Machine Vision Introduction - TKH Group

Machine Vision

Introduction

Capital Markets Day

30 November 2016

CMD 2016 | 30-11-2016 | 2

Machine Vision Growth drivers

Extensive industrial automation and robotization responds to

high productivity and quality of manufactured products

Vision-technology is a superior alternative for control of

manufacturing systems and for the human eye in the area of

detection, inspection and identification

Strong increase in the number of applications where vision

technology will be adopted

Based on the advanced TKH technology markets share

growth will be realised

Position

Technology leadership in many application areas

Market leader for high-end systems

Strong innovation and R&D competence with breakthrough

technology for 3D inspection

Strong worldwide sales organisation

Recognised by leading Industrial application companies

worldwide as key supplier

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Machine Vision -

Key targets & strategy Key targets & strategy

• ROS > 20%

• Organic growth > 15% based on continuous R&D and market expansion

• Enter low / mid cost segment with a dedicated platform development (Leonardo)

• Strengthen Allied Vision in mid-/ high-end markets (Galileo)

• Determined to beat Keyence in 3D inspection through innovative product differentiation (eg., virtual Gocator with emulator,

algorithm extendibility)

• Win substantial market share within the consumer electronic market

Key Challenges

• Continuously increasing price pressure/ commoditization

• Transformation from complex legacy portfolio (AVT, Prosilica, Vosskühler) to the managed programs “Leonardo” and “Galileo”

• Enhancement of global structures (processes, matrix organization)

• Develop a larger presence in APAC.

Top Execution Priorities

• Extension GigE product portfolio, established product lines

• Product launch Leonardo

• Prepare project realization plan Galileo

• Complete new product introductions in time to add expected revenue

• Get sales and distribution channel focused on Gocator sales

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Growth Building Blocks

Growth verticals (in € million)

2012 2014 2015 Growth scenarios

Machine Vision 95 103 114 150 175

Fast market growth 3-D inspection market in combination with innovations

Fast market growth 2D-inspection market in combination with

innovations

Market share growth North-America / Europe /

Asia

Medical & Tire Building inspection

systems

2D Technology

Frank Grube – CEO Allied Vision

CAPITAL MARKETS DAY 2016

30 November 2016

CMD 2016 | 30-11-2016 | 6

Camera design, production and validation

Modular concept

Customer-specific modifications

OEM development

Embedded & host software

Accessories selection and validation (e.g. lenses, cables, etc.)

Broad high-tech vision expertise (visible and non-visible imaging)

Who we are – the camera innovator Our product proposition

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Who we are – a global player

Canada: Burnaby, BC

USA: Newburyport, MA Exton, PA

Germany

Singapore

China: Shanghai

8 locations worldwide with

>300 highly motivated staff

Distribution partners in

more than 30 countries

Former Prosilica Inc.,

acquired in 2008

Order Fulfillment, R&D, support functions

Support NBP

Sales office EXT

Ahrensburg

R&D, support functions, Supply Mgt.

Sales offices

Sales offices

Osnabrück

Former VDS Vosskühler, acquired in 2011

Production, R&D Stadtroda

Headquarters

Order Fulfillment, support functions

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How we got there – pro-active strategy

evolution

Next chapter of

success story

Buy and build

strategy

(organic &

inorganic)

Design and

production of

own digital

cameras

Distribution

and

modification

Focus today

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Our challenge – portfolio complexity has

to be reduced

Harmonize

various

technologies, run

under single

software

However:

• Acquisitions

created a wide

technological

spectrum based

on diverging

development

philosophies

• Strong mid-range

focus

New approach

needed –

takeover by

TKH from

Augusta

enables us to

do that

• Segmentation

• Portfolio Mgt

• Consolidation High

end

Mid

range

Low

cost

Our Position Today

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Industrial Inspection

Knorr Bremse

Quality control of disc

brake components

Healthcare & Medical

Carl Zeiss Meditec

Opthtalmologic

examination device

Science & Nature

NASA/

General Motors

ISS astronaut-robot

Robonaut 2

Security & Traffic

Vexcel / Bing Street side

Mobile imaging to capture

street views

Sports & Entertainment

Sport vision

Statistical analysis of

baseball and other games

Our cameras – used around the world

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We improve and unlock applications for

end customers

Detecting bad apples –

preserving entire

shiploads from decay

Higher reliability

See more - Achieve more

Pre-classifying samples,

e.g. cancerous cells –

manual work lengthy &

prohibitively expensive

Reduced cost

Focus on what counts

Better quality

Inspecting displays –

consumers don‘t

accept less-than-

perfect

100% inspection

Pick & place of “chicken

feed“ –

impossible for humans

New products

See the bigger picture

The future is digital smart connected

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Our market grows strongly

Machine vision digital camera market, €m Rise of digital ecosystems –

increasing demand for machine

vision

Further process automation –

more machines needed

Technology advances –

more applications within reach

Geographic shift –

APAC increasingly important

Source: Allied Vision research, CloseBrothers Sydler Research AG

2020 2019

1,222

1,039

2018

+15% CAGR

2015 2016 2017

How can Allied Vision capture

and outpace this growth?

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We focus on the growth segments

Industrial Vision Medical & Life Science Emerging segments Retail

Transportation

Logistics

Automotive

Robotics

Packaging

Recycling

Electronics

Semiconductor

Food Industry

Agriculture

Ophthalmology/Optometry

Biomedical Research

Microscopy

Pharmaceutical

DNA Analysis

Life Sciences/Pathology

Dental

Surgical Lights

Others

Vending Machines

Reverse Vending

ATM

Cash Acceptors / Recycler

People Counter

Kiosk Terminals

Postal Systems

POS Solutions

Entertainment, Marketing &

Multimedia (EMM)

Outdoor Imaging

ITS

Sports Analytics

UAVs

Wheel Alignment Systems

Allied Vision target segments and attractiveness indicator

++ ++ +++ +++

Source: Allied Vision research, VDMA, CloseBrothers Sydler Research AG

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We will respond to market differentiation with a

differentiated platform product strategy

The Market 2020

High End

100% growth

Mid range

33% growth

Entry level

133% growth

< €299*

70%

€840m

10%

€120m

Includes new

markets

20%

€240m

< €4.999*

Our Future Portfolio

‘Leonardo’

platform

‘Galileo’

platform

Current

portfolio

Bringing new features to

the customer, including

key interfaces

More tailored product

scoping and focus on

growth segments

Superior cost position

through scale and

modularity

Moving from ‘manu’-

facturing to highly

automated and

controlled production

Source: Allied Vision research

* Average sales price per camera

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Harvesting 2018+

While building the new platforms, we continue

sustaining and extending the established portfolio

New portfolio

New technological platform with

revolutionary features

Novel technology unused in our

market segment

Designed in an “incubator” approach

with dedicated teams

Established portfolio

Continue sustaining

Continue designing in new sensors

and features

No reduction in level of importance or

focus

Building a new portfolio based on

new technologies offering ground-

breaking capabilities

Ensuring a continued revenue

stream from the established

portfolio to feed the transition and

bridge the gap

Investing 2015-2017

R&D

capacity

increase

>100% last 3

years

Building the

organization

(COM, R&D)

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Our marketplace is fragmented and ever-

changing Competitive environment

Competitors

(selection)

Revenue (´15) Focus

€85m Strong growth in recent years

through main focus on lower end

Not disclosed Innovative competitor, now acquired

by FLIR Systems

Not disclosed Mostly USB products and with focus

on CMOS sensors

Plus further players, including a long-tail of owner-led and single-product

companies

Source: Annual reports, Allied Vision analyses.

Lower-end

competition,

e.g. Dahua,

Hikvision from

China

Vertical

integration,

e.g. FLIR

acquiring Point

Grey

New use cases

& technology,

e.g. IoT,

embedded vision

Only platform-based, full-

range provider in the

future

Modular product concept

reconciles tailored

products and attractive

pricing

Short time-to-market and

customer intimacy – we

have always been known

for “going the extra mile”

for our customers

How we differentiate:

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To summarize: we are uniquely positioned

for our €150m revenue ambition

Key enablers for Allied Vision growth plans

Harvesting the global organization –

customer intimacy

TKH R&D invest strategy –

delivering multi-year break-through projects

Shaping the fragmented market –

proven M&A literacy

Critical mass –

scale effects that are unavailable to most

competitors

Ambition to profitably

grow to €150m revenue