Investor Presentation July 2011

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Investor Briefings – July 2011
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DataDot Technology Limited - Disclaimer
Disclaimer:
This presentation has been prepared by DataDot Technology Limited („DataDot”) based on information available at the time of
preparation. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or
correctness of the information, opinions and conclusions contained within this presentation.
To the maximum extent permitted by law, neither DataDot or any member of the DataDot group, their directors, employees or
agents, nor any other person accepts any liability for any loss arising from the use of this presentation or its contents or
otherwise arising from fault or negligence on the part of their directors, employees or agents.
General Securities Warning:
This presentation is not an offer or invitation for subscription of purchase of or a recommendation of securities. It does not take
into account investment objectives, financial situation and particular needs of the investor. Before making an investment in
DataDot, the investor or prospective investor should consider whether such an investment is appropriate to their particular
investment needs, objectives and financial circumstances and consult an investment advisor if necessary.
All Information including business forward plans in this presentation should not be considered as a recommendation in relation
to holding purchasing or selling, securities or other instruments in DataDot. Due care and attention has been used in the
preparing this information. However, actual results may vary from projected results and any variation may be materially positive
or negative. Forward plans, by their very nature, are subject to uncertainty and contingencies many of which are outside of the
control of DataDot.
Past performance is not a reliable indication of future performance.
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DataDot Technology Limited – Overview
DataDot Technology Limited (DataDot):
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Australian stock exchange listed in 2005 (ASX:DDT).
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Market capitalisation:
Issued Capital:
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Available cash:
~$16.2 m
474,575,800 shares
$3m+ Cash (post growth investment)
Negligible debt
DDT Share Price: Jan09 - Jul11
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DataDot Technology Limited - five year strategy
DDT‟s 2011 strategic objectives are:
1. To grow market capitalisation and shareholder value by increasing:
> Revenue
> Profit
> Share Price
2. To improve quality of earnings by:
> Diversifying product range
> Diversifying revenue base
> Diversifying geographical and customer concentration
Through targeted strategies and actions for
1. Organic growth
2. Strategic growth (acquisitions, partnerships etc.)
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DataDot Technology - Financial Performance
Extract Gordon Capital report (June 2011)
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Strong balance sheet
More efficient cost base
Investment in growth initiatives
2011 hit by material one-offs
2012 will see return back to pre one-off levels with strong revenue growth possible
(“multiple shots on goal”)
Quality of earnings materially improved
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The target markets for our technologies
Asset Protection
Solutions
Brand Protection
Solutions
Anti-counterfeiting
solutions for seeds
For motor vehicles, reported car theft in the top 73 countries amounts to 3.6m cars
p.a., costing over US$72b annually. Theft reduction opportunities equally exist in the
motorcycles/scooter, marine, commercial equipment markets.
US Chamber of Commerce expects that counterfeiting in the USA is expected to
grow from US$500 BN to US$2 Trillion in the next 20 years.
Global seed industry is US$45bn p.a., counterfeiting of seeds ranges from 30% to
65% in developing countries.
VerifiTT JV with Coats – in tracer thread. Coats has group sales in excess of $1.5bn
and views tracer thread as value added service for their customers.
Large global copper theft problem – in problem countries like South Africa, estimates
for metal theft are $832m p.a.; - a large proportion of which is copper cable.
Securing a small percentage of these markets will generate strong growth for
DataDot Technology.
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12 July 2011
Recent Market Focused Developments
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New distributors in China and Brazil now active in building markets.
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DD South Africa – regulations to mandate microdot marking being phased in FY2011/12.
Increased productive capacity has involved considerable investment.
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Growing DDT‟s top line – investment in new business development management (BDM)
resources in:
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New Product Development
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Europe – new BDM,
North America – 3 new BDMs, stronger relationship with key distributor DataDot Dealer
Services,
China – 5 new sales staff in Shanghai JV‟s office, and
Australia.
DataTrace DNA Reader Development,
Application of Laser Induced Breakdown Spectroscopy (LIBS) in mining services (ore vs.
waste) and building materials.
International rollout of AgTechnix capability.
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12 July 2011
1.
Secure solutions for asset protection, authentication and identification.
• DataDotDNA® and DataDot Metallic
• DataThreadDNATM
• DataBaseDNA
Actual Size
1mm
• assetDNA & baseLINE software
• DD SecureTM
Magnified
DataDot
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system:
Identification and deterrence results in successful prosecution.
Identification
Deterrence
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Prosecution
12 July 2011
The system works!
Index of cars stolen and not recovered
(per 1000 vehicles)
2.50
2.00
1.50
DataDots fitted to
Subaru cars in
Australia result
in a significant
reduction in the
incidence of theft.
2.253
2.008
2.154
1.00
0.50
0.290
0.00
Subaru Forester
Toyota - RAV 4
Nissan - X-Trail
Honda - CRV
Source: - National Motor Vehicle Theft Reduction Council, November 2010.
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Key Growth Drivers
Key Growth Drivers for DataDotDNA® in Five Year Strategy:
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Aggressively grow microdot product globally
Package DataDots into innovative solutions for the management of risk in financial
and insurance solutions
Problem:
Theft and Asset Management
Opportunity:
Asset Protection and Asset Management through use of
DataDotDNA® for Motor vehicles, Motorcycles, Marine, Plant, Home
etc.
Market size:
For motor vehicles, reported car theft in the top 73 countries amounts
to 3.59m cars p.a., estimated to be costing over US$72b p.a.
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Key Growth Drivers (continued)
Opportunity in Motor Vehicles
Automotive – Holistic Strategy
1.
2.
3.
Auto OEMs pre-fit DataDots – OEM offering includes Theft Excess Rebate (TER).
OEMs benefit from reduction in fraud and increase in use of genuine parts.
Auto Dealers provide Aftermarket theft warranty and extended service warranty products,
underpinned by DataDots, increasing profit margin per vehicle. Warranty products underwritten
and insured by external third party.
Customer has value add of theft protection, lower insurance premiums, TER and a quality
extended warranty product with certainty of warranted parts on car (through DataDots).
Based on successful model of selling DataDotDNA® as a risk reduction product in Italy through Fiat and
Directline Insurance and in the USA through DataDot Dealer Services (DDDS).
Initially pilot program in Australia for Auto Aftermarket partnering with DDDS to sell extended warranty
product and theft warranty product. Once successful will roll out strategy on global basis.
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2.
A leading global solution incorporating technology developed in
association with the CSIRO.
• Engineered micro particles with unique tracers,
• Presence and concentration detectable by specially developed portable reader,
• Awarded prestigious DuPont “Innovation Prize” in 2008
• Featured in the Australian Technology Showcase from November 2010 onwards.
“If terrorism did not exist,
counterfeiting would be the
most damaging criminal act of
the early 21st century. Every
year counterfeit products and
illegal overruns rob companies
& governments of hundreds
of billions of dollars and
counterfeit drugs & spare parts
kill thousands of people.”
The World Customs Organisation
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Key Growth Drivers
Key Growth Drivers for DataTrace DNA in Five Year Strategy:
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Develop new products and applications using patents, trade marks and trade secrets
to protect intellectual property.
Aggressively grow DataTrace DNA technology.
Problem:
Counterfeiting and Brand Protection
Opportunity:
Authentication through use of DataTraceDNA® in polymers, metals,
paints, inks, bulk materials, textiles etc.
Market size:
US Chamber of Commerce expects that counterfeiting in the USA is
expected to grow from US$500 BN to US$2 Trillion in the next 20
years.
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3.
Our award-winning products
Global seed industry security, coating and seed enhancement
• IntelliSeedTM,
• IntelliBright,
• Seedworx, SeedXcell, Seed enhancement products,
• IntelliGlow,
• IntelliLabel, and
• baseLINETM.
Global seed industry is
US$38bn p.a., counterfeiting of
seeds ranges from 30% to 65%
in developing countries.
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Key Growth Drivers
Key Growth Drivers for AgTechnix in Five Year Strategy:
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Expand the growth of AgTechnix business.
Problem:
Counterfeiting
Opportunity:
 Authentication through use of IntelliSeed™ and IntelliLabel in
conjunction with seed coating and seed enhancement products.
 Polymer Seed Coating material sales
 „On-seed‟ enhancement technologies
Market size:
Global seed industry is US$38bn p.a., counterfeiting of seeds ranges
from 30% to 65% in developing countries.
Estimated market of „on-seed‟ technologies is ~ US$1 - 3 billion p.a.
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Key Growth Drivers (cont.)
Opportunity in Seed Coating Materials
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Market size of polymer seed coating materials in India estimated at 1,000 tonnes p.a.
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Market for polymer seed coating materials growing at greater than 30% annually over
past 3 years.
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Market opportunity is currently ~US$12.5 million p.a.
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Two market leaders estimated to have 80% market share (US$10 million p.a.)
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Opportunity to replace market leaders with AgTechnix next generation polymer seed
coating materials either stand-alone or as part of complete authentication solution.
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DataDot Technology - Recent R&D Initiatives
Project “Thor”
DataDots made from new materials including stainless steel, polymers, metals, and
heat resistant materials for specific environments such as extreme heat, cold, high
salt, high UV, consumable. Have completed proof-of-concept for the production of
next generation DataDots from multiple material types.
Beacon Dot Protection System
DDT has lodged patents and completed the production system enabling it to deploy
the new Beacon Dot protection system. The system provides law enforcement with
a special electronic locator to easily find and identify a DataDot.
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DataDot Technology - Recent R&D Initiatives
(continued)
Mirror Image DataDots
This development was deployed into the European market in May 2011. As half of
all DataDots may be face-down on application, inclusion of a mirror image of each
line of data allows the DataDot to be more easily read by Police.
DataDot silicone tip pen applicator
The development of a new click-activated hand-held DataDot applicator
(to be sold in retail markets outside Australia) will be rolled out mid-August 2011.
The functionality of the applicator allows more user-friendly application of
DataDotDNA® to home and small business valuables.
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DataDot Technology - Recent R&D Initiatives
TraceCoatTM
TraceCoatTM allows metal, glass and various other materials to be coated using a
chemical coating (electro-less nickel) process. In partnership with Surface
Technology Inc. DataTrace is working with a number of prospective clients trialling
this product, initially for authentication of metal components used in the fashion
industry. TraceCoatTM also offers the ability to mark high-value industrial, automotive
and airline parts to improve safety, reduce false warranty claims and authenticate a
manufacturer‟s genuine parts.
DataTrace Single DataTraceDNA® code reader – the “C1”
DataTrace has developed a new reader designed for field-force detection of single
DataTraceDNA® codes. This is a more affordable, highly secure, single code reader
that replaces the single code reading function performed by the current multi-code
reader, “The Authenticator”.
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DataDot Technology - Recent R&D Initiatives
(continued)
AuthentiCableTM
AuthentiCableTM – the anti-theft cable product for copper and aluminium cables will
soon be able to be manufactured in DDT‟s Taiwan factory. The AuthentiCableTM
product has been enhanced by including an alpha-numeric code on the cable. This
combination provides multiple layers of security to protect valuable cables.
Development of new DataTraceDNA® codes
DataTrace has discovered new DataTraceDNA® codes, adding to the existing library
of DataTraceDNA® codes and thus giving DataTrace customers a wider range of
codes for use in authentication.
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DataDot Technology - Recent R&D Initiatives
IntelliLabelTM
IntelliLabelsTM are a self-adhesive UV resistant label that combines a unique serial
number (linked to DDT‟s database) printed onto anti-tamper/tamper evident labels with
the added security of DataTraceDNA® embedded in the Label. This creates a label that
has multiple layers of security to defeat would-be package counterfeiters.
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DataDot Technology - Awards & Recognition
• NAB Agribusiness Award for Excellence – Technology &
Innovation Award (2010)
• DuPont Innovation Award – Agriculture & Food
Production (2010/11)
• Presenter at Danforth Innovation Centre,St. Louis, USA
(May 2011)
• Featured in Australian Technology Showcase
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