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ENTER THE WORLD OF NANO AND MICROSYSTEMS Investors meeting 31 March 2016

Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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Page 1: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

ENTER THE WORLD OF NANO AND MICROSYSTEMS

Investors meeting31 March 2016

Page 2: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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DISCLAIMER

This presentation does not contain or constitute an offer of securities for sale or an invitation or inducement to invest in securities in France, the United States or any other jurisdiction.

This presentation may contain information expressed as forward-looking statements. Forward-looking statements are statements that are not historical facts. Forward-looking statements may include anticipations, projections and their underlying assumptions, statements (regarding plans, objectives, expectations and intentions, future financial results, potential events, operations, services, products). Such information concerns either trends or targets and cannot be regarded as results forecasts or as any other performance indicator.

This information is by nature subject to risks and uncertainties, that may cause the actual results to differ from those mentioned in the forward-looking statements. Even though Tronics’ management believes that the expectations reflected as of the date of this presentation in such forward-looking statements are reasonable, this information does not reflect the company's future performance and are not intended to give any assurances or comfort as to future results. Therefore no-one should unduly rely on these forward-looking statements. Tronics makes no commitment to update this information.

More comprehensive information about Tronics may be obtained on its website (www.tronicsgroup.com).

Page 3: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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1 Tronics overview

2 2015 highlights

3 2015 results

4 Projects underway and objectives

AGENDA

Page 4: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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Nano and microsystems are miniaturized devices enabling sensor and/or actuator functions

Packaging

MEMS/NEMSelement

Control, digitizationand communicationelectronics

EXAMPLE OF A GYPRO MICROSYSTEM

Mobilemicrostructure

Nano-wire

Inertial Sensors: orientation, speed and position of an object in space

Optical Microsystems: integration of miniaturized optical systems

RF Components: management of Radio-Frequency signals

BioMEMS: compact devices for biology or pharmacology analysis

Miniaturization, power savings and system cost optimization

WHAT IS THE PURPOSE OF NANO ANDMICROSYSTEMS?

Page 5: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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Wearable devices

Automotive

Smartphones & tablets Life Sciences

AeronauticsDefence

Main functions:accelerometers, gyroscopes, pressure sensors, optical components

NANO AND MICROSYSTEMS ARE PERVADINGALL SECTORS OF ACTIVITY

Page 6: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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Tronics (Dallas)Tronics (Crolles)

2 direct production sites

Listed onAlternext Paris

since February 2015

92 employeesincluding 55 engineers

and scientists

Leading customer references

2015 revenue:$8.7 M

15 years of R&D25 active patent

families

Distributors in Europe, Japan, China, Israel

TRONICS OVERVIEW

Page 7: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

Avionics and UAVs• AHRS & Standby instruments

• Flight control sensors

• Autopilots, navigation assistance

Marine• Ship stabilisation

• Manoeuver assistance

Robotics• Robotics control

• Aided surgery

• Machine automation

Autonomous vehicles• Positioning

• Driver assistance systems

• Navigation

Page 8: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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2015 highlights

Page 9: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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POSITIVE ACHIEVEMENTS

> Good business momentum- 11 new customers (excluding GYPRO®)- Further penetration of new markets

(Life Sciences)

> Acceleration of international development

> Ramp up of activity at Dallas

> Strengthening of inertial product range GYPRO® and AXO

> Significant investments for the development of new products

DIVERSIFICATION OF CUSTOMER PORTFOLIO

STRENGTHENING AT INTERNATIONAL LEVEL

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… AND FACTORS THAT WEIGHED ONPROFITABILITY

> No revenue from the historical customer of the Group (vs €1.8M in 2014) in an unfavourable oil environment

> Volume of manufacturing orders lower than expected at the beginning of the period (optical, RF MEMS)

> Finalisation of an engineering project with high added value postponed to 2016

> Longer timeframes than expected between engineering phase and production launch

LAUNCH OF A €700K COST REDUCTION PLAN AT THE

END OF 2015, EFFECTIVE IN 2016

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13 customers

(+3 in 2015)

22 customers

(+3 in 2015)

12 customers

(+5 in 2015)5 customers 5 partners

EXAMPLES OF CUSTOMERS

Aeronautics & Security Industry Representatives

DistributorsMedical Consumer electronics

DIVERSIFICATION OF CUSTOMER PORTFOLIO

®Coagulex

TOP 5 = 57% of revenue (vs 74% in 2014)TOP 10 = 78% of revenue (vs 88% in 2014)

New in 2016

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2015 results

Page 13: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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Pre-sales3 to 6 months

Concept & prototyping

9 months

Industrialization6 to 9 months

Multi-year production

27%73%

REVENUE ANALYSIS

CYCLE TIME FROM SALES TO PRODUCTION

2015 REVENUE : €7,755 KBREAKDOWN BY NATURE IN %

Manufacturing (sale of end-use products)Engineering (sale of services)

ManufacturingEngineering

Products currently in the development phasewill generate manufacturing revenue

when they enter into production

Ramp up of Life SciencesRepresenting 12% of total revenue in 2015

(versus 2% in 2014)

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74%

16%

10%

Europe

Asia

Americas

61%39%

Crolles

Dallas

REVENUE ANALYSIS

2015 REVENUE BREAKDOWNBY GEOGRAPHICAL AREA IN %

2015 REVENUE BREAKDOWNBY PRODUCTION UNIT IN %

International represented44% of total revenue in 2015

versus 28% in 2014Continuing “fablight” strategy

Page 15: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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SIMPLIFIED INCOME STATEMENT

€K - IFRS 2015 2014

Revenue 7,755 11,609

Research tax credit, subsidies and other revenue 3,104 3,105

Purchases consumed (2,930) (3,666)

External costs (2,403) (2,293)

Staff costs (6,894) (7,030)

Current operating income (2,724) 368

Financial income (53) (125)

Income before tax (2,778) 243

Income taxes (241) (69)

Share in income of associated companies (19) (26)

Group share of net income (2,997) 140

- Production volumes for 2 customers much lower than announced at the beginning of the year

- Sercel: lack of revenue vs. €1.8M in 2014

- Gross margin at 62.2% versus 68.4% in 2014 because of the increased proportion of R&D purchases(gross margin of 73% excluding R&D versus 75% in 2014)

- Control of overhead costs

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6,019Non-current assets

A SOUND BALANCE SHEET

9,074

1,909

5,654

Equity15,029

Financial debt

Other liabilities

4,500

3,127

In €K

As of 31.12.2015

Other current assets

Current assets

Cash

Page 17: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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CASH FLOW TABLE

€K 31.12.15 31.12.14

Change deriving from operations (3,055) 867

Of which WCR variation (1,759) (975)

Change deriving from investments (1,273) (819)

Change deriving from financing 9,605 (245)

Change in cash 5,296 (181)

Closing cash 9,074 3,778

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GOAL: RETURN TO BREAKEVEN IN 2017

COST REDUCTION PROGRAMME OF €700K

LAUNCH AT THE END OF 2015 OF A PROGRAMME REPRESENTING 9% OF 2015 FIXED COSTS

‒ Rationalisation of external costs: subcontracting, consulting, renegotiation of

supplier contracts

‒ Control of outsourced R&D

‒ Control of staff costs Plan now fully implemented

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Projects underway and objectives

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3 KEY AREAS WITH STRONG INDUSTRIAL POTENTIAL

INERTIAL

1

BIOMEMS

2

INDUSTRIALAPPLICATIONS

3

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NEW R&D PARTNERSHIPS SIGNED AT THEEND OF 2015

STARS projectAccelerometer 100%made in Rhône-Alpes

Objective:Provide an accelerometer based on Tronics’ product and tested in

real conditions

TRACE projectTransfer of the

M&NEMS technology

Objective:Qualify Tronics’ MEMS

technologies for autonomous vehicles and industrial automation

1

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Qualification6 months

Pre-sales3 to 6 months

Multi-year production

NEW RANGE OF INERTIAL STANDARD PRODUCTS

‒ High performance and low power consumption‒ Reduced footprint and weight

‒ Same packaging and electronics than GYPRO®‒ Same MEMS technology than GYPRO®

ACCELERATION OF PRODUCTION LAUNCH CYCLE

GYROS « GYPRO® »: all key benefits on a single chip

ACCELEROMETERS “AXO”: low risk approach base on the reuse of the GYPRO®

Shortertime to volume

1

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HIGH PERFORMANCE INERTIAL APPLICATIONS

> Sampling orders from 30 customers

> Strengthening of the inertial standard product range: GYPRO2300 and GYPRO3300 + accelerometers

> Partnerships for the development of customized products

> Commercial agreements with key players in the sector

PROJECTS UNDERWAY

NEW PROJECTS SIGNED

1

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- British company, €300M revenue

- Pan-European distributor

- Salesforce of 25 people dedicated to sensors

- Already distributing Colibrys and Silicon Sensing products

Strong and very qualified customer base

NEW EXCLUSIVE DISTRIBUTION AGREEMENT WITH ACAL BFI FOR HIGH PERFORMANCE INERTIAL

COVERING A LARGE AREA OF 14 COUNTRIES:

- United Kingdom, Belgium, Netherlands,

France, Germany, Austria, Switzerland,

Italy, Spain, Portugal, Sweden, Norway,

Finland and Denmark

Short-term opportunityto book new accounts

1

Page 25: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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DEVELOPMENT OF THE LIFE SCIENCES SEGMENT

ACCELERATION OF BUSINESS DEVELOPMENT IN LIFE SCIENCES APPLICATIONS (BioMEMS)

- Strong revenue growth in 2015: 12% of total

revenue, versus 2% at the end of 2014

- First commercial successes with leading

international players: 12 active customers in 2015

According to the “Microfluidic Applications” report (May 2015) released by Yole Développement, the BioMEMS market will reach

$6.8 billion in 2020.By 2020, 85% or $5.8 billion will be represented by accelerometers,

pressure sensors and microfluidic devices.

2

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> 1 new contract signed in wearable medical devices with targeted manufacturing revenue of $2.5M/year starting in 2017

> Mobile/wearable solutions

> Single-use point of care diagnostics

> Biomedical diagnostic

BIOMEMS AND WEARABLE APPLICATIONS PORTABLES

PROJECTS UNDERWAY

NEW PROJECTS SIGNED

2

Page 27: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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BUILDING AUTOMATION

PRESENCEDETECTION

ROBOTICS/AUTONOMOUS VEHICULES

NETWORK SYNCHRONISATION

INDUSTRIAL PRINTING

SAFETY/GAS DETECTION

INDUSTRY OF THE FUTURE: GROWING SEGMENTS 3

Page 28: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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> Signature of a €700K contract for industrial gas analysis, with targeted manufacturing revenue of €500K to €1M/year

> First order booked at the beginning of 2016 in presence detection with potential production revenue higher than $600K/year

> Ramp up of components for printing heads

> Optical components

> Products for the watchmaking industry

INDUSTRIAL APPLICATIONS

PROJECTS UNDERWAY

NEW PROJECTS SIGNED

3

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AREAS OF WORK AND OBJECTIVES FOR 2016

2016 objectives

> Build a strong pipeline of new

businesses with key players

> Achieve revenue of about €11M

> Improvement expected in H2

Areas of work

1/ Gradually ramp up the manufacturing activity

2/ Continue to obtain new customers

3/ Strengthen the distribution network

4/ Develop R&D projects and pursue the technology roadmap

Page 30: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

The stock exchange

30

Page 31: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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CAPITAL BREAKDOWN (% - AS OF 31 JANUARY 2016)

Page 32: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

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Alternext Paris

IPO date: 10 February 2015

Label: TRONICS

ISIN code: FR0004175099

Mnemonic code: ALTRO

ICB classification: 9576 – Semiconductors

Price on 29 March 2016: €5.6 per share

Market capitalisation on 29 March 2016: €20M

Next release :

First half 2016 results,21 September 2016(after market close)

TRONICS’ STOCK

Page 33: Investors meeting 31 March 2016 - Actusnews Wire · Investors meeting. 31 March 2016. 2. ... Europe, Japan, China, Israel. TRONICS OVERVIEW. 7 A LEADERSHIP IN HIGH PERFORMANCE INERTIAL

www.tronicsgroup.com

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