New strategic partnerships within Digital Identity and Mobile

DevicesInterim Report January – June 2019

Published August 16, 2019

2

Highlights Q2

License agreement with Egis Technology

Partnership with Covr Security

Revenue from pilot projects within Digital Identity

Strenghtened presence in Asia through established office in

Shanghai

DIGITAL IDENTITY

3

SMART CARDS

MOBILE DEVICES

Driving factors in our product areas

Demand for convenience, security and personalization

Demand for increased security, convenience and reduced

fraud for contactless payments

Demand for user friendly design with improved security

Development according to plan

4

The market is demanding solutions with the ability to verify

a person’s identity in a convenient and secure way

The partnership with Covr strengthens our offering

A number of Proof-of-Concept (PoCs) are carried out

Commercialization of the product expected in 2020

DIGITAL IDENTITY

5

High demand on increased security, convenience and

reduced fraud

Precise integrated in the first biometric smart card

module to receive Mastercard CAST Certificate

PoCs and pilot tests are carried out

Commercialization in modest volumes expected in Q4

2019

Significant progress towards

commercialization

SMART CARDS

6

First integration of our fingerprint software in a series of mobile devices, in collaboration with Egis Technology – 10 MSEK in revenue expected during H2 2019

The new office in Shanghai is established and offers customer service, support and product development for the customers in Asia

Continued strong collaborations with actors such as Qualcomm and several sensor partners in Asia

Technology shift in which optical sensors are gaining ground

Our strategy in Asia has borne

fruit

MOBILE DEVICES

Financial development

7

Net sales & gross margin

8

Net sales Q2 MSEK 13,4 (18,7)

Gross margin Q2 78,8 % (82,8)

Amortization of capitalized development

expenses of MSEK 2,5 (2,4)

Gross margin

Net sales

Net sales

0%

20%

40%

60%

80%

100%

0

2

4

6

8

10

12

14

16

18

20

Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

MSEK

9

Operating profit/loss Q2 MSEK - 7,3 (- 3,3)

EBITDA Q2 MSEK - 4,1 (- 0,5)

Operating expenses Q2 MSEK 17,9 (18,8)

Cost reduction mainly due to completed

reorganization and reduced sales costs

Increased costs in R&D due to increased

investments in digital identity

EBITDA

Operating profit/loss

Operating profit/loss

Operating profit/loss

-16,0

-14,0

-12,0

-10,0

-8,0

-6,0

-4,0

-2,0

0,0

2,0

Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

MSEK

10

Cash flow Q2 MSEK - 2,0 (- 11,7)Adjusted cash flow Q2 MSEK + 1,2*

Cash and cash equivalents per 30/6 MSEK 65,4 (93,6)

Cash and cash equivalents

Cash flow from operating activities

Cash flow from operating activities

Cash flow

0,0

40,0

80,0

120,0

-12,0

-10,0

-8,0

-6,0

-4,0

-2,0

0,0

2,0

4,0

6,0

Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

MSEKMSEK

*Adjusted for payments of the provision for costs made in the fourth quarter of 2018 related to the reorganization

Intensive first half of 2019 with several milestones achieved

Partnership with Covr Security strengthens our digital identity

offering. We are expecting a commercialization of Precise

YOUNiQ in 2020

Significant progress in biometric smart cards. We are expecting

a commercialization in modest volumes during Q4 2019

Optical sensors gains more ground over capacitive and

ultrasound sensors

11

Summary

12

Thank you!

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