Leveraging Roll-to Roll Technology
to Expand the Internet of Things
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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 2016 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 successin 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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Thin Film Electronics ASA
Providing digital identities to physical objects through printing
Near Field Communications (NFC)
for IoT enablement1
Global leader in Printed Electronics2
Scaling to the billions of units by roll based
manufacturing3
Strong patent portfolio
• Over 290 patents in total
• 2016: 17 new patents issued and 7 new patent families received priority date
Award-winning NFC Innovation Center in Silicon Valley
Broad & diverse global partner ecosystem
Publicly listed OSE/OTCQX
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Thinfilm’s Vision
Add a little bit
of intelligence
to a lot of things.
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Consumer Engagement with BrandSearch & Social MediaE-commerce scrolling
Offline-to-Online (Omnichannel)• Brands connect directly with
consumers when they tap on products
Consumers researching “Olive Oil” • Brands pay for listing • Traffic determined by search provider
Consumers researching “Olive Oil” • Consumers hunting for good
deals and highly reviewed products
Mobile Marketing Today Tapping (NFC Smartphones)
Consumer Engagement
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Applications
PLATFORM
PRODUCTS
Thinfilm Solutions
OpenSense™SpeedTap™
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Craft Beers1
Wine & Spirits2
Diamonds3
Tobacco4
Pharma 5
Health & Beauty Products6
Specialty Foods7
Subscription Boxes8
Thinfilm is targeting millennials through several key vertical markets
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Non-disclosed customersLeading tobacco brands
Arc WorldwideDigital activation partner
Key vertical: Tobacco
“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 Worldwide (Leo Burnett)
• Leo Burnett’s digital activation group
• 3rd largest agency in the world
• Thinfilm exclusive partner to deliver NFC Solutions to clients
• Arc Worldwide customer expects field trial in Q1 2017
• NA brand: 900 million unit opportunity
• European brand: Request for budgetary quote received this month for 100 million and 1 billion labels respectively
• Asian specialty solutions provider for tobacco: Related pilots and field trials expected in first half of 2017 using engagement portal hosted in China
Traction within producers, packagers and brand agency
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Key vertical: OTC
• Provider of premier packaging solutions for J&J and Nestlé
• Engaging pharmaceutical industry to integrate NFC OpenSense™ into Rx/OTC packaging
• Automated application of OpenSense™ integrated in Jones’ high-volume production line
• Pilot with leading OTC pharma company
"Thinfilm’s unique printed NFC solution addresses multiple needs within the pharmaceutical channel, particularly around product integrity and patient safety.“
Chris Jones Harris Strategic Initiatives & Alliances, Jones Packaging
Integrated high-volume production for OTC
Link to Jones video: https://www.youtube.com/watch?v=HLiUwgjfLTo
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Key vertical: Medical devices
YpsomedGlobal leader in injection systems
Non-disclosed customerFortune 500 global leader
• Partnership with leading global pharma company in their largest prescription franchise
• Improve patient adherence to prevent acute attacks and manage therapeutic treatment of chronic disease
• Request made to leading handset manufacturer to support pharma applications
"Ypsomed has identified a need amongst its customers for injection devices that in the long run support the administration of medicine with intelligent functions realised by electronics and soft are."
2015/16 semi-annual report
• Injection pen for chemotherapy, blood thinning and fertility treatments
• 50 million CHF invested in next-gen injection/infusion systems
Improving patient outcomes
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Barbadillo and FerngroveProduct authentication of exclusive wine
HopsyFresh craft beer directly to consumers
DiageoWorld’s first smart bottle
Key vertical: Drinks
“We believe Thinfilm’s technology gives our partner breweries a
powerful tool to connect with their customers beyond the brewery.”
Sebastien Tron, Co-Founder & CEO, Hopsy
• Enables microbreweries to engage with consumers, educate customers, and differentiate their brands
• Thinfilm and Diageo collaborated to develop Johnnie Walker Blue Label® “smart bottle” prototype
• Ongoing integration work with label partner
• Barbadillo: Leading Spanish winery
• Ferngrove: Major Australian wine supplier to APAC region
110 unique articles; 41 international; 4,000+ tweets
Innovative brands marketing to millennials
Link to Hopsy video: https://www.youtube.com/watch?v=lRzogcnzXJg&t=1s
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Key vertical: Specialty food
“… the wine industry has done a much better job [than the olive oil industry] of educating customers on how to evaluate, buy and enjoy wine. That’s why I created iOlive. I believe it will do for olive oil consumers what the leading wine apps have done for wine lovers. And I’m very excited about using SpeedTap technology to take it to the next level.”
Peter Barachini, Director, iOlive
Authenticating quality: Extra virgin olive oils
• Thinfilm partnered with winning Green Award Italian app platform – iOlive
• 150 Tuscan producers use iOlive to provide product information and for quality authentication, including Buonamici, La Ranocchiaia, SPO, and Il Cavallino
• iOlive digitizes the International Olive Council profile sheet for assessment of olive oil (used in 44 countries)
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Key vertical: Diamonds
“Sarine is leveraging world-leading NFC technology to advance the performance of Sarine Profile in jewelry retail settings in real time.”
Uzi Levami, CEO, Sarine Technologies.
Create digital identity for diamonds
• Thinfilm and Sarine using NFC to create digital identities for diamonds
• SpeedTap™ integrated into Sarine Profile™ sales and consumer support system
• Tags tell each diamond’s story in real-time, supports buying decisions with scientific accuracy, and provides digital proof of lineage and ownership.
• Field trial planned
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Adding NFC to Hang TagsSimplifying Supply Chain
• Ideal for promotional campaigns
• Integrating SpeedTap™ technology into popular ElastiTag® hang tags
• Eliminates the need for more formal integration with product labels and packaging
• Makes NFC accessible to companies of all sizes
• Bedford clients include Unilever, P&G, Diageo, Nestle, L’Oreal, and Colgate-Palmolive
“Thinfilm’s revolutionary SpeedTap™ technology, combined with the distinctive personally of ElastiTags®, will create compelling consumer experience on nearly any type of product.”
Kim Millbrandt, PresidentBedford Industries
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HolopticaKey vertical: Temporary worker ID cards
• Leader in holographic solutions for brand protection and document security
• Combine technology to deliver printed nanotechnology anti-counterfeiting solutions
• First use-case in temporary worker ID cards
“We’re excited about the role these innovative tags can play in effectively addressing the document security needs of governments and related authorities around the globe.”
George Perkous, CEOHoloptica
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Goals Roll-to-Roll equipment (examples)
• 5 billion unit NFC annual capacity
• Material dominates per-die cost
• Total front-end die cost reduced by 10x
• USD 600+ million annual revenue potential with 30% gross margin
• Cash break-even by end 2018 / early 2019
• Capex of USD 32 million for R2R and USD 5 million for sustaining activities
Scaling to Billion-Unit Volumes and cash break-even
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Progress
Site
2581 Junction Avenue, San Jose, California
• Site is leased for 12 years
• Vendor finalists selected
• Ordering of line-related equipment in process
• EAS production end 2017, NFC by Q3 2018
• Former Qualcomm site
• 22,000+ m2 class 10-10,000 clean room
• Office-space remodelling ongoing
• Move-in April 2017
Modern Facility to House Roll-to-Roll Line
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Appendix
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Top 10 Strategic Technology Trends 2017
Source: Gartner
“By 2018, Gartner expects most of the world’s largest 200 companies to…utilize the full toolkit of big data and analytics … improve customer experience”
“Existing things including IoT devices will become intelligent things...enabled systems everywhere including home, office, factory floor and medical facility”
“…billions of thins will be represented by digital twins, a dynamic software model of a physical thing or system”
“Digital technology platforms are the building blocs for digital business…new platforms and services for IoT, AI and conversational systems will be a key focus”
Intelligent Apps Intelligent Things
Digital Twins Digital Technology Platforms
Gartner on…
Trends coincide with Thinfilm’s solutions and strategy
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Key vertical: Anti-theft
• Global leader in providing retail sector with anti-theft systems, store automation systems, RFID stock control systems, and customer experience technology
• Partnered with Thinfilm to supply global fast-fashion brands with high-value loss prevention system featuring EAS (electronic article surveillance) tags
• Currently in market under the Nedap !FaST brand
• Thinfilm has delivered 13 million units
“Our mission at Nedap, ultimately, is to protect the profits of our clients while enhancing the shopping experience of their customers. Thinfilm’s EAS labels help us do just that.”
Rob Schurrman, director and GMNedap Retail
Anti-theft solution provided for global fast fashion retailer
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Key vertical: Memory
• Manufacturing scale-up partner
• Global leader in business services, digital printing & document management
• Launched two products featuring Thinfilm Memory™
• 1.3B unit capacity in Rochester, NY plant
• Traction with customs agencies and governments re: tax-stamp solutions
Xerox Printed Memory built on Thinfilm technology
Link to Xerox video: https://www.youtube.com/watch?v=oxKiraJ61hs