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FINGERPRINT CARDS
SHB SMALL/MIDCAP SEMINAR, JUNE 7 2017
CHRISTIAN FREDRIKSON, CEO
Agenda
Introduction to Fingerprints
Business update
Inventories
Current business opportunities
The smartcard opportuntity
Long term view
Becoming the biometrics company
Market Opportunities
Strategy
The acquisition of Delta ID2
INTRODUCTION TO FINGERPRINTS
3
Fingerprints of Sweden
- In biometrics since 1997
Founded 1997 in Gothenburg, Sweden
Public company listed on NASDAQ OMX
+400 employees
HQ in Gothenburg, R&D in Sweden and Denmark
Subsidiaries in China, South Korea, Taiwan, US
Financial highlights 2016 – 129% revenue growth
Revenues : 6,638 MSEK (2,900)
Gross Margin : 48% (43)
Operating margin : 39% (31)
4
Our core business – advanced biometric system solutions, both HW and SW
Market position – global market leader
Key focus areas – smartphones, tablets, PCs, smartcards, IoT, automotive
Global brands use our products
5
Unique System Knowledge
BIOMETRIC
ALGORITHMSSOFTWARE
DEVELOPMENT
ASIC/SILICON
CHIP DEVELOPMENT
PACKAGING
EXPERTISE
6
BUSINESS UPDATE
7
Short term congestion in our value chain –
expected to be normalized end of Q2
8
Progress with Tier2 and Tier3 OEMs
9
• Represents some 25% of the market
• Long tail of >150 OEMsLaunches with new OEM-
customers announced
New wins with FPC1028
important for low-end
smartphones and this segment
Teaming up with new partners
such as distributors, module-
houses and platform providers
First launch on Spreadtrum
platform – Qiku (April)
Market launches Q1 2017
18 mobile devices by 13 OEM customers
Launches by Huawei, Xiaomi, Lenovo and Oppo
Huawei P10 with FPC1268 under glass
First smartphone with sensor under continuous cover glass
Blackberry and Indian Micromax, new customers
Launch of FPC SENSETOUCH™
Eight features now launched
10
Smartcard key success factors
Supporting a battery- and contact-less scenario
Very low power consumption required
High security and convenience
Solid biometric performance
Secure environment
Supporting EMVco* standards for payments
Complying with packaging and production requirements
Ultra-thin package
ISO- and CQM-certifications
Bendable and scratch resistant
Lean, effective and high yield card manufacturing
Meeting cost requirements
Highly price sensitive market demand curve
11 * ”EMVCo exists to facilitate worldwide interoperability and acceptance of secure payment transactions.” www.emvco.com
Mobilizing the smartcard value chain
Fingerprints
Gemalto
Oberthur
Kona-I
Others…
Banks
Corporations
Governments
Cardholder
Card manufacturers
examples
Card
Issuers
• HW (sensor module)
• On card SW (algorithms)
• SW (off card. Enrolment
& GUI)
• Packaging (Production
SW & tools)
Payment schemes and standardization bodies* i.e. MC, VISA, CUP, EMVCo, ISO, FIDO…
Solution providers
examples
G&D
HID
*Setting standards, are custodians of payment system integrity and act as catalysts for industry development initiatives like financial inclusion.
Applications :
ID, loyalty,
access,
payment
Cardlab
Others…
NXP
ZWIPE
THE LONG TERM VIEW
13
Megatrends that affect us
Biometrics
Security and convenience
Cloudification
Online payment/banking
Digitalization (IoT)
CSR awareness
14
#1 BIOMETRICS COMPANY
15
16
New segments expand fingerprint sensor market
Continued strong market
growth in smartphones
The market for biometric smart
cards is expected to expand
rapidly in 2018
Growth opportunity in PC – low
penetration rate
Source: Strategy Analytics, IHS, Fingerprint Cards estimates Dec 2016.Total Addressable Market excludes Apple, includes all other OEMs and segments including swipe technology
16
Fingerprints growth strategy
Grow with the existing
customer base
Add new customers
Other segmentsPC
Internet of ThingsAutomotive
Industrial and medical
New offerings
Other sensors
M&A opportunities
Segments
Existing
New
OfferingExisting New
SmartcardsSensor adaptation
Utilize scale advantagesStrong growth potential
Extended biometric
scope
Trackpad
Higher security
More features
17
The big picture of biometrics
Technologies
Facial Iris Voice
Palm vein Finger vein Fingerprint
Capacitive
Ultrasonic
Optical
1 st generation
Spray coated
2nd generation
Under glass
3rd generation
Under thicker glass
Touch sensorsBiometric modalities
18
THE PERFECT MATCHFingerprint Cards acquires Delta ID
19
Summary
We expect the excess inventory in the value chain to
be normalized by the end of Q2
We remain competitive and have good traction also
with Tier 2/3 customers and entry level smartphones
Delta ID is a milestone to become a Biometrics
Company and the acquisition will be closed during Q2
20
THANK YOU!Stay in touch & connect
E-mail: [email protected]
For more information, visit us at www.fingerprints.com