Thin Film Electronics ASA Annual Report 2017 ... regarding augmented reality (AR) experiences, and...

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  • Annual Report 2017 Thin Film Electronics ASA

  • Contents

    USA - San Jose NFC Innovation Center

    2581 Junction Avenue San Jose, CA 95134 Phone: +1 408 503 7300

    Follow Thinfilm

    Norway - Oslo Corporate Headquarters

    Henrik Ibsens Gate 100 PO Box 2911 Solli 0255 Oslo Phone: +47 22 42 45 00 Email:

    United Kingdom - London Sales Office

    2 Eastbourne Terrace Paddington London W2 6LG Phone: +44 203 865 6346

    China - Shanghai Supply Chain and Sales Office 柏摩电子(上海)有限公司

    Room 1802, 18 Floor Bao An Building 800 Dong Fang Road Shanghai, China 200122 Phone: +86 21 5116 7107 Fax: +86 21 5116 7116

    Singapore Sales Office

    71 Robinson Road #14-01 Singapore 068895

    Sweden - Linköping Development Office

    Westmansgatan 27B 582 16 Linköping Phone: +46 13 460 2400

    Germany Sales Office

    WeWork Axel-Springer-Platz 3, 20355 Hamburg, Germany

    USA - San Francisco Sales and Software Office

    WeWork 655 Montgomery Street 7th Floor San Francisco, CA 94111 Phone: +1 408 503 7300

  • Table of Contents

    Message from the CEO

    2017 Highlights

    About Thinfilm and Printed Electronics

    Report from the Board of Directors

    Consolidated Statements of Comprehensive Income

    Consolidated Statements of Financial Position

    Consolidated Statements of Changes in Equity

    Consolidated Cash Flow Statements

    Notes to the Consolidated Financial Statements

    Profit and Loss Statements Thinfilm ASA

    Balance Sheet Thinfilm ASA

    Cash Flow Statements Thinfilm ASA

    Notes to the Annual Financial Statements Thinfilm ASA

    Corporate Social Responsibility (CSR) Statement

    Responsibility Statement

    Auditor’s Report

    Corporate Governance

    Articles of Association

    Board of Directors

    Executive Management





















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    Message from the CEO

    Thinfilm is changing the face of mobile marketing.

    In 2017, we began to fulfill our vision of enabling

    the Internet of Everything by pioneering the use of

    roll-based manufacturing to create printed integrated

    circuits. These flexible, ultra-thin devices offer unique

    advantages, and the manufacturing process enables

    the scaled production of electronic components –

    such as Near Field Communication (NFC) tags – into

    the billions of units annually. While our leadership in

    novel manufacturing is a key to making smart products

    ubiquitous, Thinfilm is also the only company in the

    industry offering a complete end-to-end solution for

    NFC mobile marketing. Our CNECT™ cloud-based

    software platform allows brands and marketers to

    manage the NFC tags, deliver unique digital content

    and experiences, and track consumer interactions

    in real-time. In order to foster the widest possible

    application of NFC, Thinfilm customers have the

    choice to use our proprietary PDPS (printed dopant

    polysilicon) NFC tags, or Thinfilm-programmed

    traditional silicon NFC tags.

    The elegance of NFC mobile marketing is that it

    derives value from consumer behavior that is already

    happening. Research shows that 80% of consumers

    are already using their smartphones at the time of

    purchase while shopping in-store, and Thinfilm is

    leveraging the NFC technology that is already built

    into every new smartphone. Between Android and

    iOS-based platforms, there are an estimated two

    billion NFC-compatible phones around the globe.

    This number will continue to grow as older phones

    are replaced with newer models.

    The ongoing mass adoption of contactless payment

    systems continues to drive consumer “tapping”

    behavior. This behavior initially started with credit

    cards but quickly spread to smartphones as Apple

    Pay and Google Pay gained in popularity. As mobile

    payment platforms become more mainstream,

    NFC mobile marketing will gain traction, especially

    after Apple’s announcement of inclusion of NFC

    compatibility beyond just payments with the latest

    version of iOS. The release of iOS 11 in 2017 spiked

    interest in iPhone-dominated markets, including

    North America, Western Europe, Japan, and Australia.

    This is in addition to the Android-centric markets

    throughout the rest of the world that have enjoyed

    broader NFC functionality for years. Now, regardless

    of the mobile operating system (OS), Thinfilm’s

    solutions allow brands to establish direct connections

    with consumers and control the dialogue without

    being subject to influence from search engines and

    online marketplaces.

    Brands are always looking for better ways to engage

    customers and build relationships. NFC mobile

    marketing provides this opportunity by giving brands

    a way to reach customers at privileged moments

    that other marketing channels cannot provide, both

    in the aisle while shopping and at-home during a

    Dear Shareholders,

  • 5Message from the CEO

    product’s consumption phase. Always with an eye on

    brand image, agencies and brand managers value

    Thinfilm’s customizable, discreet packaging that

    cannot be matched by other vehicles as it improves

    the overall user experience and brand impression.

    CNECT™ version 2.0 is expected to launch in April. It

    offers pre-packaged NFC applications that empower

    brands to “surprise and delight” customers with

    relevant experiences that enhance loyalty and drive

    repeat purchases. Smart marketers know that a pull

    strategy, through which customers and prospects

    opt-in, is always more trusted and effective than

    push-based marketing efforts. In sum, NFC mobile

    marketing is a compelling complement to awareness

    advertising and helps brands close the sale by

    delivering the right message to customers at the

    right time. Leading brands do business with Thinfilm

    to pursue exciting new marketing opportunities and

    gain valuable insights into customer behavior that,

    until recently, were simply not accessible.

    During the past year, Thinfilm gained a reputation

    as a leader in NFC mobile marketing among brands

    as well as industry organizations. Thinfilm won the

    large majority of the publicly announced NFC mobile

    marketing projects in 2017 and had over 27 in-market

    deployments. Thinfilm also won two awards from

    the Mobile Marketing Association (MMA). One was

    an MMA Smarties™ award in the “Internet of Things

    – Products in the Market” category for our work

    with Coronado Brewing Co. as they launched a new

    product. The other, an “MMA Impact Award”, was

    given to Thinfilm’s Matt Bright, Sr. Director Product &

    Technical Marketing, in recognition of his leadership

    in advancing the MMA’s IoT (Internet of Things)

    initiatives. Matt is also the co-author of NFC Mobile

    Marketing for Dummies, part of the well-known Wiley

    “dummies” series of instruction manuals. Thinfilm was

    awarded these prestigious accolades in competition

    with large digital agencies, media companies, and

    many household brands.

    The CNECT software platform is helping to fuel

    adoption for marketing purposes and interest by

    brands. First-party data from user-initiated interactions

    gathered by CNECT provides insights not available

    through other channels and helps fill the gap between

    online marketing and offline behavior. Our customers

    include wineries, craft beer producers, tobacco

    companies, and major brands within OTC pharma,

    cosmetics, nutrition products, and the broader

    consumer packaged goods (CPG) industry. They have

    discovered useful, unexpected insights, including usage

    frequency logged by time-of-day and day-of-week. The

    data also revealed the viral nature of these campaigns as

    well as the longevity of a campaign beyond the

    initial target audience or flight. Insights also include

    information on distribution, including confirmation

    that a product has reached store shelves and

    how long it takes for direct mail campaigns to be

    Version 2.0 of the CNECT platform is expected to launch in April and will feature expanded functionality and enhanced UI/UX.

    Marge Ang (left), Sr. Director Marketing, accepts the MMA Smarties™ “Internet of Things – Products in the Market” Award on behalf of Thinfilm; Matt Bright (right), Sr. Director Product & Technical Marketing, receives an “MMA Impact Award” for his leadership in advancing the MMA’s IoT initiatives.

  • 6

    canvassed. Campaigns can also serve as a monitoring

    mechanism to determine if field representatives are

    doing their jobs and deploying material as instructed.

    These actionable insights can help brands modify