1. IDEX ASA
Enabling the mass market for secure ID
8th April 2013
Hemant Mardia
Kristian Wiermyhr
CONFIDENTIAL
2. IDEX MISSION
To be the leading
supplier of
fingerprint sensor
technology for the
mass market
Secure and Simple ID
by biometric
authentication of
every device you own
IDEX VISION
CONFIDENTIAL 2
3. THIN & FLEXIBLELOW COST ACCURATE & SECURE
IDEX’ OFFERING:
SMARTFINGER®
Demand for fingerprint sensors is on the cusp of explosive growth
to a $multi-billion mass market driven by smartphone adoption
Precedence on core patents for best in class sensor technology
enabling low cost, secure & accurate fingerprint recognition
Transformation of market by Apple: 80% of smartphone market
addressable by only IDEX and 2 other principal vendors
Only sensor technology for emerging ID and smart card market
IDEX BUSINESS PROPOSITION
1
2
3
4
CONFIDENTIAL 3
4. 2013 -
IDEX POSITIONED FOR GROWTH
Swipe sensor
patent
Fingerprint sensor
demonstrator
Silicon sensor
Polymer sensor R&D
Key patents
Cross licensing ST,
UPEK & IDEX
Listed Oslo Axess
Card demonstrator
Volume MOUs for
cards and bag locks
SmartFinger®
Technology
Pioneering
sensor IP Core patent era
Commercialisation for
mobile and cards
Strengthened
leadership team
Mobile comms
partnership
Mass market cost &
manufacturing set up
Productisation
for Cards
Remaining vendors:
Apple acquire Authentec (UPEK)
IDEX, Fingerprint Cards, Validity
>$50M invested in best in class fingerprint sensor technology
Surviving mass market technology:
Capacitive: deployed in volume
Multiple sensor technologies:
Capacitive, optical, thermal, pressure
Key originators:
IDEX, AuthenTec, ST, UPEK, Fingerprint Cards,
Infineon, Fujitsu, Sony, Atmel, Hitachi,
NEC, Atrua, Veridicom
2010-20122008-20092000-20071996-1999
CONFIDENTIAL 4
5. APPLE ACQUIRES FINGERPRINT SENSOR LEADER
AUTHENTEC $356M IN 2012 TRANSFORMING DEMAND
TRANSFORMATION OF IDEX
OPPORTUNITY
Biometrics
Login to the future
The ID of you
IDEX HAS PATENT XLICENCE WITH AUTHENTEC
AUTHENTEC SUPPLIED TIER ONE OEMS: NOW CAPTIVE
IDEX ONE OF ONLY THREE SENSOR VENDORS INTO THE
NON-APPLE MOBILE HANDSET MARKET
IDEX IS UNIQUELY POSITIONED WITH FUNDAMENTAL IP
FINGERPRINT SENSORS
EXPECTED TO FOLLOW
CAMERA MASS ADOPTION
MODEL
LOW COST <$1 ENABLING
NEW SECURE
APPLICATIONS
CONFIDENTIAL 5
6. THE GAMECHANGER: APPLE’S PLANS?
• Fingerprint-sensor in mobile devices:
- Unlock phone
- Authentication of the user
- Mobile Payments
- Bring-Your-Own-Device (BYOD)
- Personalization of services
NOW: HOME BUTTON SENSOR
NEXT: “HOLY GRAIL”
IMAGING THROUGH GLASS
ONLY IDEX patented technology
enables the sensor IN the screen
CONFIDENTIAL 6
7. Leverage uniquely strong IP
and patent portfolio: safe
haven
Proven low cost, thin, secure
and accurate sensors and
algorithms
Strengthened leadership team
to deliver commercial
exploitation
Developing major global OEM
partners for mass market
scaling
Limited competitors with high
barrier to entry in a large
market
IDEX
partnerships
MOBILE
DEVICES
INTERNET
OF
THINGS
CARDS
ID &
SMART
IDEX GO TO MARKET STRATEGY
New MASS market services enabled by low cost
biometric authentication
CONFIDENTIAL 7
8. • Smartphones 1.2B shipments by 2015
• tabs/PC 0.75B 2013
• Non telecoms cards 2.2B shipments 2013
• Internet of Things 25B connected by 2015
IDEX MASS MARKET OPPORTUNITY
THE
BILLION
DOLLAR
PLAY:
Identity is the new money
David Birch, UK consultant and media personality
Your smartphone will be your wallet and biometrics will
keep your valuable information secure
Daniel Burrus, leading futurist on tech trends
“ ”
“
”
CONFIDENTIAL 8
9. MOBILE PHONE MARKET SCALE
1.75B mobile phones 2012 (Gartner)
2.25B forecast 2017 (IDC)
Rapid smartphone penetration majority now to ~70% in 2017
>80% forecast share not captive to Apple
107
85
43.5
16.2
15
13.7
192
Mobile Sales by volume Q4 12
Samsung
Nokia
Apple
ZTE
LG
Huawei
Others
114.7
43.5
7.3
6.2
36
Smartphone Sales by volume Q4 12
Android
Apple
RIM
Microsoft
Other
1.2 Billion unit market accessible by IDEX in 2017
CONFIDENTIAL 9
10. NEXT: ID AND SMART CARD REVOLUTION
• Security and privacy in the digital world
• IDEX SmartFinger Film®; the only
biometric sensor thin enough to comply
to ID/smartcard form factors
3400
4200
4700
5200 5450
750
880
1050
1260
1480
160
190
240
290
350
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2009 2010 2011 2012f 2013f
Millionunits
Eurosmart Secure Device shipments estimates
Others
Government
Banking
Telecom
4 520
5 520
6 295
7 095
7 665
+13%
+8%
CONFIDENTIAL 10
11. • Mobile communications
- Unprecedented Billion unit market catalysed by Apple acquisition
- Apple transforms sensor market but restricts supply internally
- Other handset manufacturers rapidly developing smartphones with sensors
- 80% market available: IDEX strong position with core patents & Apple Xlicence
- Terms agreed with a global mobile comms partner in Q1 13
• Cards: ID and contactless
- Only IDEX offer thin form factor meeting Card standards
- MOU for China wide ID Q4 2012; forecast $6M 2014, immense volume 2015
- Gemalto: largest card manufacturer; e-Go consortium “touch access”
- Multiple other partners
• Internet of things:
- OEM Contract for tier 1 bag lock program Q4 2012; volumes expected 2014
- Future Electronics: fourth largest electronics distributor; IDEX global channel
- Multiple other partners
THE FUTURE FOR IDEX
CONFIDENTIAL 11
12. • IDEX most complete patent portfolio in capacitive fingerprint sensing outside Apple
• “First-to-file” patents covering the fundamentals of these low cost sensors
• 14 patent families granted and 3 in filing since 1997
• IDEX patents have been assessed and verified in a litigation between IDEX and UPEK
(acquired by AuthenTec)/ST Microelectronics and a cross licence agreed
IDEX CORE PATENT STRENGTH
CORE PATENTS IDEX APPLE/AUTHENTEC APPLICATION
ON THE FLY IMAGE
RECONSTRUCTION
Most accurate fingerprint
matching with swipe sensor
ANY MATERIAL SENSOR
X
Thinnest, flexible sensor in
multiple form factors
THROUGH MATERIAL SENSING
(VIAS) X
Sensor IN glass screen
ACTIVE ELECTRODE
Fundamental to low cost , small
swipe and touch sensors
IDEX fundamental patent coverage vs competitors is highly attractive to customers
CONFIDENTIAL 12
13. Picture by James Sullivan
Human fingerprint : ~ 0,6 mm
IDEX single line sensor
array : 0,05-0,07 mm
THE LANDSCAPE WE EXPLORE
CONFIDENTIAL 13
14. • SmartFinger® offers unsurpassed image quality and biometric performance
• On the fly imaging: wide range of finger swipe speeds, directions and movement
• Sensing through material including glass using VIAS
• Thinnest sensor in flexible materials: only sensor meeting form factor for cards
• Protected by extensive patent portfolio
Acquire
fingerprint
data
Reconstruct
image
Extract
features
Match vs.
template
SmartFinger®
sensor
Image Algorithm Processing Secure chip
YES/NO
1040 1045 1050 1055 1060 1065 1070 1075 1080 1085 1090
0
20
40
60
80
100
120
140
160
180
200
line number
signallevel
image channel
corresponding speed channel
IDEX OFFERS A COMPLETE
RECOGNITION SOLUTION
CONFIDENTIAL 14
15. IDEX SENSOR
COMPETITIVE ADVANTAGE
KEY BENEFIT FEATURE IDEX Company A Company B
SENSOR CARD
INTEGRATION
Ultrathin Flexible sensor *** x **
SENSOR MOBILE DEVICE
INTEGRATION
Small sized, low pin count surface
mount sensor
*** ** x
SINGLE LINE, ROBUST
ON-THE-FLY IMAGING
Algorithm handles varying finger
directions and movements
*** x **
BIOMETRIC
PERFORMANCE
Image quality: lowest false
rejection/false acceptance
*** ** **
ON-DEVICE SECURITY Compact algorithm allows secure
on-device authentication
*** x x
TOUCH-SCREEN
IMPLEMENTATION
Sensor-IN-glass solution *** x x
LOW POWER
COSUMPTION
Low power fingerprint imaging
and processing
** *** *
IDEX best in class technology for
low mobile devices and cards
CONFIDENTIAL 15
16. IDEX MASS MARKET OPPORTUNITY
2015 Consumer Electronics Cards Other markets
IDEX mass market volumes expected 2014; design wins 2012/2013
IDEX positioned for significant market share as one of three vendors
Total Industry Revenue 3,95 Billion USDTotal Industry Revenue 2,0 Billion USD
1 billion Consumer Electronics with
fingerprint sensors sold ,
ASP 1,1 USD
(Consumer electronics includes smart phones, tablets, laptops, gaming
consoles etc)
150 million cards, ASP 2,5 USD
130 million other devices, ASP 4,5 USD
2017
1,5 billion CE with fingerprint
sensor sold ,
ASP 0,9 USD
700 million cards,
ASP 2 USD
400 million other devices,
ASP 3 USD
CONFIDENTIAL 16
17. IDEX INVESTMENT PROPOSITION
• R&D investment and focus on emerging biometric market for
smart card/ IOT where highest performance i.e
security/accuracy/speed/thin/flexible/low power are critical
– Only vendor with a ISO card solution
– Now well positioned for smartphone explosion
– Billion unit and billion dollar market opportunities
• Best in class swipe sensor performance
• Unique “holy grail” sensor in glass
• Fully protected by early patents and Apple/Authentec xlicence
• Now marketing to smartphone sector for the first time
• Manufacturing being established for volume & low cost
• Product and technology roadmap to support major partners
CONFIDENTIAL 17
18. IDEX INVESTMENT PROPOSITION
IDEX AND FINGERPRINTCARDS SHARE PRICE INCREASE SINCE APPLE BOUGHT AUTHENTEC
Cusp of significant growth exploiting leading IP platform in fingerprint sensors
• Executing a global partner strategy to exploit mobile market during 2013
• Exploitation of high value added ID/smartcard and “Internet of things” following
• Investment to scale team and products to support market leading partners
• Significant value growth from mass market opportunity with limited competition
- IDEX $100M vs Fingerprints Cards $300M market cap Mar 13
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
FingerprintCards IDEX
CONFIDENTIAL 18
19. • 2012 limited R&D revenues of £0.5M
• Restructuring in 2012; loss £3.6M principally R&D investment
• 2013 expansion of R&D and sales channels: estimated opex
• TAX LOSS CARRYFORWARD ≈£35M
- 28% tax rate, no ageing restriction
• LISTED IN OSLO
- 1,185 shareholders, 95 percent Norwegian
- 28% shareholding outside Norway
PROFIT AND LOSS STATEMENT
-5000
-4000
-3000
-2000
-1000
0
1000
2012 2011
P&L (£k)
Revenue EBIT
0
1000
2000
3000
4000
5000
2013E 2012 2011
Operating Expense (£k)
R&D Sales G&A
CONFIDENTIAL 19
20. • NO FINANCIAL DEBT, FUNDED BY EQUITY
• CASH 31 DEC 2012 £2.2M
• WORKING CAPITAL VIRTUALLY NIL
• 2013 funding for business development ahead of
revenue step change 2014
CASHFLOW STATEMENT
£k 2013 2012 2011
Net cash flow from operational activities -£3,211 -£3,815
Net cash provided by financing activities £3,090 £4,756
Opening cash balance £2,204 £2,313 £1,395
Closing cash balance £2,204 £2,313
CONFIDENTIAL 20
21. • High barrier to entry due to fundamental patents and technology
• Cross license with Apple on core patents
• Building out an exciting roadmap for low cost sensors
• A market ready for takeoff sparked by Apple
• Mobile market now, card market tomorrow, IOT the future…
• Limited competition in a multibillion volume market
• Valuable IP and attractive valuation vs competition
SUMMARY
CONFIDENTIAL 21
23. IDEX PATENT FAMILIES FOR “SINGLE
LINE” SWIPE FINGERPRINT SENSORS
SENSOR MODULE
• The fingerprint sensor measurement
system
• The implementation of IDEX’
electronics chip
• EP1292 227B1 and 7,184,581
“SINGLE LINE” SWIPE SENSOR
• Capacitive sensing principle
• Image reconstruction based on single
line images
• Measuring movement of finger
• World wide exclusive licenses to IDEX
• Essential for swipe sensors
• EP0988614 and US 7,110,577 (and
continuations)
LIVE FINGER DETECTION
• A system for characterization of the
physiological conditions of the
human skin
• A fingerprint sensor which also can
determine weather an object consists
of living skin
• EP1503668 and US 7,856,262
NAVIGATION AND POINTING TOOLS
• Fingerprint sensor that also can be
used for on-screen navigation and
pointing, e.g. on mobile devices
• EP1312037 and US 7,129,926
• EP1328919B1 and 7,251,351
FINGERPRINT SENSOR WITH SUBSTRATE VIAS
• Sensing part and electronics separated
• Allows for polymer and PC based sensors
• Electronics optimized independent from
sensing part
• Thin, bendable sensors for card integration
• EP1303828 and US 7,251,351 (polymer)
• Silicon
CONFIDENTIAL 23
24. IDEX SINGLE LINE IMAGING VS. STITCHING
BASED ON MEASUREMENT
OF FINGER MOVEMENT
0 100 200 300
50
100
150
200
250
300
0 0 100 200 300 400
BASED ON “STITCHING” OF
PARTIAL IMAGES
ACCEPTED
Finger swipe direction +40
Enrolled fingerprint - normal swipe direction
CONFIDENTIAL 24
25. FINGERPRINT BIOMETRICS
– SECURITY FOR MASS MARKETS
• Added security by multifactor authentication:
– Something you have; card
– Something you know; password
– Something you are; fingerprint
• Fingerprint biometrics
– Everyone has a unique fingerprint
– Reliable and secure authentication
– Compact readers, low cost and low power
consumption
– Simple use for every-day, personal use
FINGERPRINTS IS OBVIOUS CHOICE DUE TO
LOW COST
IMMUNE TO ENVIRONMENTAL
PROVEN HERITAGE
1
2
3
CONFIDENTIAL 25
26. BALANCE SHEET
Balance sheet 2012 2011
Amounts in NOK 1,000
ASSETS
Machinery and office equipment 626 939
Long-term receivables 332 325
Total long-term assets 958 1 264
Accounts receivable 17 19
Other receivables 3 715 3 161
Prepaid expenses 512 343
Total receivables 4 244 3 523
Cash and bank deposits 19 833 21 462
Total cash and bank deposits 19 833 21 462
TOTAL ASSETS 25 035 26 249
EQUITY AND LIABILITIES
Total paid-in-capital 143 949 111 632
Other equity (125 631) (92 266)
Total equity 18 318 19 366
Accounts payable 2 561 2 230
Public duties payable 906 471
Other short-term liabilities 3 250 4 182
Total liabilities 6 717 6 883
TOTAL EQUITY AND LIABILITIES 25 035 26 249
CONFIDENTIAL 26
27. BIOS LEADERSHIP TEAM
Dr. Ralph Bernstein: CEO & CTO. At IDEX from 2006 bringing Smartfinger IP technology to market and achieving listing on
Oslo Stock Exchange; Research Director in microsystems and nanotechnology and 15 years experience at Sintef, the
leading R&D organisation in Norway. Ph.D in Physical Electronics from Norwegian Inst. Of Science and technology.
Morten Opstad: Chairman at IDEX since 1997. Partner and Chairman at Advokatfirma Raeder DA. Provided legal
assistance with several technology innovation companies. Directorships include Thin Film ASA and cXense AS.
Erling Svela: CFO at IDEX since 2008. Extensive experience in various industries and listed companies. M.Sc in economics
(Norway) and MBA from Henley. Certified European Financial Analyst.
Øyvind Slogedal: VP Business Development. At IDEX since 2006 driving technology innovation, product roadmaps and
solutions with strategic partners. 15 years industrial experience. M.Sc in mechanical engineering (USA).
Kristian Wiermyhr: VP Strategy. Joined IDEX in 2013 to support strategic partner projects and investor relations. 20 years
experience in financial sector in Norway and internationally. Served as senior partner in investment banks RS Platou
Markets and ABG Sundal Collier.
Inge Berge: IR Officer and business developer at IDEX since 2012. Formerly associated partner in the PR and consulting
firm First House. 20 years experience in the media industry as journalist, editor and owner including starting and
managing three financial online businesses. B.Sc in finance from BI Norwegian Business School.
Robert Keith: Consultant for IDEX in 2013. Extensive strategic experience in investing in technology innovation businesses
particularly in Norway and dealing with international partners. Established track record of significant value creation.
Dr Hemant Mardia: Strategy Consultant for IDEX in 2013. President of Axxcss Wireless Ltd. Formerly CEO at Filtronic Plc, a
UK FTSE listed telecomms company. 28 years experience in technology and commercialising start ups, with leadership
positions in the telecoms, security and defence sectors. Ph.D in signal processing from Leeds University (UK).
CONFIDENTIAL 27
28. TOP 20 SHAREHOLDERS
Name Number of shares Per cent
A.S. Holding A/S 77 225 875 25
Charles Street International Ltd 37 107 236 12
Colargol Invest AS 17 500 318 5.7
Euroclear Bank S.A./N.V. (nominee) 16 997 966 5.5
MP Pensjon 7 500 000 2.4
Storebrand Vekst 7 385 514 2.4
Hedger Management SA 6 000 000 1.9
Lars Frithjof Rønne 5 700 000 1.8
Sven Christian Rønne 4 760 953 1.5
Marc O'Polo Norge AS 4 613 148 1.5
Six Sis AG (Nominee) 4 513 073 1.5
Big Top Holding AS 3 500 000 1.1
Stålhe Invest AS 3 257 282 1.1
Harald Voigt 3 115 443 1
Jens Andre Henriksen 3 070 000 1
Jon Ola Frankplads 3 014 200 1
Marit Høvding 2 947 342 1
Simen Falck Engelstad 2 487 788 0.8
Luum AS 2 284 696 0.7
Egge Gård AS 2 156 550 0.7
TOTAL 215 137 384 69.5
CONFIDENTIAL 28
