FINGERPRINT CARDS

Q1 2018MAY 3, 2018

Q1 2018 Summary

RevenuesMargins &

profitabilityHighlights

Revenues:

SEK 290 (686) M,

a 58% decrease year-

over-year

Gross profit:

SEK 45 (282) M

Gross Margin:

15% (41)

Operating profit*:

SEK -175 (71) M

Operating margin:

-60% (10)

Operating Cash

Flow:

SEK -204 (-324) M

Shift towards smaller

and cheaper fingerprint

sensors negatively

impacted revenues

and gross margin

Performance in the

Chinese smartphone

market remained weak

Cost-cutting program

proceeding as planned

Operating result

impacted by

restructuring costs of

SEK 40.2 M

2

*Operating result impacted by restructuring costs of SEK -40.2 M

BUSINESS UPDATE

Cost control and diversification

Result impacted by intense competition, a product mix shift and

a declining Chinese smartphone market

We are lowering our costs…

Cost reduction program executed according to plan, saving SEK 360m during

2018

High-priority development project with the aim of launching a fingerprint

sensor with a lower production cost than the present generation of sensors

… and diversifying our business

Expanding our biometric technology portfolio, e.g. face recognition and in-

display

We have a strong position in emerging application areas, e.g. in smart cards

4

Market launches and business

development in Q1 2018

17 mobile devices launched by 7 OEM customers.

Launches by Huawei, Xiaomi and Oppo among others.

Two PCs launched with our fingerprint sensors

FPC1291 launched, the first fingerprint sensor from the third

generation

A facial recognition solution is being developed. expected to be

integrated into customer products in the second half of 2018.

Ten-year exclusive agreement with Gentex to bring iris-scanning

technology to the automotive industry

Partnership with Altran aimed at offering biometric solutions for

the automotive industry

Biometric smart card market trials in the Middle East and Japan

5

Biometric smart card market trials in the

Middle East and Japan

Fingerprints is collaborating with IDEMIA

on Japan’s first biometric payment card

trial. An FPC1300-series sensor is used,

featuring ultra-low power consumption

and superior biometric performance.

Biometric payment card pilot with Visa,

the first of its kind in the Middle East.

The card technology is provided by

Zwipe, and is using a sensor from the

FPC1300-series.

6

Summary

Earnings in the first quarter of 2018 impacted by a continued weakening of

sales, as anticipated

Shift towards smaller and cheaper fingerprint sensors continued, impacting

sales and gross margin

Cost reduction program executed according to plan, saving SEK 360 M in

2018

Challenging market conditions, but some stabilization and sequential growth

expected in Q2

Cash flow from operating activities expected to sequentially improve during

Q2 and be positive, due to a tax refund and an improved operating result.

Fingerprints is well-positioned to benefit from the adoption of biometry in new

areas: biometric smart cards and automotive/embedded

7* Excluding Apple

Q1 2018 FINANCIAL RESULTS

Q1 2018 Financial performance

9

-70

-60

-50

-40

-30

-20

-10

0

10

20

30

40

50

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

Revenues, SEK M

Operating profit/loss, SEK M

Gross margin, %

Operating margin, %

Revenues, Operating profit/loss and Gross margin, quarters

Operating expenses development

10

75,2% 29,0%

26,1%

0

100

200

300

400

500

600

700

800

900

2018 2017 2017

Jan-Mars Jan-Mars Jan-Dec

Operating expenses, MSEK, and in relation to revenues

Development costs

Administrative costs

Selling costs

Weaker profitability in Q1 2018

11

Jan-Mar Jan-Mar

2018 2017

Operating profit, SEK M -174.9 70.8

Operating margin (%) -60% 10%

EPS, SEK -0.47 0.17

Working capital development

*Average working capital excluding net cash over 5 quarters/rolling 12 months sales

12

0%

10%

20%

30%

40%

0

200

400

600

800

1000

1200

1400

2016 2016 2016 2017 2017 2017 2017 2018

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Working capital (excluding cash and tax items)

Working capital

in % of revenues

Q1 2018 Cash flow and Net cash trend

13

-400

-300

-200

-100

0

100

200

300

400

500

600

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

Cash and cash equivalents

Cash flow from operating activities

Cash and cash equivalents and cash flow, MSEK

Q&A

14

THANK YOU!