Next Biometrics Group Asa · OSL:NEXT
Next Biometrics Group Asa — Investor Day (February 2024)
59 slides from Next Biometrics Group Asa's investor day presentation, Feb 14, 2024
Slide 1: NEXT Biometrics Group Capital Markets Day
NEXT BIOMETRICS GROUP Capital Markets Day February 14, 2024 nextbiometrics.com
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: Agenda
Agenda • 11:30 Opening Remarks • Company Overview and Outlook • 12:00 LUNCH • Product Technology and Product Innovation Roadmap • Market Trends and Industry Analysis • Biometric market in India and China • Closing Remarks and Q&A NEXT BIOMETRICS GROUP ASA 3
Slide 4: Oslo (HQ) Seattle Malmö
Oslo (HQ) Seattle Malmö Tokyo New Delhi Shanghai Houston Dubai Taipei Shenzhen Chennai 4
Slide 5: Today's speakers – Management team
Today’s speakers – Management team Ulf Ritsvall Eirik Underthun Marcus Lauren Digvijay Singh Kanwar Joshua Chiu CEO CFO CPO SVP, Head of Sales IUEA SVP, Head of Sales South-East Asia 25+ years´ experience from 25+ years´ finance experience 25+ years´ product and project 17+ years´ of sales and busin
Slide 6: Mission and Vision
Mission and Vision Vision Provide the best biometric technology protecting data, information and people in a digital society Mission We provide advanced fingerprint sensor technology with uncompromised security enabling user-friendly authentication and access to systems, information and resources NE
Slide 7: Scale-up phase: Growth and profitability
Scale-up phase: Growth and profitability Idea & product phase Turnaround phase Scale-up phase 2010 - 2019 2020 - 2023 2024+ • Prototype and product development • FAP20 product launched • Disrupt the FAP20 market • Dell PC-sensors deliveries • Customer focus • Realize the revenue potential in India K
Slide 8: Financial progress
Financial progress LTM OPEX1) Gross margin (%) Adjusted EBITDA5) per quarter (MNOK) 180 50% 2018-20204) average Q4 2023 45% 0 160 NEXT Biometrics share price (NOK) 40% 140 -5 12,00 35% 120 10,00 -10 30% 100 8,00 25% -15 6,00 80 20% 4,00 60 -20 15% 2,00 40 10% -25 0,00 July '19 July '21 Oct '21 Dec '
Slide 9: Favorable Market dynamics
Favorable Market dynamics • Continued double-digit growing biometric markets • Dominated by a few giants and many mid-sized players • Multiple complementing and competing biometric modalities - IRIS and Fingerprints mainly used for high- end market • Global trend towards higher security needs with i
Slide 10: Current status and outlook
Current status and outlook • Q4 scorecard: • Quarterly revenue growing, still EBITDA negative • Gross margins increasing, OPEX on track • Outlook: • India is ramping up, China ramping up during Q1 2024 • Continuation of adding design wins to the sales funnel • Adding high gross margin customers • Ex
Slide 11: Strategic direction
Strategic direction • To enter high-end market with partners and direct sales in key markets • Revenue runway from established business in India, China, and other design wins in rest of the world • Additional revenue growth from • Expanding in other biometric modalities • Expanding with new business
Slide 12: Pause in presentation. We will return shortly.
Pause in presentation. We will return shortly. NEXT BIOMETRICS GROUP ASA 12
Slide 13: Product Technology & Product Innovation Roadmap
Product Technology & Product Innovation Roadmap NEXT BIOMETRICS GROUP ASA 13
Slide 14: Technology comparison
Technology comparison Capacitive Optical Active Thermal • Cost effective for smaller sizes • Tends to be big and bulky • Unique technology • Total Cost increases significantly with • Different cost structure, since the • Disruptive price points for customers, size camera quality drives the cost, mor
Slide 15: Cost related to size
Cost related to size • Price grows with size (more materiel), this is valid for basically all technologies • But different technologies - grows differently • Sensor materiel cost, passive components, PCB, manufacturing costs, yield etc. Solution Cost Silicon Optical LTPS Active Area Price advantage
Slide 16: Advantages of NEXT Active Thermal
Advantages of NEXT Active Thermal • Wet fingers • Active Thermal can handle even soaked finger • Sun-light • Active Thermal is not affected by sunlight • Liveness • Different materials act differently, and we look for human finger behaviour • Anti spoofing • High resolution picture of the fingerprin
Slide 17: NEXT Active Thermal sensor technology
NEXT Active Thermal sensor technology • The active area is covered with “pixels” • The more pixels per inch, the better picture • We have 500dpi (almost 20 pixels per mm) • In each pixel, there is a tiny sensor to measure thermal activity • Different materials conduct heat differently • Skin contact
Slide 18: Unique protection
Unique protection • Our sensors are made of a thin layer of semiconductors, to Human Hair (70 µm) measure your finger • You want to get close to the finger, to get the best measurement (image) White blood cell • Protect the layer of semiconductors (14µm) • Unique way, using combinations of different
Slide 19: Product Line-up
Product Line-up Access 100 Access 200 Access 300 Oyster III Access 100 Sensor features a large Access 200 Sensor features a high- ACCESS 300 Sensor (FAP20) has been The Oyster III reader takes Next 12×17 mm active sensing area for quality 12×12 mm active sensing specifically designed (15x20mm) to Bi
Slide 20: Certifications
Certifications • L0 and L1 for Aadhaar in India • PIV certified for FBI • NIBSS (Nigeria Inter-Bank Settlement System) • Our latest certificate is ChinaID, a certificate that is granted for products that fulfil the tough requirements to only allow the best products for sensitive applications • Banki
Slide 21: FAP30
Product development Solution Cost Silicon Optical LTPS FAP30 A300 A100 Active Area • Natural to step to add a new size to the portfolio • FAP30 is a standardized size • FAP30 has an existing market, where Customers are used to costly devices • Active Thermal™ will be very price - competitive • Activ
Slide 22: Product development: FAP30
Product development: FAP30 • Project economics NEXT FAP30: FAP20 FAP30 (400 x 300) (400 x 500) • Development cost is already included in 2024 OPEX cost guiding 15.24 x 20.32 mm 20.32 x 25.4 mm • NEXT’s prospective FAP30 product has gathered strong interest from partners as NEXT can offer sensor at v
Slide 23: Technology summary
Technology summary • Disruptive Sensor Technology and coating • Cost competitive • Mature manufacturing • Big size (Secure) • Liveness • Major certificates • Well positioned, with sought - after products • New Customers, on both existing and upcoming products NEXT BIOMETRICS GROUP ASA 23
Slide 24: Market Trends and Industry Analysis
Market Trends and Industry Analysis NEXT BIOMETRICS GROUP ASA 24
Slide 25: Market trends
Market trends • Rapid Growth due to growing security threats • Logical Access and Governmental • Multimodal Biometrics • Biometrics in Financial Services • Contactless Biometrics NEXT BIOMETRICS GROUP ASA 25
Slide 26: Market Segments
Market Segments Public Security Payment & Fintech Access Control Office & Notebook
Slide 27: Tailored to a wide range of use cases
Tailored to a wide range of use cases NEXT’s FAP20 sensor is used in a variety of applications Public Security Payment & Fintech Access Control Office & Notebook Government ID Point of Sales (POS) terminals and digital Door locks, logical access devices Laptops, PC, mice and more wallets and more. •
Slide 28: Pause in presentation. We will return shortly.
Pause in presentation. We will return shortly. NEXT BIOMETRICS GROUP ASA 28
Slide 29: China
China NEXT BIOMETRICS GROUP ASA 29
Slide 30: China is now the key biometric market in the world
China is now the key biometric market in the world Importance of China Demographics and biometrics Policy & Economy The future • 1.4 bn people • Stable biometrics demand growth • Increasing NEXT traction in large despite local economic downturn attractive market • Biometrics everywhere: • Government
Slide 31: NEXT is progressing in China
NEXT is progressing in China NEXT China status NEXT marketing and product development NEXT progress on key milestones NEXT progress in China • Market: Identified the right market for • Certificate: NEXT awarded • NEXT now in partnership with the most NEXT being live verification and large ChinaID
Slide 32: NEXT focus on high security market
NEXT focus on high security market Core strength – Unique technology Active Thermal™ differentiates NEXT from competitors. Live finger verification & large- area as mandatory for high-security NEXT: Large-area sensor Competitors: Small-area sensor High-secure market (ID, banking, etc) Consumer marke
Slide 33: NEXT market-entry strategy focusing on top distributors and direct sales
NEXT market-entry strategy focusing on top distributors and direct sales to market niche players Besides traditional distributorship model, NEXT has expanded its business to a direct-sales model, that we work directly with top-tier OEMs & Partners, and become a preferred supplier in the ecosystem an
Slide 34: NEXT focusing on niche segments with high security needs
NEXT focusing on niche segments with high security needs • Unique high-security technology & product – identified niche markets in China • NEXT have products with high gross margin in less competitive market Niche segments with attractive margin for NEXT’s large-area sensor Banking & Fintech Social
Slide 35: Partnership with Biometric solution provider
Partnership with Biometric solution provider • Signed exclusive partner agreement with largest biometrics solution provider in healthcare and medical segment in China • The Partner to promote NEXT live-finger verification to Ministry of Healthcare as a national standard • Exclusivity, will exchange
Slide 36: Execution of Market Strategy
Execution of Market Strategy Phase 1: Obtain certification & Phase 2: Build-up references & high- Phase 3: Win top-tier banks/gov & scale partnerships level business development, sale ramp- up sales & sustain in China up • Certification& Integration • Qualified by top-tier banks • Supplying referenc
Slide 37: China set for growth
China set for growth 2023 Highlights 2024 Outlook • Secured contracts estimated value NOK 130 – 270 • Ongoing China macroeconomic challenges, yet - NEXT million over 3 years expects that the Chinese biometric market will increase in 2024 compared to 2023 • Got the first stocking order for ChinaID ma
Slide 38: Q&A
Q&A NEXT BIOMETRICS GROUP ASA 38
Slide 39: India
India NEXT BIOMETRICS GROUP ASA 39
Slide 40: India - the role model for government ID deployment
India - the role model for government ID deployment Importance of India India Aadhaar program Key benefits The future • 1.2 Billion people enrolled and growing • $1.5 billion investment saved $29 billion • New government and financial schemes are being added at a fast pace • The fingerprint digita
Slide 41: India Biometric Market – Ready for the leap
India Biometric Market – Ready for the leap India fingerprint sensor market development (Aadhaar) • Early mover, established Aadhaar year 2009 • Largest database to date with 1.2 Billion people • Slow development from 2019 to 2023 – delayed due to covid, political challenges • The phase-out dead
Slide 42: Pole position to take a large share of India fingerprint sensor market
Pole position to take a large share of India fingerprint sensor market NEXT India status NEXT marketing positioning NEXT progress • Approached the market as a sensor company rather than a • Certification: One NEXT partner awarded Aadhaar L1 certificate; finished product company; NEXT is not threat t
Slide 43: India Target Segments
India Target Segments Single Fingerprint Device - For SIM Micro ATM/Point of Sale Access Control for attendance card Sale/Pension for Subsidised grains Tablet for Child enrolment Keyboard for Windows Login Aadhaar enabled ATM use Biometrics for transaction NEXT BIOMETRICS GROUP ASA 43
Slide 44: India: Overview
India: Overview 2023 Highlights 2024 Outlook • Secured contracts valued NOK 300 million over 2-5 years • Expecting to have 3 or more OEM to have L1 certification in 2024 that are using NEXT’s FAP20 sensor • NEXT partner ACPL secured Aadhaar L1 certification • Largest Bank in India expected to releas
Slide 45: Global
Global NEXT BIOMETRICS GROUP ASA 45
Slide 46: India, China then we take EMEA and Americas
India, China then we take EMEA and Americas Africa Europe Americas Replacement market System Type of Market MOSIP Market /Innovative Integrator/Fragmented Focus National ID projects Healthcare & Logistics Logistics/Access Control Value Added Reseller ( Channel/Leverage VAR ) Design Houses & VAR Desi
Slide 47: Q&A
Q&A NEXT BIOMETRICS GROUP ASA 47
Slide 48: Closing
Closing NEXT BIOMETRICS GROUP ASA 48
Slide 49: Capital Markets Day takeaways
Capital Markets Day takeaways ▪ NEXT targets a growing and large biometric market with disruptive Active Thermal technology ▪ >2 USD billion market ▪ NEXT well positioned in market with favorable market dynamics ▪ Following the turnaround phase, NEXT has now entered the scale-up phase ▪ Revenue runw
Slide 50: NEXT proof points to date
NEXT proof points to date Products valid/competitive Customers segments relevant Strong position in China and India Financial Margins relevant Cost Control Expecting The missing part is adding more customers and receiving final purchase orders with shipping dates for contracts in place NEXT BIOMETRI
Slide 51: Outlook
Outlook • Expect strong growth in FAP20 revenues and total revenues in coming quarters • Already secured contracts and design-wins with NOK 200 million in total annual revenue potential • 50% gross margin and an annual run-rate OPEX cost of NOK 65 million expected in 2024 • Current OPEX level can ca
Slide 52: Final remarks
Final remarks • It has taken time, but markets are now taking off in India and China • Launching the high margin FAP30 to a booming market with key customer ready and willing to order • NEXT has secured volume contracts and partnerships that will lift revenues in 2024, but even more so in 2025: • Ad
Slide 53: Q&A
Q&A NEXT BIOMETRICS GROUP ASA 53
Slide 54: Appendix
Appendix NEXT BIOMETRICS GROUP ASA 54
Slide 55: Ulf Ritsvall
Ulf Ritsvall New CEO of NEXT as per October 1, 2023 • Previously Senior Vice President, Sales and Marketing, at NEXT • Prior to joining NEXT, 25+ years experience from executive positions in the biometrics and telecom industry • Unique industry knowledge and large network – lived and worked in South
Slide 56: Eirik Underthun
Eirik Underthun CFO at NEXT Biometrics from Q1 2020 • 26 years’ experience in finance, business controlling and strategy/business development roles in IT/Telecom, Oil Services and Management Consulting companies. • Extensive financial management and business controlling experience including internat
Slide 57: Marcus Laurén
Marcus Laurén CPO – Chief Product Officer from Q4 2023 • Internationally experienced business professional, with 25+ years’ experience from companies like Ericsson, IKEA and biometrics company Fingerprint Cards. • Marcus has extensive and diverse knowledge from different industries, but is especiall
Slide 58: Joshua Chiu
Joshua Chiu SVP Head of Sales South-East Asia • Previously President at Egis Technology China and Senior Sales Director, Country Manager Taiwan at Fingerprint Cards • Prior to joining NEXT, 20+ years experience from executive positions in the biometrics and semiconductor industry • Joshua has more t
Slide 59: Digvijay Singh Kanwar
Digvijay Singh Kanwar SVP, Head of Sales IUEA (India, US, EU and Africa) • Before taking on his current role as Senior Vice President, Head of Sales IUEA, Digvijay Singh Kanwar led NEXT’s sales team in India and served as the Country Manager for India. • Digvijay’s diverse experience was cultivated