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Fingerprint Cards AB: Year-End Report January – December 2020
Highlights of the quarter
SEK 340.6 M in non-cash write-downs, whereof SEK 267.7 M attributable to the Delta ID acquisition.
Volume order for one hundred thousand T-Shape sensor modules from top-three card manufacturer.
Design win from a top-tier global PC manufacturer.
Fourth quarter of 2020
Revenues amounted to SEK 369.4 M (381.4)
The gross margin was 24 percent (23)
EBITDA totaled SEK 32.4 M (13.3)
SEK 340.6 M in non-cash write-downs
The operating result was negative SEK 326.8 M (neg: 15.3)
Earnings per share before dilution were negative SEK 1.02 (neg: 0.06)
Cash flow from operating activities amounted to SEK 46.9 M (82.4)
January-December 2020
Revenues amounted to SEK 1,255.7 M (1,458.6).
The gross margin was 22 percent (23)
EBITDA totaled SEK 59.4 M (128.7)
SEK 340.6 M in non-cash write-downs
The operating result was negative SEK 365.8 M (neg: 14.4)
Earnings per share before dilution were negative SEK 1.10 (neg: 0.04)
Cash flow from operating activities amounted to SEK 158.1 M (160.4)
The Board proposes to the Annual General Meeting that no dividend be paid for the 2020 fiscal year
CEO’s comments
In constant currency terms, revenue increased by 7 percent compared to the same period last year. We also increased our revenue compared with the preceding quarter, driven by continued healthy demand for our products, while our access to production capacity among the major semiconductor manufacturers also improved somewhat. A more favorable product mix, with a higher share of new products, contributed to improving the gross margin during the quarter. The result in the quarter was impacted by SEK 340.6 M in non-cash write-downs, whereof SEK 267.7 M is attributable to the acquisition of Delta ID, and the rest to R&D project and patents in the under-display area. Our positive view of the potential in iris recognition is unchanged, but we have made the assessment that future cash flows may be somewhat delayed, partly due to effects related to the corona pandemic. The main reason for the write-downs in under-display is the fact that average selling prices (ASP) have decreased significantly. In other respects, we have an unchanged positive view of the potential in the under-display area. Our underlying operating profit, adjusted for write-downs, was positive and amounted to SEK 14 M. Our liquidity is good, with net cash holdings of SEK 354 M as at December 31, 2020.
During the quarter, we launched the FPC1542, a new, thin capacitive sensor with a curved shape that builds further on our highly successful FPC1540/1541 product. Fingerprints is the market leader for capacitive sensors for smartphones, with a share that represents more than one-third of the global market. The capacitive fingerprint sensor is a proven and popular technology in the mobile industry, largely because of its reliability, performance, and cost efficiency. The fact is that some of Fingerprints’ customers once again have a preference for capacitive sensors as opposed to under-display sensors. Our new, thin sensors, designed for side-mounting, are particularly popular.
As we now enter the first quarter of 2021, we foresee continued challenges relating to the prevailing limitations in our supply chain. The geopolitical situation has increased the domestic demand for silicon chips in China, while the need for chips has generally increased due to the accelerating digitalization in the world. We are making progress in our work to secure additional suppliers to obtain the required capacity, both in mainland China and beyond. We have, in common with many external industry analysts, a very positive view of the trend in the market for biometric solutions. 2021 has good potential to be the year when biometrics make serious inroads in at least two new mass markets in which Fingerprints has a strong position: payments and PCs. We recently announced new volume orders in both of these areas: In January 2021, we communicated orders for several hundred thousand sensors from two top-tier PC manufacturers and in late December last year, we announced an order for one hundred thousand sensors from one of the world’s three largest card manufacturers.
During 2020, a biometric payment card was certified for the first time by both Mastercard and Visa. The card, which features Fingerprint’s technology, is supplied by Thales and now enables card issuers to implement major commercial launches of contactless biometric cards. BNP Paribas, one of the world’s ten largest banks, began its commercial roll-out of biometric payment cards during the autumn of 2020, and has announced that it aims to offer all of its customers these cards. In a recent survey carried out in France, Germany, the UK, Canada and Australia, more than half of the respondents said that they were prepared to switch banks to gain access to a biometric card. We are still only in the infancy of development in a uniquely interesting industry of the future, in which Fingerprints will continue to play a leading role.
Christian Fredrikson, President and CEO
Today at 09:00 CEST Fingerprints’ CEO Christian Fredrikson will present the report together with CFO Per Sundqvist in a combined webcast and telephone conference. The presentation will be held in English.
The report will be available at fingerprints.com
The webcast and the presentation material can be accessed through https://edge.media-server.com/mmc/p/bpmivekk
For analysts and media: The telephone conference dial-in is +44 (0) 2071 928000 (international participants) or 08-506 921 80 (Swedish participants). Please state conference ID 6669097.
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