neonode earnings presentation q3 2018 · 2018-11-08 · •net loss reduced to $0.8m compared to...

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Copyright Neonode © 2001-2018 All rights reserved. Stockholm – San Jose – Seoul – Tokyo – Taipei Nasdaq (NEON)

Neonode Earnings Presentation Q3 20188 November, 2018Håkan Persson, CEO Lars Lindqvist, CFODavid Brunton, Head of Investor Relations

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Forward Looking Statements

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and

Section 21E of the Securities Exchange Act of 1934, as amended, adopted pursuant to the Private Securities Litigation Reform Act of 1995.

Statements that are not purely historical may be forward-looking. You can identify some forward-looking statements by the use of words

such as "believes," "anticipates," "expects," "intends" and similar expressions. Forward looking statements involve inherent risks and

uncertainties regarding events, conditions and financial trends that may affect Neonode’s future plans of operation, business strategy,

results of operations and financial position. A number of important factors could cause actual results to differ materially from those

included within or contemplated by such forward-looking statements, including, but not limited to risks relating to the uncertainty of

growth in market acceptance for Neonode technology, a history of losses since inception, Neonode’s ability to remain competitive in

response to new technologies, the costs to defend, as well as risks of losing, patents and intellectual property rights, a reliance on current

and future Neonode customers’ ability to develop and sell products that incorporate Neonode technology, customer concentration and

dependence on a limited number of customers, the uncertainty of demand for Neonode technology in certain markets, the ability to

manage growth effectively, dependence on key members of Neonode management and development team, limited experience in

conducting operations internationally, and the ability to obtain adequate capital to fund future operations, For a discussion of these and

other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion

under ‘‘Risk Factors’’ contained in Neonode’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in Neonode’s

publicly available filings with the Securities and Exchange Commission. Forward-looking statements reflect Neonode’s analysis only as of

the date hereof. Actual events or results may differ materially from the results discussed in or implied by the forward-looking statements.

We do not undertake any responsibility to update or revise any of these factors or to announce publicly any revisions to forward-looking

statements, whether as a result of new information, future events or otherwise.

NEONODE

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Third quarter update

• Selected for technology evaluations by several automotive OEM’s• Q3 revenue decrease of 17% YoY• Headwinds in the Chinese vehicles market• Printer license fees affected by Canon shifting to new product platform

• Net loss reduced to $0.8M compared to $1.1M in Q3 2017• Cash used reduced to $0.8M compared to $1.7M in Q3 2017

Events after the quarter• Customer acceptance of zForce AIR for a display in a medical device• Purchase Order received for initial supply of sensors for Taxi Meters

NEONODE

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NEONODE

Key Execution Areas Execution ProgressIdentify targeted use cases for Touch, Mid-Air Interaction and Object sensing

• Identified concrete use cases for targeted segments: Automotive, Consumer Electronics, Medical & Major Appliances

Focused sales effort • Sales process established• Engaged with all license customers• Targeted module sales to selected segments• Started to establish partner network

Increased marketing to create awareness

• Increased event participation• Improved website content• Improved visual communication• New Interactive Demo Units

Technology improvements to increase competitiveness

• New version of Core with enhanced performance and customer Bill of Material• Cost down of zForce Air

Preparing for volume production • Automotive certification in progress• Tuning production process• Identified production partner

Key Execution Areas

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Capitalizing on Market Opportunities

• Increase licensing revenue from existing customers for both current

and new models.

• Drive sales of sensor modules leveraging relationships with key

customers within automotive and new customers in selected

strategic segments.

• Use marketing, third party sales and systems integrators to create

market coverage, pipeline and sales

• Grow NRE revenues from customer driven development projects –

automotive and licensing projects.

NEONODE

Door Collision Avoidance

IVI Virtual Trackpad

Trunk Opener

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Touch Interaction Mid-Air Interaction Object Sensing

DIRECT SALESAutomotive

Consumer Electronics

PARTNER SALESOther Segments(Medical devices, Industrial, Retail, Major Appliances)

Focus Segments and Use Cases

NEONODE

Entry SystemDoor Collision

AvoidancePinch protection

Touch on DisplayRugged DisplaySmart Surface

Touch on DisplaySmart Surfaces

Touchless Touch

Accident Avoidance

Pinch protection

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Customer Progress

Touch Interaction Mid-Air Interaction Object Sensing

Evaluation

• 2 Auto interior touch & touch on window,

• AI home device & consumer displays

• Lawn mower• Washing machine & refrigerator• DigiKey 509 evaluation kits

• Auto tailgate & trunk entry

• Rollable display• Smart store

• Auto collision detection & pinch detection

Prototype• Auto steering wheel &

infotainment system

Pre-Production• Auto taxi meter• Medical display• Aeronautics instrument display• Printer display

• Auto collision detection

NEONODE

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Summary of Technology Platforms

zForce CORE – LicensingStable platform that enables very accurate touch on a display.

Release of new version 1.5 in final stage. (Version 2.0 in concept design)

• Cost reduction

• Improved performance

zForce AIR – Licensing or Sensor ModuleA new level of freedom of design, ease of integration and flexibility.

Key Focus

• Auto certification

• Preparing for mass production

• Larger form factors

NEONODE

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Q3-2018: Financial Summary

• Q3 revenue decrease of 17% YoY

• License fees $1.6M,modules $22K and NRE’s $287K compared to license fees $2.1M and modules $36K in Q3 2017

• Net loss of $0.8M or $0.01 per share compared to $1.1M or $0.02 per share loss in Q3 2017

• Expenses at $2.5M

NEONODE

0,00,51,01,52,02,53,03,5

Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18

Revenues ($M)

License Fees NRE Modules

-2

-1,5

-1

-0,5

0Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18

Net Income ($M)

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Q3-2018: License Revenues

• License fees decreased 23% YoY

• Printer license fees decreased 16%. Mainly related to HP and Canon

• Automotive license fees decreased 45% YoY

• License customers shipped 2.4 million products during Q3 2018, accumulated >64 million since 2011

NEONODE

0,0

0,5

1,0

1,5

2,0

2,5

3,0

Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18

License Fee Revenues ($M)

e-Readers Printers Automotive

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Cash and Balance Sheet Summary

• Working capital of $4.6 million as of September 30, 2018

• $2.7 million in cash and $1.5 million in accounts receivables as of September 30, 2018

NEONODE

GroupBalanceSheetSummary($M)

Q3-2017 Q4-2017 Q1-2018 Q2-2018 Q3-2018Total Assets 15.7 13.1 13.0 11.2 9.7Equity 10.9 7.9 8.5 7.0 6.0Equity Ratio 69% 60% 65% 63% 62%Cash 6.9 5.8 4.9 3.7 2.7Current Liabilities 3.9 3.6 3.0 2.9 2.4Working Capital 8.2 6.2 6.8 5.6 4.6

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-2,5

-2

-1,5

-1

-0,5

0

Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18

Cash Used By Operations

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Outlook

• We have focused the company on capturing market share where we have a distinct advantage.

• We have the building blocks to increase our revenue from licenses, NRE and sensor sales.

• We have been accepted as a sensor module supplier to a global medical device company creating a foundation to be included in future models.

• We will increase our marketing efforts to showcase the capability of our technology.

• My confidence is very high that we are on the right path to get to profitability.

NEONODE

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Q&A

neonode earnings presentation q3 2018 · 2018-11-08 · •net loss reduced to $0.8m compared to...

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