PRECISE BIOMETRICS CORPORATE PRESENTATION Håkan Persson | CEO October 13, 2016 VERIFIED BY YOU
COMPANY OVERVIEW Convenient and secure identity authentication, for everyone, everywhere Founded in 1997 Head Office in Lund, Sweden USA, Asia, Europe 35 employees & consultants Nasdaq OMX Stockholm
BUSINESS AREAS AND PRODUCTS FINGERPRINT MOBILE SMART TECHNOLOGY CARD SOLUTIONS TACTIVO™ FOR iOS PRECISE BIOMATCH™ MOBILE TACTIVO™ FOR PRECISE BIOMATCH™ ANDROID EMBEDDED MATCH-ON-CARD™
FINGERPRINT TECHNOLOGY
POWERFUL ALGORITHMS THAT PROVIDE THE BEST USER EXPERIENCE 1) Image enhancement and extraction of the fingeprints unique features, which are stored in a secure zone 2) Matching of the fingerprints unique features with the stored template 3) If it´s a match, the phone opens/the person is given access to the chosen application
THE LEADER IN FINGERPRINT SOFTWARE Precise Biometrics is the leading independent supplier of fingerprint software – Our software has become somewhat of a de facto standard among sensor vendors USER WORLD-LEADING PROVEN EXPERIENCE R&D TECHNOLOGY STRONG INDEPENDENT PATENTS
INTEGRATED IN OVER 150 DIFFERENT MOBILE DEVICES FROM 40 VENDORS Precise BioMatch Mobile is used by leading mobile device manufacturers such as Coolpad, Google, Huawei, HTC, Lenovo, LG, Oppo, Sony, ZTE and Xiaomi.
BUSINESS MODEL & CUSTOMERS Primary customers – sensor vendors Market solutions directly to OEM:s and other suppliers in their eco-system Revenues: Annual license fee Royalty Support and maintenance
CONTINUED MARKET GROWTH Addressable market of 800 million smartphones, tablets and laptops with fingerprint technology in 2017 Compound Annual Growth Rate of 35 % to 2020 Growth opportunities for Precise Biometrics short and long term Million Units 1400 CAGR 2015-2020 1200 § Total Mobile handsets, CAGR 35 % 1000 tablets,laptops (excl Apple) 800 600 400 200 Source: Redeye 0 2014 2015 2016 2017 2018 2019 2020
GREAT POTENTIAL IN NEW PRODUCT AREAS Fingerprint technology is entering new product areas, smart cards and payment cards in particular, but also wearables, cars and IoT Annual addressable market of one billion credit cards Demand for efficient and light algorithm solutions with high performance We are collaborating with our customers on several projects related to smart cards, wearables and cars This market can become as large as the market for mobile devices
NEW CUSTOMERS CREATE GROWTH OPPORTUNITIES Continued positive development with new customer agreements 19 license agreements with sensor manufacturers and security companies Well positioned to benefit from market growth and to capture a considerable market share Continuous evaluation of new potential partners
TRENDS AND DEVELOPMENT Increased competition will drive differentiation of fingerprint solutions – technology, industrial design and use case Emerging technologies – ultra sound, optical solutions Fingerprint sensors are going under glass and could go under plastic and metal Anti fraud – Liveness solutions will become increasingly important Adoption of other biometric modalities will increase and become complementary to fingerprint technology
TECHNOLOGY LEADERSHIP Significant performance improvements of our core algorithm solution Customer specific optimizations – new sensor technologies Reference implementations and integration support to make integration of fingerprint software more efficient Established local integration and support organization for China & Taiwan Investigating new requirements and specifications for future mobile payment solutions
MOBILE SMART CARD SOLUTIONS
TACTIVO ENABLES MOBILITY IN ORGANIZATIONS USING SMART CARDS Smart card reader for smartphones and tablets (iOS & Android) Increased information security through secure & convenient login using two-factor authentication Improved organizational efficiency and work environment, while reducing cost TACTIVO CUSTOMERS Defense Logistics Agency (US DOD) US Navy National Health Service (UK) Municipalities and county councils in Sweden
FINANCIAL DEVELOPMENT
NET SALES (PER QUARTER / 12 MONTHS ROLLING) (MSEK) (MSEK) 30 100 90 25 80 70 20 60 15 50 40 10 30 20 5 10 0 0 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3’14- Q1’15- Q2’15- Q3’15- Q4’14- Q215 Q4’15 Q1’16 Q2’16 Q3’15 Net sales increased to 21.9 (10.0) MSEK in Q2 – up 119 % Net sales 12 months rolling increased to 87.9 (31.8) MSEK – up 176 % compared to Q314 – Q215 Strong sales increase in Fingerprint Technology Business Area – up 174 % compared to Q2 15
CONTINUED HIGH GROSS MARGIN 100% Gross margin increased to 88% (81%) 90% Increased sales of fingerprint software 80% has led to an increase in gross margin 70% 60% 50% 40% 30% 20% 10% 0% Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16
OPERATING PROFIT & EBITDA (EBITDA PER QUARTER / 12 MONTHS ROLLING) (MSEK) (MSEK) 30 10 8 20 6 10 4 Q3’14- Q4’14- Q215 Q3’15 2 0 Q2’15- Q1’15- Q3’15- Q1’16 Q4’15 Q2’16 0 Q2'15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 -10 -2 -20 -4 -6 -30 Operating profit for Q2 2016 increased to 4.4 MSEK from - EBITDA 12 months rolling increased to 26.5 (-27.3) MSEK 7.9 MSEK in Q2 2015 EBITDA for Q2 2016 increased to 6.2 MSEK from -5.2 MSEK in Q2 2015
PRECISE BIOMETRICS MANAGEMENT RUTGER PETERSSON DANIEL EDLUND TOMMY NILSSON PATRIK LINDEBERG R&D DIRECTOR CORPORATE CFO COO MARKETING MANAGER HÅKAN PERSSON CEO
OUTLOOK
OUTLOOK Continue to strengthen position as the leader in fingerprint software Increased revenue opportunities as more customers gain market share – reduced dependency on specific customers Great opportunities in new product areas that requires a small fingerprint sensor in constrained environments Growth over time in our business area Mobile Smart Card Solutions Well positioned for profitable growth and continued positive company development
THANK YOU! precisebiometrics.com VERIFIED BY YOU
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