Fingerprint Cards AB

Interim Report January - March 2019

Highlights of the quarter

• Fingerprints' first in-display sensor, FPC1610, was launched
• Healthy order inflow with continued strong volume trend for FPC1511, the fourth-generation capacitive sensor

Sales growth continued in new areas, outside capacitive sensors for mobile phones

Fingerprints signed a partnership with Gemalto and secured the world's first volume order of fingerprint sensors for dual-interface biometric payment cards

Fingerprints participated in a further two market trials of biometric payment cards

First quarter of 2019

• Revenues amounted to SEK 342.9 M (289.7)
• The gross margin was 23 percent (15)
• EBITDA totalled SEK 35.8 M (neg: 148.7)
• The operating result was negative SEK 1.9 M (neg: 174.9)
• Earnings per share before dilution amounted to a negative SEK 0.01 (neg: 0.47)
• Cash flow from operating activities was a negative SEK 161.1 M (neg: 203.8)

CEO's comments

Compared with the first quarter of 2018, Fingerprints' sales increased 18 percent, which is satisfying, particularly considering that Q1 is generally a seasonally weak quarter. Order bookings have continued to trend favorably at the beginning of the second quarter.

The gross margin improved, both year-on-year and compared with the preceding quarter. However, the profitability level is not satisfactory and was impacted by us selling a relatively high proportion of low-margin products from our inventory during the quarter. The shift to FPC1511, the latest generation of capacitive sensors, is still under way among our OEM customers. EBITDA was positive and continued to improve strongly in relation the preceding year. Fingerprints' financial position is favorable, with cash assets that amounted to SEK 338 M at the end of the quarter. The negative cash flow that we are reporting for the first quarter is attributable to a seasonal effect concerning accounts payable, as well as some delayed receivables, which were settled during the week following the end of the quarter. As at May 10, our cash position had increased by SEK 108 million since March 31, and amounted to SEK 446 million.