AI Terminal
Polight ASA
Investor Presentation • Nov 3, 2022
3717_rns_2022-11-03_2fb851a6-6d60-4f76-89fb-d00e6188f848.pdf
Investor Presentation
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Third quarter 2022
1 Third quarter 2022 - Earnings presentation Earnings presentation 3 November 2022
Disclaimer
This presentation (the "Presentation") has been produced by poLight ASA (the "Company") exclusively for information purposes. This Presentation has not been approved, reviewed or registered with any public authority or stock exchange. Further to the aforementioned, this presentation is the result of an effort of the Company to present certain information which the Company has deemed relevant in accessible format. This Presentation is not intended to contain an exhaustive overview of the Company's present or future financial condition and there are several other facts and circumstances relevant to the Company and its present and future financial condition that not been included in this Presentation. This Presentation may not be disclosed, in whole or in part, or summarized or otherwise reproduced, distributed or referred to, in whole or in part, without prior written consent of the Company.
This Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates or intends to operate. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward- looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or any of its subsidiary undertakings or any such person's officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors
nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company assumes no obligation to update any forward-looking statements or to conform these forward-looking statements to our actual results. Furthermore, information about past performance given in this Presentation is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither the Company nor any of its parent or subsidiary undertakings or any such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
By reviewing this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the businesses of the Company. This Presentation must be read in conjunction with the recent financial reports of the Company and the disclosures therein. The distribution of this Presentation in certain jurisdictions may be restricted by law. Persons in possession of this Presentation are required to inform themselves about, and to observe, any such restrictions. No action has been taken or will be taken in any jurisdiction by the Company that would permit the possession or distribution of this Presentation in any country or jurisdiction where specific action for that purpose is required.
No shares or other securities are being offered pursuant to this Presentation. This Presentation does not constitute an offer to sell or form part of, and should not be construed as, an offer or invitation for the sale or subscription of, or a solicitation of an offer to buy or subscribe for, any shares or other securities in any jurisdiction, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any offer, contract, commitment or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company.
By reviewing this Presentation you agree to be bound by the foregoing limitations.
This Presentation speaks as of 3 November 2022. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. The Company does not intend, and does not assume any obligation, to update or correct any information included in this Presentation. This Presentation shall be governed by Norwegian law, and any disputes relating to hereto is subject to the sole and exclusive jurisdiction of Norwegian courts, with Nordre Vestfold District Court as legal venue.
Today's agenda
Presenting
- Key events
- Introduction to poLight
- Operations and markets review
- Financial review
- Outlook
- Q&A
Dr. Øyvind Isaksen
Chief Executive Officer
Dr. Isaksen has been CEO of poLight since August 2014. He has previously held several CEO positions, most recently in the publicly listed company Q-Free ASA, which he left in January 2014, after 7 years as CEO. Øyvind Isaksen holds a PhD in Applied Physics.
Alf Henning Bekkevik
Chief Financial Officer
Bekkevik is a senior executive with a background from Arthur Andersen (E&Y), Wallendahl, Fjord Line, Grenland Group and lately from Wood Group Mustang as VP Finance. He holds a Master in Business & Economics (Siviløkonom) degree from NHH and is a state certified public accountant.
Key events in the quarter
- Follow-on order from an Augmented Reality (AR) customer, confirms that an enterprise AR product using TLensÒ will be on the market in 2022
- Other AR cases also progressing well encouraging pipeline building up
- Xenocore has confirmed use of TLensÒ in their next generation disposable laparoscope (Saberscope), which is in qualification stage
- Increased activity in the industrial market, especially barcode related
- Teledyne e2v launched "Optimom 2M Multi Focus Lens" at Vision exhibition in Stuttgart, - their 2nd generation camera powered by TLensÒ
- Smartphone cases actively pursued, likely that market demand for higher performance selfie camera will increase over time
poLight at a glance
Background & description Geographical footprint
- Global player in tunable optics with applications in mobile, web cam, industrial, augmented reality, medical and others
- Founded in 2005 and has since developed state-of-the-art expertise in tunable optics, polymers, MEMS technology and image applications and processing
- Holds 17 worldwide patent families, 9 pending applications and 4 registered trademarks
- 37 employees including long-term consultants
- Headquartered in Horten, Norway, with employees in Finland, France, UK, USA, China and Taiwan
poLight enables unique use cases
poLight products & technology well-suited for several applications
Smartphones, wearables, accessories
- Smartphone represent a large addressable market for which billions of cameras are produced each year
- 1,5 billion phones per year with 1 front camera and an average of 3 back cameras
- Camera function key
- Potential addressable market for TLens®/poLight technology estimated at 3 billion units per year
Barcode/Industrial
- Evolving from 1D laser to 2D imaging barcode readers
- Lasers replaced by camera systems, where autofocus will improve efficiency in scanning and portfolio
- Barcode technology is spreading to new industries
- OEM scan engine vendors today are increasingly looking to enable machine vision capabilities on their current offerings
Augmented Reality (AR)
• AR is expected to to grow significantly as the technology is rapidly expanding beyond entertainment and gaming to an increasing number of industrial, commercial, educational applications and later become a consumer device
Other
- New opportunities are emerging that could represent significant potential
- Endoscopy and automobile are just two examples of new opportunities for poLight technology
Operations and market review
8 Third quarter 2022 - Earnings presentation
Consumer/smartphone: Add-in TLens® design opens opportunities
- Add-in TLens® design is attracting good interest
- Several reference designs have been developed to position TLens® for various use cases
- During the quarter, the focus has been on smartphone and augmented reality applications
- Other applications, such as webcams, drones, etc. also being explored
- Selfie smartphone camera solution still the most relevant short/mediumterm
- The company continued to use a lot of resources during the quarter to position itself for the smartphone market
3 design-win, 8 ongoing PoCs1 and 10 planning PoCs
8 PoC: 3 AR, 4 smartphone, 1 iris
AR: a enterprise product using TLens® will be on the market in 2022
- TLens is being considered by several important market players
- Low power consumption, no gravity sensitivity, temperature stabilisation, high speed and compactness key
- Follow-on order from an Augmented Reality (AR) customer and confirmed that an enterprise AR product using TLens® will be on the market in 2022
- Further design-wins could be achieved within the next 6 months
- Two use cases : world facing camera & display solutions
1 design-win, 5 design-in´s (1 consumer), 4 ongoing PoCs (3 consumer) and 9 planning PoC
Barcode / Industrial
- Teledyne e2v launched "Optimom 2M Multi Focus Lens" at Vision exhibition in Stuttgart, - their 2nd generation camera powered by TLensÒ
- The opportunity pipeline for this market segment is quite promising
- It will, however, take time to develop this market and will require entry into some broader application areas
- Over and above barcode applications, the company is involved in various other industrial applications.
4 design-wins, 1 design-in (Teledyne), 12 PoCs (8 barcode), and 12 planning (8 barcode)
Healthcare
- Xenocore has confirmed use of TLensÒ in their next generation disposable laparoscope (Saberscope), - undergoing qualification (https://xenocor.com)
- Related to the announcements made 20 August 2021 and 21 September 2021
- The Kavli activity has generated a lot of activity and the company are serving several new similar cases – representing more than half the ongoing PoC
- The other ongoing PoC are more related to commercial companies having the potential to use TLens Ò in commercial products
- The company continues to support selected opportunities in this market segment
- Over time this market sector can potentially become an important part of poLight
1 design-win (Kavli), 1 design-in (surgical device, Xenocore), 12 PoCs ongoing and 7 planning PoC
Good progress in most customer cases
| Design-win | Project | Completed PoC | Ongoing PoC | Planning PoC | |
|---|---|---|---|---|---|
| Consumer | 3 (3) | 0 (0) | 30 (28) | 5 (7) | 6 (5) |
| Augmented Reality | 1 (1) | 5 (5) | 11 (10) | 4 (5) | 9 (6) |
| Industrial | 4 (4) | 1 (1) | 17 (17) | 12 (9) | 12 (11) |
| Other (e.g. medical, etc) | 1 (1) | 1 (1) | 3 (3) | 12 (10) | 9 (7) |
| Number in ( ) represents last quarter | 9 (9) | 7 (7) | 61 (58) | 33 (31) | 36 (29) |
Key financials
| (in NOK million) | Q3 2022 | Q3 2021 | FY 2021 |
|---|---|---|---|
| Revenue | 5.3 | 1.7 | 10.0 |
| Cost of sales | -2.1 | -0.9 | -3.9 |
| Research and development expenses | -7.2 | -2.0 | -25.4 |
| Sales and marketing expenses | -2.6 | -1.3 | -7.2 |
| Operational / supply chain expenses | -1.9 | -1.4 | -9.1 |
| Administrative expenses | -2.8 | 0.9 | -6.9 |
| EBITDA | -11.3 | -2.9 | -42.4 |
- Revenue reflects sales of TLens® and ASICs of NOK 3.1 million and NOK 2.2 million in revenue from NRE "non-recurring engineering" relating to customer development projects
- EBITDA loss of NOK 11.3 million vs. loss of NOK 2.9 million in Q3 2021
- Increased sales resources and R&D/operational personnel
- Due to share price decline in the Q3 last year, NOK 5 million in accrued employer's national insurance contributions (NICs) relating to the share option plan, has been reversed (negative expense).
Income statement Balance sheet summary
| (in NOK million) | Q3 2022 | Q3 2021 | FY 2021 |
|---|---|---|---|
| Intangible assets | 26.7 | 35.9 | 33.4 |
| Inventories | 36.0 | 12.2 | 16.8 |
| Cash and cash equivalents | 104.4 | 164.1 | 157.8 |
| Total equity | 166.2 | 207.7 | 213.4 |
| Total current liabilities | 15.7 | 16.9 | 21.3 |
| Total equity and liabilities | 185.1 | 228.7 | 238.7 |
- Cash position of NOK 104.4 million, compared with NOK 164.1 million at Q3 2021
- Inventory of NOK 36.0 million compared with NOK 12.2 million at Q3 2021.
- The inventory has increased by NOK 19.2 year to date
- The increase in inventories mainly relates to wafers from ST Microelectronics (long lead-time components)
- Improves the readiness for potential volume customers
Cash Flow
- Q3 cash used in operating activities was NOK 19.6 million, compared with NOK 9.1 million in Q3 2021
- Increased inventory by NOK 5.5 million in the quarter
- Q3 cash used in investing activities was NOK 0.3 million
- Q3 net decrease in cash was NOK 20.1 million
Q3 2022 cash flow development
Outlook
- The activity level is high and is reflecting a growing pipeline
- Several smartphone OEMs are experiencing reduced sales impacting their willingness to invest in new releases and implies increased cost awareness
- However, the increasing pressure on better performance selfie camera, and changes to the handling of the pandemic, will potentially change the situation over time
- The company will continue to use resources to position itself for the smartphone market
- The AR opportunities is developing positively, and first enterprise AR product using TLensÒ is confirmed to be in the market in 2022 - major milestone !
- poLight is involved with both AR enterprise/professional and AR consumer use cases, both for camera and display applications
- Market segments, such as industrial and medical, is less impacted by the current sentiment, and is progressing as expected
Management Team
Dr. Øyvind Isaksen Chief Executive Officer
Dr. Isaksen has been CEO of poLight since August 2014. He has previously held several CEO positions, most recently in the publicly listed company Q-Free ASA, which he left in January 2014, after 7 years as CEO. Øyvind Isaksen holds a PhD in Applied Physics.
Alf Henning Bekkevik
Chief Financial Officer
Bekkevik is a senior executive with a background from Arthur Andersen (E&Y), Wallendahl, Fjord Line, Grenland Group, and, most recently, as VP Finance for Wood Group Norway AS. He holds a master's degree in business & economics (Siviløkonom) from NHH, and is a certified public accountant.
Pierre Craen
Chief Technology Officer
Craen is a senior executive with more than 20 years' experience in opto-mechanical systems engineering. Prior to joining poLight, he managed product development teams at Varioptic, Barco and Motorola/Symbol. Mr Craen holds an MSc in Optical Engineering from Sup-Optic, as well as an MSc in Applied Physics.
Marianne Sandal
Chief Operating Officer
Sandal is a senior executive with background from Tele-communications (Nera) and Road User Charging (Q-Free). She holds a BSc in Mechanical Engineering in addition to courses from Norwegian School of Management (BI). She has been responsible for world wide operations for more than 15 years.
Board of Directors
Grethe Viksaas – Board Chair, independent
Grethe Viksaas has a long career from the Northern European managed service provider Basefarm AS. First as founder and CEO, and later as executive chair and member of the board of directors. Prior to Basefarm, Ms Viksaas served as CEO for SOL System AS and in several management positions in IT companies. She has experience from numerous board positions, including Telenor ASA. She is currently a non-executive director on the boards of Link Mobility Group Holding ASA and Crayon Group Holding ASA. She also serves as Chair of the Board in No Isolation AS and Farmforce AS. Ms Viksaas has a master's degree in computer science from the University of Oslo.
Ann-Tove Kongsnes - Board member
Ms. Kongsnes is an Investment Director at Investinor AS. Kongsnes has over her career gained extensive experience from investments, development, M&A, IPO's and exits of technology companies. Prior to this, she worked 7 years with international marketing, and was formerly a Director of Marketing and Operations. Kongsnes has extensive board experience, and currently serves on the boards of 6 of Investinor's portfolio companies in addition to 4 Chair/member seats in Nomination Committees. She holds an MSc in Economics and Business Administration from HIB and took the Advanced Program in Corporate Finance at NHH.
Dr. Juha Alakarhu - Board member, independent
Juha Alakarhu is the VP of Imaging at Axon in Tampere, Finland. He runs the Axon R&D office in Finland and is responsible forthe imaging system for Axon camera products. Dr Alakarhu's entire career has been devoted to developing cameras. Before joining Axon in 2018, he worked for Nokia and Microsoft, where he developed several pioneering camera solutions, such as oversampling (the 41-megapixel camera), optical image stabiliser, and virtual reality technology. Juha Alakarhu holds a PhD from Tampere University of Technology.
Svenn-Tore Larsen - Board member, independent
Mr. Larsen is an Electronic Engineer from the University of Strathclyde, UK. He was appointed Chief Executive Officer of Nordic Semiconductor in February 2002. Mr. Larsen has broad international experience in the semiconductor business, previously as Director for the Nordic region for Xilinx Inc. He has also been working at Philips Semiconductor.
Thomas Görling - Board member
Thomas Görling is a Senior Investment Director at Stiftelsen Industrifonden (Sweden) with a comprehensive involvement in building successful technology companies. Representing Industrifonden, he has been engaged in a number of portfolio company boards, at present Medtentia International Ltd Oy (Finland) and eBuilder AB (Sweden). Before joining Industrifonden in 1998, Mr. Görling held management positions within the European optical instrument and systems industry. Thomas holds a Master of Science from the Royal Institute of Technology in Stockholm, and studied business economics at Stockholm University.
Statement of income
| NOK 000 | Note | Q3 2022 | Q3 2021 | YTD 2022 YTD 2021 | FY 2021 | |
|---|---|---|---|---|---|---|
| Sale of goods | 3 092 | 1 696 | 6 498 | 4777 | 8 683 | |
| Rendering of services | 2 181 | 0 | 2 771 | 1 350 | 1 350 | |
| Revenue | 5272 | 1696 | 9 270 | 6 126 | 10 032 | |
| Cost of sales | -2 086 | -930 | -3 517 | -2 540 | -3 851 | |
| Gross profit | 3 186 | 766 | 5 753 | 3 587 | 6 182 | |
| Research and development expenses net of governmental | ||||||
| grants | 7,8 | -7 175 | -1 967 | -26 780 | -18 808 | -25 360 |
| Sales and marketing expenses | -2 633 | -1 270 | -9 373 | -3 933 | -7 224 | |
| Operational / supply chain expenses | -1 942 | -1 366 | -6 272 | -6 409 | -9 139 | |
| Administrative expenses | -2 759 | ਰੇਤੀ ਹੈ। ਇਹ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਸਿੰਘ ਅਤੇ ਇੱਕ ਸਿੰਘ ਦੇ ਸੰਗ੍ਰਹਿ ਦੇ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਸਿੰਘ ਅਤੇ ਇੱਕ ਸਿੰਘ ਸੀ। ਉਸ ਦੀ ਇੱਕ ਵਿੱਚ ਇੱਕ ਸਾਹਿਤ ਕੀਤੀ ਹੈ। ਉਹ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱ | -7 023 | -11 179 | -6 868 | |
| Operating result before depreciation and amortisation | ||||||
| (EBITDA) | -11 322 | -2 886 | -43 694 | -36 742 | -42 409 | |
| Depreciation and amortisation | 9 | -2 271 | -3 080 | -8 013 | -8 973 | -11 923 |
| Operating result (EBIT) | -13 594 | -5 967 | -51 706 | -45 716 | -54 332 | |
| Net financial items | б | 704 | -19 | 664 | 184 | 944 |
| Loss before tax | -12 890 | -6 016 | -51 042 | -45 532 | -53 388 | |
| Income tax expense | -49 | -61 | -53 | -106 | -ਰੇਤੇ | |
| Loss for the period | -12 939 | -6 076 | -51 095 | -45 637 | -53 481 | |
Balance sheet
| NOK 000 | Note | Q3 2022 | Q3 2021 | FY 2021 |
|---|---|---|---|---|
| ASSETS | ||||
| Property, plant and equipment | 6612 | 1 393 | 2 356 | |
| Intangible assets | 9 | 26 674 | 35 944 | 33 377 |
| Right-of-use assets | 3 982 | 5 025 | 4 778 | |
| Total non-current assets | 37 268 | 42 363 | 40 511 | |
| Inventories | 36 025 | 12 236 | JE 836 | |
| Trade and other receivables | 8 | 4 071 | 8 662 | 22 078 |
| Prepayments | 3 366 | 1 354 | 1 456 | |
| Cash and cash equivalents | 104 413 | 164 067 | 157 810 | |
| Total current assets | 147 875 | 186 318 | 198 180 | |
| Total assets | 185 143 | 228 681 | 238 691 | |
| EQUITY AND LIABILITIES | ||||
| Share capital | 2 078 | 2 053 | 2 077 | |
| Share premium | 209 573 | 247 263 | 209 320 | |
| Reserves | 1 136 | 1 036 | 1 035 | |
| Retained earnings | -46 563 | -42 616 | 977 | |
| Total equity | 166 223 | 207 736 | 213 409 | |
| Lease liabilities | 3 178 | 4 013 | 3 934 | |
| Total non-current liabilities | 3 178 | 4 013 | 3 934 | |
| Trade and other payables | 10 | 14 244 | 14 661 | 19 906 |
| Current lease liabilities | da8 | 1 083 | 942 | |
| Provisions | 500 | 1 189 | 500 | |
| Total current liabilities | 15 742 | 16 932 | 21 349 | |
| Total liabilities | 18 920 | 20 945 | 25 282 | |
| Total equity and liabilities | 185 143 | 228 681 | 238 691 |
Cash flow
| NOK 000 | Note | Q3 2022 | Q3 2021 | YTD 2022 YTD 2021 | FY 2021 | |
|---|---|---|---|---|---|---|
| Operating activities | ||||||
| Profit / loss (-) for the period | -12 890 | -6 016 | -51 042 | -45 531 | -53 388 | |
| Adjustments for: | ||||||
| Depreciation of property, plant and equipment and | ||||||
| right-of-use assets | 453 | 513 | 1 309 | 1 272 | 1 654 | |
| Amortisation of intangible assets | 9 | 1819 | 2 567 | 6 703 | 7 701 | 10 269 |
| Net finance income | -704 | 49 | -664 | -184 | -944 | |
| Equity-settled share-based payments | 1 021 | 894 | 3 554 | 2 785 | 4 385 | |
| Other non-cash items | ਤਰੇਰੇ | 138 | -431 | ਤੇ ਚੋਰੇ | 937 | |
| Changes in unrealised net foreign exchange rate | ||||||
| differences/fluctuations | -32 | -3 | -73 | 5 | 21 | |
| Changes in working capital: | ||||||
| Increase (-) in trade and other receivables and prepayments | -234 | -737 | 10 384 | 634 | -11 332 | |
| Increase (-) in inventories | -5 530 | -3 665 | -19 190 | -3 072 | -7 669 | |
| Decrease (-) in trade and other payables | 10 | -8626 | -5 314 | -5 663 | 3 977 | 9 223 |
| Changes in provisions and government grants | 4 511 | 2 581 | 5 713 | -712 | -2 954 | |
| Interest received | б | 385 | 10 | 1 344 | 28 | 585 |
| Interest paid | б | 80 | 5 | -253 | -110 | -203 |
| Income tax paid | -19 | 61 | -53 | -106 | -129 | |
| Net cash flows used in operating activities | -19 556 | -9 150 | -48 361 | -32 965 | -49 546 | |
| Investing activities | ||||||
| Purchase of property, plant and equipment | -301 | -550 | -4 764 | -900 | -2 142 | |
| Net cash flows used in investing activities | -301 | -550 | -4 764 | -900 | -2 142 | |
| Financing activities | ||||||
| Proceeds from issuance of ordinary shares | 0 | 125 000 | 0 | 125 000 | 137 803 | |
| Proceeds from exercise of share options | 0 | 0 | 254 | 3 204 | 3 397 | |
| Transaction costs on issue of shares | 0 | -6 431 | 0 | -6 437 | -7 530 | |
| Payment of lease liabilities | -238 | -441 | -700 | -1 038 | -1 355 | |
| Net cash flows from/(used in) financing activities | -238 | 118 128 | -446 | 120 729 | 132 315 | |
| Net increase in cash and cash equivalents | -20 095 | 108 428 | -53 571 | 86 865 | 80 627 | |
| Effect of exchange rate changes on cash and cash equivalents | ਦਰੇ | 7 | 174 | -8 | -26 | |
| Cash and cash equivalents at the start of the period | 124 438 | 55 631 | 157 810 | 77 209 | 77 209 | |
| Cash and cash equivalents at the close of the period | 104 413 | 164 066 | 104 413 | 164 066 | 157 810 |