BEYO BEYOND MEASU EASURE
A C C U R A C Y S P E E D Q U A L I T Y P A R T N E R S H I P
Company Company Overvi Overview ew
August 2018
Company Company Overvi Overview ew A C C U R A C Y S P E E D - - PowerPoint PPT Presentation
BEYO BEYOND MEASU EASURE Company Company Overvi Overview ew A C C U R A C Y S P E E D August 2018 Q U A L I T Y P A R T N E R S H I P Fo Forwa rward rd Looki king Sta tate teme ments ts This Presentation contains forward-looking
BEYO BEYOND MEASU EASURE
A C C U R A C Y S P E E D Q U A L I T Y P A R T N E R S H I P
August 2018
This Presentation contains forward-looking statements within the meaning of applicable Canadian securities legislation. Such forward-looking statements concern the business and anticipated financial performance of the Company and include, without limitation, statements with respect to the Company’s objectives, goals, liquidity, sources of capital, expectations of sales and ownership and continued development of its technologies and products. These forward-looking statements are based on certain factors and assumptions, including, without limitation, the Company’s ability to successfully complete new purchase orders along the timelines expected; continued and future demand for the Company’s products; continued sales to the Company’s major customers; the continued financial health of the semiconductor industry; and the Company’s ability to continue and further enhance revenue diversification and open new market opportunities. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation: additional measures and controls may not be implemented as expected or along the timelines anticipated; uncertainties relating to the market for the Company’s products and maintaining a stable level of orders; fluctuations in revenue as a result of volatility in the markets and product mix; risks relating to the Company’s present reliance on its major customers for the majority of its sales; risks relating to the Company’s reliance on the financial health of the semiconductor industry; risks relating to the development of competing technologies and the possibility of increased competition; the effect of slow growth in the United States, the Company’s principal market, as well as other economies and other economic trends and conditions in the markets that the Company and its customers serve; risks associated with technical difficulties or delays in product introductions, improvements, implementation; uncertainties in product pricing or other initiatives of the Company and its competitors; uncertainties in factors that may result in a reduction in capital expenditures and/or delayed buying decisions affecting demand for the Company’s products; risks relating to currency fluctuations, particularly between the Canadian and United States dollars; and risks in pursuing additional development projects to support existing customers or pursue other business opportunities. The foregoing assumptions, risks and uncertainties are not exhaustive of the items that may affect our forward-looking statements. Should underlying assumptions prove to be incorrect or one or more of these risks and uncertainties materialize, actual results may vary materially from those described in the forward-looking statements. The Company’s forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made. For the reasons set forth above, persons should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements included herein if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law. 8/22/2018 1
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We provi vide fiber optic c proce cess ss monitoring syst systems s to incr crease se the va value and co competitive veness ss of our cu cust stomers’ s’ Wafer Fabrica cation Equipment (“WFE”) by y enabling end use sers s (ch chip make kers) s) to improve ve yi yield, uptime, and profitability
Q2 Q2 2018 YT YTD 2018 Reve venue (C$ millions) s) $15 $28 YoY Reve venue Growth 64% 37% Gross ss Margin 57% 57% EBI EBITDA A Margin 35% 35% Cash sh on 6/30/2018 $41 million (No Debt) Reve venue Guidance ce: Q3 Q3 2018 $10 to to $12 million FY FY 2018 Exce xceeding ove verall indust stry y growth
$8.8 $8.8 $8.8 $8.8 $11.0 $11.0 $11.9 $11.9 $12.6 $12.6 $18.2 $18.2 $24.7 $24.7 $19.5 $19.5
$ $- $ $5.0 $ $10.0 $ $15.0 $ $20.0 $ $25.0 $ $30.0
Q3 Q3 2016 2016 Q4 Q4 2016 2016 Q1 Q1 2017 2017 Q2 Q2 2017 2017 Q3 Q3 2017 2017 Q4 Q4 2017 2017 Q1 Q1 2018 2018 Q2 Q2 2018 2018
Ord Order Ba r Backlo cklog (CAD) $ (CAD) $ in in millio millions
122% 122% IN INCREASE
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Our Our target target customers customers are are WFE WFE suppl suppliers ers in n the the semi semiconductor conductor and and other
sol solid-state state industri ndustries es Our ur products products are are depl deployed
n the the harshest harshest envi environments ronments where where the the most most preci precise se measurements measurements are are requi required red to to produce produce the the end end customers customers most most advanced advanced and and val valuabl uable e products products Our Our sol soluti utions
become “desi “designed gned in” n” to to our
partners’ products, products, produci producing ng stabl stable e growi growing ng revenue revenue streams streams wi with th 7-10 10 year year life fe cycl cycles es
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Broadening & diversifying into all elements of the economy
Autos: s: $30B (9%)1 Robotics cs $10B (30%) Io IoT $30B (15%) Phones: s: $85B (4%) Serve vers: s: $15B (6%) VR VR/AR AR: $10B B (15%) Medica cal: $5B (11%)
1 Labeling convention: “Market segment”: IC Revenue in 2020 (CAGR 2016-2020)
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Semi Semiconductors conductors are are made made in n fabs, fabs, where where Photon Photon Contr
sensors sensors are are used used in n several several process process steps. steps.
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Lam Research 47.2% Tokyo Electron 26.3% Applied Materials 18.5% Hitachi 3.7% Others 4.2% Lithography $8.5 Deposition $12.3 Dry Etch $10.8 Other clean&removal $5.2
Thermal & doping $2.7 Inspection & Met.
$5.5 Automation $2.5
Global WFE Market by Process (2017) (Billions of USD) Dry Etch Equipment Market share (2017)
Source: Gartner, Market Share: Semiconductor Wafer Fab Equipment, Worldwide, 2017
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Source: SEMI/SEAJ, SEMI EMDS
Device Total Etch Steps Logic 40nm 35 Logic 28nm 50 Logic 10nm >110 Logic 7nm >140
Source: SEMI ISS, G Yin AMEC, Jan 2017
Etch ch sp spend 3D NAND Etch ch sp spend 2D NAND > 3x
x
Sources:
Etch ch Li Litho ho CV CVD
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The performance of an individual chip is very sensitive to the local wafer temperature. More sensors enable better temperature control & uniformity which produce higher yield
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Photon C Control h has t s the h highest st a accu ccuracy a cy and st stability i y in t the h harsh shest st e envi vironments Photon C Control i is t s the l leader i in f fiber o
c temperature se senso sors i s in W Wafer F Fabrica cation Eq Equipment (WFE) E) Compared t to co competitors, s, P Photon C Control
s:
processing
(“under one roof”)
Compared t to o
tech chnologies, s, o
approach ch
s:
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market outpaces WFE markets (5 year CAGRs 37% vs 2.3%1)
process control required for more advanced devices
1 Gartner, 2018
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development of innovative new products (share and margins)
under internal development now
revenue growth
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Organi ganic c gr grow
Growth in n exi existi sting ng semi semi verti vertical cal
Expand into nto new new semi semi verti vertical cals s (e.g., (e.g., deposi depositi tion,
CMP)
Expand into nto adj adjacent acent markets markets
Inor norgani ganic c gr grow
M&A Opportuni Opportuniti ties es whi which ch accel accelerate erate our
time me to to revenue revenue for for new new products products
Oth Other
Investing ng cash cash from from operati
n innovati nnovative ve new new products products
Plan an to to have have 40% 40% of
revenue in n 2020 2020 generated generated from from products products introduced ntroduced from from today today forward forward
Investing ng cash cash in n our
stock to to dri drive ve sharehol shareholder der val value ue
We wi will mai maintai ntain n fi fiscal scal di disci scipl pline ne whi while e executi executing ng our
growth strategy strategy
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10 20 30 40 50 60 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016 2017 2018
Trailing T Twelve ve M Months R s Reve venue C CAD$ M M
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Etch ch W WFE > > S Semi W WFE
for the most advanced products PHO r reve venue > > E Etch ch W WFE
advantages for the most advanced products
have made it the market and technology leader in this space
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CA CAD$ D$ M
$17.3 $17.3 $21.0 $21.0 $27.6 $27.6 $32.2 $32.2 $43.8 $43.8 $51.5 $51.5 $4.4 $4.4 $6.0 $6.0 $10.5 $10.5 $10.5 $10.5 $14.3 $14.3 $16.7 $16.7
25.3% 25.3% 28.5% 28.5% 38.2% 38.2% 32.7% 32.7% 32.6% 32.6% 32.5% 32.5% 2013 2014 2015 2016 2017 TTM
Revenue EBITDA EBITDA Margin
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CA CAD$ D$ M
$1.8 $1.8 $8.2 $8.2 $12.3 $12.3 $7.6 $7.6 $8.4 $8.4 $12.8 $12.8 $6.1 $6.1 $14.1 $14.1 $26.2 $26.2 $32.5 $32.5 $34.3 $34.3 $40.1 $40.1 2013 2014 2015 2016 2017 TTM
Cash from Operations Cash
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TSX E Exch xchange: P PHO
Closing Price (@ 8/21/18) $2. 2.21 21 # Shares (Basic) 11 111mm 1mm # Shares(Fully diluted) 115mm 115mm 52-Week High $2. $2.60 60 52-Week low $1. $1.33 33 Market Cap $2 $244 44mm mm Cash (@ 6/30/18) $41 41mm mm Debt (@ 6/30/18) Ni Nil
Analyst yst Cove verage:
Echelon Wealth Partners GMP Securities Paradigm Capital
Aug
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CO COMPANY NY CO CONT NTACT CT: Scott Edmonds President, CEO and Director Photon Control Inc. IN INVESTOR OR RELATION IONS: IR@photon-control.com