arctic june 2016 - Thinfilm Electronics · 6/14/2016 · plan (40M+), completion expected Q2 2016...
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Leveraging Rollto Roll Technology to enable NFC Everywhere™ Facility upgrade/expansion to support global NFC OpenSense™ and SpeedTap™ rollouts DavorSutija CEO Oslo Roadshow Arctic Securities June 2016
Transcript of arctic june 2016 - Thinfilm Electronics · 6/14/2016 · plan (40M+), completion expected Q2 2016...
Leveraging Roll-‐to Roll Technology to enable NFC Everywhere™Facility upgrade/expansion to support global NFC OpenSense™ and SpeedTap™ rollouts
Davor SutijaCEO
Oslo RoadshowArctic SecuritiesJune 2016
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This report includes forward-‐looking statements covered by the Private Securities Litigation Reform Act of 1995. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results for fiscal year 2015 and beyond could differ materially from the Company's current expectations. Forward-‐looking statements, including estimates of capacity, selling price and other material considerations, are identified by words such as "anticipates," "projects," "expects," "plans," "intends," "believes," "estimates," "targets," and other similar expressions that indicate trends and future events.
Factors that could cause the Company's results to differ materially from those expressed in forward-‐looking statements include, without limitation, variation in demand and acceptance of the Company's products and services, the frequency, magnitude and timing of raw-‐material-‐price changes, general business and economic conditions beyond the Company's control, timing of the completion and integration of acquisitions, the consequences of competitive factors in the marketplace including the ability to attract and retain customers, results of continuous improvement and other cost-‐containment strategies, and the Company's success in attracting and retaining key personnel. The Company undertakes no obligation to revise or update forward-‐looking statements as a result of new information, since these statements may no longer be accurate or timely.
Thinfilm financial reports may be accessed via the following web page: http://www.thinfilm.no/investor-‐relations/reports-‐presentations/
Safe Harbor Statement
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The “Internet of Everything” Opportunity
Source: Gartner; IDC, MobiHealth; Bluetooth SIG;; IMF; HIS; The Semiconductor Industry Association; BI Intelligence OICA; IC Insights; MarketLine; Apparel Market; Planet Forward; Companies & Markets
Internet of Everything
(201
6)
2.7 billion computing devices
21 billion microcontrollers
80 billion apparel items
5-‐10+ trillion consumables
Internet of Things
(201
4)
8.0 billion RFID chips
534million Bluetooth accessories46 million wearables
Global Semiconductor Capacity Limit
Thinfilm Existing Markets
Adding 1% toretail value
=$100 billion
market opportunity
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Thinfilm Business Models
(NYSE:XRX)
NFC OpenSense™ and NFC SpeedTap™• Pilot orders delivered and planned to consumer brand
companies• Go-‐to-‐Market Partners• Packaging partner program
Thinfilm Memory™• Smart consumables, brand protection• Xerox Corporation licenses Thinfilm
Memory Label technology• 1.3B unit plant• Xerox® Printed Memory showcased at
Drupa as one of core Xerox innovations
PRODUCTS IN MARKET NFC PRODUCT PLATFORM
(AMS: NEDAP)
(NYSE:DEO)
(Private: Water Street) (Private: Keiretsu Forum)
Electronic Article Surveillance (EAS)• Global rollout with leading fast-‐fashion retailer• Exclusive agreement on EAS tags for fast retail
with the one of the largest anti-‐theft solution providers, Nedap
Smart Sensor Labels• Partnered with leaders in pharma, food cool chain
solution suppliers• To be launched to market in Q4 2016
Increasing ASP
PENDING PRODUCT LAUNCHES
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Xerox – Security Printing• Manufacturing scale-‐up partner• Global leader in business services,
digital printing & document management • Launched Xerox Printed Memory™ based on
Thinfilm Memory in Sept. 2015• 1.3B unit capacity in NY plant• Technology transfer completed, test
equipment delivered• Traction with customs agencies and
governments re: tax-‐stamp solutions• Xerox showcasing memory-‐based security at
Drupa in June 2016.
PRC23PAM1
XRX42V01
Scale-‐up and licensing of Memory
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Wireless Product RoadmapMay 2016
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OpenSense | Authenticator
User downloads app from Google Play;User taps on bottle when app is open
User is informed of tag state
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SpeedTap | Tap & Launch
User taps on wine bottle
Launch various consumer engagement use cases
Mobile Commerce Winery Photo Tour
Analytics
Thin Film Dashboard
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Connecting with consumers
Consumer scrolling Search directed Direct dialogue with Brand
Offline 2 Online (O2O)• Brands can connect directly with consumers
when they tap on their products
Consumers searching “Olive Oil” • Brands pay to be listed in “Sponsored”
sections above the fold• Traffic is determined by search provider
and influenced by SEO/SEM strategies
Consumers researching “Olive Oil” • Users looking for good deals and highly
reviewed and rated products
Mobile Marketing Today Tapping using NFC Smartphones
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Dialogue with Consumers
Favorite RecipeDeeper Engagement & Cross Promotion
Authenticate & Freshness Mobile Commerce & Special Offers
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• Craft Beers• Wine & Spirits• Tobacco• Pharma• Health and beauty products• Subscription boxes• Specialty Foods
Key Vertical Markets – Targeting Millennials
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• Based in Switzerland• Publicly listed on the
SIX Swiss Exchange• Global leader in injection
systems for self-‐medication• Investing over 50 million
Swiss francs in next-‐gen injection/infusion systems
• Thinfilm provided OpenSense™ and software system for YpsoMate Smart
• Ypsomed and Thinfilm continue commercializing YpsoMate Smart
Smart Medical Devices: Improve Patient Outcomes
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Latest Phones are NFC-‐Ready & Compatible with TF Tags
Galaxy S7
Also Galaxy 4,5,6
LG G5 M5
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# Smartphones (million) That Can Read Thinfilm Tags
563
13711786 1914117
20
0
500
1000
1500
2000
2500
2016 2017 2018 2019
Thinfilm URL + App Thinfilm App only
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Why Do Thinfilm Tags Have a Faster Read Speed?
Tag Response
Actual time depends on bit rate, amount of data, number of tags in the field
Tag Response
Data Send(128-‐bit)
<5 ms, 200 reads per secondReader
Reader
Thinfilm Tag-‐Talks-‐First
ISO 14443-‐3 (Unencrypted)1
Identification & Selection
Programming
Source: NTAG213 datasheet specifications
>100 ms
1Encrypted tags ~ 5x longer than unencrypted
Sending
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Why Are ThinfilmNFC Solutions Highly Secure?SpeedTap & OpenSense
1 Permanently Etched ID using nanotechnology
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Unique Thinfilm NFC Protocol: ISO 14443-‐2 TTF 4
Proprietary Authentication App & Cloud System 5
Longer ID: 128 bits vs. 56 bits 56Non-‐encrypted NFC Thinfilm NFC
128
Thinfilm SpeedTap128 bits -‐ ID
Unique Protocol FlagClone
Proprie
tary Prin
ted
Electronic Technology
Industry
Protocol
Software
3 (OpenSense only): 2 states ID
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Digital Activation
• Arc Worldwide is Leo Burnett’sdigital activation group
• Leo Burnett part of Publicis, the 3rd largest agency in the world
• Clients include McDonald’s, P&G, Kellogg’s, Alcon, Purina,Coca-‐Cola, Miller-‐Coors
• Signed exclusive agreement with Thinfilm to deliverNFC OpenSense™ to clients
• Davor Sutija and Nick Jones on panel at Mobile World Congress 2016
“The opportunity we saw was for sending pre-‐ and post-‐purchase messaging to smartphones. If you know the moment when a package has been opened it’s a game-‐changer for marketers.”
– Nick Jones, EVP Innovation & GrowthArc Wordlwide (Leo Burnett)
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Retail Solutions
• TCS is the leading IT services, consulting, and business solutions firm
• Parent company, Tata, is world’s 10thlargest IT provider
• Recognized by Brand Finance as one of the Big 4 Global IT Services Brands
• Partnership with Thinfilm to create the “Next Experience in Retail”
• Thinfilm demonstrated technology in Tata booth at National Retail Federation 2016
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Preferred Converter Program
• Engaging pharmaceutical industry to integrate NFC OpenSense™ into Rx/OTC packaging
• Delivered prototypes and engineering samples to global pharma companies
• Establishing key manufacturing processes for high-‐speed/high-‐volume production lines, including use of ferrite shields
• Jones placed 6-‐figure unit order for NFC OpenSense tags w/ ferrite shields in Q4
"Thinfilm’s unique printed NFC solution addresses multiple needs within the pharmaceutical channel,
particularly around product integrity and patient safety."
– Chris Jones Harris, Principal, Strategic Initiatives & Alliances, Jones Packaging
• Leading manufacturer of flexible packaging and labels
• Engaging beverages industry to integrate NFC OpenSense in labelsand packaging
• Thinfilm received a 6-‐figure unit order from Constantia for NFC OpenSense
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Wireless Products: Capacity-Expansion Roadmap
• EAS, NFC OpenSense™, NFC SpeedTap™, andSmart Labels share capacity
• Sheet-based: 28M unit annual throughput
• $4.2M capex spent on first step in expansionplan (40M+), completion expected Q2 2016
• Preliminary engineering design completed
• Vendor selection underway
• Up to 5 billion OpenSense™ / NFC SpeedTap™annual capacity equivalent per line
• $300-680M annual revenue potential
• $18-$32M CAPEX
Existing Capacity:Sheet-Based Processing (S2S)
Scale-Up Program:Roll-to-Roll Processing (R2R)
Photo above is representative of R2R equipment. Actual equipment has not yet been ordered.
Photo courtesy of Northfield Automation Systems.
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• New facility allows for roll-‐to-‐rollproduction by end of 2017
• EAS production anticipated first,NFC products in 2018
• Equipment purchases expectedto commence Q3, subject tocompletion ofvendor selectionand volumedemand
Move to Expanded Fabrication Facility
Photos above are representative of R2R equipment. Actual equipment has not yet been ordered.Photos courtesy of Northfield Automation Systems.
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NFC Cost-‐Per-‐Die Reduced by an Order of Magnitude
Labor cost Other cost Total costMaterial cost
S2SR2R
• Batch size increases by 50x
• Throughput of new line increases by two orders of magnitude
• Material cost dominates per-‐die cost as labor and other costs are depreciated over a vastly higher number of die
• Total front-‐end cost per die of NFC products reduced by an order of magnitude
• Material Cost also reduced as roll is 2x thinner than sheet.
• Thinner die creates new Addressable Market
R2R production: material cost dominates NFC cost per die
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Thank you.
Executive contact:Davor [email protected]+47 94 84 98 86
Institutional-‐investor contact:John Afzelius-‐JenevallCFOjohn.afzelius-‐[email protected]+47 95 87 96 80
