fingerprint cards q1 2016 report

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Fingerprint CardsQ1 2016 Report

April 28, 2016


Strong Q1 2016 results

Revenues Margins & profitability Highlights

Revenues: MSEK 1,491 (MSEK 140), an increase of966% y-o-y and 10% q-o-q

Gross profit: MSEK 732 (MSEK 37)

Gross margin: 49% (27%)

EBIT: MSEK 589 (MSEK -19)

Operating margin: 40% (-13%)

EPS: SEK 7.12 (SEK -0.32), before dilution

26 mobile devices launchedwith FPC touch fingerprint sensors

Strengthened competitiveposition in smartphones

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Business update


26 smartphones/devices by 12 OEMs– China continue to be very strong

– Huawei, Xiaomi, Lenovo, Oppo and Vivo launched 13 phones with our sensors during the quarter

– LG G5

– New phones by HTC and Sony

Market development – Q1 2016


Continued market leadership

* Source: Strategy Analytics April 2016, FPC

27 devices launched by customers named above in 2016 to date

0%

5%

10%

15%

20%

25%

Global Smartphone Vendor Market Share %, Q1 2016

Launched phones with competitior or inhouse Has not launched phone with fingerprint sensor Launched phone with FPC sensor in 2016


Smartphone seasonality

Seasonal decline in Q1

* Source: Strategy Analytics, April 2016

0,0

50,0

100,0

150,0

200,0

250,0

300,0

350,0

400,0

450,0

Q4 '14 Q1 '15 (A) Q2 '15 Q3'15 Q4'15 Q1'16

M U

nit

sSmartphones Quarterly Volume shipments


Revenue growth from more phones

Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

3957

83XXX

XXX

# of Devices launched (accumulated)

Schematic illustration

Revenue generated by launches in 2015

Revenue generated by launches in 2016


Volume and revenue ramp up

Design WinProject start

First order/Samples

First Shipments

Phone Launch

Pre-sales/ Integration

Launch support High volume

Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Quarterly Revenue(schematic)

Schematic illustration


Extending performance with launched sensors

• Anti-spoof and improved fully inhouse algorithm for industry’s best security and biometric performance

• Vertical integration combining sensor technology, packaging, algorithm, software, leads to highestperformance

Fingerprint sensors under glass or ceramics

• FPC1245 with ceramics highly successful, used in Xiaomi Mi5 and Oppo R9/R9+

• Launch of FPC1268 for mounting under cover glass- Phones being developed for launch H2 2016

New sensors under way for entry level segment

Extending our technology leadership

FPC1245


• Strong market growth in fingerprint sensors

• Other segments start to contribute in 2016

• Other segments to add substantial value in 2017 and 2018

New segments to expand the market

Source: Strategy Analytics, IHS, FPC estimatesTotal addressable market excludes Apple, includes all other OEMs and segments including swipe technology

0

500

1000

1500

2000

2014 2015 2016 2017 2018

M Units Total addressable market

Smartphone Other


Strategy for growth

Existing

New

Existing

Grow with the existing customer base

Add new customers

Extended biometry scope• Trackpad• Higher security• More features

New

New offerings• Other sensors• M&A opportunities

Segments

Offering

Other segments

• Automotive• Industrial and medical• Internet of things

Smart Cards

• Sensor adaptation• Utilize scale advantages• Strong growth potential


Strategy for growth in progress

Existing

New

Existing

Grow with the existing customer base

Add new customers

Extended biometry scope• Trackpad• Higher security

- Anti-spoof and improved algorithm• More features

New

New offerings• Other sensors• M&A opportunities

Segments

Offering

Progress Q1 2016

• Automotive design win announced• Wearables platform announced with

Gemalto, ST, PB

Progress Q1 2016

• Continued cooperation with Zwipe• Progress with other partners• Plan for commercial launch in 2016


• Continued market leadership– Very high share of phones launched

in Q1

– Very strong outlook for new phones to be launched by existing and new customers

• Continued technology leadership– New sensors & new features

• Increased investments for continued leadership in smartphones and new segments

Continued leadership


Outlook


2016 Guidance

Previous 2016 Guidance(1) Updated 2016 Guidance

Revenue 2016 SEK 7,000-8,500 million SEK 7,000-8,500 million

Operating margin 2016Improved operating margin

compared to H2 2015

Improved operating margin compared to H2

2015

Average SEK/USD rate 8.50 (applied to Q1-Q4) 8.30 (applied to Q2-Q4)

1. Guidance as of 5/2/2016.


2016 Q1 Financial results


Quarterly financial trends


Investing for future growth


Improved profitability

Q1 Q1 Apr-Mar Apr-Mar

2016 2015 2015/16 2014/15

Operating profit, SEK M 589,1 -18,8 1518,2 -137,5

Operating margin, % 40 -13 36 -39

EPS, SEK 7,12 -0,32 20,18 -2,37


Working capital development

*Average working capital over 5 quarters/rolling 12 months sales

*


Cash flow and Net cash trend


Q&A

fingerprint cards q1 2016 report

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