Slide 1: Half Year Results Presentation
HALF YEAR RESULTS PRESENTATION For the six months ended 31 January 2018
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 – Encouraging Progress in Commercialisation
HIGHLIGHTS – ENCOURAGING PROGRESS IN COMMERCIALISATION Momentum in current trading • Game changing Material Development and Supply Agreement with a large US-listed Corporation for advanced electronic devices • Increasing number of Nanoco equipped displays products moving through to commercial produc
Slide 4: Company Overview – Pioneer and World Leader
COMPANY OVERVIEW – PIONEER AND WORLD LEADER • Pioneer and world leader in the development and production of cadmium-free quantum dots (CFQDs) • Platform technology enables revenue from multiple, large addressable markets Display • Extensive patent portfolio, c.600 patents granted/pending • Large add
Slide 5: Strengths
STRENGTHS Leader in heavy-metal-free CFQD® quantum dot & Nano- material products Leading R&D innovation Intellectual property • Leading performance • High quality • Reliability Scalable production process • Low risk Molecular seeding process • High volume Efficient scalable production • Cost competi
Slide 6: Nano-materials
NANO-MATERIALS
Slide 7: Nano-materials – Game Changing
NANO-MATERIALS – GAME CHANGING • Move from traditional, costly semiconductor processing to increased functionality in nano-particles • Nano particle development is a core competency of Nanoco o Complex particle design and development o Scale up o Mass production • Focus on new generations of infrare
Slide 8: Display
DISPLAY
Slide 9: Growing Display Market Opportunity
GROWING DISPLAY MARKET OPPORTUNITY • Benefits of CFQDs o Enables Wide Color Gamut (WCG) displays for 4K, UHD, HDR, gaming, streaming, photos o Integrated into existing LCD technology o Consistent and accurate colours across product range o Improved peak brightness and contrast o Lightning fast respo
Slide 10: Multi-Channel Strategy to Display Success
MULTI-CHANNEL STRATEGY TO DISPLAY SUCCESS Nanoco Non-exclusive Licensees • Revenue from licence fees • Revenue from Runcorn • Revenue from royalties and royalties produced CFQD resin + royalty • Product sold under the • Technology transfer • Focus on Taiwanese display TREVISTA™ brand completed OEMs
Slide 11: Focused Sales Pipeline – Product Expected in Market in 2018
FOCUSED SALES PIPELINE – PRODUCT EXPECTED IN MARKET IN 2018 NDA, scope and design specifications • Focused on Taiwanese OEMs with near term potential Specification agreement and development • Sales process has taken longer sampling than anticipated o Customisation required for Technical approval eac
Slide 12: Continuous Innovation Critical to Success
CONTINUOUS INNOVATION CRITICAL TO SUCCESS • Continuous improvement in • QD enabled CFQD quality to QD colour filters for • EL QD QD meet display LCD TVs • Nanoco / Kyulux demands Colour QLED agreement Film • Improved colour, • Direct competitor • Aggressive reduction of Filter brightness and viewing
Slide 13: Other Markets
NANOCO 7 S S S OTHER MARKETS
Slide 14: Horticulture Lighting
HORTICULTURE LIGHTING • Our technology is being commercialised today o Commercial Supply and License Agreement with the Sports Turf Research Institute o Lights being trialled by leading UK grower for large vertical farm investment • As the world’s population continues to grow and is focused increasi
Slide 15: Medical Device / Lighting
NANOCO* Pain Relief & Recovery
Slide 16: Nanoco Life Sciences
NANOCO LIFE SCIENCES • Focus on cancer imaging and diagnostics In vivo photoluminescence images of lymph nodes in • Recent CRO test results show Nanoco CFQD image agent is non- mice mutagenic, using industry standard AMES testing, required by regulatory guidelines • Partnership in place with Covance
Slide 17: Next Generation 2D and Other New Materials
NEXT GENERATION 2D AND OTHER NEW MATERIALS • 2D material development programme o Partnership between Nanoco and University of Manchester, National Graphene Institute o Collaboration between Nobel Laureate Prof. Kostya Novoselov and Nanoco o Develop and commercialise future generations of materials o
Slide 18: Operations
OPERATIONS
Slide 19: Expanding Manufacturing to Fulfil Commercial Sales
EXPANDING MANUFACTURING TO FULFIL COMMERCIAL SALES • Expanding Runcorn production to service new and growing nano-materials business • Expansion fully funded by customer • Runcorn currently fulfilling commercial display orders • Displays capacity of 1 million TV/year (55inch) with 24/7 operation • I
Slide 20: Financial Review
FINANCIAL REVIEW
Slide 21: Business Model
BUSINESS MODEL Licence fees Royalties Sources of revenue Joint development and grant Sale of materials income 20
Slide 22: Financial Highlights
FINANCIAL HIGHLIGHTS H1 2018 H1 2017 Movement £m £m £m Revenue and other income 0.3 0.8 (0.5) R & D investment 1.9 2.9 (1.0) LBITDA (4.3) (5.9) 1.6 Loss after tax (4.2) (5.4) (1.2) Cash and short term deposits 8.7 8.3 0.4 Deferred revenue 0.6 0.8 (0.2) Net assets 14.3 14.1 0.2 No No No Patents grant
Slide 23: Movement in Net Loss During H1 2018
MOVEMENT IN NET LOSS DURING H1 2018 7,000 323 23 985 6,000 240 5,428 5,000 4,205 4,000 £'000 1,204 35 345 3,000 2,000 1,000 - 2017 Loss Billings Deferred revenue Cost of sales R&D Admin Interest Tax credit 2018 Loss 22
Slide 24: Movement in Operating Costs Compared to H1 2017
MOVEMENT IN OPERATING COSTS COMPARED TO H1 2017 23
Slide 25: Movement in Cash H1 2018
MOVEMENT IN CASH H1 2018 9,000 7,956 8,744 8,000 7,000 5,706 6,000 5,000 £'000 4,000 3,000 2,000 256 125 56 268 266 1,000 108 51 4,835 383 - 2017 Cash 2018 Loss Depreciation Amortisation Share based Inventories Receivables Payables Deferred Capital Placing Cash 2018 before tax payments revenue expen
Slide 26: Summary
SUMMARY
Slide 27: Summary – Momentum in Current Trading
SUMMARY – MOMENTUM IN CURRENT TRADING • Platform technology enables revenue from multiple, large addressable markets • Game changing Material Development and Supply Agreement with a large US-listed Corporation for advanced electronic devices • Runcorn manufacturing expansion underway to support new
Slide 28: Questions Q&A
NANOCO GROUP PLCe® QUESTIONS Q&A
Slide 29: Appendices
APPENDICES
Slide 30: What Is a Quantum Dot?
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 parts of
Slide 31: Benefits of CFQD Quantum Dot Film
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 saturation ➢ Narrow bandwidth = more light ➢ Uses existing LCD manufacturing extraction through colour filters infrastructure ➢ Imp
Slide 32: Breakdown of a QD LCD Display
BREAKDOWN OF A QD LCD DISPLAY CFQD Quantum Dot Film Back Light Unit (BLU) Optical Films Pure White light LCD Panel LCD Filter Blue / White light Luminance Luminance Wavelength Wavelength Emits light – much Light energises Quantum dots LCD panel creates the Each pixel / shutter is paired more blue th
Slide 33: What People Are Saying About QD Displays
WHAT PEOPLE ARE SAYING ABOUT QD DISPLAYS “A TV screen that is jaw-droppingly good” “TVs are entering a new era in 2017” - The Independent - Trusted Reviews “May be the holy grail of “CF791’s pitch-perfect colors change the game gaming displays” for ultrawides” - Forbes - Monitornerds.com Digital Tre
Slide 34: Cadmium-Free to Dominate Rapidly Growing Market
CADMIUM-FREE TO DOMINATE RAPIDLY GROWING MARKET QD Film revenue by Application QD Material Revenue Breakdown 33
Slide 35: Competition and Supply
COMPETITION AND SUPPLY • Nanoco and its licensees, Dow and Merck, are the only commercial suppliers of CFQDs • Competition chasing cadmium free hard Cadmium-free QDs CFQD Market Players Cadmium Market Players Samsung via Hansol – shipped >3m Nanosys – stated capacity 6m TVs TVs in 2016 pa, recently
Slide 36: LCD TV Market Share 2016
LCD TV MARKET SHARE 2016 Samsung 22% Others 27% LG Changhong 12% 3% Haier 3% Vizio 4% TCL TPV 9% Source: Statista 4% Skyworth Hisense 5% Sony 6% 6% 35
Slide 37: RoHS Update
RoHS UPDATE • Cadmium-based quantum dots are currently banned in lighting and will be effectively banned in displays from 31st October 2019, since the normal RoHS limit of 100ppm will apply once the exemption ends • Nanoco expects that regulations in other key markets, including China, will fall in
Slide 38: Leadership
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 University of
Slide 39: Statement of Comprehensive Income
STATEMENT OF COMPREHENSIVE INCOME 2018 2017 £’000 £’000 Revenue 196 676 Cost of sales (59) (36) Gross profit 137 640 Other operating income 59 142 Operating expenses Research and development expenses (1,888) (2,873) Administrative expenses (3,143) (4,347) Operating loss (4,835) (6,438) - before shar
Slide 40: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION 31 January 31 January 2018 2017 Group Group £’000 £’000 Assets Non-current assets Tangible fixed assets 634 1,106 Intangible assets 3,234 2,820 3,868 3,926 Current assets Inventories 132 238 Trade and other receivables 925 1,013 Income tax asset 2,467 2,945 Short-term
Slide 41: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION 31 January 31 January 2018 2017 Group Group £’000 £’000 Non-current liabilities Deferred revenue 501 597 501 597 Total liabilities 1,813 2,329 Net assets 14,323 14,120 Capital and reserves Issued equity capital 66,565 58,602 Share-based payment reserve 3,082 2,955 Mer
Slide 42: Statement of Cash Flow
STATEMENT OF CASH FLOW 31 January 31 January 2018 2017 Group Group £’000 £’000 (Loss)/profit before tax (4,835) (6,403) Adjustments for: Net finance income - (35) Depreciation of tangible fixed assets 266 393 Amortisation of intangible assets 268 186 Share-based payments 125 240 Changes in working c
Slide 43: Statement of Cash Flow
STATEMENT OF CASH FLOW 31 January 31 January 2018 2017 Group Group £’000 £’000 Cash flow from investing activities Purchases of tangible fixed assets (7) (239) Purchases of intangible fixed assets (376) (583) Decrease in cash placed on deposit - - Interest received - 13 Net cash inflow from investin
Slide 44: Shareholder Analysis (as at 31 January 2018)
SHAREHOLDER ANALYSIS (AS AT 31 JANUARY 2018) Name Shareholding Percentage Lombard Odier 59,024,089 20.64 Hargreaves Lansdown Asset Management 24,846,180 8.69 Cogefi Gestion 18,862,117 6.60 Baillie Gifford & Co 15,976,767 5.59 Miton Asset Management 15,403,765 5.39 Dr Nigel Pickett (CTO) 11,112,347 3
Slide 45: 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 44