primarily targeting the smartphone market
Primarily targeting the smartphone market Camera phone market potential Rear dual camera trends Units (bn) Ratio Units (million) Ratio 3.90 85.0% 700 50% 3.85 653 3.80 650 599 3.74 600 574 3.75 550 526 38% 40% 3.67 82.1% 82.5% 35% 35% 500 471 33% 3.60 3.57 450 30% 80.9% 30% 3.49 400 3.45 79.8% 350 3
Slide 9: Mobile camera value chain
For Mobile camera value chain i pur llustra pos tion e on ly Image sensor Optics autofocus& OIS Camera Module System OEMs Camera Module companies will be poLight´s customers, but mobile phone makers will dictate 9
Slide 10: The incumbent Technology - Voice Coil Motor (VCM)
The incumbent Technology - Voice Coil Motor (VCM) How the technology works Characteristics Complex Lens stack moving up and down • Yield penalty in order to change focus • Advanced calibration procedures needed to restrain image quality • Complicates multi camera solution • Magnets, springs and coil
Slide 11: TLens technology – autofocus Actuator
TLens® technology – autofocus Actuator Principle of operation Implementation Glass membrane Piezo-film Piezo-film Glass membrane Polymer Silicon Glass support Polymer Light Glass From From From FromGel Gel Gel >>>Gel MEMS MEMS> MEMS MEMS Wafer Wafer Wafer Wafer >TLens® TLens®>>>>Camera >>>TLens® TLe
Slide 12: Always take pictures with everything in focus
Always take pictures with everything in focus poLight TLens® enables new and unique use cases for front camera implementations Constant field of view Incumbent VCM actuators cannot perform! Quick image acquisition 12
Slide 13: poLight TLens - THE AF solution for front facing camera
poLight TLens® - THE AF solution for front facing camera TLens® enables small Slim Face camera Benefits • poLights Tlens® technology Cover glass TLens® Display representing a significant size reduction compared to traditional VCM technology • Smallest footprint reduced by approx. 60% vs. current VCM
Slide 14: Operations and market review
Operations and market review
Slide 15: Growing TLens interest driven by strong mobile camera trends
Growing TLens® interest driven by strong mobile camera trends • Use of higher mega-pixel and increased light sensitivity sensor driving demand for AF in front • “Edgeless screens” favour the use of a very compact, small footprint (xy) size TLens® solution • AF-solutions for selfie camera favoured by
Slide 16: Increased attention from smartphone segment
Increased attention from smartphone segment • Positive performance feedback for all ongoing PoCs • All are related to front facing camera Market Dialogue # customers Planning Design PoC segment (not PoC yet) bought TLens PoC Win • Challenging to meet space constraints due to bezel-free screen • New
Slide 17: Additional mass-market and industrial use-cases emerging
Additional mass-market and industrial use-cases emerging • Barcode Dialogue # customers • Ongoing POCs with Tier 1 suppliers progressing well Market Planning Design (not lto PoC bought eval PoC segment PoC Win • One new Tier 1 supplier ordered evaluation kit yet) kit/TLens • Dialogues started with t
Slide 18: Financial review
€ polight B Os Cc oe Cc iv
Slide 19: Key financial
Key financial Income statement Balance sheet summary (NOK million) Q3 2018 Q3 2017 YTD 2018 YTD 2017 FY 2017 (NOK million) Q3 2018 Q3 2017 FY 2017 Revenue 0.3 0.1 0.5 0.1 0.6 Intangible assets 73.7 67.8 67.4 EBIT -31.5 -12.5 -61.4 -32.1 -52.1 Cash and cash equivalents 167.6 110.9 93.6 Research and d
Slide 20: Preparing to appeal Norwegian VAT claim
Preparing to appeal Norwegian VAT claim • The Norwegian Tax Administration (Skatt Sør) has decided to claim repayment of refunded VAT together with additional associated taxes for the period since 2013 and that poLight is to be excluded from the Norwegian VAT Register • NOK 15.8 million monetary imp
Slide 21: IPO provides cash to drive TLens commercialisation
IPO provides cash to drive TLens commercialisation Q3 2018 cash flow development (NOK million) 167,6 • Q3 cash used in operations of NOK 9.5 million • Cash used in investing activities was NOK 1.9 million • Decrease from Q3 2017 on lower capitalised 119,3 development expenses • Net cash flows from f
Slide 22: Summary and outlook
potight =e) Cc (a0) > = sx £6 ES 5 5 Ao
Slide 23: Status and future ambitions
Status and future ambitions Operating milestones Today Target first Release new First design-win Launch new design-win for product, TLens for smartphone product for Optical PoC projects barcode Platinum, main camera Image Stabilization ongoing - covering bigger (OIS) and bigger smartphone sensor for
Slide 24: Summary
Summary • Set to outcompete today’s traditional autofocus products for mobile cameras with innovative product offering built on the unique TLens® technology • Several on-going proof-of-concept projects with attractive mobile phone - and camera module vendors • Strong interest from barcode-reader mar
Slide 25: Q&A
Q&A Next event: Q418 15 February 2019
Slide 26: Appendix
Appendix (>) Instant focus 26 Y “| x Small X and Y Allin focus Constant field of view High optical axis stability PRR No gravity High performance front facing camera wi Smart implementation of dual camera dE No magnetic interference a impact Low power consumption
Slide 27: Management Team
Management Team Dr. Øyvind Isaksen Chief Executive Officer Dr.Isaksen has been CEO in poLight since August 2014. He has previously held several CEO positions, most recently in the publicly listed company Q-Free ASA, which he left January 2014 after 7 years as CEO. Dr. Isaksen holds a Ph.D in Applied
Slide 28: Board of Directors
Board of Directors Eivind Bergsmyr - Chairman Mr. Bergsmyr is Partner in Viking Venture since 2009. Bergsmyr was previously CEO of the Norwegian start-up Nacre AS, sold in 2007 to Sperian Protection and recognized as the Nordic Venture Exit of the Year. Prior to this, Bergsmyr acquired some extensiv
Slide 29: Interim consolidated statement of income (unaudited)
Interim consolidated statement of income (unaudited) NOK 000 Note Q3 2018 Q3 2017 YTD 2018 YTD 2017 FY 2017 Revenue 255 75 505 75 613 Cost of sales -404 -5 000 -1 409 -5 000 -7 400 Research and development expenses 7 -6 484 -2 285 -22 930 -8 563 -21 051 Sales and marketing expenses -1 705 -1 947 -5
Slide 30: Balance sheet (unaudited)
Balance sheet (unaudited) NOK 000 Note Q3 2018 Q3 2017 FY 2017 ASSETS Property, plant and equipment 1 613 2 097 1 874 Intangible assets 8 73 670 67 803 67 444 Total non-current assets 75 283 69 900 69 318 Inventories 7 495 5 162 1 781 Trade and other receivables 8 021 7 522 5 260 Other current asset
Slide 31: Cash flow (unaudited)
Cash flow (unaudited) NOK 000 Note Q3 2018 Q3 2017 YTD 2018 YTD 2017 FY 2017 Operating activities Profit before tax -31 952 -15 436 -61 512 -34 302 -50 566 Non-cash adjustment to reconcile profit before tax to net cash flows: Depreciation and impairment of property, plant and equipment 242 278 763 8