Fingerprint Cards
Q2 2016 Report
July 22, 2016
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Strong Q2 2016 results
Revenues
Revenues: MSEK 1,666
(MSEK 445), an increase of
274% y-o-y and 12% q-o-q
Margins & profitability
Gross profit: MSEK 814
(MSEK 159)
Highlights
Gross margin: 49% (36%)
42 smartphones launched
with FPC touch fingerprint
sensors
EBIT: MSEK 710 (MSEK 65)
FPC increasing market share
Operating margin: 43%
(15%)
EPS: SEK 1.72 (SEK 0.22*)
before dilution
* EPS for Q2 2015 adjusted for the share split in Q2 2016
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Business update
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Market development – Q2 2016
42 smartphones by 18 OEMs
– China continues to be very strong
– Huawei, Xiaomi, Lenovo, Oppo and Vivo
launched 26 phones with our sensors
during the quarter
– Motorola, Sharp, Meitu launched the
first phones with FPC sensors
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Continued market leadership
Global Smartphone Vendor Market Share %, Q1 2016
25%
20%
15%
10%
5%
0%
Launched phones with competitior or inhouse
Has not launched phone with fingerprint sensor
Launched phone with FPC sensor in 2016
>50 devices launched by customers named above in 2016 to date
* Source: Strategy Analytics April 2016, FPC
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Smartphone seasonality
Smartphones Quarterly Volume Shipments*
450
400
350
M Units
300
250
200
150
100
50
0
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Marginal sequential growth in Q2 2016 estimated. Strong Q4 2016 estimated.
* Source: Strategy Analytics, April 2016
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Revenue growth from more devices
# of Mobile devices launched (accumulated)
XXX
125
83
39
57
Revenue generated by launches in 2016
Revenue generated by launches in 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Schematic illustration
Appr. 100 design wins for mobile devices planned for launch Q3 16-Q1 17
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Volume and revenue ramp up
Pre-sales/
Integration
Launch support
High volume
Phone Launch
Quarterly Revenue
(schematic)
First Shipments
Design Win
Project start
First order/
Samples
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Schematic illustration
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New technology address segmentation
• High-tier segment: Highly advanced
sensors, strong interest in sensor under
glass
– FPC1268 planned for launch in smartphones
during H2 2016
– Excellent biometric performance verified
• Entry-level segment: Key to grow
fingerprint sensor market to >1 billion units
in 2017
– FPC1028 launched in Q2, highly optimized touch
fingerprint sensor
• Own algorithm key enabler for FPC1268
and FPC1028
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Strategy for growth in progress
Progress IoT and Automotive Q2 2016
• FPC-BM announced to drive new market segments
New
Progress Smart Cards Q2 2016
• Product announcements by Kona-I and MeReal
• Continued cooperation with Zwipe
• Additional partnerships progressing well
• Sensors ready for mass production during Q3 2016
Segments
Existing
Grow with the existing
customer base
Add new customers
Existing
Extended biometry scope
• Trackpad
• Higher security
- Anti-spoof and improved algorithm
• More features
New offerings
• Other sensors
• M&A opportunities
New
Offering
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Continued leadership
• Growing market share
– 71 mobile devices launched in H1
2016 (vs 56 in 2015)
– Market share target for 2016: 5070%; we estimate to reach upper
part of interval
• Continued technology leadership
– FPC1268 under glass for high-tier
– FPC1028 for entry level
– FPC-BM for Internet of Things and
other markets
– Next generation sensors
architecture underway
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Outlook
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2016 Guidance
Previous 2016 Guidance(1)
Updated 2016 Guidance
SEK 7,000-8,500 million
SEK 7,200-8,300 million
Operating margin 2016
Improved operating margin
compared to H2 2015
Improved operating margin
compared to H2 2015
Average SEK/USD rate
8.30 (applied to Q2-Q4)
8.40 (applied to Q3-Q4)
Revenue 2016
1.
Guidance as of 28 April 2016.
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2016 Q2 Financial results
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Quarterly financial trends
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Investing for future growth
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Improved profitability
Operating profit, SEK M
Operating margin, %
Apr-Jun
2016
709,7
43
Apr-Jun
2015
65,5
15
Jan-Jun
2016
1298,7
41
Jan-Jun
2015
46,6
8
EPS, SEK*
1,72
0,22
3,16
0,16
* Earnings per share has been restated for the share split in May 2016
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Working capital development
*
*Average working capital excluding net cash over 5 quarters/rolling 12 months sales
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Cash flow and Net cash trend
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Long term financial targets
Moving three-year financial targets, now covering 2016-2018, with 2015 as the
base. These targets are not to be considered as guidance, it’s our long-term
expectations for the company.
• Growth
–
Fingerprint Cards targets a compound annual revenue growth of approximately
60% from 2016 to 2018
• Profitability
–
Fingerprint Cards targets an operating margin of at least 35 % for each year
from 2016 to 2018
• Capital structure
–
Fingerprint Cards will have a strong balance sheet, typically with a net cash
position. Excess capital will be returned to shareholders through share buybacks and/or dividends.
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Q&A
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