©2016 IDEX ASA©2016 IDEX ASA
PRESENTATION OF THIRD QUARTER 2016IDEX ASA
10 November 2016Hemant Mardia, CEOHenrik Knudtzon, CFO
www.idex.no
©2016 IDEX ASA
DISCLAIMER
This quarterly presentation includes and is based, inter alia, on forward‐looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. Such forward‐looking information and statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for IDEX ASA (IDEX) and its subsidiaries. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the IDEX businesses, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time. Although IDEX believes that its expectations and the information in this presentation were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this presentation. IDEX ASA nor any other company within the IDEX Group is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the presentation, and neither IDEX ASA, any other company within the IDEX Group nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in this presentation. IDEX ASA undertakes no obligation to publicly update or revise any forward‐looking information or statements in this presentation.
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©2016 IDEX ASA
COMMERCIALISATION BREAKTHROUGHS IN TARGET MARKETS
3
Cards ID & smart
Internet ofThings (IOT)
Mobile devices
Commercial momentum in mobile• 8 design wins• 2 million units produced
Significant progress on biometric card programmes• Safran partnership• First orders for customer trial
with global payment company
Gaining traction within IOT• Shipments to 3 customers
Fingerprint Sensors
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©2016 IDEX ASA
MOBILE ADOPTION DRIVING HUGE MARKET POTENTIAL
4
Source: Acuity Market Intelligence; Nilson Report; IHS; IDEX research
Three massive markets – each with multi‐billion unit potential in 2020Million units
151650
Mobile smart devices (excl Apple)
6 000
2 500
Smart cards
12 000+
IoT
2020 ‐ total units2016 ‐ units with fingerprint sensor
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©2016 IDEX ASA
IDEX COMPETITIVE ADVANTAGE
Silicon capacitive touch sensors mainstream in mobile• Crowded space, multiple vendors• Size/ cost compromise• Small imaging areas cost effective
Off‐chip sensor offers differentiation• IDEX one of only two vendors• Small silicon footprint and low cost material• Not constrained in image size or shape• Unique flexibility for glass, OLED, cards and IoT solutions
5
Less than 13mm silicon
Silicon size larger than sensor image area
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©2016 IDEX ASA
MOBILE ADOPTION TREND TO DISPLAY INTEGRATION
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Sensor in non‐active
area
Sensor in active display
6
IDEX offers solutions to capture market growth now and for the next generation
INDICATIVE ADOPTION
Current generation: Coated buttons
Interim solutions: Ceramic/ glass
Next generation: Flexible OLED
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©2016 IDEX ASA
GAINING MARKET MOMENTUMWITH MULTIPLE DESIGN WINS
Dec '15 Feb '16 Apr '16 Jun '16 Aug '16 Oct '16 Dec '16 Feb '17 Apr '17 Jun '17
09.11.20167
Major Asianmobile customer
Chinese mobilecustomer
• 8 mobile design wins and 3 customers• Growing pipeline following LG launch• Qualified with major module integrators• Qualification of Eagle sensor with tier‐one OEM progressing
Design win
Market launchL
L
L
L
L L L L
L Indicativemarket launchDW
DW
DW
DW
DWDWDWDW DW
L
©2016 IDEX ASA
DEMAND FOR GLASS SOLUTIONS RAPIDLY CHANGING
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Sapphire topApple iPhone 7
Ceramic/glass buttone.g. Meizu Pro 6
Under glasse.g. Xiaomi Mi 5
IDEX ceramic/ glassIntegrated in‐glass
Cost Very high High Very high Medium
Biometrics High Medium Medium High
Value chain Limited to Apple Established New New
Integrator Module house Panel integrator Panel/module integrator
IDEX solution Cardinal launchQ1 2017
Industrialising withmultiple partners
©2016 IDEX ASA
POSITIONING TO INTERCEPT NEXT GENERATION FLEXIBLE DISPLAYS
Multiple benefits from flexible displays• Eliminates fragile cover glass
• Increased battery life
• Larger and thinner display
IDEX off‐chip sensor ideally suited for display integration• Same architecture as touch panels
• Enables large‐size sensors
• Sensor made of polymer material
Investing in product development• Hired team of display integration experts
• IDEX holds core IP
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©2016 IDEX ASA
IDEX SMARTCARD MARKET OPPORTUNITY
10
Source: The Nilson Report, IHS, IDEX analysis
1
2016 2020
6 000
Multi‐billion unit potential in 2020Million units
Banking
ID
Other
Financial inclusion
Access
Driven by several huge verticals
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©2016 IDEX ASA
TECHNOLOGY LEADERSHIP FOR CARD SENSORS
11
Any size • Off‐chip can support up to full fingerprint sensor size
Flexible • Sensor is polymer not brittle silicon
Low cost • Off‐chip silicon footprint <13 sq mm• Sensor array scalable in low cost polymer
Low powerconsumption
• Current generation at ~50 mW• Next generation ~3x lower
Compatibility withcard manufacturing
• Designed for standard manufacturing process
Strong IP • Extensive patent portfolio
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©2016 IDEX ASA12
Prospective Customers
Card integration/ manufacturers
EMV chip providers
Fingerprint sensor providers
Payment and government ID programs
IDEX EXPANDING CARD ECOSYSTEM PARTNERS
Strategic partnership with tier one global payment company
Partnership with Safran Identity & Security• Global lead in identity
• Deploying systems in more than 100 countries
• 40 years of experience
• Major payment card manufacturer
Gaining wider traction within value chain
Card ecosystem
09.11.2016
©2016 IDEX ASA
SIGNIFICANT PROGRESS ON BIOMETRIC CARD PROGRAMME
09.11.201613
June 2015:Strategic partnership withglobal paymentcompany
End 2015:Flexible fingerprinttouch manufactured
April 2016:ISO card bending tests passed
March 2016:World’s first flexible touch sensor integrated in ISO standard Cards
June 2016:Passedcompatibilitytesting in existingPOS terminals
End 2016:Expected end customer trial
Expect volume shipments to biometric cards in 2H 2017
August 2016:Successful live pilot with global payment partner
October 2016:First commercialorder to support customer trials
©2016 IDEX ASA
IDEX OFF‐CHIP SENSOR SHIPPING IN MULTIPLE IOT PRODUCTS
14
SideTouchTM from BIO‐key‐ USB fingerprint reader
KT wiz stick from KT‐ encryption device for B2B ‐ digital door lock solution
IDEX off‐chip sensor selected due to strong value proposition• Excellent biometric performance from medium‐ to larger sized sensor
• Compelling cost position
• Great flexibility in sensor material and form factors
‐‐ Pursuing selected opportunities where current products have a strong fit ‐‐
d
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©2016 IDEX ASA
INVESTING IN DIFFERENTIATED PRODUCT ROADMAP
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2016•Customer specific features
• Software and algorithm development
2017•New low power ASIC•Contactless card sensors•Glass/ceramic sensors• Secure solutions
2018•Sensor for flexible OLED display
• Integrated sensors
©2016 IDEX ASA
SCALING UP THE ORGANISATION TO CAPTURE MARKET GROWTH
Appointed Stan Swearingen as Chief Product Officer• Extensive industry leadership, formerly CTO at Atmel &
Synaptics
• Strong product development track record
Strengthened team for direct sales• Sales, marketing and field applications increased
Growing product development team• Ramping up Card focussed organisation, including Lim
Goh as Director of Product Line
• Silicon team with display integration expertise
• Expanding software team
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China
Boston
Norway
UK
South KoreaSan Jose
Rochester
©2016 IDEX ASA
ADVANCING COMMERCIALISATION IN ALL THREE TARGET MARKETS
Strong mobile momentum with multiple design wins
• Additional design wins and smartphone launches expected• Launches of glass/ceramic sensor products in Q1 17
Significant progress on Card programme
• Customer trials of ISO card sensor expected end 16, completed in Q1 17• Expansion of card ecosystem partners
Gaining traction within IOT
• Continued shipments of sensors to IoT customers
Further strengthening organisation
• Growing product development including Card & IOT team
17 09.11.2016
©2016 IDEX ASA18
THIRD QUARTER KEY FINANCIALS
15
1050
40
0
70
10
60
80
530
20
0
845
57
Q3 16
27
7
Q2 16
23
7
14
Q1 16
21
53
6
25
22
4
17
Q4 15
73
4
32
0
37
Q3 15
4
23
24
52
0
R&DPayroll Other Op.ExRevenues
Continued revenues, mostly from LG programmes• YTD revenues of NOK 26.1 million
• Q3 revenues of NOK 8.4 million
Gross margin of 16 per cent YTD• Mainly Cardinal sensors
• Initial volumes of Eagle
OPEX reflect investments in organisation and increased activity
Quarterly revenuesNOK million
Quarterly OPEX NOK million
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STRONG BALANCE SHEET WITH USD 72M CASH, NO DEBT
579623
683
764
382
0
100
200
300
400
500
600
700
800
Q3 16Q1 16Q4 15 Q2 16Q3 15
Net cash position by quarterNOK millions
Third quarter cash outflow ofNOK 44 million• EBITDA of NOK ‐56 million
• Working capital effects of NOK 9 million
Strong cash balance of NOK 579 million
09.11.2016
©2016 IDEX ASA©2016 IDEX ASA
THANK YOU
All information is provided “as is” and without warranty or representation.The wordmark "IDEX“, "SmartFinger" and the IDEX logo are registered trademarks of IDEX ASA.
All other brands or product names are the property of their respective holders.
©2016 IDEX ASA
IDEX SUMMARY
Fingerprint solutions for mass markets• Off‐chip polymer sensors• Silicon sensors
• 45 granted and pending patent families• Apple cross license
Oslo, Norway; Silicon Valley, Boston, US; UK and Far East offices with ~100 staff
Oslo Børs exchange, ~2800 shareholders
Include Invesco and Funds managed by Woodford
UNIQUE TECHNOLOGY
STRONG PATENTS
GLOBAL OPERATION
PUBLIC LISTED
STRATEGIC INVESTORS
PUBLICLY LISTED
• Mobile, Smart and ID cards, IOTMARKETS
INSTITUTIONAL INVESTORS
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