DDD Group plc The 3D Solutions Company Chris Yewdall, CEO Victoria - - PowerPoint PPT Presentation

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DDD Group plc The 3D Solutions Company Chris Yewdall, CEO Victoria - - PowerPoint PPT Presentation

DDD Group plc The 3D Solutions Company Chris Yewdall, CEO Victoria Stull, CFO 1 December 2012 www.DDD.com Disclaimer This presentation has been prepared by DDD Group Plc (the Company ) solely for use in connection with the introduction


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www.DDD.com December 2012 1

DDD Group plc The 3D Solutions Company

Chris Yewdall, CEO Victoria Stull, CFO

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www.DDD.com December 2012 2

Disclaimer

This presentation has been prepared by DDD Group Plc (the “Company”) solely for use in connection with the introduction of the Company for the LD Micro Conference, Los Angeles, CA 5-6 December 2012. This presentation does not constitute or form part of, and should not be construed as, an offer, invitation or inducement to purchase or subscribe for any securities nor shall it or any part of it form the basis

  • f, or be relied upon in connection with, any contract or commitment whatsoever. This document does not constitute either advice or a recommendation regarding any securities of the Company. Any person

who is in any doubt about the subject matter of this document should consult an authorised person. The contents of this document are strictly private and confidential and, accordingly, the contents of this document must not be published, reproduced, copied or disclosed to any person other than the recipients’ professional advisers and then only on the condition that such professional advisers maintain the confidentiality of this document. By accepting delivery hereof, the recipient agrees to return this document to the Company promptly on request, together with any other materials provided to it in connection herewith, without retaining any copies. Unless specifically attributed to another source, any targets, forecasts, estimates and projections contained in this document have been prepared by the management of the Company and involve elements of subjective judgement and analysis which may or may not be correct. In addition, some statements contained in this document or in documents referred to in it are or may be forward-looking statements. Actual results may differ from those expressed in such statements, depending on a variety of factors. Any forward-looking information contained in this document has been prepared on the basis of a number

  • f assumptions that may prove to be incorrect, and accordingly, actual results may vary. The information set out herein may be subject to updating, completion, revision, verification and amendment and such

information may change materially. Neither the Company nor its advisers nor any of their respective directors or employees or any other person make any representation or warranty, express or implied, as to the accuracy or completeness of the contents of this document or of any other document or information supplied at any time. In particular, but without limitation, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any assumptions, targets, forecasts, projections, estimates or prospects with regard to the anticipated future performance of the Company. No responsibility or liability is accepted by any such person for any errors, misstatements or omissions in this document or any other such document or information. The exclusions set out in this paragraph do not extend to an exclusion of liability for, or remedy in respect of, fraudulent misrepresentation. Neither the Company nor its respective advisers or any of their respective directors or employees or any other person shall be obliged to provide the recipient with any further information or to update this document or correct any inaccuracies that become apparent. This document may be communicated to, and is only directed at (i) persons outside the EEA, (ii) persons having professional experience in matters relating to investments, being investment professionals as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (“FPO”), (iii) persons falling within Article 49(2)(a) to (d) of the FPO (including high net worth companies and unincorporated associations), and (iv) persons to whom communication may otherwise be lawfully made, (together ”relevant persons”). The document must not be acted on or relied upon by any persons who are not relevant persons. Any recipient of this document, to whom communication of it is not lawful, should return it to the Company immediately.

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www.DDD.com December 2012 3

Agenda

  • 3D consumer markets

– TV, PCs and mobile phones/tablets

  • DDD’s 3D licensing business
  • DDD’s 3D content aggregation business
  • Financial highlights
  • Share capital structure
  • OTCQX listing
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www.DDD.com December 2012 4

The 3D TV market

  • The first 3D TVs were introduced in 2010
  • Annual shipments of 3D TVs are growing rapidly
  • 3D TV installed base forecast of >400m by 2015

50m 100m 150m 2011 2012 2013 2014 2015 23m 49m 81m 116m 154m

Source: DisplaySearch, Displaybank and iSuppli Corp.

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The 3D PC market

  • 3D PC products arrived in 2009
  • 3D PC chips from leading vendors
  • 3D PC market is now growing

– 1m 3D PC displays sold in 2011 – >1m TriDef PC software licenses shipped in first half of 2012 – 27.7 million 3D PC displays forecast for 2018

Source: DisplaySearch and DDD Company data

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www.DDD.com December 2012 6

The 3D Mobile market

  • Smartphones and tablets deliver 3D

without requiring 3D glasses

  • Smartphone chipmakers now

supporting 3D displays and apps

  • Over 1 million TriDef Mobile Android

licenses shipped since June 2011

  • 71 million 3D smartphones/year

forecast by 2018

Source: DisplaySearch

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www.DDD.com December 2012 7

The 3D opportunity

  • Sales of consumer devices continue to grow

– 3D TVs now have a negligible price premium – 3D glasses no longer required on phones, tablets and some PCs

  • 3D content creation lags behind device adoption

– Hollywood 3D movie release schedule is constrained by number

  • f weeks in a year and also number of available 3D screens

– Consumer market is a 24x7 content business – Specially made 3D content for TVs, PCs and mobiles is sparse

  • What can be done to make more 3D content available?
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DDD’s TriDef 3D solution

  • DDD’s TriDef 3D solutions convert 2D content to 3D and

are used by leading manufacturers in their 3D products

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OEM licensing business

  • DDD develops and licenses 3D intellectual property

– Automatic 2D to 3D conversion for photos, video and games – Enables over 700 of the latest PC games to be played in 3D ‘out of the box’

  • Growing patent library - 53 granted patents in 24 countries
  • DDD packages these solutions for different markets

– Firmware for chip developers to use in TVs, Blu-ray players, STBs – Windows software for use with notebook PCs and monitors – Android application for smartphones and tablets

  • Revenue from licensing, royalties and development fees
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www.DDD.com December 2012 10

DDD’s TV OEM ecosystem

OEMs TV Chip Manufacturers 3D TVs 3D Blu-ray 3D monitors License Agreement Royalties IP License & Firmware Technology 3D chip

  • Royalties range from $1 to

$0.30

  • Calendar quarter reporting
  • Licensees include US &

Taiwan TV chip makers

NRE & Royalties

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DDD’s PC OEM ecosystem

PC Chip Manufacturers 3D notebooks 3D AIO & Desktops 3D monitors Software Distribution License 3D chipset & TriDef s/w

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DDD’s PC OEM ecosystem

OEMs PC Chip Manufacturers 3D notebooks 3D monitors Software Distribution License Royalties Software Distribution License PC LCD Manufacturers 3D LCD & TriDef s/w 3D AIO & Desktops ODMs Royalties

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DDD’s PC OEM ecosystem

OEMs PC Chip Manufacturers 3D notebooks 3D monitors Software Distribution License Royalties Software Distribution License PC LCD Manufacturers 3D LCD & TriDef s/w 3D AIO & Desktops ODMs

  • Royalties range from $2.70

to $1.00

  • Quarterly reporting
  • Short time between

license signing and shipment

Royalties

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www.DDD.com December 2012 14

DDD’s Mobile OEM ecosystem

OEMs Mobile AP Manufacturers 3D Smartphone or Tablet License Agreement Royalties Developer Tool kit 2D chip

  • Royalties range from $0.25

to $0.20

  • Quarterly reporting

TriDef Android App (AP optimized) Embedded TriDef s/w

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www.DDD.com December 2012 15

IP licensing for chips

  • TV market – strong performance and growth

– Samsung is the largest customer by volume

  • 3D Televisions
  • 3D Blu-ray players
  • 3D PC monitors

– ioGear recently launched first set top box with TriDef 2D to 3D conversion

  • Next generation TV solutions

– Next gen TV chips are reprogrammable ARM chips – Allows delivery of TriDef 3D solution as software – Reduces time to market and commercial risk – Already integrated with ARM-based video processing chip from two chip suppliers

5m 10m 15m 2011 FY 2012 H1 2.5m 7.3m 5.5m 9.5-13m Annual chip IP shipments 2010 FY

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www.DDD.com December 2012 16

IP licensing for PC software

  • PC market – strong performance and growth

– Sony is the largest customer by volume – LG Electronics, Samsung, AOC, Lenovo are other top PC OEM customers

  • Significant focus on iCafe market in China

– Partnered with ShunWang Technology Co., China’s largest iCafe software provider with 60% share – 90,000 franchised i-Cafes with over 5 million PCs – 50 million customers per day visit the iCafes – Upgrade market for 3D PC monitor makers – 3D software upgrade launched in November 2012 – TriDef converts over 80 Chinese games to 3D

0.5m 1m 2m 2011 FY 2012 H1 65k 876k 1.1m 2 – 2.5m Annual software shipments 2010 FY

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www.DDD.com December 2012 17

IP licensing for mobile

  • 3D mobile market – expected performance and new opportunities
  • LG Optimus 3D glasses-free smartphone

– Over 1 million units of TriDef 3D Mobile Android have been shipped since June 2011 – LG launched the new Optimus 3D Max phone in March 2012

  • Tablet opportunities are increasing

– TriDef 3D Mobile is already integrated with three 3D Android tablet reference designs – Potential for design wins and product launches in China in early 2013

  • New features under development for 3D smartphones and tablets

– Automatic 2D to 3D conversion for mobile games – YABAZAM! 3D movie content app for smartphones and tablets

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www.DDD.com December 2012 18

DDD’s YABAZAM! 3D portal

  • Hollywood using 3D to drive demand in Blu-ray format
  • Conventional cable and satellite distribution are slow to act

– For TVs, PCs and mobile, 3D content is scarce

  • DDD created Yabazam.com - a digital 3D content distribution label

– Drives revenue growth from downstream end user 3D content consumption – Already connected to TriDef PC software and downloadable apps for LG and Samsung Smart TVs

  • Revenue derived from end user fees
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YABAZAM! 3D everywhere

End User 3D content creators Original 3D content Smart TV Digital 3D content portal Download revenue Revenue share Q4 2012 Yabazam App

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YABAZAM! 3D update

  • Yabazam! 3D app now available on both LG and Samsung Smart TVs

– Available in US, Korea, Germany, UK, Hong Kong and Taiwan

20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000

Cummulative downloads of Yabazam SmartTV App

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  • Primary focus on US 3D Smart TV market

– Highest forecast 3D penetration and usage of Smart TV features – 120m by 2015

  • Transactional Video on Demand system launched on both platforms
  • Launch a fixed fee monthly subscription plan in Q4 2012

– Similar to Netflix 2D movie streaming subscription – Netflix currently has 23m US subscribers paying $7.99/month

  • Continue to acquire new 3D titles from 3D film/TV producers

– 40+ new titles added in 2012 increasing library to over 70 3D movies

  • Truly accretive business model for content library owners

– Focus on 2D libraries and create incremental assets for content owners by converting to 3D

YABAZAM! 3D status

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www.DDD.com December 2012 22

2012 H1 key metrics:

  • Turnover – $4m

– Up 74% over H1 2011 – Up 25% sequentially over H2 2011 ($3.2 to $4.0m)

  • 99% of revenue is royalty based
  • Gross margin – 96%
  • 7m units of IP shipped - up 52% YOY; 57% over H2’11

– IP shipments in 2011 were 9.1 million – TV IP shipments grew 23% YOY; 98% over H2’11 – PC software shipments grew ,1031% YOY; 40% over H2’11 – Mobile represented 4% of unit volume

  • Samsung, Sony and LG each >10% of revenue
  • Cash and receivables at 30 June - $4.4m

– Cash and receivables Dec 31 11 - $4.3m

Financial performance

$3m $6m $9m 2010 2011 H1 ‘12 $2.0 $5.5 $4.0 Gross margin 92% 94% 96% Analyst Estimates $8-8.5m

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  • 500

500 1000 1500 2000 H1'10 H2'10 H1'11 H2'11 H1'12

EBITDA*

EBITDA and OPEX trends

*Adjusted for non-cash share based payment expense 500 1000 1500 2000 2500 H1'10 H2'10 H1'11 H2'11 H1'12

OPEX

$000’s $000’s

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Profit trends

  • 800
  • 600
  • 400
  • 200

200 400 600 800 1000 1200 H1'10 H2'10 H1'11 H2'11 H1'12

Profit before tax*

  • 1000
  • 800
  • 600
  • 400
  • 200

200 400 H1'10 H2'10 H1'11 H2'11 H1'12

Profit after tax**

**Adjusted for non-cash share based payment expense and initial deferred tax asset *Adjusted for non-cash share based payment expense

$000’s $000’s

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Share ownership

8.8% 31.8% 14.1% 7.6% 13.5%

Corporate holders High net worth individuals Board of directors Reportable institutions Other institutions

  • Listed on AIM market of

London Stock Exchange

  • Ticker symbol: DDD
  • Market Cap of £30.7m ($49m)

(based on Dec 3rd closing price)

  • Share capital
  • Issued shares: 134.4m
  • Options: 10.2m

Public float

24.2%

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OTCQX listing

  • American Depository Receipts listing of DDD’s AIM shares on US

OTCQX market (1 ADR share = 10 AIM shares)

  • Simplifies acquisition of UK listed AIM shares by US-based investors
  • OTCQX listing of the ADR shares is in the final stages

– Deutsche Bank is the ADR banker – Canaccord Genuity is the market maker – Company information published in S&P Manual on Monday December 3rd

  • OTCQX ticker will be DDDGY
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Summary

  • The leading consumer 3D solutions company

– Over 23 million 3D devices incorporating TriDef 3D have been shipped since 2010 – High margin technology licensing income – Digital 3D content publishing business with growing content library and platforms

  • Strong list of Tier 1 OEM licensees in large growth markets

– Smart TV, mobile, tablet

  • Strong growth of high margin revenue

– Profitable for the past two halves

  • Sustainable model that leverages existing licenses into future

– SmartTV gaming, high quality low bandwidth 3D content delivery

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www.DDD.com December 2012 28

Thank you

DDD USA Inc. 6100 Center Drive, Suite 1100 Los Angeles CA 90045 Tel +1 310 566 3340 USA Fax +1 310 566 3380

www.DDD.com www.Yabazam.com www.TriDef.com