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Powering the Internet of EverythingUsing Printed Electronics to Create a Truly Connected World
John Afzelius-JenevallCFOJennifer ErnstEVP, Sales and Business Development
CLSA INNOVATION SUMMITNEW YORK, DECEMBER 2014
Low-cost electronics made by printing
1OSE: THIN.OL - MKT CAP $316 Million – 83 Employees - 270+ Patents and Patents Pending
REDEFINING THE INTERNET OF THINGS
83 million cars
2.3 billion computing devices
19 billion microcontrollers
80 billion apparel items
5-10 trillion disposables
Internet of Things(2014)
Internet of Everything
(2020)
2Source: IDC; Gartner; World Bank; IMF; HIS; The Semiconductor Industry Association; OICA; IC Insights; MarketLine; Apparel Market; Planet Forward; Companies & Markets
6.0 billion RFID chips
Adding 1% to retail value
= $100B market
opportunity
Expanded IoE with printed electronics
FreshFoods
Medical
Authentication
TraditionalIoT
Internet/ Cloud
Pharma
Consumer Goods
SupplyChain
Print /Publishing
THE NEW INTERNET OF EVERYTHING
“FORGET ‘THE CLOUD’… ‘THE FOG’ IS TECH’S FUTURE.”
-- CHRISTOPHER MIMS, WALL STREET JOURNAL (MAY 2014)
NFC+SENSORS+CLOUD= INTERNET OF EVERYTHING @ TRILLION SCALE
Real-timepersonalized
offers
Product info,reviews,
comparisons
Expert tips,recipes
Authenticitycheck
Recallcheck
SUPPLY CHAINPROTECT THE BRAND
POINT OF PURCHASESELL THE BRAND
POINT OF USEBUILD BRAND LOYALTY
Tap forinstantreorder
CloudNFC
SensorData
Real-timesensing
THE OPTIMAL WAY TO CONNECT THE EDGE
5
Mobile Networkis Ubiquitous
“Mobile First” Attitude is Pervasive
NFC on All Mobile Platforms
Connectable Items are Everywhere
Mobile Networks are Data Networks
Source: IDC; Ericsson Mobility Report June 2014; OICA; ExactTarget 2014 Mobile Behavior Report; IBM; Cisco; ABI 2013
NFC the only connectivity solution with IoE
scalability
PRINTED ELECTRONICS IN REALITY
THINFILM’S PRODUCT WAVES
Thinfilm Memory & EASIn Production – retail products in market
Smart LabelsSampling – pre-orders received
NFC Smart Labels Demonstrated May 2014
LUXURY GOODSFMCGS
TOYS & GAMES
• Smart consumables• Brand protection• Collectible cards• Anti-theft labels
• Sensors• Timers
• Wireless capture of uniqueID plus sensor data
• Broad industry compatibility,including Google, Samsung, NXP, Qualcomm, Broadcom
7
(Visitor management)
(Pharma) (Fresh food)
(Smart packaging)
RETAIL STOCK PROTECTIONSUCCESSFUL FIRST MILLION-UNIT VOLUME DELIVERY IN Q3
• Global rollout in progress with leadingfashion retailer
• 60M-unit annual capacity installed, withpotential to double capacity at same site
• Consolidated demand in shoe categorymay exceed 100M by 2016
• Additional 10x opportunity in jeans, jackets • EAS Label ASP: $0.06 – 0.10• Core technology in Nedap Retail !Fast solution,
leading Europe-based EAS systems integrator• Tags compatible with installed systems
8
SMART LABELSSMART LABEL DEMONSTRATORS DELIVERED TO TEMPTIME AND OTHER STRATEGIC
CUSTOMERS
• $1B+ market for temperature sensing labels• 500M color-changing temperature sensor
labels annually; smart labels provide technology roadmap for industry
• Pre-orders received from lead customers,qualification & production target in 2015
• 15M-unit annual in-house capacity installed,expandable to 40M at same site
• Smart Label ASP: $0.50 – 1.00• Additional sensor integration in evaluation;
market opportunities in healthcare-to-the-home, consumer goods, logistics
9
FMCG
NFCX (EXTENDED-RANGE NFC)MOBILE-CENTRIC SENSOR NETWORKS BASED ON PRINTED ELECTRONICS
• Target markets include home healthcare, remote diagnostics, next-generation retail, manufacturing
• Mobile phone at center of user experience• 1-meter read range monitors multiple sensors on
body or in close proximity• NFC smart sensor label demonstrated May 2014• NFCx expected demonstration by
end of 2015• NFC/NFCx Sensor Label ASP: $1.50+
10
PARTNERING TO BUILD THE FUTURE
“These smart labels areabout to become a big part of‘the internet of things’”
8 March 2014
“Thinfilm’s approach uses smart labels and tags to make the Internet of Things possible’”
18 February 2014
11
1st commercialorder for BPS
received from FMCG(OCT)
Demo of 1st
stand-alone printed organic sensor label
(OCT)
Milestones of Progress
1st commercial orders delivered to luxury goods manufacturer
(DEC)
Thinfilm receives CTIA eTech Award
(SEP)
1st demo ofNFC smart label
(MAY)
1st productionorder for RF
(MAY)
Flextronics partnership
(SEP)
Temptimepartnership
(MAR)
PakSensepartnership
(APR)
EVRYTHNGpartnership
(JULY)
Nedappartnership
(MAY)
Bradypartnership
(JAN)
Bemispartnership
(DEC)
Delivery oftemp sensor label
commercial samples(OCT)
Acquistion of Kovio IP/assets
(JAN)
PARC (Xerox) increases stake in
Thinfilm(DEC)
Thinfilm acceptedto 2015 MWC
(OCT)
2013 2014
Growing revenue & transition to product sales
• Revenue growing rapidly
• YoY growth >100%
• Product sales emerging
• Strong balance sheet:
• $20M cash (end-Q3)• Not including $23M investment from Ferd in Q4
• No debt
• Legacy investment in predecessor companies exceeds $200M
• 270+ patents and patents pending
• Unique IP position in printed rewritable memory, printed logic, silicon inks.
631
871
285278
582
48
876
4,000
3,5001,250
0
1,500
3,000
500
1,000
1,500
2,000
2,500
0
1,000
750
500
250
1,293
Q2 2014
Q1 2014
Q4 2013
Q3 2013
Q2 2013
516
Q1 2013
Q4 2012
Q3 2012
159
Q2 2012
58
Q1 2012
Q3 2014
Revenue* [kUSD, LHS]
LTM revenue [kUSD, RHS]
THIN revenue* [$k]
Note: all amounts in US Dollars
* excludes Other Income
FINANCIAL HIGHLIGHTS
12
Share Details(Dec 8 2014)
Share price: NOK 4.40 | $0.61Market cap: NOK 2,268M | $316M
Key Dates 1995 – Founded as Opticom subsidiary2005 – Restructured2008 – IPO (Oslo Axess Exchange)2010 – Management change & strategy shift
Locations Oslo, Norway (HQ); Silicon Valley (San Jose),Linköping, Sweden; Dresden, Germany;Tokyo, Japan
Employees 83 FTEs (26 PhDs)
DavorSutija, PhDCEO
FAST (Microsoft),SINOR AS
ChristerKarlsson, PhDCTO
National DefenceResearch Establishment
PeterFischer, PhDCPO
Plastic Logic, Qimonda, Infineon
John Afzelius-Jenevall, CFACFO
Orkla, Catella Capital Management, Nordea
JenniferErnst, MBAEVP, Sales/BusDev
PARC (Xerox),FlexTech Alliance
HenrikSjöberg, PhDSVP, Prod Mgmt
Acreo, Micronic Mydata
THINFILM SNAPSHOT
Apr-14 Jul-14Oct-13Jul-13 Oct-14
4.0
3.0
5.0
6.0
7.0
2.0
1.0
Jan-14
THIN share price 18 months [NOK]
13
THINFILM SELECTED TO PARTICIPATE INMOBILE WORLD CONGRESS 2015
14
• Thinfilm CEO, Davor Sutija, chosen as keynote speaker• Other keynote program members include CEOs of
Visa, Sprint, Renault-Nissan, Telenor Group and Huawei
“The 2015 GSMA Mobile World Congress will convene industry leaders, visionaries and innovators to explore the trends that will
shape mobile in the years ahead.”
• More than 85,000 attendees• More than 46,000 C-Level leaders• More than 4,500 CEOs • More than 1,800 exhibitors• Nearly 4,000 press members representing 1,700 media
outlets from 84 countries
Q&AThank you for your attention
15
THINFILM HIGHLIGHTS: Q3 2014
16
Smart Label demonstrators
delivered to Temptimeand other strategic
customers
Thinfilm launches wireless EAS product,ships 7-figure unit orderFerd AS to invest
$23 million in Thinfilm
Thinfilm receives prestigious CTIA Emerging Technology Award
Thinfilm CEO, Davor Sutija, to keynote
2015 Mobile World Congress
BRAND ENHANCEMENTCONTINUED NEGOTIATIONS WITH POTENTIAL 1.3 BILLION UNIT SCALE-UP PARTNER
17
• Deployed by luxury goods manufacturer as alternative to holograms ($5 billion market)
• Trials with FMCGs, toys & games manufacturers for use on consumables
• Memory label ASP: $0.04 – 0.10• 200M unit annual Thinfilm-owned capacity in EU• Qualified manufacturing capacity at partner facility
in Asia• Thinfilm revenue from complete solution—
labels, readers, ASICs
18
FERD AS TO INVEST $23 MILLION IN THINFILM
Transaction fully funds current product roadmap
• Ferd AS to acquire 37.5M shares @ NOK 4.00 kr• 150 NOKm (23 USDm)
• 7.3% of shares in the Company
• Ferd to receive 31.25M warrants @ NOK 4.80 kr• 150 NOKm (23 USDm) if exercised
• Exercisable after 12 month holding period
• Warrants expire after 3 years
• Transaction subject to EGM approval• 14 November 2014 EGM has been called for
• Family-owned Norwegian industrial and financial group• Active and long-term owner of strong companies with
international potential• Carries out financial activities through investments in a
broad range of asset classes• Equity of 24 NOKbn (4.0 USDbn) as per 31 December
2013
•24% of food calories produced for human consumption are wasted
•40% of food losses in developing countries due to poor storage/monitoring
•30%+ shorter shelf life in fresh foods following a brief high-temp event
•$8 Billion logistics market for temp-sensitive pharmaceuticals
•40% of vaccines in UK kept at incorrect temperatures
•$20M in ruined vaccines annually in US Federal Vaccines for Children Program
EXAMPLE: THE NEED FOR COST-EFFECTIVE SENSING
Mobile deviceis preferred in
ALL cases
THE RAPIDLY EVOLVING CONSUMER
Source: Deloitte Digital, 2013
CloudDatabases
& Algorithms
NFC
SensorData
INTERACTIVE FOOD & DIGITAL PHARMA
NFC+SENSORS+CLOUD= INTERNET OF EVERYTHING @ TRILLION SCALE
Real-timepersonalized
offers
Product info,reviews,
comparisons
Expert tips,recipes
Authenticitycheck
Recallcheck
SUPPLY CHAINPROTECT THE BRAND
POINT OF PURCHASESELL THE BRAND
POINT OF USEBUILD BRAND LOYALTY
Tap forinstantreorder
CloudNFC
SensorData
Real-timesensing
Printed Electronics Conventional Silicon
• Additive print processes,based on inks
• Highly scalable• CapEx orders of magnitude below
conventional silicon• Quick turnaround• Continous roll or high-efficiency
sheetfed processes• Large area sensor compatible
• Subtractive process,based on photolithography
• Gradual capacity scaling not possible due to ‘megafab’ economics
• New factories $5-10B+• Hundreds of production steps• 8-12 week standard process time• Relies on old/obsolete factories;
70 closed 2009-2013, 9 more in 2014
MANUFACTURING THE INTERNET OF EVERYTHING
“The explosion of connected things offers opportunities for technology
companies across the spectrum, including Qualcomm, Thin Film
Electronics, … Cisco Systems, Amazon and Salesforce.com.”
– Tiernan Ray, Barron’s “Tech Review: The Next Industrial Revolution”
October 11, 2014
CTIA Emerging Technology
Award – Sept. 2014
Pharmaceutical
Manufacturing
All-Star Innovator
– Sept. 2014
World Technology
Award – Oct. 2012WSJ Technology
Innovation Award,
Runner Up – Oct. 2012
GigaOM Mobile 15
Award – Sept. 2012
RECOGNIZED WORLDWIDE FOR AWARD-WINNING INNOVATION
24
t h i n f i l m . n o
Institutional investor contact:John Afzelius-JenevallCFOjohn.afzelius-jenevall@thinfilm.noPhone +47 95 87 96 80
THANK YOU
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