Experience the future with PVD coatings CEO’s presentation Annual General Meeting of Shareholders Impact Coatings AB (publ) May 15, 2019 Annual General Meeting ‒ May 15, 2019
Impact Coatings in brief ▪ Industrial technology supplier with 20+ years of experience in delivering PVD thin film coating solutions ▪ We provide PVD systems, services, and after sales ▪ "IMPC" share listed on Nasdaq First North Stockholm with market value ~SEK 225 million (May 2019) Annual General Meeting ‒ May 15, 2019
Key business drivers Green technology Design & Fashion New Technologies A sustainable world Global demand for luxury & New technologies and lifestyle products applications Fuel cells, eyewear, watches, and a wide range of other products require durable, cost-efficient and environmentally friendly surfaces. Annual General Meeting ‒ May 15, 2019
Products and services PVD systems Services After sales ▪ Machines (INLINECOATER™) ▪ Coatings Services ▪ Maintenance ▪ Coatings (e.g. MAXPHASE™) ▪ R&D support ▪ Support ▪ Production line integration ▪ Coating development ▪ Consumables & spare parts ▪ Knowhow and licenses Annual General Meeting ‒ May 15, 2019
Impact Coatings, a PVD company INLINECOATER™ Annual General Meeting ‒ May 15, 2019
Short cycle and high-quality PVD INLINECOATER™ Traditional box coater PVD system small chamber and short cycle PVD Side view Side view LL - loadlock 3 Top view LL Pump 2 1 Annual General Meeting ‒ May 15, 2019
Applications (M) (D) (FC) (R) Annual General Meeting ‒ May 15, 2019
Decorative (D) Applications: Eyewear, watches & accessories Customers: Eyewear manufactures, watchmakers, and other suppliers in the fashion & design industry. Often owners of own brands. Drivers: Quality, flexibility, specific colors Impact Coatings position: ▪ Offers higher coating consistency and production flexibility with INLINECOATER™ ▪ Strong reference cases, 11 installations Market potential: ▪ Large existing market segment ▪ Customers typically not cost sensitive Note: For illustrative purposes, not indicative of who we work with. Annual General Meeting ‒ May 15, 2019
Plastic metallization (M) and reflectors (R) Applications: Decorative components, emerging technologies, automotive lighting reflectors Customers: Automotive Tier 2, Tier 3, etc. Drivers: Production technology, low cost per part, production uptime Impact Coatings position: ▪ Offers cost efficient production technology ▪ Strong reference cases, 10 installations ▪ Small player, many competitors Market potential: ▪ Large existing and growing market segment ▪ Automation trend ▪ Emerging technologies Annual General Meeting ‒ May 15, 2019
Fuel cells (FC) Applications: Metal bipolar plates for hydrogen fuel cells Customers: Automotive OEMs, automotive Tier 1-2, and other fuel cell industry leaders Drivers: Energy efficiency, durability, low cost per part Impact Coatings offering & position: ▪ Ceramic MAXPHASE™ coating for LT -PEM bipolar plates ▪ INLINECOATER™ system for production and efficient R&D ▪ Coating service for R&D and initial production ▪ Well established knowledge center for fuel cell PVD coatings ▪ Advocate for post-coating production flow ▪ First FC coating system delivery April 2019 Market potential: ▪ Competitive solutions for today´s FC market ▪ Good potential to be part of tomorrow’s FCEV volume market Annual General Meeting ‒ May 15, 2019
Company strategy: We aim to build a solid business within D/M/R today, with a large future potential in fuel cells Impact Coatings’ proven competitiveness High “Invest in fuel cells for the future” Decorative Reflectors Metallization Low “ Build stable core business in DMR today ” Time to multi-system sales Annual General Meeting ‒ May 15, 2019
Full year 2018 and Q1 2019 Annual General Meeting ‒ May 15, 2019
2018 Transformation to industrial company 4 focus areas Achievements → 1 Technological leadership Deliveries in all focus segments passed 6 months → 2 Commercial discipline Financially sound customers, secured payments → 3 Structured sales process Predicted net revenue 2019 to increase significantly → 4 World class manufacturing and quality COGS and delivery times reduced, ISO 9001:2015 → Goal to create a self-financing and growing industrial company Innovation company Industrial company Annual General Meeting ‒ May 15, 2019
Significant events 2018 ▪ Torbjörn Sandberg appointed acting CEO May 26, and CEO October 5 ▪ Accounting investigation against former CEO Henrik Ljungcrantz ▪ Updated strategy presented with Q2 report ▪ PwC appointed new auditor at Extraordinary General Meeting ▪ Change of Certified Adviser to Redeye AB ▪ PVD system order from Varioplast Konrad Däbritz GmbH ▪ PVD system order from Swiss watch manufacturer ▪ PVD system order from Henen Yuqing Power Co., Ltd. ▪ Previous orders from China Hydrogen Energy (2016) and Huaquing Power Technology (2017) declared no longer valid Annual General Meeting ‒ May 15, 2019
Significant events Q1 2019 ▪ Order for PVD system from Beijing Shouhang Resources Saving Co., Ltd. ▪ Order for PVD system from a Scandinavian eyewear manufacturer ▪ Marie Dhayer Teikmans appointed new CFO Significant events after the period ▪ Delivery of coating system to Henan Yuqing Power Co., Ltd. ▪ Delivery of coating system to a Swiss watch manufacturer Annual General Meeting ‒ May 15, 2019
Financial results Q1 2019 and Full year 2018 Financials (SEK thousands) Q1 2019 Q1 2018 FY 2018 FY 2017 Net revenue 2 947 6 443 20 194 25 014 Total income 6 452 7 141 30 609 30 418 Gross margin (%) 54 58 37 23 Operating profit (EBIT) -10 320 -6 101 -37 568 -30 111 Net income -10 323 -6 121 -37 593 -29 887 Cash flow from operations -8 685 -3 696 -13 319 -43 801 Cash and liquid assets 37 984 61 619 46 669 65 386 Interest bearing debt 0 0 0 2 061 Shareholder equity 54 001 95 796 64 324 101 987 Annual General Meeting ‒ May 15, 2019
Order book and deliveries ▪ Order book end Q1: EUR 4 059 thousands Coating system deliveries Q2 (services and after sales not included) Henan Yuqing Power Co., ▪ Two coating systems delivered in April Ltd., INLINECOATER™FC Swiss watch manufacturer, INLINECOATER™D Outlook 2019 ▪ We have a good potential for delivering business Coating system order book for delivery in 2019 moving forward, even though timing is unclear Beijing Shouhang ▪ We see that D/M/R – just as our strategy is Resources Saving Co., Ltd., formulated – will deliver results in a shorter time INLINECOATER™ frame compared to Fuel Cells Scandinavian eyewear manufacturer, INLINECOATER™D Annual General Meeting ‒ May 15, 2019
Summary ▪ To date four PVD coating systems for 2019 delivery shows commercial discipline and trust from demanding customers ▪ Stable, repeat customers and high growth potential within Decorative, Metallization, and Reflector (D/M/R) applications ▪ For the future, a high-performance fuel cell coating solutions that addresses the needs of a global transport industry in transformation ▪ After 20+ years of innovation and development, Impact Coatings is making progress toward becoming a profitable industrial company. Annual General Meeting ‒ May 15, 2019 Annual General Meeting ‒ May 15, 2019
Annual General Meeting ‒ May 15, 2019
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