Investors meeting 9 September 2015

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ENTER IN THE WORLD OF NANO AND MICROSYSTEMS Investors meeting 9 September 2015

Transcript of Investors meeting 9 September 2015

Page 1: Investors meeting 9 September 2015

ENTER IN THE WORLD OF NANO AND MICROSYSTEMS

Investors meeting9 September 2015

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DISCLAIMER

This presentation does not contain or constitute an offer of securities for sale or an invitation or

inducement to invest in securities in France, the United States or any other jurisdiction.

This presentation may contain information expressed as forward-looking statements. Forward-looking

statements are statements that are not historical facts. Forward-looking statements may include

anticipations, projections and their underlying assumptions, statements (regarding plans, objectives,

expectations and intentions, future financial results, potential events, operations, services, products).

Such information concerns either trends or targets and cannot be regarded as results forecasts or as

any other performance indicator.

This information is by nature subject to risks and uncertainties, that may cause the actual results to

differ from those mentioned in the forward-looking statements. Even though Tronics’ management

believes that the expectations reflected as of the date of this presentation in such forward-looking

statements are reasonable, this information does not reflect the company's future performance and are

not intended to give any assurances or comfort as to future results. Therefore no-one should unduly

rely on these forward-looking statements. Tronics makes no commitment to update this information.

More comprehensive information about Tronics may be obtained on its website

(www.tronicsgroup.com).

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1 Tronics overview

2 First half 2015 results

3 Projects underway and objectives

AGENDA

Enter the world of nano and microsystems

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NANO AND MICROSYSTEMS ARE PERVADINGALL SECTORS OF ACTIVITY

Main application domains:

Smartphones, Tablets & Wearable electronics

Automotive

Life Sciences

Aeronautics

Defense

Other

Main functions:Accelerometers, gyroscopes, pressure sensors, optical components, other

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Nano and microsystems are miniaturized devices enabling sensor and/or actuator functions

Packaging

MEMS/NEMSelement

Control, digitizationand communicationelectronics

EXAMPLE OF A MICROSYSTEM: GYPRO

Mobilemicrostructure

Nano-wire

Inertial Sensors: orientation, speed and position of an object in space

Optical Microsystems: integration of miniaturized optical systems

RF Components: management of Radio-Frequency signals

BioMEMS: compact devices for biology or pharmacology analysis

Miniaturization, power savings and system cost optimization

WHAT IS THE PURPOSE OF NANO ANDMICROSYSTEMS?

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Tronics (Dallas)

Tronics (Crolles)

2 direct production sites

Listed onAlternext Paris

since February 2015

92 employeesincluding 55 engineers

and scientists

Leading customer references

2014 revenue:$20 M

15 years of R&D25 active patent

families

Distributors in Japan, China, Israel

TRONICS OVERVIEW

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A company focused on technology

A NEW PHASE OF GROWTH

Accelerated monetization of

technologyexpertise

First promising results

Becoming a major worldwide player

Development of a strong and patented technology expertise

Constitution of technology platforms

International development

One major customer (Sercel) representing more than half of total revenue

1997

Strengthened management team

Launch of new solutions and acceleration of marketing initiatives

Willingness to diversify customer portfolio

More than 85% of revenue outside of Sercel in 2014

Growth: 14% in 2014 (54% excluding Sercel)

13 new customers

Unique positioning on the most promising segments

Ambitious product roadmap

Disruptive technology: M&NEMS

2013 2014 20152012 ….

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UNIQUE POSITIONING ACROSS THEWHOLE VALUE CHAIN

From engineering … … to manufacturing

QualificationDesign and simulation

Manufacturing processes

Specifications and managementof control electronics

Tests andcharacterization

A FULL RANGE OF SERVICES WITH HIGH ADDED VALUE

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REUSABLE TECHNOLOGY BLOCKS TOACCELERATE TIME TO MARKET

CORTO: Tronics capitalizes on its leadership in high

performance inertial sensors

M&NEMS: disruptive technology developed by LETI (15 patent families)

6 patents from Tronicsat various steps of validation

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First half 2015 results

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21%

79%Manufacturing

Engineering

Pre-sales

3 to 6 months

Concept & prototyping

9 months

Industrialization

6 to 9 months

Multi-year production

REVENUE ANALYSIS

CYCLE TIME FROM SALES TO PRODUCTION

FIRST HALF 2015 REVENUE: €4,197KBREAKDOWN BY NATURE

Manufacturing (sale of end-use products)Engineering (sale of services)

Products currently in the development phasewill generate manufacturing revenue

within the next 12-24 monthswhen they enter into production

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70%18%

12%

Europe

Asia

Americas

63%37%

Crolles

Dallas

REVENUE ANALYSIS

FIRST HALF 2015 REVENUE BREAKDOWNBY GEOGRAPHICAL AREA

FIRST HALF 2015 REVENUE BREAKDOWNBY PRODUCTION UNIT

International represented

43% of total revenue in H1 2015, versus 21% in H1 2014

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SIMPLIFIED INCOME STATEMENT

€K - IFRSH1 2015Not audited

H1 2014

Revenue 4,197 6,001

Production 6,019 7,447

Purchases consumed 1,672 2,110

External costs 1,280 1,222

Staff costs 3,470 3,266

Current operating income (1,070) 219

Financial income (22) (84)

Income before tax (1,092) 136

Income taxes (104) (35)

Share in income of associated companies

(11) (19)

Group share of net income (1,200) 79

CONSOLIDATED INCOME STATEMENT

- Gross margin at 60.2% versus 64.8% in n-1

- Gross margin integrating R&D revenue widened from 71.7% in n-1 to 72.2%

- Structural costs held stable in order to pursue the development plan

- Production volumes by a significant customer much lower than announced at the beginning of the year -Sercel: lack of revenue vs. €1.5M in n-1

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A SOUND BALANCE SHEET

Capital increase related to the IPO:€11M

Non-current assets

Other current assets

Current assets

Cash 11,377

2,091

5,063

6,264 Equity16,784

Financial debt

Other liabilities

5,007

3,004

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CASH FLOW TABLE

€K 30/06/2015 30/06/2014

Variation deriving from operations -1,756 190

Of which WCR variation -1,299 -563

Variation deriving from investments -963 -598

Variation deriving from financing 10,299 238

Variation in cash 7,600 -170

Closing cash 11,377 3,790

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Projects underway and objectives

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REMINDER OF PROJECTS UNDERWAY PRESENTED AT THE IPO

˃ Accelerate business development by strengthening the Sales & Marketing staff

and the distribution networks

˃ Increase the number of active programs with existing customers

˃ Enlarge the pipeline of business opportunities

˃ Target leaders in each of the sectors addressed

1/ BUSINESS DEVELOPMENT

2/ PRODUCT RANGE DEVELOPMENT

˃ Penetrate the segment of single-use medical devices

˃ Capitalize on our leadership in inertial sensors for the aeronautics industry

˃ Reinforce the range of standard products

3/ TAKE ADVANTAGE OF ACQUISITION OPPORTUNITIES

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2 customer projects with TSV under finalization of prototyping

In progress jointly with Leti, magnetometer prototypes in Q3

Concept developed through 1 project –start in H2 2015

In progress jointly with Leti -operational prototypes in Q3

Concept developed through 1 project –start in H1 2016

Start of the conceptual phase in 2016 in order to integrate the GYPRO

Progress report:

TECHNOLOGY ROADMAP (R&D/IP)

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NEW SALES & MARKETING DIRECTOR

Very strong experience at international levelin the sector of MEMS and semiconductors

Francois Vieillard ● Sales & Marketing Director

• More than 25 years of experience in Sales & Marketing at executive positions for significant semiconductor companies such as National Semiconductor, Toshiba, Cirrus Logic

• Strong expertise in selling MEMS, software at global level

• Negotiation of large business deals (>$100M) with European, US and Japanese groups

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DEVELOPMENT OF THE MEDICAL SECTOR

ACCELERATION OF BUSINESS DEVELOPMENT IN APPLICATIONS FOR LIFE SCIENCES (BioMEMS)

- First commercial successes with major players at global level:

- Strong revenue growth on this segment in first half of 2015

(12% of total revenue, versus 2% at the end of 2014)

- Presence at the Sensors Expo conference in June 2015 at Long Beach, California

- 2 new customer programs, including one significant project with an international

player in medical devices

According to a study published by Yole in May 2015, the BioMEMS market will reach $6.6 Bn in 2020.

Accelerometers, pressure sensors and microfluidic devices will represent $800 M

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STRENGTHENING OF THE RANGE OF STANDARD INERTIAL PRODUCTS: GYROS

STRONG COMMERCIAL DEVELOPMENT OF THE GYPRO®* PRODUCT RANGE

* Miniaturized high performance inertial sensors

Commercial agreement with AVNET Israel(April 2015)

Partnership with THALES to qualify the GYPRO3300 for civil aviation

applications

November 2014 June 2015 July 2015

2 new products even better than previous versions: GYPRO2300LD and GYPRO3300

Active participation at the Paris Air Show

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TRONICS, INITIATOR OF THE “STARS” PROJECT: PROVIDE AN ACCELEROMETER BASED ON TRONICS’ PRODUCT AND TESTED IN REAL CONDITIONS

- Considerable gains in terms of cost, weight and

footprint

STRATEGIC AIM OF THE PROJECT: MARKET DEVELOPMENT OF MEMS INERTIAL SENSORS

- Reliability level enabling measurement of

acceleration in harsh environments

(aeronautics, rail transport, industrial)

- Project support by the Government and the

Rhone-Alpes region

INDUSTRIAL PARTNERS:

Pictures to scale

OTHER PARTNERS :

Current solutions

STRENGTHENING OF THE RANGE OF STANDARD INERTIAL PRODUCTS: ACCELEROMETERS

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ATTRACTIVITY OF THE M&NEMS TECHNOLOGY FOR THE INTEGRATION OF VARIOUS SENSORS

Accelero

Gyro

Compass

Pressure

Strong potential of development especially in the Asian area

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SUCCESS IN THE SECTOR OF MICROSYSTEMS

Enlargement of the pipeline of business opportunities in key segments with deals recently signed in the sectors of mobility, aeronautics, life

sciences (medical devices), watchmaking, etc.

COMMERCIAL SUCCESSES CONFIRMED THROUGH SIGNIFICANT DEVELOPMENT PROJECTS WITH:

- One of the top 5 worldwide providers of mobile solutions

- One of the major players in the sector of watchmaking

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2018 objectives

- €40 M revenue- Improvement in profitability

For 2015

- Net income: improvement expected in H2

- A solid pipeline of new businesses with key players

UNCHANGED AMBITIONS FOR 2018

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The stock exchange

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52.42

5.48

15.43

20.49

6.24 Institutional

Founders

Other shareholders

31.88

4.95

20.96

9.180.26

12.20

3.96

10.79

5.82Institutional

Founders

Other shareholders

Public

Treasury shares

Before IPO As of 31 July 2015

CAPITAL BREAKDOWN (%)

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TRONICS’ STOCK

Alternext Paris

IPO date: 10 February 2015

Label: TRONICS

ISIN code: FR0004175099

Mnemonic code: ALTRO

ICB classification: 9576 – Semiconductors

Introduction price: €13.20 by share

Price on 1 September 2015: €11.58 per share

Market capitalization on 1 September 2015: €38.17 M

Next release:

2015 revenue,16 February 2016

(after Alternext market close)

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www.tronicsgroup.com