JUNE 2015
The Smarter Way to Build the Internet of Everything Using Printed Electronics to Create a Truly Connected World
Davor Sutija CEO
John Afzelius-Jenevall CFO
A Leader in Printed Electronics Low-cost, high-volume electronics manufactured by printing Offering Summary Issuer
Thin Film Electronics ASA
Exchange/Ticker
Oslo Børs:THIN; US (OTC): TFECY
Security
Ordinary Shares and Warrants
Offering
Size(1)
$20M
Shares Outstanding
521.1M
Use of Proceeds
Capacity Expansion
Expected Pricing
TBD / Market Value
Placement Agent
Cowen and Company
Publicly Listed: OSE | 90+ Employees | 270+ Patents and Patents-Pending (1) There is no minimum or maximum required for subscription in this contemplated transaction.
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Management Team Jennifer Ernst, Chief Strategy Officer 2015. Prior: EVP, Sales/BD from 2011, Xerox PARC; Chair, US National Consortium Printed Electronics; MBA, Santa Clara University
Davor Sutija Chief Executive Officer
John Afzelius-Jenevall Chief Financial Officer
2010. Prior: SVP, Product Marketing, FAST, a Microsoft subsidiary. Founding CEO, SiNOR AS (REC-SiTech). Boards of Orbotech, SensoNor, Birdstep, and Owera.
2013. Prior: VP, Corporate Development, Orkla ASA; Portfolio Manager at Catella Capital Management, Nordea.
Management & Technology, Wharton School; Ph.D., Chemical Engineering, UC Berkeley. Hertz Fellow
‘Star Manager of the Year’ – Morningstar CFA. BS, Economics. MS, Engineering, Royal Institute of Technology
Kai Leppänen, Chief Commercial Officer 2015. Prior: VP Sales/BD EMEA from 2013, Opera Software, Symbian, 12snap Mobile Advertising. BA, International Business, MSc, Info. Sys. Mgmt, London Peter Fischer, Chief Product Officer 2014. Prior: Plastic Logic (CTO); Qimonda, Infineon. “Forty Innovators Building the Next-gen Electronics,” EETimes. Board, Organic Electronics Association. Ph.D., Physics, University of Magdeburg Christer Karlsson, Chief Technology Officer 2005. Prior: Deputy Research Director, National Defence Research Establishment, Sweden. Ph.D. Linköping University.
Henrik Sjöberg, SVP, Product Management 2013. Prior: Micronic Mydata, ACREO. Ph.D., Physics, Royal Institute of Technology
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The “Internet of Everything” Opportunity 534 million Bluetooth accessories (2014)
Internet of Things
46 million wearables
2.7 billion computing devices
8.0 billion RFID chips
21 billion microcontrollers
IoT market constrained by cost, scalability Capital-intensive nature of silicon manufacturing
High cost of assembly – 70% of system
Thinfilm Existing Markets
80 billion apparel items (2015)
Internet of Everything
Global Semiconductor Capacity Limit
5-10+ trillion consumables
Printing: scalability @ cost-points unmatched by any other technology Opens large new markets to intelligence, connectivity
Source: Gartner; IDC, MobiHealth; Bluetooth SIG;; IMF; HIS; The Semiconductor Industry Association; BI Intelligence OICA; IC Insights; MarketLine; Apparel Market; Planet Forward; Companies & Markets
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Thinfilm Business Overview Leader in commercializing printed electronics. Strong market traction. 270+ patents & patents-pending protecting technology arsenal unique in the industry. Global rollouts initiated Dec 2014 for Thinfilm Memory™ and EAS products; strong traction on Q1 product announcement. Go-to-market partnerships with Fortune 500 / Forbes 2000 customers. PRODUCTS IN MARKET
2015 PRODUCT INTRODUCTIONS
Thinfilm Memory™
NFC OpenSense™ - Feb 2015 launch, Q3 Ramp
• Smart consumables, brand protection • Scale-up with Xerox Corporation 1.3B unit plant • 4-10¢ selling price
• • • •
(NYSE:XRX)
Target markets include spirits, tobacco, cosmetics Partnered with largest global spirits manufacturer Multiple 50-100M+ unit brand opportunities 30-50¢ selling price
(NYSE:DEO)
Electronic Article Surveillance (EAS)
Smart Sensor Labels
• • • •
• $1.4B temperature monitoring market • Partnered with leaders in pharma, food • $1.50-$2.20 selling price
Global rollout with leading fast-fashion retailer 13M units on order 100M potential aggregated demand by year-end 6-10¢ selling price (AMS: NEDAP)
(Private: Water Street)
(Private: Keiretsu Forum)
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NFC OpenSense™ Critical Properties for High-Volume Brands Priority 1: Delivering to Market of 1 Zero connection with consumer from retail to home • High-volume marketing driven by data • Personalization and IoT top two concerns of marketers
Priority 2: Counterfeit Defense Package reuse #1 issue in packaged goods • 30% of global alcohol consumption counterfeit • 12% of global cigarette market • $75B worth of counterfeit medicines
NFC OpenSense™ addresses both.
Thinfilm will “radically change the landscape for Internet connected things.” Forbes: “The Smart Labels That Will Power The Internet Of Things,” March 2015
Sources: International Center for Alcohol Policies; International Federation of Spirits Producer; Organized Crime and Corruption Reporting Project; Digital Coding and Tracking Association; Center for Medicine in the Public Interest; Emarketer
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NFC OpenSense™ Five Months from Concept to Product Launch • Two-state ID separates “buying” from “consuming” •
Different pre- and post-sale interactions w/consumer
•
Capture unique product ID, time, location, profile info
•
Engage consumer from shelf to home
Diageo Smart Bottle Debut @ Mobile World Congress, March 2015 Johnnie Walker® Blue Label 24M units annually
“Sealed”
“Open”
• Factory-sealed ID provides anti-counterfeit protection • 100M+ unit brands, multiple markets •
Field trials in discussion with category leaders
•
Spirits/baijiu, tobacco, cosmetics, milk powder • • • •
$0.35 ASP 28M, 27% gross margin on installed capacity 120M, 50% gm w/line upgrades 1B+ w/roll-to-roll process, 50%+ gm
110 unique articles; 41 international; 4,000+ tweets
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From Pilots to Global Rollouts Compounded Growth Within and Across Brands = 241M annually
Johnnie Walker® Blue Label
= 313M annually
24M = 30M per brand
Additional Premium Brands
Extend within brand 80M
50M
Wine
= 200M+ per brand per region
10M
Wine Category Tobacco
Wine 200M+
100M
300M
150M
200-400M+
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OpenSense™ in Sensor Label Platform Low-Cost, Ubiquitous Sensing and Communication for the Internet of Things NFC Sensor Labels
• • • • •
$1.4B temperature-monitoring market < ½ the price of other electronic indicators 2x the performance of chemical alternatives Deliveries for field trials in progress Additional opportunities in consumer, logistics, industrial, and healthcare
• • • •
Roadmap
NFCx / UHF • Extending read distance • Joint work with major wireless player • Exclusive license to earth-friendly printed battery, 4x cheaper than thin-film Li • Can extend sensor platform to wearables
$1.75 ASP 9M, 15% gm operational 40M, 30% gm w/line upgrades 350M, 40%+ gm w/roll-to-roll process
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Partnering to Build the Future
Leading electronics manufacturing and global supply chain company
Largest professional packaging and label converter in Greater China
Global business services, digital printing, and document mgmt company
Technology company pioneering ultrathin, flexible batteries
Developer/supplier of innovative solutions for the retail market
Leading inkjet applications and printed electronics company
International organization overseeing customs regulations governing trade between countries
Cloud-based IoT Smart Products Platform Company
World’s largest spirits manufacturer
Solutions provider for temperature monitoring of food perishables
Solutions provider for temperature monitoring of sensitive medical goods
Global leader in flexible packaging; 200B packages/year
Technology consultant and pioneer in printed electronics
NFC ECOSYSTEM SUPPORT
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Key Milestones Acquisition of Printed Logic IP
1st demo of NFC smart label
Flextronics partnership
(JAN 14)
(MAY 14)
(SEP 14)
Nedap partnership
1st production order for EAS
(MAY 14)
(MAY 14)
Temp sensor Xerox scale-up samples delivered partnership
Mobile World Congress keynote
World Customs Organization partnership
(FEB 15)
(MAR 15)
(MAY 15)
(DEC 14)
(OCT 14)
Thinfilm receives Volume order CTIA eTech Award EAS (SEP 14)
OpenSense™ launch
(DEC 14)
Listed Oslo Børs
Diageo partnership
Level 1 ADR on OTCQX
(FEB 15)
(FEB 15)
(MAR 15)
ANTICIPATED FUTURE MILESTONES
OS pilots in spirits
OS pilots in other FMCG*
Ramp in EAS orders
Volume OS rollouts
(Q3)
(Q4)
(Q4)
(Q1)
First Asia orders
Temp smart label pilot
(Q3)
(Q4)
Expansion of sensor product line (Q4) * FMCG = Fast Moving Consumer Goods
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Thinfilm Snapshot THIN share 12 months [NOK]
Intellectual Assets Legacy investment in technology exceeds $200M 277 patents and patents-pending
Balance Sheet $24M cash (end-Q1) No debt
12
9.00 8.00 7.00
Volume (mm) Price (NOK)
10 8
6.00 5.00
6 4.00
Millions
Share Details Share price: NOK 5.79 | $0.74 (11 June 2015) Market cap: NOK 3,018M | $384M
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3.00 2.00
Revenue YoY growth >100% Q4 2014 record quarter in NOK Q1 2015 move from JDAs to product
Key Dates 1995 – Founded as Opticom subsidiary
2 1.00 0
0.00
THIN revenue & other income [kUSD$]
2005 – Restructured 2008 – IPO (Oslo Axess Exchange) 2010 – Management change & strategy shift 2014 – Acquisition of complementary technology assets 2015 – Level 1 ADR on OTCQX; listed on Oslo Børs
Locations Headquarters: Oslo, Norway; Sites: San Jose, CA, US; Linköping, Sweden; Tokyo, Japan; Shanghai, China
Employees 90+, 26 PhDs
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Capacity Expansion Roadmap 120 Installed base
Current Investment Proposal
Line upgrades
92
44 28 28
16
28
28
Upgrade path 2015 - 2016
• Sheet-based: 28M unit annual throughput
• Staged upgrades to meet demand case
• EAS, NFC OpenSense and Smart Labels share capacity
• 44M units 2015, 120M 2016 • $40M+ potential revenue @ 50% gross margin
• Future expansion on roll-to-roll • 1B+ capacity; $20-$25M per line • $250M+ potential revenue per line, 50%+ gross margins • Process development $8M
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Use of Proceeds $17.5M CAPEX – from 28M units to 120M units • Upgrade processing equipment at rate-limiting steps • Replicate processes to eliminate single-points of failure • Install handling equipment at second- and third-source assembly partners, secure supply chain redundancy
$2.5M OPEX • Increased OPEX due to equipment
• One-time design and installation expenses • Baseline work on roll-to-roll process development toward 1B unit roll-to-roll systems
Increased capacity within 6 months ~$40M annual revenue potential @ 50% gross margin
Future roll-to-roll funded on profits and scale-up partner investments 14
Thank you. Executive contact:
Institutional-investor contact:
Davor Sutija CEO
John Afzelius-Jenevall CFO
[email protected] +47 94 84 98 86
[email protected] +47 95 87 96 80
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Sample Addressable Markets for NFC OpenSense™
Spirits • 1-to-1 consumer engagement, pre- and post-purchase • Identify bottles refilled with counterfeit products – #1 brand protection issue for spirits
• Trace lineage and spot suspicious activity through cloud-based software • Concentrated buyer base, rollout across multiple brands, 10 - 100 million units at a time
Diageo
US
Global
27.4
313.2
Johnnie Walker
