corporate presentation june 2008. disclaimer this presentation may contain “forward-looking...
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CORPORATE PRESENTATIONJune 2008
DISCLAIMERThis presentation may contain “forward-looking statements” that could present a number of risks and uncertainties. Forward-looking statements are typically identified by the worst “believe”, “expect”, “anticipate”, “intend”, “estimate” and similar expressions. Actual results could differ materially from those contemplated by these forward-looking statements as a result of certain factors. In light of these risks and uncertainties, there can be no assurance that the results and events contemplated but the forward-looking information will in fact transpire. Readers are cautioned not to place undue reliance on these forward-looking statements. SENSIO Technologies Inc. does not undertake the obligation to update or revise forward-looking statements.
OUR MISSION:To become the world standard for 3D content distribution at home by having the SENSIO® 3D decoding technology available in consumer video equipment (Dolby of 3D)
OUR PLAN:Maintain our technological lead in the stereoscopic field while forging strategic relationships with key content partners (studios, producers, etc.) to quickly become a de facto standard.
• Company specialized in the development and marketing of stereoscopic (3D) technologies, products and services
• Founded in 1999
• Based in Montreal, Canada
• 13 employees as at March 2008
• Publicly traded company TSX Venture (SIO.V); year-end May 31
EXPERTS IN STEREOSCOPY, FANATICS OF 3D!
3D EXPLANATION AND CONTENT DISTRIBUTION
WHAT IS 3D?
L
STEP 2:DISPLAYING
Using various methods, each eye is being presented only its respective image stream
R
2 points of view of the same scene are taken simultaneously at slightly different angles
STEP 1:SHOOTING 3D
STEP 3: PERCEIVING 3D
The brain then fuses both images and get the illusion that objects are in or out of the screen
2D VS 3D
DISTRIBUTION 2D DISPLAY2D CONTENT CREATION
2D PLAYBACK
• Single camera
• Single film or storage
• Single channel (broadcast) or media (DVD)
• Single image at all times on the screen
• Single channel receivers or single disc players
2D VS 3D
DISTRIBUTION 3D DISPLAY3D CONTENT CREATION PLAYBACK
3D READY CAMERAS
• Dual cameras• Dual storage• New settings• New rigs + controls
3D READY DISPLAYS• Must display 2 streams
on the screen• Must separate each
stream for each eye• Commercially available
on the CE market since 2007
ONE 3D MOVIE = 2 MOVIES (1 LEFT EYE, 1 RIGHT EYE)
There is no 3D ready distribution infrastructure for the home market
MAIN CHALLENGES
• Bandwidth (twice over 2D)
• Required modification to infrastructure
• Synchronization of the two streams
• Implementation costs
• Quality of 2D and 3D playback
??? ???*
* Except anaglyph
SENSIO® 3D
DISTRIBUTION 2D DISPLAY2D CONTENT CREATION PLAYBACK
SENSIO® 3D
DISTRIBUTIONREGULAR TV OR 3D READY
DISPLAY
3D CONTENT CREATION PLAYBACK
SENSIO encoder
SENSIO decoderConventional 2D distribution infrastructure
THE SENSIO 3D TECHNOLOGY USES THE 2D DISTRIBUTION
INFRASTRUCTURE FOR 3D CONTENT
SENSIO 3Dencoded media
Conventional HD player or digital receiver
EXAMPLE OF INTEGRATION
SENSIO3DIP or chip
• Stereoscopic compression / decompression with no visual loss (2:1)
• Universal stereoscopic formatter (anaglyphic, page flipping, dual stream, 2D, etc.)
SENSIO® 3D: Transforming the worldwide 2D distribution into 3D
HOLLYWOHOLLYWOODOD
ASIA
MARKET AND PRODUCTS
PRODUCT LINE
• PROFESSIONAL LINE– SENSIO LIVE! 3D encoder– SENSIO D-CINEMA decoder– SENSIO 3D software encoding
• CONSUMER LINE– SENSIO 3D decoder chip– IP licensing
MID/LONG TERM: 200M$/yearGenerate a strong profitability by exploiting the consumer electronic market via the integration of the SENSIO 3D technology as either a chip or intellectual property
D-Cinema
Specialty market
Consumer market
•Chip – mid end•IP Integration – mass market
MARKETSEGMENTATION
SHORT TERM: 5M-10M$/yearCreate visibility to consumers by enabling live 3D events in digital theatres across North America
BUSINESS MODELD-CINEMA (live events)
PRODUCERSDISTRIBUTORS
BROADCASTERSD-CINEMA
OPERATORS
1 32
PRODUCTSSENSIO 3D LIVE ENCODER
MARKET(USA)
POTENTIAL(total)
Estimated at 1 000 in USA
1 000 X 8K$ = 8M$
SENSIO D-CINEMA DECODER
38 000 screens (1,700 3D - 04/08)
38 000 X 1.5K$ = 57M$
BUSINESS MODEL CONSUMER MARKET
STUDIOSHOME VIDEO
MANUFACTURERSOF PLAYERS MANUFACTURERS
OF 3D HDTVS
1 32
PRODUCTSSENSIO 3D SOFTWARE ENCODING
MARKET(USA)
POTENTIAL(annual)
Estimated at 30/year in USA
Minimal
SENSIO 3D IP CORE
28M units/year
28M X 5$ = 140M$/YEAR
BROADCASTERSAND TV PROD.
MAN. OF DIGITALRECEIVERS
SENSIO 3D IP CORE
35M units/year
35M X 1$ = 35M$/YEAR
REST OF WORLD
50M
EUROPE
100M
ASIA
200M
USA
150M
ESTIMATED IP CORE MARKET AT MATURITY
Video products sold worldwide by territory (million units)
500M products X 1,00$ royalty =500M$ potential IP revenues
BUSINESS MODEL CONSUMER MARKET
YOU WANT MORE?
• OTHER MARKETS
– Game console– PC Card– Mobile phone
• Founded 16 years ago• Business Model: Licensing (1)
• Consumer division since 1996 (more than 300M DTS products on the market since)
• IPO value (07/2003): 220,5M$US• Market cap.(03/2008): 1,76B$US
(1) SENSIO is using a similar business model as DTS
Figures in 000’s USD 2001 2002 2003 2004 2005
Revenues 28 748 41 056 51 702 61 431 75 252
Gross profit 18 696 30 420 40 670 45 269 55 639
Net profit Net profit 3 9083 908 6 2506 250 9 8999 899 9 9769 976 7 9087 908
Licencing revenues 15 241 25 657 35 374 41 886 56 966
Gross profit 12 259 23 903 33 480 39 821 52 225
Net profitNet profit 4 1024 102 12 71212 712 18 71418 714 19 96919 969 N/AN/A
Figure’s in 000’s USD 2007 2006 2005 2004
Total revenues $482,03 $391,54 $327,97 $289,04
Gross profits $407,76 $315,50 $247,75 $197,54
Operating income $186,95 $129,58 $$84,06 $67,84
Nets revenuesNets revenues $142,83$142,83 $89,55$89,55 $52,29$52,29 $39,84$39,84
Financial info•Gross margin of 84 %
•Net margin of 39 %
•Market cap.(03/2008): 3.91B$US
SENSIO: More than a cool technology
Depth Mapping (DDD, Philipps R&D)
Dual Stream (Dolby, Evertz)
Correlation techniques
(MPEG2 multi, QVis)
Additional bandwidth over 2D25 to 30% more than
2D100% more than
2D40-60% more than
2D
Compatibility with 2D distr. infrastructure
Incompatible Partly compatible Incompatible
Synch. issues DifficultVery difficult and
complexDifficult
Implementation costs for distributors and consumers
Very Costly Very expensive Very costly
Quality of 2D playback and 3D playback
Average 3D, good 2DVery high quality
2D and 3DVery good 2D and
3D
Acceptable Issue/challenging Unacceptable
COMPETITOR ANALYSIS
The elegant and simple 3D solution
SENSIO 3D
Additional bandwidth over 2D
Same as 2D
Compatibility with 2D distr. Infrastructure
100% Compatible
Compatibility with various 3D displays
100% compatible
Implementation costs for distributors and consumers
Inexpensive
Synchronisation issues
None
Quality of 2D playback and 3D playback
Very good 2D and 3D
BONUS: Real time 2D to 3D Conversion
• Sub-licensing deal with JVC
• Natural depth effect
• Quality: 60% of real 3D content
• Infinite content availability
We bring 3D content
• SENSIO recognized as the leader by Hollywood studios and producers
• Existing library of titles: 16 SENSIO 3D DVD titles available TODAY
• Upcoming Live 3D events (sports, concerts, shows) in PPV and VOD
• New HD titles from major studios coming soon in 2008
• Proof of concept done with the award winning S3D-100 stereoscopic video processor (on the market since 2003)
• Alliance with Simplay for HDMI interoperability and consumer user-friendliness
• First SENSIO 3D integration deal signed with SpectronIQ for LCD 3DTV
• Two distributors (Hakuto and Microtek) to support the Japanese, Korean and global Asian markets
• Test platform, content and engineering support available
A practical solution
A NEW PHASE FOR SENSIO: BECOMING THE DOLBY OF 3D
PREVIOUS SENSIO MILESTONES
• Patent pending technology (China, India, Japan, Europe, Canada and USA)
• Proof of concept done with the award winning Library of 41 films including 8 from major studios (Disney and Universal)
• Links established with majors studios (clients such as Dreamworks, Disney, and Miramax)
• Advanced discussions with major CE manufacturers for integration (Toshiba, JVC, Sharp, Marantz, Optoma, SAMSUNG, etc.)
• First sales of development boards to CE manufacturers (05/2007)
• Signature of a deal with AccessIT and IDC for Live 3D deployment in digital theatres
• First technology integration inside a consumer 3D-ready display (SpectronIQ
CONCLUSION
TV Manufacturers are ready to release 3D ready TV on consumer market
SENSIO is very well positionned to become the 3D standard for home consumer market
Recent milestones demonstrate that SENSIO can achieve his goal
Business model is very attractive and represent a huge return on investment opportunity for investors
• FINANCIAL INFORMATIONS
FINANCIAL INFORMATION
Financial Summary – 2008/02/28Assets: $3,384KLiabilities: $1,268KEquity: $2,116KTTM Sales:$179KTTM EBITDA: $1,241KMarket Cap: $ 11.9M
TYPE OPTIONS WARRANTS TOTAL FULLY TOTAL FULLYSHAREHOLDERS ISSUED ISSUED DILLUTED DILLUTED
(K) % (K) (K) (K) %Management and Board 9 314 27.41% 1 201 528 11 043 23.60%Institutionnal 11 908 35.04% - 7 804 19 712 42.13%Float 12 759 37.55% 275 2 995 16 029 34.26%TOTAL ISSUED 33 981 100.00% 1 476 11 327 46 784 100.00%
SHAREHOLDING