Strategy update September 26, 2018 With you today Torbjrn - - PowerPoint PPT Presentation

Strategy update

September 26, 2018

With you today

Torbjörn Sandberg, CEO Peter Högfeldt, VP Marketing & Customer Operations

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Impact Coatings has strong fundamentals

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• Competent team
• Leading PVD technology
• Cutting-edge fuel cell product
• Progress on commercial and industrial practices

Our ambition is to become a mid-cap listed industrial company

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Mid-cap industrial company Niche R&D focused company

Commercial discipline World class manufacturing and quality Structured go-to-market processes Continued technical leadership

We aim to lead niches in Decorative, Metallization and Reflectors (DMR)

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Metallization of automotive parts Automotive reflectors Current situation Next steps

• We offer customers a

versatile machine with unique coatings

• We have an innovative

reflector coating system that produces superior quality products

• We support a wide range of

applications with cost- efficient PVD systems for plastic parts

• Drive awareness among

high-end eyewear and watchmakers

• Increase the capacity of our

machine to earn premium pricing

• Focus on existing

customers and products, take on select development project with large-scale automotive suppliers Decorative for consumer products Product Best track record Most benefits from differentiation Highest willingness to pay

We have built a solid customer base in DMR

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10 5 3 3 1 22 D M int. R R&D Total Installed base by end use, # Machines # Customers 5 5 n/a 3 1 14 Decorative Metallization Internal use Reflectors R&D Total Sample customers

(Contract manufacturing)

We have close relationships and preferred supplier status with many of our customers

DMR is key to building a profitable core business today

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Impact Coatings’ proven competitiveness Time to achieve multi-unit orders “Build stable core business in DMR today” Decorative Metallization Reflectors >2 Years (2020+) <1 Year (2019) Low High

Fuel cells (FC) offer large potential upside in the medium term

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Impact Coatings’ proven competitiveness Time to achieve multi-unit orders “Invest in fuel cells for the future” “Build stable core business in DMR today” Decorative Metallization Reflectors >2 Years (2020+) <1 Year (2019) Low High

The FC segment will focus on industry leaders: OEM’s, industrials and select mature innovators

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~5 ~5 Example applications #Accounts in portfolio Group Bus/ truck startups without product volume Key automotive OEMs, T1-2’s and

• ther industrials

Mature innovators with a proprietary technological edge De-prioritized startups, subsidy- driven customers & sub-scale industrials Startups in applications with relatively low potential FC volume (phone chargers, consumer drones etc.) Impact Coatings’ fuel cell customer portfolio

Backup power Cars Busses Trucks Automotive Forklifts

Iterative evaluation process

We will be rigorous in prioritizing which mature innovators we work with

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IC’s long-term focus customers in fuel cells All potential FC companies Significant capitalization Experienced management Credible execution Meaningful size or strategic value If the customer is not self-funding it is well capitalized (e.g. 3+ years of runway) and has committed long-term owners Management is experienced in running companies of relevant size in relevant industries The customer has a credible plan to execute their strategy and a history of delivering on their promises The customer can become a large customer or provides

• ther strategic value (e.g. technology)

Among potential customers that meet our criteria we will prioritize our resources based on our assessment of the lifetime value of each account Prioritization

We will focus on selling close to home, but also develop strategic customers in foreign markets

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“Close to home” “Foreign markets”

Lower cost to sell and serve because of geographic proximity and standardized business practices Higher cost to sell and serve because of physical distance Established well-functioning IC organization, efficient travel More challenging to organize technical support, installations and customer service Standardized selling/ buying process and commercial practices Less standardized selling/ buying process, requires increased financial and commercial risk management We will focus on selling close to home We will develop strategic customers in foreign markets

We will keep assembly in-house to drive higher efficiency and lower cost

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Today Target

• Develop a highly repeatable

manufacturing process

• Train and retain manufacturing staff

Faster assembly (Medium-term initiative)

• 50%

Project hours per machine

Today Target

• Simplify, replace or eliminate parts
• Develop robust supplier base

Reduced bill of materials (Long-term initiative)

• 30%

Bill of materials

Today Target

• Reduce vendor lead time
• Keep key components in stock

Shorter lead time (Immediate priority)

• 30%

Contract to delivery lead time

Our ambition is to develop Impact Coatings into a mid-cap industrial company

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• We have strong fundamentals
• We aim to lead select DMR niches and work with fuel cell industry leaders
• We will focus on selling close to home, but also develop strategic customers in foreign markets
• We will keep assembly in-house to drive higher efficiency and lower cost.

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Q&A

Please call in to the telephone conference to ask a question