FINGERPRINT CARDS ABANNUAL GENERAL

MEETINGCHRISTIAN FREDRIKSON, CEO

GOTHENBURG, SWEDEN

APRIL 20 2017

Agenda

Inledning

Kortsiktiga utmaningar

2016 i perspektiv

Långsiktiga möjligheter

2

INTRODUCTION

3

We are highly competitive and fight for our

market shares

OEMs implement dual sourcing which fuels competition

Our products are competitive and so are our cost levels

Market share from 55-60% in 2016 to around 50% in 2017

Unique system knowledge

Biometric algorithms

Asic/silicon chip development

Software development

Packaging expertise

4

SHORT TERM CHALLENGES

5

Short term congestion in our value chain

6

We are part of a long value chain

Distributor

(~ 5)

OEM

(> 20)

Mod House

(~ 10)

Distr&Retail

(100.000s)

Fingerprint

Cards AB

Packaging, SW

Fingerprints ”Sell-In”

Fingerprints Revenue recognition

Fingerprints ”Sell-

Through”Fingerprints market

share measurement

wafers modules Smartphoneswafers

Approximately 4-6 months lead time

Note: Illustrative. Applies to mobile devices7

Inventory levels are a short term challenge

Inventory levels are expected to normalize during Q2

Consumer demand remains as expected and fingerprint sensor

penetration is still increasing

8

2016 IN PERSPECTIVE

9

Fingerprints value creation

55-60%Market share

>10 Billiontouches per day

136Devices launched in 2016

10

20Sensor models

Employee

sat 80%

#1 Innovative

Swedish Company

579 MSEK

in taxes*

186new talents

in Fingerprints

*From Income Statement. 498 MSEK cash-flow wise

Value creationKey financials

Revenues of SEK 6,639 M (2,900), up 129% YoY

Gross Margin 48% (43)

Operating Profit of SEK 2,613 M (910), up 187% YoY

Operating Margin of 39% (31)

Earnings per share SEK 6.50 (2.52)

Cash flow from operating activities of SEK 1,130 M (910)

Net Cash SEK 1,162 M (1,031)

187%Profit increase

129%Rev increase

11

Fine from Nasdaq Stockholm

Disciplinary CommitteeWhy?

Nasdaq’s critique: company’s information disclosure routines

The specific reasons for the fine:

Disclosure of 2016 guidance at CMD 2015 and incorrect

statement from chairman in conjunction with the events

that followed (December 2015)

Twitter statements from non appointed Company

spokesperson (September 2015, March 2016)

What?

Fine corresponding to two annual fees (SEK 916 496)(To be commented later on in the agenda § 23)

Actions:

More proactive in communication with Nasdaq

Establish a Communication department and

IR function

12

136 mobile devices

launched in 2016

All in all 14 OEM-customers

10 launches by new OEM-customers

Launch Google – Pixel Smartphone

12 mobile devices launched in India by

Chinese OEMs

Rear mounted FPC1035 most frequent sensor

- in 54 launches

Huawei Mate 9 Pro with FPC1268 under glass

13

Progress in new segments

Samsung PC Notebook 9 launched

PC-offer presented at CES (in Q1)

Ultra thin Smart Card sensor series launched

Smartcard prototypes at Money 20/20

Biometric module launched for IoT

Partnerships established

14

LONG TERM OPPORTUNITIES

15

Megatrends

that affect us

Biometrics

Security and convenience

Cloudification

Online payment/banking

Digitalization (IoT)

CSR awareness

16

#1 BIOMETRICS COMPANY

17

The change we will face

#1 FINGERPRINT SENSOR COMPANY

Market of 1.5 B units

10s of customers

3-5 major competitors

One technology

Focus on device

Business model: HW focus

One Business Line

Innovate or die

Customer focus

Entrepreneur

#1 BIOMETRICS COMPANY

Market of 10-15 B units

100s of customers

10-15 major competitors

Several technologies

Focus on cloud and device

Business model: SW/system/HW

Several Business Lines

Innovate or die

Customer & stakeholder focus

Innovative biometric company

18

Strategy for continued profitable growth

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

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

20

THE PERFECT MATCHFingerprint Cards acquires Delta ID

21

Long term financial objectives

22

Fingerprints’

Sustainability

2016 Highlights

Several policies issued

Code of Business Conduct for employees

as well as for Suppliers

Created a Sustainability Forum to bring

management attention Sustainability

Created a Sustainability Framework

aligning our efforts and goals

ISO14001 certified and reported to

Carbon Disclosure Project

23

Talented people create results

24

Summering

Vi är konkurrenskraftiga och slåss för våra marknadsandelar

Vi har den bästa systemkompetensen inom biometri

Kortsiktiga utmaningar

Alltför stora varulager i värdekedjan har försvagat efterfrågan från OEM

Normaliserade varulager i värdekedjan under Q2

Vi förblir konkurrenskraftiga i en mycket tuff marknad

2016 i perspektiv

Stabil ekonomi, men på en krokig väg

Marknadsledande med 55-60% av marknaden

En bred och växande produktportfölj

Långsiktiga möjligheter

Tillväxten kommer från nya segment och av ny teknologi

Ökad ambition kring hållbarhetsarbete

Vår ambition är att vara det ledande biometribolaget25

Stay in touch & connect

E-mail: investrel@fingerprints.com

For more information, visit us at www.fingerprints.com