FINGERPRINT CARDS
Q1 2017
INTERIM REPORT
MAY 4, 2017
Q1 2017 Summary
Revenues
Revenues:
SEK 686 (1,491) M,
a decrease of 54%
year over year
Margins &
profitability
Gross profit:
SEK 282 (732) M
Gross margin:
41% (49)
Operating profit:
SEK 71 (619) M
Operating margin:
10% (41)
EPS: SEK 0,17 (1,44)
before dilution
Cash Flow :
SEK -324 (279) M
2
Highlights
18 mobile devices
with Fingerprints’
sensors launched
Huawei P10 with
FPC1268 under solid
glass
Good traction in Tier
2/3 and low cost
segment
Well positioned in the
Smartcard segment
BUSINESS UPDATE
Short term congestion in our value chain
4
We are part of a long value chain
Fingerprints ”Sell-In”
Fingerprints Revenue recognition
”Sell-Through”
Fingerprints market
share measurement
Packaging, SW
Fingerprint
Cards AB
Distributor
(~ 5)
wafers
Mod House
(~ 10)
wafers
OEM
(> 20)
Distr&Retail
(100.000s)
modules
Approximately 4-6 months lead time
Note: Illustrative. Applies to mobile devices
5
Smartphones
OEM customers market share
Global Smartphone Vendor Market Share %, Q1 2017
25%
20%
15%
10%
5%
0%
Launched phones with competitor or inhouse
Source: Strategy Analytics provisional data, Fingerprints estimates
6
Has not launched phone with fingerprint sensor
Launched phone with FPC sensor
Progress with Tier2 and Tier3 OEMs
Launches with new OEMcustomers announced
New wins with FPC1028
important for low-end
smartphones and this segment
Teaming up with new partners
such as distributors, modulehouses and platform providers
First launch on Spreadtrum
platform – Qiku (April)
7
• Represents some 25% of the market
• Long tail of >150 OEMs
Market launches Q1 2017
18 mobile devices by 13 OEM customers
Launches by Huawei, Xiaomi, Lenovo and Oppo
Huawei P10 with FPC1268 under glass
First smartphone with sensor under continuous cover glass
Blackberry and Indian Micromax, new customers
Launch of FPC SENSETOUCH™
Eight features now launched
8
Smartcard key success factors
Supporting a battery- and contact-less scenario
Very low power consumption required
High security and convenience
Solid biometric performance
Secure environment
Supporting EMVco* standards for payments
Complying with packaging and production requirements
Ultra-thin package
ISO- and CQM-certifications
Bendable and scratch resistant
Lean, effective and high yield card manufacturing
Meeting cost requirements
Highly price sensitive market demand curve
9
* ”EMVCo exists to facilitate worldwide interoperability and acceptance of secure payment transactions.” www.emvco.com
Mobilizing the smartcard value chain
Payment schemes and standardization bodies* i.e. MC, VISA, CUP, EMVCo, ISO, FIDO…
Solution providers
examples
Card manufacturers
examples
NXP
ZWIPE
Cardlab
Others…
• HW (sensor module)
• On card SW (algorithms)
• SW (off card. Enrolment
& GUI)
• Packaging (Production
SW & tools)
Card
Issuers
Oberthur
Banks
Gemalto
Corporations
G&D
Governments
Kona-I
Applications :
ID, loyalty,
access,
payment
HID
Cardholder
Fingerprints
Others…
*Setting standards, are custodians of payment system integrity and act as catalysts for industry development initiatives like financial inclusion.
New key recruitments
Hassan Tabrizi
Interim CFO
11
Peter Bergson
Legal Councel
Angelica Berg
Sustainability
Summary
A weak but profitable first quarter
Excess inventory in the value chain has weakened
demand from OEMs
We remain competitive in a highly competitive market
Good traction in Tier 2/3 and entry level segments
We are well positioned within the smartcard segment
12
Q1 2017 FINANCIAL RESULTS
Q1 2017 Financial performance
14
Investing for the future
15
Weaker profitability in Q1 2017
Operating profit, SEK M
Operating margin, %
Jan-Mar
2017
70,8
10
Jan-Mar
2016
618,7
41
Jan-Dec
2016
2578,5*
39
EPS, SEK
0,17
1,44
6,40
* Exchange rate effects on bank balances are reported under “Financial income and expenses” as from 2017,
which means a re-classification of the 2016 operating profit.
16
Working capital development
* *
*Average working capital excluding net cash over 5 quarters/rolling 12 months sales
17
Q1 2017 Cash flow and Net cash trend
18
Q&A
19
THANK YOU!