annual results for year ended 31 december 2013 03 28 annual... · 4 significant milestones achieved...
TRANSCRIPT
Annual Results for year ended 31 December 2013
Anthony Sethill, CEO
Jonathan Apps, CFO
31 March, 2014
1
Contents
1. Group Overview
2. Wireless Healthcare
3. Connected Audio
4. Digital Radio
5. Financials and Summary
2
• Wireless
Healthcare
Toumaz: semiconductors for low power wireless connectivity
• Connected Audio
• Digital Radio
• Focus on high growth markets
- pioneer in wireless healthcare
monitoring
- innovator in connected audio
(platform for Internet of Things)
- #1 provider of solutions for digital
radio
• Group revenues: £21.9m FY13 Core skills / common
technologies
3
• Toumaz’s ultra-low power connectivity solutions address opportunities within Internet of Things and
wearable technologies
Strategy and objectives
Lines of business What we do Goals for 2014/15
Wireless Healthcare • SensiumVitals®: wireless monitoring of
vital signs
- low power, disposable
- general wards, A&E (and home)
• Create effective global
sales & marketing platform
• Enhance functionality
Connected Audio • High quality solutions for mass market
- Bluetooth and Wi-Fi turnkey solutions
- integrated content streaming services
- enhanced functionality, e.g. multi-room
• Extend content streaming
partnerships
• Top two solutions provider
Digital Radio • DAB / DAB+ in Europe and Asia Pac
• Developing HD radio for US
• Drive growth of DAB /
DAB+ market
• Enter HD market (2014)
4
Significant milestones achieved
Funding • £17.2m (net) raised – to take Group to break-even in H2 2015
Healthcare
• Direct sales and distribution for territories accounting for 60% of world
healthcare expenditure
• First commercial order: Hurley Medical Center, Flint, Michigan (A&E)
• CE Mark (Sep 13); Spire Healthcare UK pilot in soft launch
Connected
Audio
• Partnerships with Spotify and Imagination content streaming services
• Design wins include Pure, Media Saturn and Revo
Digital
Radio
• International markets growing; UK government signals digital future
• Frontier retained 80% market share of consumer DAB market
• Next generation silicon (Chorus 4) samples – working / being tested by
strategic customers, e.g. Sony
5
Contents
1. Group Overview
2. Wireless Healthcare
3. Connected Audio
4. Digital Radio
5. Financials and Summary
6
• Market growth driven by
- growing demands on health providers
(aging populations, chronic diseases)
- pressure to improve patient care / save
costs
- capabilities of enabling technologies 82
128
185
264
370
2013 2014 2015 2016 2017
Global hospital wireless patient / vital
signs monitoring, $m revenue1
45%
CAGR
Sources: (1) ON World “Health & Wellness Wireless Sensor Networks” Report 2013; (2) Novasecta (March 2013), ON World (ibid)
Wireless monitoring - high growth opportunity
7
SensiumVitals® - turnkey solution for vital signs monitoring
• Disposable patch (five days battery life) for general wards and A&E
- patient data (heart rate, respiration, temperature) taken every two minutes
- sent wirelessly to hospital IT system - provides early warnings
Hub
• FDA 510k cleared
• CE Mark approved
• TGA approved
1
(1) Electronic Medical Records
8
SensiumVitals® addressing 60% of global healthcare spend
Sensium Healthcare direct salesforce: UK, France, Germany
Third party distributors: US, Canada, Mexico, Sweden, Norway, Denmark,
Portugal, Bahrain, Australia and New Zealand
New North American
distribution agreement
with NantHealth (Oct 13)
CE Mark
(Oct 13)
TGA approval
(Mar 14)
9
First US deployment: Hurley Medical Center, Michigan
Hurley Medical Center, Flint, Michigan
• Deployment in one of the largest
Emergency Departments in US
• Will monitor patients, post-triage,
who may wait for extended periods
• System installed; full launch May 14
10
First UK deployment: Spire Healthcare
Spire Healthcare, Montefiore Hospital,
Brighton & Hove, UK
• Leading UK private hospital group
(38 hospitals)
• System installed and tested at
Montefiore Hospital
• Soft launch underway
- being integrated with ADT system1
- full launch planned for May 14
(1) Admissions, Transfers and Discharges
11
• Hospital interest driven by
- enhanced patient care (early warnings)
- ability to monitor patients waiting in A&E
- monitoring of patients in private wards
- patient mobility (speeds recovery)
- financial benefits of early intervention
• Policy focus on technology in health1
45
7 8
UK, France,
Germany
North America Rest of World
Number of qualified prospects by region, March 2014
Current pipeline of 60 potential customers
(1) e.g. in response to Francis Report
12
Next steps
• Lower costs and extend range of patches
• Additional vital signs (SpO2, blood pressure, ECG)
Product
development
• At least one major health economics study in 2014 – to provide
additional evidence of SensiumVitals® benefits
Health
economics
• Assess opportunities in
- home health: post-discharge, long term chronic disease management
- assisted care
New market
sectors
• Extend distribution coverage – especially, Europe & Middle East
(2014) and Japan (2015)
New
territories
13
Contents
1. Group Overview
2. Wireless Healthcare
3. Connected Audio
4. Digital Radio
5. Financials and Summary
14
• Connected audio devices rising from 34m units
p.a. (2013) to 67m (2017)
- smart devices
- cloud-based content streaming
• Wi-Fi to become leading standard
- 37m units p.a. in 2017
- superior functionality to Bluetooth (at cost-
effective prices)
97.9
130.8
189.9
271.0
349.0
2013 2014 2015 2016 2017
Global Wi-Fi connected audio market1,
$m
37%
CAGR
(1) Solutions for speaker docks, home theatre systems, speakers, A/V receivers, mini-systems, networked audio players / adapters,
multi-room audio systems. Source: Park Associates (Jul 2013), Frontier Silicon analysis
Connected audio via Wi-Fi poised for take-off
15
• Significant experience
in Internet Radio
• Hardware, software &
systems engineering
skills
• Apps & cloud-based
services
Frontier well positioned
Technology
skills Partnerships
Turn-key
solutions
Customer
relationships
• Global brands
• Importers / retailers
• Technology from
Imagination
Technologies
• Content from Spotify
• Competitors more
focused on silicon
• Frontier’s solutions
approach speeds time
to market
16
Q2 14: Apple Airplay & multi-room added to connected solution
Cloud
Content
Integrated proposition
• Multi-room streaming to wireless
speakers demonstrated at CES in
Jan 2014, available in Q2.
• Airplay will be added in April 2104
– opens up market for Apple
devices
• Strong customer interest
17
2015: Symphony, next generation solution for Connected Audio
• Solution for mass market
high quality connected
audio systems
- superior audio
experience
- reduction in cost, power
consumption and size
• Revenues mid-2015
Baseband Apps
processor
Audio
DAC Bluetooth
Modem
Multi-channel
audio
Symphony Baseband IC
PA Wi-Fi RF
NFC
Symphony RF IC
Symphony – two chip solution
18
Contents
1. Group Overview
2. Wireless Healthcare
3. Connected Audio
4. Digital Radio
5. Financials and Summary
19
• DAB / DAB+ market growth driven by
- Germany up 52% (2013)
- new territories: NL, Poland, France
- first countries nearing DSO: Norway
(2017) – up 148% in 2013
- “digital future” for UK radio
• Upside: global development of Digital
Radio, e.g. HD Radio (US), DRM (India)
DAB/DAB+ sales (consumer and
automotive aftermarket), $m
Sources: GfK, Frontier Silicon estimates (Oct 2013)
Strong growth from DAB / DAB+; upside from HD
36
47
6164 66
2013 2014 2015 2016 2017
16%
CAGR
Units
(m) 4.4 6.5 8.9 10.9 13.2
20
Frontier Silicon – #1 provider of solutions for digital radio
Portable
radios
Home audio
systems In-car
Clock radios
& docks
(1) Consumer and automotive aftermarket DAB / DAB+ devices
• In 2013, leadership
position maintained
- 80% market share1
• New products included
- Bluetooth-enabled
solution
- next generation
automotive software
21
2014: targeting the US HD Radio market
• US digital radio based on HD
Radio standard
• To date, market predominantly
automotive
• Frontier partnering with iBiquity
(developer of HD Radio), to
target domestic receiver market
US population density map
22
Next generation IC (Chorus 4) – launching H2 2014
• Advanced single chip solution
- power consumption: 50%
lower
- enhanced functionality1
- cost: 36% lower
- multiple (global) standards
• Timetable
- engage with “alpha
customers”: Q1 14
- revenues: Q4 14
RF Baseband & apps
processor
ROM
Audio
DAC
Chorus 4 – “four chips in one”
(1) For consumers, faster scanning / tuning, improved radio performance; for manufacturers, tools to enable faster time to market
23
Contents
1. Group Overview
2. Wireless Healthcare
3. Connected Audio
4. Digital Radio
5. Financials and Summary
24
Income statement
• Volumes up year on year, but revenues and
gross margin down
- reduced selling prices, as digital audio
solutions reach end of life
• Q1 2014 trading in line with expectations
• Digital Radio and Connected Audio division
trading profitably when R&D costs excluded
Full year 2013 2012
£m £m
Revenue1 21.9 22.1
Cost of Sales (12.2) (12.1)
Gross margin 9.7 10.0
Research & development costs2 (9.1) (9.8)
Sales & administrative costs (10.0) (11.4)
EBITDA (9.4) (11.2)
Depreciation and amortisation (3.0) (12.8)
Other non trading costs3 (0.9) (0.1)
Loss for the period (13.3) (24.1)
Unit volumes shipped (m) 3.5 3.3
(1) 2012 comparatives on pro-forma basis including Frontier Silicon from Jan 2012 and excluding £0.3m of non-recurring consulting
revenue in Toumaz Healthcare and £0.5m bad debt incurred by Toumaz in 1H 2012 (2) Group policy to expense R&D costs where
possible. (3) includes costs of share based payments of £0.8m in 2013.
25
Balance sheet at 31 December
£m 2013 2012
Non-current assets
Goodwill 19.1 19.1
Other intangible assets 17.7 17.7
Property, plant and equipment 0.7 0.9
37.5 37.7
Current assets
Inventory 1.5 1.8
Tax receivable 2.7 1.6
Trade and other receivables 4.2 3.3
Cash and cash equivalents 21.5 15.3
29.9 22.0
Total assets 67.4 59.7
Current liabilities
Trade and other payables 8.3 7.8
Equity
Share capital 4.1 2.8
Contingent consideration 0.3 1.1
Share premium 114.9 98.0
Share based payment reserve 2.5 1.9
Foreign exchange (0.1) (0.1)
Retained earnings (62.6) (51.8)
59.1 51.9
Total equity and liabilities 67.4 59.7
• Cash/net working capital in line with
expectations at end February
26
Financial objectives
• Group expected to be cash-flow positive in 2015
• Mid-term: grow revenue 5x by 2017
• Overheads and indirect costs continue to be kept under tight control
• Gross margins expected to improve from today’s blended 44% as a result of new
chip developments
27
• Focus: three high growth sectors
• Strategic goals
- establish SensiumVitals® as global leader in vital signs monitoring – in-hospital and
later in-home
- in Connected Audio, establish Frontier Silicon as leading silicon platform
- in Digital Radio, leverage leadership position to drive global market growth
• Financial objectives
- cash-flow positive by H2 2015
- increase revenues 5x by 2017
Summary