fingerprint cards q1 2018 - fingerprints – you are the ... · a declining chinese smartphone...
TRANSCRIPT
FINGERPRINT CARDS
Q1 2018MAY 3, 2018
Q1 2018 Summary
RevenuesMargins &
profitabilityHighlights
Revenues:
SEK 290 (686) M,
a 58% decrease year-
over-year
Gross profit:
SEK 45 (282) M
Gross Margin:
15% (41)
Operating profit*:
SEK -175 (71) M
Operating margin:
-60% (10)
Operating Cash
Flow:
SEK -204 (-324) M
Shift towards smaller
and cheaper fingerprint
sensors negatively
impacted revenues
and gross margin
Performance in the
Chinese smartphone
market remained weak
Cost-cutting program
proceeding as planned
Operating result
impacted by
restructuring costs of
SEK 40.2 M
2
*Operating result impacted by restructuring costs of SEK -40.2 M
BUSINESS UPDATE
Cost control and diversification
Result impacted by intense competition, a product mix shift and
a declining Chinese smartphone market
We are lowering our costs…
Cost reduction program executed according to plan, saving SEK 360m during
2018
High-priority development project with the aim of launching a fingerprint
sensor with a lower production cost than the present generation of sensors
… and diversifying our business
Expanding our biometric technology portfolio, e.g. face recognition and in-
display
We have a strong position in emerging application areas, e.g. in smart cards
4
Market launches and business
development in Q1 2018
17 mobile devices launched by 7 OEM customers.
Launches by Huawei, Xiaomi and Oppo among others.
Two PCs launched with our fingerprint sensors
FPC1291 launched, the first fingerprint sensor from the third
generation
A facial recognition solution is being developed. expected to be
integrated into customer products in the second half of 2018.
Ten-year exclusive agreement with Gentex to bring iris-scanning
technology to the automotive industry
Partnership with Altran aimed at offering biometric solutions for
the automotive industry
Biometric smart card market trials in the Middle East and Japan
5
Biometric smart card market trials in the
Middle East and Japan
Fingerprints is collaborating with IDEMIA
on Japan’s first biometric payment card
trial. An FPC1300-series sensor is used,
featuring ultra-low power consumption
and superior biometric performance.
Biometric payment card pilot with Visa,
the first of its kind in the Middle East.
The card technology is provided by
Zwipe, and is using a sensor from the
FPC1300-series.
6
Summary
Earnings in the first quarter of 2018 impacted by a continued weakening of
sales, as anticipated
Shift towards smaller and cheaper fingerprint sensors continued, impacting
sales and gross margin
Cost reduction program executed according to plan, saving SEK 360 M in
2018
Challenging market conditions, but some stabilization and sequential growth
expected in Q2
Cash flow from operating activities expected to sequentially improve during
Q2 and be positive, due to a tax refund and an improved operating result.
Fingerprints is well-positioned to benefit from the adoption of biometry in new
areas: biometric smart cards and automotive/embedded
7* Excluding Apple
Q1 2018 FINANCIAL RESULTS
Q1 2018 Financial performance
9
-70
-60
-50
-40
-30
-20
-10
0
10
20
30
40
50
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
Revenues, SEK M
Operating profit/loss, SEK M
Gross margin, %
Operating margin, %
Revenues, Operating profit/loss and Gross margin, quarters
Operating expenses development
10
75,2% 29,0%
26,1%
0
100
200
300
400
500
600
700
800
900
2018 2017 2017
Jan-Mars Jan-Mars Jan-Dec
Operating expenses, MSEK, and in relation to revenues
Development costs
Administrative costs
Selling costs
Weaker profitability in Q1 2018
11
Jan-Mar Jan-Mar
2018 2017
Operating profit, SEK M -174.9 70.8
Operating margin (%) -60% 10%
EPS, SEK -0.47 0.17
Working capital development
*Average working capital excluding net cash over 5 quarters/rolling 12 months sales
12
0%
10%
20%
30%
40%
0
200
400
600
800
1000
1200
1400
2016 2016 2016 2017 2017 2017 2017 2018
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Working capital (excluding cash and tax items)
Working capital
in % of revenues
Q1 2018 Cash flow and Net cash trend
13
-400
-300
-200
-100
0
100
200
300
400
500
600
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
Cash and cash equivalents
Cash flow from operating activities
Cash and cash equivalents and cash flow, MSEK
Q&A
14
THANK YOU!