Technology for Everyone - NPG Smart TV · Technology for Everyone • NPG, a leading company and first Smart TV manufacturer using the Android system (February 2012). • NPG’s

Technology for Everyone

®

Patent Pending

Who we are


• Enrique Cosío is a 35-year old IT technical engineer with extensive experience in electronics.

• 1989: He distributed and introduced electronic components in Spain from American and Asian trademarks, which

now are market leaders. This resulted in connections and technological alliances, which he continues to maintain,

crucial for the development of the telecommunications sector in Spain and South America.

• 1996: He established NPG and partnered with an American-Chinese multinational company, opening offices in

Spain, France, Portugal, Germany and Italy. He became the main shareholder for Europe.

• 1997 and 1998: NPG becomes the leader in the Telecommunications Sector (Modem Fax), the number 1

Seller in Spain and Portugal, and the number 3 seller in France.

• 1998: As supplier of hardware (modem) to Telefonica, NPG had an important role in the development of ADSL and

Terra.

• 2002: Enrique Cosío begins his own independent path with NPG.

• 2009 - 2011: NPG becomes the number 1 DTT seller in Spain.

• NPG becomes the main supplier of DTT devices sold to the Spanish Public Administration.

• 2011: NPG enters the LCD and LED TV market, by opening an assembling factory in Torrejón de Ardoz (Spain).

• 2012: NPG opens its own production and R&D&I plant in China.

• NPG is currently operating in Europe, Latin America and China, with headquarters in Spain, Colombia and

Canton.

• NPG has 75 permanent employees and up to 200 temporary employees.

2

• Both DFC Group BVBA and Inversiones Norcen S.L. are companies that are 100% controlled by Enrique Cosío

NPG’s Shareholders Structure

51%

49%

Before investment

DFC Group Inversiones Norcen

35,7%

34,3%

30%

DFC Group Inversiones Norcen MAB

After investment (*Approximate values)


3

NPG Europa (Spain HQ) Engineering (IRD)

Assembling factory

Technical Service and Call Center

Total surface 6,690 m2

Production capacity/month 90,000 units

Employees 60 – 110

NPG Asia

China Factory

Engineering (R+D)

Sales and Marketing

Total Surface 3,750m2

SMT Assembling chain

Open Cell Line

Production capacity/month 150,000 units

Employees 200

NPG Europa

Portugal

Trade Delegation

NPG Europa

France

Trade Delegation

Where we are

NPG LATAM Mexico

Factory

R+D Engineering

Trade Delegation

NPG LATAM Colombia

Trade Delegation


4

We focus on mass consumption products

Sound and

Home Cinema Multimedia DTT Receivers

LED TV

Smart TV / Plasma

DVD and

Portable TV

Tablets and

Smartphones Smart TV Box


5

® Patent Pending

Technological Alliances

We have strong alliances with the main chipset and software multinational companies.

Licenses

Financial Alliances

Standards and Respect for the Environment

We comply with all the international standards and certificates.

Alliances


6

DOLBY

(in process)

We are listed in the Alternative Stock Market (MAB)

NPG in the Media

Average journal readers: more than

250,000 people see our advertisement

Leaders in promotions launched by Spanish press

media for their readers.

Why:

Competitive Prices.

Quality: key for media since it is a formula to win

over users for them and not a source of income

(low quality equipment and services result in

claims).

Spanish editorial groups are potential NPG

prescribers in LATAM.

Computer Magazines

Professional IT Magazines

Telecommunications Magazines

Consumer Electronics Professional Magazines

Other Media Press


7

Competitive Advantage


• NPG, a leading company and first Smart TV manufacturer using the Android system (February

2012).

• NPG’s Smart TV can be customized and adapted to any client and market.

• With Android, thousands of free apps for your TV.

• Connected TV is becoming a trend for the coming years.

• We are the only Spanish manufacturer with its own R&D&I department: more than 10% of our

employees are engineers.

• We are the only manufacturers with own factories in China (Zhongshan) and Spain (Madrid). Also,

we follow Japanese control and production standards. Our factory in LATAM (Mexico) is in the

process of being built.

• Local support and after-sales service.

8

Patent Pending

®

http://smarttv.npgtech.com/

Global Market Data

Source: Gfk Forecast December 2013

100% Spanish Technological Expense in 2013:

• 82% Hardware (TV, Phone, Computers,…)

• 18% Software

33%

23%

14%

13%

13%

13%

8%

6%

7%

4%

4%

4%

3%

4%

2012

2013


9

Consumer electronics event / Ignacio López Orlando

Our competitors

Our competitors are not the big trademarks.

In Spain, 77.3% of the TV market is dominated by LG, Samsung, Sony

and Panasonic.

Following them, there are numerous competitors (Nevir, Thompson,

Grundig, Blaupunkt, Haier, I-Joy, Hisense, Toshiba,…) with a maximum 2%

of the market share. NPG successfully competes among them: we are

growing in a contracting market.

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

2009 2010 2011 2012

Evolution of NPG’s TV sales (in thousand Euros)

0

500

1.000

1.500

2.000

2.500

3.000

CRT LCD PDP

TV market evolution in Spain (thousand of Euros)

Source: Gfk Forecast December 2013

Validation in the Spanish market, which has already touched bottom

with 1,300 million Euros and 3.3 million devices.


10

Diverse Client Portfolio and Concentration

Top 10 Client Ranking 2011-13

Name %

El Corte Inglés, S.A. 18.85

Ticnova Quality Team S.L. 10.95

Alcampo S.A. 9.85

Telecor S.A. 5.56

Alcampo Portugal 3.60

Bricodis S.A. (AKI) 2.55

Informática Megasur, S. L. 1.60

Carrefour S.A 1.52

Bcm-bricolage S.A. 1.31

Leroy Merlin S.L.U. 1.23

Evolution of Client Portfolio 2011-

13

Year Client Protfolio

2010 243 Clients

2011 292 Clients

2012 271 Clients

2013 284 Clients

• Average Payment Collection Period – 45 days after invoice date

• 0% Overdue payments - credit sales are guaranteed. If the risk is not covered by the insurance company,

purchases are paid in advance.


11

Profitability Sectors – Products

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

8,54% 7,23%

12,17%

EBITDA Sectors 2011-2013

Consumer

Electronics Promotions IT

NAME GROSS MG

Smart-multimedia 18.09%

TABLET PC 21.54%

SOUND BAR 13.29%

TV 16" to 24" 13.75%

TV 29" to 40" 12.89%

TV SMART 17.97%

PORTABLE TV 20.55%

DTT – SD 18.10%

DTT - HD 9.79%

MULTIMEDIA 20.02%

Margin per Type of Product


12

Leaders in the Spanish Analog Blackout – Evolution of Sales

0

2

4

6

8

10

12

14

16

18

20

2005 2006 2007 2008 2009 2010 2011 2012

Analog

Blackout

In Spain

Th

ou

san

d o

f E

uro

s

Evolution of DTT Sales among Main Manufacturers (in thousand Euros)

2008 (Total/DTT)

2009 (Total/DTT)

Personal Grand Technology (NPG) 6,98 5.6 19 17.5

Engel Axill 37.44 9.3 56 16.7

Philips Ibérica (Consumption and Lifestyle) 445 15.3 254 15.2

Gigaset Communications Iberia (Siemens-Gigaset) 34 15.4 42 12.8

Worldwide Sales Corporation (Best Buy) 16.32 6.14 27 12.11

Afax Suns (Sunstech) 28.15 5.6 26 8.1

Blusens Global Corporation 70 10.5 100 5.9

Lineas Omenex Metronic (Metronic) 7.07 5.2 9 4.2

Nevir 19.8 1.56 20 3.76

Fagor Electrónica 56 2,8 50 2.5

Infinity Sistem (Airis) 250 1.46 250 1.67

Televés (Comsumption Division) 105.63 1.68 95.7 1,5

Sanyo 45 2.9 11.3 0.7

Hauppauge 4,2 0.5 4 0.5

Grupo ETCO (Fersey) 7.5 0.3 7.8 0.3

Dexxon Spain 4 0.2 3.5 0.17


13

Evolution of Sales Mix

0%

50%

100%

2009 2010 2011 2012

OTHER TV 16" to 24" TV 26" to 40" Portable TV DTT Tuner

The company’s turning point resulted by

taking advantage of the Analog Blackout

in Spain.

Immediately after, we entered the TV

segment.

The result has been that:

We have doubled our turnover in respect

to 2008.

We have entered a larger business

segment, more stable in the medium and

long term.

We have mirrored our successful

commercial strategy in the Analog

Blackout in Portugal.

% o

n s

ale

s in

Eu

ros


14

We have successfully mirrored our commercial

strategies in Portugal

The analogue switch off took place between April 2009

and April 2012.

We entered this market with DTT and TV receivers,

simultaneously.

0

0,5

1

1,5

2

2,5

2011 2012

DTT Tuner TV OthersSale

s in m

illio

n thousand E

uro

s In 2012 we changed

our sales mix

growing an 8%.

* There is a significant difference

between Portugal and Spain: In Portugal

ppv TV represents 30% of the market

share and is sustainably growing. In this

regard, Portugal is closer to LATAM than

to Spain.


15

In a stable reposition market of 1 million devices, NPG’s share is 11%.

9,90%

11,10%

7,70%

22,60%

5,80% 4,90%

2,60%

35,40%

SET TOP BOXES 2013 SALES

AXIL NPG ENERGY SIST BEST BUY NEVIR SUNSTECH ENGEL OTHERS

Graphs adapted in accordance to sources Gfk Forecast December 2013

SET-TOP-BOXES BRANDS SEGMENTATION December 2013

Sales Value %


16


NPG, leader in the sale of small screen Smart TV´s

PTV/FLAT Smart TV June 2014

18”-23,9” Sales Units %

17

2,3% 1,5% 1,7%

27,8%

20,6%

44,5%

0,1% 1,0% 0,5%

JANUARY-APRIL 2014 SMART TV 18" - 24" SALES

DMTECH HISENSE LG NPG SONY SAMSUNG LOEWE PANASONIC PHILIPS

26,1 21,3 31,2

38,1

17,4 27,7

26,1 20,1

52,6 46,2 27,5 28,0

JAN 14 FEB 14 MAR 14 APR 14

SMART TV 18" - 24“ 2014 SALES

EVOLUTION

NPG SONY SAMSUNG

Graphs adapted in accordance to sources Gfk Forecast June 2014

Expansion Project


18

General Interest Information

The whole Latin America is involved in the process of switching to digital

technology for TV in the coming years due to Government’s imperative. This

will result in forced demand.

According to the chart attached, in 2017 about 95 million households will have

access to DTT and will have gone through analogue switch off.

The sale of consumer electronics in emerging countries (China, India and Latin

America) went from 37% to 46% of total figures worldwide in 2012 (Gfk for

CES 2012).

The number of tuners will be important due to the significant number of

families who will not purchase a new adapted TV: DTT’s target public in

Latin America is, to a larger degree, not within reach of the consumer credit

system, their income barely covers their basic expenses (Source: Horacio

Gennari; CEO Business Bureau; 2012).

According to the data from GFK, HD TVs are the second most consumed

electronic devices.

ANALOG BLACKOUT IN

LATAM

2015 Mexico, Uruguay

2016 Brazil

2017 Chile

2018 El Salvador

2019 Colombia, Venezuela

2020 Argentina, Peru,

Bolivia, Ecuador

2021 Panama, Honduras

LATAM Spain Portugal1

Population 577 45 11

No. Of households 156 16 4

NPG’s sales Analog Blackout ? 38 7

Sales/No. of households ? 2,375 1,75

Figures in thousand Euros

1 Sales in Portugal include 2013 forecasts Year of Analog Blackout + before and after


19

Analog Blackout, a Business Opportunity

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

2005 2006 2007 2008 2009 2010

Th

ou

san

ds

PRESS CUOTA NPG RETAIL

150,000

435,000

200,000 180,000

2,050,000

1,545,000

ANALOG

BLACKOUT MAY 2010

22%

16% 5%

5.5%

12.4% 5.9% 200,000

800,000

2,450,000

4,200,000

5,570,000

DTT in Press= 1,155,000 units (NPG’s share= 70 %)

VENEZUELA 2020

PERU 2020

COLOMBIA 2019

ARGENTINA 2019

COSTA RICA 2018

ECUADOR 2017

CHILE 2017

PUERTO RICO 2017

BRAZIL 2016

MEXICO 2015

URUGUAY 2015

DTT Sales in all channels = 17.780.000 uds (NPG’s share = 13 %)

* Spanish Population 46 M/Inhab.

Correspondence between Spain-Latam implementation periods

Year Spain


20

LATAM: Operations Structure and Mexico HQ

Why Mexico:

Its strategic position in the continent

It is the central axis of the Pacific Alliance

Its stable and competitive economy in terms of costs

Its experience in the electronics industry


21

NPG Latam HQ (in Project - I)

LCD OPEN CELL FACTORY AND R&D&I DEPARTMENT

Approximate total investment (in Euros) € 6,000,000.00:

• Technical Facilities:

o € 1,000,000.00 First stage

o € 1,000,000.00 following 2 years

• Raw materials: € 4,000,000.00

200 - 475 employees: 10 - 20% will be skilled technical staff, and a minimum of

80% will be residents in the State of Colima

Approximate turnover ‘till 2020 (manufacturing capacity): € 6,000,000,000.00


22

NPG Latam HQ (in Project - II)

Reliability of the

packaging process

Call Center

Show Room

Meeting Room

Burning Room Open Cell Line

Wharehouse

Automatic Assembling

Change TV ≤ 42»


Chain TV ≥ 42»


Chain for STB, DVD, etc

Surface: Office Area: 1,791 m2

• Production Area: 7,929 m2

Production Capacity: (Current/Maximum) • Panels (Open Cell): 124,800

units/month • TV (up to 42’’): 104,000/156,000

units/month • TV (from 42’’): 37,000 units/month • STB, DVD,…: 103,000/206,000

units/month


23

Plant in China

1º

2º

3º

4º

5º

FIRST STAGE:

Competitive advantages:

When manufacturing boards and Open-Cell panels, there is a saving of 8%:

3% To depreciate investment.

5% Net savings attributable to the Group’s income statement.

SECOND STAGE:

Commercial expansion:.

To be carried out in different stages (2015).

We will be positioned as

an European trademark.


24

Group’s Results 2013


25

Aggregated NPG Group’s Annual Acounts 2009 - 2013

ITEM YEAR

ASSETS 2009 2010 2011 2012 2013

A) NON-CURRENT ASSETS 712 1,846 2,423 4,050 5,360

Tangible fixed assets 674 1,816 2,363 2,753 4,123

Intangible fixes assets and other assets* 38 30 59 1,296 1,237

B) CURRENT ASSETS 4,478 5,143 7,212 7,167 8,185

Inventories 1,462 2,943 4,061 2,944 5,288

Trade and other receivables 2,592 1,886 2,736 3,917 3,260

Cash and cash equivalents 424 314 414 306 -163

TOTAL ASSETS (A+B) 5,190 6,989 9,634 11,217 13,545

NET EQUITY AND LIABILITIES 2009 2010 2011 2012 2013

A) Capital and reserves 1,534 1,411 1,797 3,213 3,675

Capital 210 210 210 429 429

Share premium and reserves 327 874 1,201 2,405 2,644

Profit / loss for the period 998 327 386 379 602

B) NON-CURRENT LIABILITIES 343 1,189 1,320 1,772 1,880

Long-term debt 324 1,172 1,166 1,607 1,715

Deferred tax liabiities 18 17 154 165 165

C) CURRENT LIABILITIES 3,318 4,389 6,517 6,232 7,990

Short-term liabilities 1,365 2,726 2,844 3,247 5,684

Trade and other payables 1,953 1,663 3,673 2,985 2,306

TOTAL EQUITY AND LIABILITIES (A+B+C) 5,195 6,989 9,634 11,217 13,545

* Increase in 2012 due to the merge with DFC Group BVBA

ITEM YEARS

Profit and Loss Statement 2009 2010 2011 2012 2013

Revenues 19,039 12,169 14,363 14,415 13,573

Supplies 15,182 8,717 9,505 9,431 8,462

Personnel expenses 518 559 640 776 961

Operating expenses ( Advertising and SSEE) 1,903 2,230 3,025 2,950 2,524

Amortization and depreciation 54 70 157 222 206

OPERATING RESULT (EBIT) 1,382 593 1,036 1,035 1,422

Finance expenses 165 155 397 442 536

Exchange rate differences -200 -29 88 90 14

NET FINANCE INCOME / EXPENSE 35 -126 -485 -533 -550

RESULT BEFORE TAXES 1,417 467 551 502 872

Income Tax 419 141 165 124 261

NET INCOME 998 327 386 379 611

Amounts in thousand of Euros

General Profit and Loss Statement 2009 - 2013 General Balance Sheet 2009 - 2013


26

Aggregated Group’s Accounts Breakdown 2013

ITEM YEAR

ASSETS SPAIN PORTUGAL FRANCE HONG KONG

AGGREGATED**

A) NON-CURRENT ASSETS 5,510 0 3 1,580 5,360

Intangible fixed assets 2,587 0 0 1,535 4,123

Tangible fixed assets and other assets 2,923 0 3 45 1,237

B) CURRENT ASSETS. 7,428 165 495 1,282 8,185

Inventories 4,742 0 261 1,271 5,288

Trade and other receivables 2,864 161 234 0 3,260

Cash and cash equivalents -178 4 0 11 -163

TOTAL ASSETS 12,938 165 498 2,862 13,545

NET EQUITY AND LIABILITIES SPAIN PORTUGAL FRANCE HONG KONG

AGFREGATED**

A) Capital and reserves 3,646 55 26 147 3,675

Capital 429 5 5 188 429

Premium share and reserves 2,654 -23 5 0 2,644

Profit / loss for the period 563 73 16 -41 602

B) NON-CURRENT LIABILITIES 1,880 0 0 1,535 1,880

Long-term debt. 1,715 0 0 1,535 1,715

Deferred taxes liabilities 165 0 0 0 165

C) CURRENT LIABILITIES 7,412 110 472 1,180 7,990

Short-term liabilities. 5,684 66 281 192 5,684

Trade and other payables 1,728 44 191 988 2,306

TOTAL EQUITY AND LIABILITIES (A+B+C) 12,938 165 498 2,862 13,545

* Annual accounts for Portugal, France and Hong Kong have not been audited

** Aggregated after intragroup adjustments

ITEM YEAR

Profit and loss Statement SPAIN PORTUGAL FRANCE HONG KONG

AGGREGATED**

Revenues 8,684 2,672 1,377 3,286 13,575

Supplies 4,438 2,540 1,051 3,018 8,462

Personnel expenses 851 25 23 63 961 Operating expenses (Advertising and SSEE) 1,963 17 284 259 2,524

Amortization and depreciation 206 0 0 0 206

OPERATING RESULT (EBIT) 1,368 90 19 -54 1,422

Finance expenses 549 0 0 -13 536

Exchange rate differences 14 0 0 0 14

NET FINANCE INCOME/EXPENSE -564 0 0 13 550

RESULTS BEFORE TAXES 804 90 19 -41 872

Income tax 241 17 3 0 261

NET INCOME 563 73 16 -41 611

Amounts in thousands of Euros

General Profit and Loss Statement 2013 General Balance Sheet 2013


27

Technology for Everyone www.npgtech.com

[email protected]

http://www.npgtech.com/

Documents

Technology for Everyone - NPG Smart TV · Technology for Everyone • NPG, a leading company and first Smart TV manufacturer using the Android system (February 2012). • NPG’s