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Connecting the Physical & Digital Worlds and Enabling Direct - - PowerPoint PPT Presentation

Connecting the Physical & Digital Worlds and Enabling Direct Brand-to-Consumer Mobile Engagement Corporate Presentation September 2017 Safe Harbor Statement This report includes forward-looking statements covered by the Private Securities


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Connecting the Physical & Digital Worlds

and Enabling Direct Brand-to-Consumer Mobile Engagement Corporate Presentation September 2017

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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 2017 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 success in 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://thinfilm.no/investors-reports-and-presentations/

Safe Harbor Statement

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Thin Film Electronics ASA

▪ Publicly listed

OSE (THIN)

OTCQX (TFECY)

▪ Revolutionary Silicon Valley fab for roll-based

manufacturing of printed electronic devices

Former Qualcomm facility

2,000 sq. m. state-of-the-art cleanroom

▪ 310 total patents

18 new patents issued in the first half of 2017

4 new patent families in the first half of 2017

▪ 162 employees worldwide ▪ Sales offices in San Francisco, London,

Singapore, Shanghai

Thinfilm creates digital identities and actionable micro-connections to physical objects

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Thinfilm’s solutions turn smartphones into intelligent agents

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With Thinfilm,

Cloud-based triggers for dynamic user experience Back-end analytics to assess & integrate NFC “touchpoints” for physical goods

End-to-End NFC Cloud Solutions

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Proof Points of NFC in Q2 Deployments

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Largest global deployment of NFC in wine & spirits industry (126,000 bottles) Consumer tapping activity in 50 US cities 13 – 17.5X increase in website conversions; 92% lift in mobile traffic Thinfilm NFC used with 20,000 emergency relief deliveries Total of 20 deployments and field-trials in-market or planned/signed in Q2 2017 Plus: ▪ Shelf-talkers > OTC Pharma ▪ In-store Displays > Consumer Durables ▪ Metalized packaging (Tobacco) ▪ Specialty Foods ▪ Planned trials in Nutritionals and Cosmetics

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Coronado Brewing Co.

Q2 deployments encompass uses in North America, Europe and Asia – ranging from local to national distribution

Exponential Increase in Tapping Activity

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Barbadillo Korean Red Cross Oskar Blues Brewery

In California In Spain In South Korea In the USA

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NFC Increases Consumer Engagement

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Call-to-action for the Surfrider / Earth Day campaign

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Largest NFC Deployment in the Wine and Spirits industry with Thinfilm’s Speedtap™ labels

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Instant Prize

Consumers Tap to Win Prize Innovative Lottery style Campaign promoted through traditional Point of Sale + Print, TV, Radio media Channels Campaign Objectives

  • Improve Consumer Engagement
  • Growth in New Brand Fans
  • Increase Sell Through

126k

Smart Bottles Largest Wine & Spirits Campaign Castillo de San Diego White Wine distributed through 200+ major retail outlets nationally in Spain

NFC Tag “Touchpoint” Applied on reverse face of Neck Collar directly beneath Call-to-Action

Thinfilm SpeedTap™ NFC enabled bottles tapped

2000+

More MQLs* than any other channel

2-11x

*Marketing Qualified Lead

Of bottles tapped were purchased and re-tapped at new location, generating location data in CNECT

>30%

2017 Campaign judged by Barbadillo to be twice as effective as prior years because of SpeedTap™ NFC deployment

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9 Brand Engagement for Barbadilllo Dando-en-el-Blanco summer campaign on 126,000 Castillo de San Diego bottles

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79% 5% 16%

79 79%

  • f all traffic from

mobile

74% 74% of mobile traffic is

paid

Desktop Mobile Tablet

Direct Paid 25% 75%

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NFC drove brand engagement better than Facebook and Google

Created higher quality traffic than display / banner ads

26% 61% 11% 54% 14% 30%

Thinfilm

  • 10x more

traffic than Social / Facebook

  • 4x more

engagement than banner / display ads

  • Even better

than Google Search / Google Banner / Display Ad Social / Facebook

54% 54% of brand engagement came from NFC and

Thinfilm SpeedTap™ enabled bottles

Inner circle: Share of paid traffic Outer circle: Engagement per source

NFC was the dominant channel for brand engagement Mobile dominates Mobile is not free

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Supply Chain & Industrial Use Case Expansion

New industrial customers signed in Q2…

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Secure Delivery Verification

Customer On-boarding for Insurance Industry

Supply Chain Tracking

Single tap to authenticate delivery of goods and services to consumer recipients Enable insurance companies to directly

  • n-board customers

while maintaining broker- based sales model Ideal for toxic, perishable and high-value pharma assets that must be checked in/out by qualified personnel

…enabled by new ecosystem partners

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Supply Chain & Industrial Use Case Expansion

New industrial customers signed in Q2…

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Preventive Maintenance

Alerts and guides technicians on troubleshooting and maintenance of industrial assets

Inspection/Logging /Reorder

Machinery and equipment that requires regular inspection, maintenance, and replacement

…enabled by new ecosystem partners

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CNECT™ Software Platform

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  • Thinfilm Software team expanded to 16

FTEs, half in-house and half near-shore

  • 10 months after Sept. 2016 kick-off,

completed a total of 19 sprints, four major product releases, and supported specific customer applications for tag pairing, iOS scanning and AR (augmented reality)

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Apple Announcement Dramatically Expands NFC Opportunity for Consumers

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▪ Apple announced support for NFC tag reading @ WWDC ▪ System requirements: ▪ iPhone 7 & higher ▪ iOS 11 (available now in beta) ▪ Must be in Scan mode ▪ Apple requires use of approved apps and more user interaction

Apple update June 2017 Thinfilm CNECT opportunity

▪ CNECT™ registered companies increased from 68 at end Q1 to 260 by end July 2017 ▪ Beta version of Thinfilm NFC Tag Scanner app for iOS devices developed and tested ▪ Solution supports conventional tags read by iOS devices

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Enabling Billions of Devices by Roll-Based Printing

14 ▪ Successful grand opening event ▪ EAS requalified / NFC requalification on schedule ▪ First product shipped from new fab ▪ Roll-based capital expansion investment on budget ▪ Ordering of NFC line near complete, including testing/inspection ▪ Laser ROM unit for writing memory pending ▪ Not gating start date ▪ First equipment arrives August 2017 ▪ Roll-based production of EAS on schedule for end 2017 ▪ First production of NFC expected early Q3 2018, on schedule ▪ Thinfilm’s BoD approved acceleration of capital program to fully complete line by mid 2018 ▪ Full line output by 2019 in the billions of units per year Broad coverage in Bay Area media and front page cover story in San Jose Mercury News

Mayor of San Jose and two Council Members showing first sheet shipped from new Junction Avenue facility on Opening Day, June 15 2017 The grand opening included keynote presentations from Gartner (Charles Golvin), and Google X (Raj Apte; Thinfilm Technical Advisory Committee, shown above)

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Thinfilm Q2 2017 Financials

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275 285 681 698 811 829 Revenue & Other Income* [kUSD, LHS] LTM Revenue & Other Income* [kUSD, RHS] 2,250 2,500 250 500 750 1,000 1,250 1,500 1,750 2,000

500 1,000 1,500 2,000 2,500 4,000 3,500 3,000 5,500 5,000 4,500

1,039 2,300 1,115 1,019 1,186 1,599 1,077 1,188 1,280 860 885 512

Record quarter revenues as a result of: ▪

Total Revenue of USD 1.7 million

8.5M EAS tags shipped

Milestone payments from Fortune 500 pharma JDA

Doubling of NFC product deliveries

Other income of USD 0.6 million, including USD 450k accounting gain because of disposal of fixed assets

OPEX rose in the period as a result of: ▪

Increased manning by 10 FTEs related to field sales and engineering/manufacturing

Higher manufacturing activity level and product deliveries

Capital plan on budget; acceleration approved by Board based on market traction ▪

USD 9.5 million used in H1 on fixed and intangible assets, primarily related to the new roll-to-roll production line and facility upgrades

USD 11.3 million pre-payments paid for equipment that has been ordered but not yet delivered related to the roll- based manufacturing capital plan

Cash balance of USD 28.2 million per end June 2017

* excludes other income related to January 2014 recognition of badwill

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Thank You

Davor Sutija CEO davor.sutija@thinfilm.no +47 94 84 98 86