Slide 1: Interim Results Presentation
INTERIM RESULTS PRESENTATION For the six months ended 31 January 2017
Slide 2: Disclaimer
DISCLAIMER The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. This presentation doe
Slide 3: Highlights – Growing Global Interest
INTERIM RESULTS HIGHLIGHTS – GROWING GLOBAL INTEREST 14 active TV and First commercial Successful debut at monitor sales expected in H2 CES programmes with 9 major OEMs Created a robust 10x increase in global supply chain On track technology manufacturing for display and transfer to Merck capacity a
Slide 4: A Pioneer and a World Leader
COMPANY OVERVIEW A PIONEER AND A WORLD LEADER • A pioneer and world leader in the development and production of CFQD® cadmium-free quantum dots • Scalable "platform technology" with multiple markets and product applications • Large addressable markets, principally focusing on: Display Lighting Solar
Slide 5: Display Business
DISPLAY BUSINESS H1 Progress
Slide 6: Building the Business
DISPLAY STRATEGY BUILDING THE BUSINESS Purchase Orders Nanoco today Technical approval £ Value creation Manufacturing, supply chain, partnerships Industrialisation, scale up, cost Proof of concept (who cares?) Innovation (CFQD) 2001 5
Slide 7: Global Partnerships Progressing Well
DISPLAY STRATEGY GLOBAL PARTNERSHIPS PROGRESSING WELL DOW CHEMICAL (USA) • January 2013; modified March 2016 (exclusive to non exclusive in April 2016) • Royalty on Dow sales • South Korean factory running and new green process successfully transferred • Commercialisation progressing well WAH HONG (
Slide 8: Robust Global Supply Chain Created
DISPLAY STRATEGY ROBUST GLOBAL SUPPLY CHAIN CREATED Manufacture CFQD & Resin based on Nanoco’s technology Component Multiple component Component manufacturers manufacturers Potential Display OEM OEMs OEMs 6 other OEMs 7
Slide 9: Multiple Revenue Sources
DISPLAY STRATEGY MULTIPLE REVENUE SOURCES Technology CFQD Product OEM £ Royalty ££ CFQD Product ££ CFQD Product ££ OEM Technology £ Royalty CFQD Product CFQD Product ££ 9 x OEMs ££ CFQD Product ££ OEM 8
Slide 10: Success at CES 2017
DISPLAY STRATEGY SUCCESS AT CES 2017 • Nanoco’s first appearance at CES 2017 was successful • TCL, Hisense and TPV-Philips exhibited large screen, ultra high definition, wide Samsung has trail blazed the color gamut prototype LCD TVs at Nanoco’s suite way, previously with its SUHD TV range, and now
Slide 11: Runcorn Ready to Fulfil Commercial Orders
MANUFACTURING & SUPPLY RUNCORN READY TO FULFIL COMMERCIAL ORDERS • 10x increase in capacity through process improvements • Enhanced to meet expected demand from Wah Hong and Merck • Current capacity of the plant is c. 500 Kgs per annum • Additional capacity will be brought on as demand dictates with
Slide 12: Expanding Capacity to Meet Forecast Demand
MANUFACTURING & SUPPLY EXPANDING CAPACITY TO MEET FORECAST DEMAND Current status Historical Intro of Intro of Debottleneck w/ 24h x 7 shift Debottleneck w/ capacity Gen 6 Gen 7 min investment work modest CapEx 40,000m2 80,000m2 330,00m2 500,000m2 950,000m2 2,000,000m2 11
Slide 13: Growing Addressable Market for QD TVs
DISPLAY MARKET OPPORTUNITY GROWING ADDRESSABLE MARKET FOR QD TVS 12
Slide 14: 50-59" TV Size and Cadmium Free QDs Dominate
DISPLAY MARKET OPPORTUNITY 50-59” TV SIZE AND CADMIUM FREE QDS DOMINATE 13
Slide 15: Developing Monitor Opportunity
DISPLAY DEVELOPING MONITOR OPPORTUNITY • QD displays are beginning to penetrate the monitor market starting in the higher priced models • Demand is growing for graphic and medical use monitors that require wide colour gamut and special image quality • Gaming monitors incorporating CFQDs were launche
Slide 16: Other Markets
OTHER MARKETS H1 Progress
Slide 17: New Opportunities in Lighting
OTHER MARKETS NEW OPPORTUNITIES IN LIGHTING • Today’s focus is in two niche areas: horticultural lighting and cosmetic skin treatment • Nanoco horticultural lights won an innovation award at CES 2017 • Our technology tunes light to match the ideal growing conditions for plants • Working with a numbe
Slide 18: Life Sciences Rapid Technology Progress
OTHER MARKETS LIFE SCIENCES RAPID TECHNOLOGY PROGRESS • Focus on in vivo imaging, diagnostic and targeted therapy In vivo photoluminescence images of the 650 emissive of cancer VivodotsTM nanoparticles following subcutaneous • Partnership in place with University College London injection into the pa
Slide 19: Solar
OTHER MARKETS SOLAR • Our solar ink has been designed to maximise the absorption of energy and can be printed by low cost methods and annealed into a PV film • The technology is based on copper, indium, gallium, selenium (“CIGS”) materials • Current efficiency is 17% • We continue to work with Lough
Slide 20: Financial Review
FINANCIAL REVIEW
Slide 21: Business Model Summary
BUSINESS MODEL SUMMARY Licence fees Royalties Sources of revenue Joint development and grant Sale of CFQD® materials income 20
Slide 22: Financial Highlights (6M to Jan 17)
BUSINESS PERFORMANCE FINANCIAL HIGHLIGHTS (6M TO 31 JAN 17) 2017 2016 Movement £m £m £m Revenue and other income 0.8 0.3 0.5 R&D investment 2.9 3.1 (0.2) LBITDA (5.9) (5.7) (0.2) Loss after tax (5.4) (5.2) (0.2) Cash and short term deposits 8.3 18.3 (10.0) Deferred revenue 0.8 0.0 0.8 Net assets 14.
Slide 23: Key Performance Indicators
BUSINESS PERFORMANCE KEY PERFORMANCE INDICATORS • Strength of balance sheet Liquidity • Key to fund R&D • Excludes lumpy payments Revenue • Key measure of growth • Sum of all invoices raised and grant income Billings • Key cash generator • Core skill R&D spend • Competitive advantage IP portfolio •
Slide 24: Key Performance Indicators (First Half)
BUSINESS PERFORMANCE KEY PERFORMANCE INDICATORS (FIRST HALF) Liquidity £m Revenues and grant income £m Billings £m £8.3m -55% £0.82m £0.44m +51% 2017 £8.3 2017 £0.82 2017 £0.44 2016 £18.3 2016 £0.29 2016 £0.29 R&D investment £m Number of patents £2.87m -6.2% 550 +37.5% 2017 £2.87 2017 550 2016 £3.06
Slide 25: Key Performance Indicators (First Half)
BUSINESS PERFORMANCE KEY PERFORMANCE INDICATORS (FIRST HALF) Analysis of Billings £m Release of deferred revenue at 31/1/17 £m 0.5 0.18 0.45 0.16 0.4 0.14 0.35 0.12 0.3 0.1 0.25 0.08 0.2 0.15 0.06 0.1 0.04 0.05 0.02 0 0 2016 2017 2017 H2 2018 2019 2020 2021 2022 2023 Milestone and royalties Deferred
Slide 26: Movement in Net Loss During the Period
FINANCIAL HIGHLIGHTS MOVEMENT IN NET LOSS DURING THE PERIOD 6,000 761 5,428 5,237 154 374 46 5,000 7 93 188 4,000 £000 3,000 2,000 1,000 - 2016 Loss Billings Deferred Cost of sales R&D Admin Interest Tax credit 2017 Loss revenue 25
Slide 27: Overhead Costs (First Half)
FINANCIAL HIGHLIGHTS OVERHEAD COSTS (FIRST HALF) Movement in overheads vs 2016 £000 -150 -100 -50 - 50 100 150 200 250 Premises costs Share based payment charge Depreciation Various other Professional fees re IP Staff costs 26
Slide 28: Movement in Cash During the 6M Ended Jan 2017
FINANCIAL HIGHLIGHTS MOVEMENT IN CASH DURING THE 6M ENDED 31 JAN 2017 16,000 14,511 14,000 12,000 1,054 917 10,000 375 545 186 240 32 393 8,328 £000 8,000 30 822 22 6,403 6,000 4,000 2,000 - - Cash Jul 16 2017 Loss Depreciation Amortisation Share based Inventories Receivables Payables Deferred Share
Slide 29: Cash Outlook
FINANCIAL HIGHLIGHTS CASH OUTLOOK • Cash at 31 January 2017 £8.3m • R&D tax credit receivable £1.9m • Commercial sales expected to commence in the second half • Cost reduction programme completed in December 2016 • Various cash flow forecasts have been prepared and sensitivity analysis performed • I
Slide 30: Summary
SUMMARY
Slide 31: Summary – Good Progress in H1
SUMMARY – GOOD PROGRESS IN H1 • Commercial sales expected in H2 • Decisive action taken to reduce costs • Sufficient cash headroom under the expected timeframe for commercial sales to commence • 9 OEMs, 14 active programmes • Multiple channel display strategy with multiple sources of revenue beginni
Slide 32: Questions Q&A
NANOCO GROUP PLCe® QUESTIONS Q&A
Slide 33: Appendices
APPENDICES
Slide 34: What Is a Quantum Dot?
OVERVIEW WHAT IS A QUANTUM DOT? • Tiny particles of a fluorescent semiconductor material • 1 to 10 nanometers in diameter • Size of the quantum dot determines the spectrum of light emitted • Smaller = blue; larger = red • Can be tuned to light beyond visible light into the Infra-red or ultra-violet
Slide 35: Benefits of CFQD Quantum Dot Film
DISPLAY BENEFITS OF CFQD® QUANTUM DOT FILM QD manufacture Resin Film Film stack Panel Display Better Colour Gamut Energy Efficient Minimal Process Change ➢ Much improved colour ➢ Narrow bandwidth = more ➢ Uses existing LCD saturation light extraction through colour manufacturing infrastructure filte
Slide 36: Key Markets Are Large
OVERVIEW KEY MARKETS ARE LARGE Horticultural Cancer imaging, diagnostics and Application LCD backlighting Thin film solar lighting therapeutic Water soluble CFQD® CFQD® quantum CFQD® quantum dots quantum dots Technology dots CFQD® quantum CIGS nanomaterials film Functionalized with dots resin antibo
Slide 37: Leadership
APPENDICES LEADERSHIP Dr Christopher Richards • CEO, Non-Executive chairman, Arysta LifeSciences Non Executive Chairman • 20 years of increasing management roles at Syngenta • Executive chairman of Plant Health Care • NED of Origin Enterprises plc Dr Michael Edelman • Led spin-out of Nanoco from Uni
Slide 38: Shareholder Analysis (as at January 2017)
APPENDICES SHAREHOLDER ANALYSIS (AS AT 31 JANUARY 2017) Name Shareholding Percentage Henderson Volantis 48,096,307 20.19 Mr Richard I Griffiths 19,125,097 8.03 Baillie Gifford & Co 17,731,559 7.44 Hargreaves Lansdown Asset Management 15,654,882 6.57 Dr Nigel Pickett (CTO) 10,945,681 4.59 GMT Capital
Slide 39: Statement of Comprehensive Income
APPENDICES STATEMENT OF COMPREHENSIVE INCOME 31 January 31 January 2017 2016 £000 £000 Revenue 676 144 Cost of sales (36) (29) Gross profit 640 115 Other operating income 142 146 Operating expenses Research and development expenses (2,873) (3,061) Administrative expenses (4,347) (3,586) Operating lo
Slide 40: Statement of Financial Position
APPENDICES STATEMENT OF FINANCIAL POSITION 31 January 31 January 2017 2016 Group Group £000 £000 Assets Non-current assets Tangible fixed assets Intangible assets 1,106 1,668 Investment in subsidiaries 2,820 2,068 3,926 3,376 Current assets Inventories 238 232 Trade and other receivables 1,013 855 I
Slide 41: Statement of Financial Position
APPENDICES STATEMENT OF FINANCIAL POSITION 31 January 31 January 2017 2016 Group Group £’000 £’000 Non-current liabilities Deferred revenue 597 - 597 - Total liabilities 2,329 1,945 Net assets 14,120 23,976 Capital and reserves Issued equity capital 58,602 58,057 Share-based payment reserve 2,955 2,
Slide 42: Statement of Cash Flow
APPENDICES STATEMENT OF CASH FLOW 31 January 31 January 2017 2016 Group Group £000 £000 (Loss)/profit before tax (6,403) (6,258) Adjustments for: Net finance income (35) (128) Depreciation of tangible fixed assets 393 533 Amortisation of intangible assets 186 139 Share-based payments 240 113 Changes
Slide 43: Statement of Cash Flow
APPENDICES STATEMENT OF CASH FLOW 31 January 31 January 2017 2016 Group Group £000 £000 Cash flow from investing activities Purchases of tangible fixed assets (239) (139) Purchases of intangible fixed assets (583) (386) Decrease in cash placed on deposit - (10,000) Interest received 13 175 Net cash
Slide 44: RoHS Update
APPENDICIES RoHS UPDATE • The European Commission has been conducting a lengthy and on-going review of the future of cadmium-based quantum dots • In spite of Members of the European Parliament voting overwhelmingly in 2015 to ban cadmium-containing quantum dots, the Commission decided to mandate a s
Slide 45: TV Film Stack
NANOCO» APPENDICES é TV FILM STACK ea Teele General TFT-LCD Structure
Slide 46: TV Market Share
APPENDICES TV MARKET SHARE Samsung 21% Others 35% LG 12% Panasonic 3% TCL 6% Vizio Hisense 3% AOC 4% Skyworth Sony 6% 5% 5% Samsung LG TCL Hisense Sony Skyworth AOC Vizio Panasonic Others 45
Slide 47: Nanoco Group PLC contact details
Nanoco Group PLC 46 Grafton Street, Manchester, M13 9NT, United Kingdom, Tel: +44 161 603 7900 | Fax: +44 161 603 7901 info@nanocotechnologies.com www.nanocogroup.com 46