30 Aug 2021

Half Year Results Investor Presentation

1 1HFY21 RESULTS PRESENTATION ASX: SBW AUGUST 2021 2 This presentation has been prepared by Shekel Brainweigh Ltd. (“Shekel Brainweigh” or the “Company”) based on information available to it as at the date of this presentation. The information in this presentation is provided in summary form and does not contain all information necessary to make an investment decision. This presentation does not constitute an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any security in Shekel Brainweigh, nor does it constitute financial product advice or take into account any individual’s investment objectives, taxation situation, financial situation or needs. An investor must not act on the basis of any matter contained in this presentation but must make its own assessment of Shekel Brainweigh and conduct its own investigations. Before making an investment decision, investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs, and seek legal, taxation and financial advice appropriate to their jurisdiction and circumstances. Shekel Brainweigh is not licensed to provide financial product advice in respect of its securities or any other financial products. Cooling off rights do not apply to the acquisition of Shekel Brainweigh securities. Although reasonable care has been taken to ensure that the facts stated in this presentation are accurate and that the opinions expressed are fair and reasonable, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Shekel Brainweigh its officers, directors, employees and agents, nor any other person, accepts any responsibility and liability for the content of this presentation including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of or reliance on any of the information contained in this presentation or otherwise arising in connection with it. The information presented in this presentation is subject to change without notice and Shekel Brainweigh does not have any responsibility or obligation to inform you of any matter arising or coming to their notice, after the date of this presentation, which may affect any matter referred to in this presentation. The distribution of this presentation may be restricted by law and you should observe any such restrictions. This presentation contains certain forward looking statements that are based on the Company’s management’s beliefs, assumptions and expectations and on information currently available to management. Such forward looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results or performance of Shekel Brainweigh to be materially different from the results or performance expressed or implied by such forward looking statements. Such forward looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the political and economic environment in which Shekel Brainweigh will operate in the future, which are subject to change without notice. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward looking statements or other forecast. To the full extent permitted by law, Shekel Brainweigh and its directors, officers, employees, advisers, agents and intermediaries disclaim any obligation or undertaking to release any updates or revisions to information to reflect any change in any of the information contained in this presentation (including, but not limited to, any assumptions or expectations set out in the presentation). DISCLAIMER 3 1H FY21 RESULTS Group revenue of US$10.6M Revenue growth of 34% on 1H20 Group Gross Profit of US$4.0M • Revenue increased 34% from $7.9 million in 1H20 to $10.6 million in 1H21 • Gross Profit increased 38% from $2.9 million in 1H20 to $4.0 million in 1H21 • Gross Margin demonstrated a slight increase with rising material and shipping costs affecting this result • Total Assets increased by 15% from $17 million in 1H20 to $19.5 million in 1H21 • Cash Position at 30 June 2021 was US$4.35 million , compared to US$1.47m at 31 December 2020. 4 GLOBAL MARKET LEADER IN ADVANCED WEIGHING TECHNOLOGIES SHEKEL SCALES ESTABLISHED CORE BUSINESS SINCE 1971 Leading supplier of weighing technologies to global retail and healthcare industries Operating in two segments: - Retail (self-checkouts) - Healthcare (in warmers and incubators) Selling to blue chip customers Including Toshiba, Fujitsu, Diebold Nixdorf and GE Healthcare RETAIL INNOVATION DIVISION ADDING AI TO IOT LOAD CELL SENSORS Enabling Retail’s Digital Transformation & Frictionless Shopping Experiences Pursuing significant blue ocean opportunities in autonomous retail to digitise on-shelf activity into valuable retail insights R&D and commercialisation of new products Innovendi and hubz (SMART vending machines), Product Aware Shelves (instant product recognition) and autonomous stores micro market solution KG 1 2 OPERATING IN TWO DISTINCT BUSINESS DIVISIONS OUR BUSINESS 5 1H21 RESULTS FROM EACH BUSINESS DIVISION 1H ended 30 June 2021 (US $ million) Shekel Scales Retail Innovation Revenue 10.24 0.38 Cost of Revenue ) 5.8 ( ) 0.8 ( Gross Profit 4.4 ) 0.425 ( Gross margin 43% ) 110% ( RD and Operating Expenses (3.7) (2.8) EBIT 0.6 ) 3.2 ( 6 PROFIT & LOSS BY BUSINESS DIVISION – 1H21 v 1H20 1H20 ended 30 June 2021 (US $ million) Shekel Scales Retail innovation Shekel Brainweigh Group 1H21 1H20 1H21 1H20 1H21 1H20 Change % Revenue 10.24 7.8 0.38 0.1 10.6 7.9 34% Cost of Revenue (5.8) (4.6) ) 0.8 ( (0.5) (6.6) (5.0) 32% Gross Profit 4.4 3.3 ) 0.425 ( (0.4) 4.0 2.9 38% Gross margin 43% 42% ) 110% ( 37.5% 36.8% 0.7% RD and Operating Expenses 3.7 ( ) (3.1) (2.9) (2.0) (6.6) (5.1) 27% EBIT 0.6 0.1 ) 3.3 ( (2.4) (2.6) (2.3) 13% Finance expenses (0.2) - (0.1) (0.2) 150% Tax on income - - (.035) - NPAT 0.6 (0.1) ) 3.3 ( (2.4) (2.75) (2.5) 7 SHEKEL BRAINWEIGH (ASX: SBW) Global Industry Classification Standard Information Technology sector, Software & Services industry group Market cap 1 A$20 million 1 Employees 155 Markets Europe, UK, USA, Australia, Japan, China, Israel Shares issued ~ 153 million Share price $0.13 (25 August 2021) Shareholders • Axcel Partners 33.7% • Concepta – 23% • Agriculture Cooperative – 15% • Others – 28.3% CORPORATE OVERVIEW FINANCIAL OVERVIEW H1 CY2021 Revenue US$10.6 million CY2020 Revenue US$18.3 million CY2020 Gross Profit US$7 million Strengthened Balance Sheet US$6.6 million raised since start of CY2021 Achieving one-off and recurring revenue $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Millions SBW 12-month share price Volume Closing Price 8 AN EXPERIENCED BOARD • Independent Director at Paz Oil Company Ltd • Chairman of Tadbik, a global leader in packaging solutions and Afimilk, a global leader in computerized systems for the dairy industry • Former CEO of Tnuva Group (2009 to 2016), Israel’s largest food conglomerate • Former CEO of Holga Kimberly (a subsidiary of Kimberly Clarke). • Founding senior partner in Gilead Sher & Co., Law Offices where he practices corporate law; project finance; administrative and constitutional law; and dispute resolution. • Senior researcher and head of the Center for Applied Negotiations at the Tel Aviv Institute for National Security Studies (INSS). • Former PM Chief of Staff and Policy Coordinator to former Prime Minister Ehud Barak. • More than 30 years’ managerial experience across the technology sector for private and public Israeli and international companies. • Has served as chairman and CEO of various companies • Played an important role in mergers and acquisitions and fundraising initiatives, with a hi- tech focus. • Venture partner and managing member at Axcel Partners LLC for over 10 years • Experienced director and manager of retail and tech companies • Deep knowledge in marketing, logistics and optimising retail operations • Director of Meredith Corporation (media), Howard Hughes Corporation (real estate) and Crocs (footwear) and four private companies. • More than 30 years experience across the finance sector including investment management, investor relations and commercial banking. Former commercial director of SeaLink Travel Group, a leading transport and tourism company listed on the ASX. • Chairman of Wiseway Group (ASX: WWG), a freight and logistics company. • 25 years’ experience in business consulting and technology, with a focus on data analytics and digital transformation. • EVP customer success APAC and Americas for Mirakl.Inc • Former IT customer solutions director for AMP • 10 years at Woolworths leading digital commerce • 23 years of experience in leadership and executive roles across production, inventory, logistics and operation management. • Held senior positions at Kvutzat Yavne Food Industry, GAASH Diamond Tools and Sales, Century Company and Haaretz Chicken Slaughterhouce. • Holds a unique set of skills, possessing a deep and trusted network, and depth of experience in production and inventory management. Tzipi Avioz EXTERNAL DIRECTOR Isaac Raviv EXTERNAL DIRECTOR Michael Hughes NON-EXECUTIVE DIRECTOR Shlomo Anikser NON-EXECUTIVE DIRECTOR Beth Kaplan NON-EXECUTIVE DIRECTOR Gilead Sher NON-EXECUTIVE DIRECTOR Arik Schor CHAIRMAN AND CEO 9 • Covid-19 pandemic did not begin to impact 2020 revenues until Q2 2020 STRONG START TO CY21 Strengthened balance sheet with A$2.1M Placement completed in January 2021; additional US$5M raised via convertible note in March 2021 1H FY21 revenue increased to $10.6 million, up 34% on 1H FY20 Retail Innovation division achieved 1H CY21 revenue of US$380,000 , 24% up on FY20 full year result Scales division reported record US$10.2m 1H CY21 revenue $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Revenue Growth CY20-21 (US$)** Two consecutive quarters of revenue growth in CY2021 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 Q1 Q2 QoQ Revenue Growth CY20 vs CY21 (US$)** CY2020 CY2021 10 TECHNOLOGY INNOVATOR START-UP, UNDERPINNED BY ESTABLISHED BUSINESS ? A precision technology company developing market-leading IP in a ‘genius-lab’ ? Global markets: supplying leading global blue-chip customers in healthcare and retail – GE Healthcare, Toshiba, Fujitsu, Atom ? Validation in achieving “Gold Partner” status by Intel for Capsule, Innovendi, hubz and as an OEM Supplier – see https://www.intel.com/content/www/us/en/search.html?ws=text#q =shekel%20brainweigh&t=All ? Developed the ‘Intel inside’ equivalent ‘Shekel smart’ in the self-checkout market READY FOR THE FUTURE OF CONTACTLESS SHOPPING IN A POST-COVID WORLD ? Retail needs IoT now more than ever ? Launched AI Retail Innovation platform – to leverage proven sensor technology to enable retail AI applications ? Commercialisation of new products in several markets ? Focus on Retail Innovation WHO WE ARE 11 * Sep 2020 – Juniper research Most automated recognition solutions rely on computer vision, RFID tags and traditional scales which fail to meet the accuracy threshold. These eliminate viable ROI models in this low-margin, giant industry ** https://go.forrester.com/blogs/distinguish-hot-from-hype-in-retail-tech-investments-for-2020/ OPPORTUNITY TO UNLOCK FRICTIONLESS RETAIL $387 B * Estimated value of retail transactions processed by frictionless checkout technologies in 2025, up from just $2B in 2020 $23B** Estimated investments by retailers in AI by 2025, up from just over $5B in 2020. 12 ? Product Aware Shelf – using IoT, on-shelf electronics, software, AI and algorithms to identify products and movements on shelves ? Product Aware Bay – comprising 4-5 Product Aware Shelf units ? Innovendi – (1 st gen) unattended automated locked vending machine incorporating our Product Aware technology ? hubz – (2 nd gen) unattended micro smart cooler enabling sale of a broader range of fresh and refrigerated products ? Micro Market Capsule – Autonomous shopping incorporating SBW’s Product Aware Bays, Innovendi units and self check-out technology to allow a fully autonomous store. PAS – PRODUCT AWARE SHELF PAB – PRODUCT AWARE BAY INNOVENDI & HUBZ – SMART VENDING AUTONOMOUS MICRO MARKET CAPSULE OUR PRODUCTS RETAIL INNOVATION 13 CAPSULE (BLACK BOX) AUTONOMOUS STORE IN PARIS. ACCELERATING COMMERCIALISATION • Flagship micro-market project Capsule fully autonomous store launched in Paris with retailer Casino in November 2020. Second store opened July 2021 • SBW’s smart vending solution hubz micro cooler launched with Imbera (US) and Parlevel (US), targeting North America and Latin America markets. First commercial order (30 units) received, primarily for North America clients • Retail Innovation Division recorded 1H CY21 revenue of US$380,000 from sales of Innovendi, hubz and autonomous retail solutions • Innovendi achieved certification as Market Ready IoT Solutions by Intel® • Paid product pilots for autonomous stores undertaken with very positive feedback from customers • First order from Australia for smart shelving received during H1 2020 • Demonstration of Capsule store here: https://www.olivierdauvers.fr/ 2020/10/08/monop-box-la-visite-video/ RETAIL INNOVATION 14 RECURRING REVENUE MODEL – RETAIL INNOVATION SAAS, DAAS & ONE-OFF REVENUE • (*) SaaS (Software as a Service) DaaS (Data analytics as Service) MACHINE (INCLUDING KIT) PRODUCT RECOGNITION SYSTEM PRODUCT RECOGNITION SOLUTION HARDWARE DAAS DATA ANALYTICS ENGINE ONE TIME CHARGE ? Five shelves hardware kit ? Software development kit/ compute ? Accessories ? Professional services ? Monitoring and alerting ? Cloud hosting ? Performance enhancement OR KIT SOLD SEPARATELY + MONTHLY SAAS* MONTHLY DAAS* ? Shelf insights ? Rev-share with retailer ? Targeting consumer packaged goods 15 RETAIL SUPPLYING THE WORLD’S LARGEST RETAILERS SHEKEL SELF CHECK OUT CUSTOMERS GO TO MARKET PARTNERS INTRODUCTION OF AUTONOMOUS RETAIL SOLUTIONS GROWING OUR RETAIL MARKET PRESENCE RETAIL SOLUTIONS GOING LIVE 16 COMPETITIVE ADVANTAGE ONE weighing platform with MULTIPLE products recognition ACCURACY >99.8% Huge database of grocery weights FLEXIBILITY 10 SKUs/shelf Remote planogram control AFFORDABILITY More cost effective than Computer Vision or RFID systems Differentiating between similar products 17 OUR PRODUCTS Healthcare and fitness scales under the Healthweigh® brand: • Healthweigh® Physician Scales • Healthweigh® Special Needs • Healthweigh® Baby and Neonatal Scales • Healthweigh® Portable Scales Provider of precision checkout electronic scale and weighing solutions: • Scanner Scales • Self Checkout Systems Force measurement weighing and scale solutions for industrial needs: • Agricultural • Manufacturing • Military • Airport baggage check-in Seamless integration into OEM applications, supplying market leaders: RETAIL INNOVATION SHEKEL SCALES KG HEALTHCARE RETAIL INDUSTRIAL OEM WEIGHING SOLUTIONS 18 Beyond Precise Weight Measurement – FAST TRACK Visual Fruit and Vegetable Recognition Frictionless, computer vision- based self checkout that can be used in autonomous stores No major infrastructure costs – using current and installed computing devices Scalable to meet any size chain from store to store; automatically updated across the network Plans to accelerate marketing activities in Europe and USA AI at 20% of the cost of similar systems Up to 99% accuracy in detection High accuracy in an ever-changing world: embedded Deep Learning 2021 SHEKEL SCALES INNOVATION 19 Our operations: Operations in China (factories) and Hungary (third party) Offices in Israel (HQ), the European Union, and Australia Our clients and distributors: North America, South America, Asia, Australia, Europe, UK PRODUCTS & SERVICES Retail self-checkout technology AI-enabled retail technology for contactless shopping Healthcare: precision weighing systems integrated into NICU incubators and warmers for premature babies Healthweigh ® line SHEKEL PRESENCE Long-term clients in Israel, the US, Europe and the UK, Japan, Brazil Global distribution of Healthweigh including the US, Europe/UK, Asia and Australia New orders in Sweden, Poland and the Netherlands Commercialisation of Innovendi and Product Aware Bays in Israel, UK, Europe and Australia Paid pilots in the US, Australia, France and Israel. GLOBAL PRESENCE OF SHEKEL PRODUCTS 20 Retail Innovation – platform for growth established • Appointed a CEO and expanded R&D team by >100% • Opened Australian office • Formed strategic partnerships with Intel, Hitachi, Imbera and Parlevel Acceleration & commercialisation of key products • Commercialisation of Innovendi in Israel, UK and Spain, and entry to Australian market • Successful commercialisation of Innovendi with about 100 machines deployed in Israel • Autonomous micro store Capsule launched with more in pipeline • Developed and commercialised hubz micro market cooler Continued earnings from core business to support growth • Revenue from product sales and SaaS • Proceeds from product and Proof of Concept pilots BUILDING BLOCKS FOR SHEKEL RETAIL INNOVATION MAJOR MILESTONES SINCE IPO Launch of Capsule First commercial sales of hubz (1H); Launch of Fast Track (expected 2H) 1975 2018 2019 2020 2021 IPO completed: SBW launches Retail Innovation Shekel Scales launched First commercial sales of Innovendi 21 POSITIONED WELL FOR GROWTH Strong momentum in Shekel’s core markets in Europe and US in H2 2021 Anticipated growth in retail and healthcare segments in CY21 Plan to launch first autonomous stores in Israel and in EU ex. France Plans to accelerate marketing activities in Europe and Asia; grow revenue through product sales and SaaS Organisational restructure and streamlined spending to maintain strong balance sheet. 2H 2021 OUTLOOK Fast Track – an innovative self-checkout solution expected to launch in H2 2021 First orders expected to be received and delivered to new key retail customer New product development of mobile self- checkout solution to commence 22 POTENTIAL TO REVOLUTIONISE RETAIL 1 ? SBW competitive edge: ‘best in class’ technology – highest accuracy ? IP engineered by ‘genius-lab’ ? Forefront application of AI-enabled technology and leveraging IoT ? Validated by global technology leader Intel • Strong growth opportunities in the autonomous retail space. • New products and services focussed recurring fees sales model. • Monetize big data assets and 4.0 shopping revolution ‘BEST IN CLASS’ TECHNOLOGY, UNIQUE INTELLECTUAL PROPERTY 2 VISIONARY LEADERSHIP WITH A TRACK RECORD OF INNOVATION & COMMERCIALISATION ? Highly experienced management team with a vision for the future ? Strong culture delivering R&D excellence ? Successful track record of commercialisation in an extremely high barrier market 3 SENSOR TECHNOLOGY TO ENABLE RETAIL AI- BASED APPLICATIONS AND DATA COLLECTION ? Significant income ? Established supply chain: global blue-chip customers with long-standing and long- term contracts ? Effective and active cost management BUILDING BIG DATA ASSETS PLATFORM FOR GROWTH THE FUTURE WHY INVEST IN SBW 23 Danny Nadri Country Manager – Australia +61 (0)434 680 391 danny@shekelbrainweigh.com Barak Nir CFO +972 50 538 6090 barak@shekelbrainweigh.com
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