Fingerprint Cards Investor Update. Extending the leadership position in 2016

Transcription

1 Fingerprint Cards Investor Update Extending the leadership position in 2016

2 Disclaimer slide FORWARD LOOKING STATEMENTS This presentation contains forward looking statements with words such as believes, anticipates, outlook, confident, meeting and expects about expected revenues and earnings, anticipated demand for fingerprint sensors and internal estimates. These forward looking statements involve a number of unknown risks, uncertainties and other factors that could cause actual results to differ materially. Unknown risks, uncertainties and other factors are discussed in the risk report section of Fingerprint Cards Annual Report 2014 and in the Interim Reports.

3 Extending the leadership position in 2016 A global technology and market leader Jörgen Lantto, President and CEO The market leader in fingerprint sensors Thomas Rex, EVP Sales and Marketing Strong know how and leading technology Pontus Jägemalm, SVP Research and Development Questions and Answers Coffee break Executing on growth Johan Wilsby, CFO Jörgen Lantto, CEO Questions and Answers

4 A global technology and market leader Jörgen Lantto, President and CEO

5 A global technology and market leader The world s no 1 fingerprint sensor supplier* Extensive experience in fingerprint sensor technology A highly scalable business model Strongly exposed to the rapidly growing market for integrated fingerprint sensors in smartphones and other devices * Cowen analysis Nov 16, 2015

6 2015 a year of strong growth FPC revenue growth >1000% A major market inflection point early OEMs launched 53 smartphones/tablets with FPC compared to 2 phones in 2014 Source: Annual reports, FPC

7 New segments to expand the market Strong market growth in fingerprint sensors Other segments start to contribute in 2016 Other segments to add substantial value in 2017 and 2018 Total addressable market excludes Apple, includes all other OEMs and segments including swipe technology

8 FPC continues to take market share

9 2016 guidance (e) Estimated FPC revenues in 2016: 6,5 8,5 BSEK Operating margin in 2016 estimated to exceed H operating margin Market growth estimated to increase in value terms by some 105% in 2016 FPC to take market share Growth drivers: Fingerprint sensor penetration in smartphones estimated to increase to >50%* New use cases, secure mobile payment * Includes Apple volumes

10 The market leader in fingerprint sensors Thomas Rex, MSc EVP, Sales and Marketing

11 Market leader in China Source: FPC

12 A global market leader * Source: Strategy Analytics, July 2015, FPC

13 Market leader in North America Smartphones/tablets with FPC touch fingerprint sensor launched 2 Google: Android 6.0 partner (Nexus 5X, Nexus 6P) 1 Microsoft (Surface 4 Pro) 1 BLU (Pure XL) 1 Nextbit (Robin)

14 FPC s value chain Distributor Module house Design support HW customization OEM/ODM SW delivery/customization Integration support Maintenance Software customization and integration. 3 9 months Huawei HW design/customization support. Shipment of wafers or packaged sensors (LGA, Land Grid Array) WPI O film CrucialTec FPC Shipment of sensors Warehousing and Logistics Packaging and module manufacturing Industrial Design, integration, tuning and end user experience

15 Volume and revenue ramp up Pre sales/ Integration Launch support High volume Phone Launch First Shipments Quarterly Revenue (schematic) Design Win Project start First order/ Samples 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 Schematic illustration

16 Quarterly revenue ramp up # of Smartphones launched (accumulated) Revenue generated by launches in 2016 Revenue generated by launches in Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 Schematic illustration

17 Strong revenue growth to continue (e) A clear market leader for touch fingerprint sensors 53 smartphones/tablets launched with FPC in 2015 A strong market position in China Customers include 9 out of 10 top handset players A highly scalable business model

18 Strong know how and leading technology Pontus Jägemalm, PhD SVP Research and Development

19 Technology leadership Technology leadership and full system capability Unique and extensive experience in touch fingerprint sensor technology Broad IP portfolio High competence and educational level, ~30% PhDs ASICS Packaging Algorithms System and SW

20 Superior 3D image quality and biometric performance 18 years of experience in touch fingerprint sensors results in leading image quality The combination of 3D image quality and world class algorithm enables state of the art performance

21 State of the art biometric performance FRR 100% 10% Algorithm B False Acceptance Rate (FAR) Security level False Rejection Rate (FRR) Convenience level State of the art performance: FAR 1/ FRR < 2% Algorithm learns with usage 2% Algorithm A 1/100k 1/50k 1/1000 FAR

22 FPC capacitive measurement An active method which provides the best image quality Direct measurement against the finger delivers superior signal Patented pixel design based on vast know how, delivers best in class signal to noise ratio Protective coating Sensing pixel

23 Silicon sensor design The pixel array size is designed in analog CMOS circuitry, and its size is driven from finger area needed The area of the pixel array is the main part of the silicon

24 Microelectronic packaging Microelectronic packaging critical for performance Industrial Design Product Integration Component Reliability Shape and thickness Customized colors, gloss Surface material, glass Bezel around sensor Enable sensor functionality Electrical interface Mechanical interface Waterproofness ESD protection Mechanical robustness Thermal resistance Chemical protection

25 Platforms and software The FPC algorithm and SW runs in the application processor of the phone Trusted Execution Environment (TEE) is used to safeguard the user s private information FPC supports all relevant platforms Very competitive latency and memory consumption

26 R&D conclusions and recap Unique and extensive experience in touch fingerprint technology Strong team with full system capability Leading image quality combined with best in class algorithms delivers the best performing fingerprint systems

27 Executing on growth Johan Wilsby, CFO Jörgen Lantto, CEO

28 Strong growth in 2015 Source: FPC

29 Securing operating leverage Gross margin trend Product mix dependency Long term GM around 40 45% Expansion of FPC organization Research & Development Customer presence New business opportunities Support functions P&L items to note in 2016 R&D capitalization Tax position Guidance: improved operating margin in 2016 compared to H2 2015

30 FX and Cash allocation FX dependencies USD based business No hedging policy SEK/USD 8,50 assumption for 2016 Working capital trend in 2016 Cash allocation Organic investments in technology and in new growth markets M&A opportunities Cash distribution

31 Executing on growth in 2016 Execute on growth plans Secure operating leverage Invest in future growth Extend FPC technology leadership Execute on business development opportunities Continue to build the company s support functions Long term financial targets to be established in 2016

32 Strategy for growth New Segments Existing Other segments Automotive Industrial and medical Internet of things Add new segments Smart Cards Sensor adaptation Utilize scale advantages Strong growth Potential Grow with the existing Maximize customer base Add new customers Evaluate and Explore Extended biometry scope Trackpad Higher security More features Invest and innovate New offerings Other sensors M&A opportunities Existing Offering New

33 Strategy for growth New Segments Existing Other segments Automotive Industrial and medical Internet of things Smart Cards Sensor adaptation Utilize scale advantages Strong growth Potential Grow with the existing customer base Add new customers Extended biometry scope Trackpad Higher security More features New offerings Other sensors M&A opportunities Existing Offering New

34 Smart card opportunity Smart card chip Biometric sensor

35 Strong growth to continue in 2016 FPC a global leader in fingerprint sensors A leading product and patent portfolio Market leading customers A leading partner for ecosystem development A leading team Profitable growth funds R&D investments in new technologies and new segments A highly scalable business model enables strong revenue growth and cash generation

36 Q&A

37 Fingerprint Cards Investor Update Thank You

38 55 FPC touch fingerprint phones launched

39 Today s speakers Jörgen Lantto President and CEO since 2015, Executive VP CTO, since Born: 1963, Education: Technical college engineer. Johan Wilsby CFO since Born: Education: Graduate in Business Administration, Stockholm school of economics Thomas Rex Executive VP Sales and Marketing, since Born: 1963, Education: MSc Electronics Engineering, Lund Institute of Engineering. Pontus Jägemalm Senior VP Research & Development since Born: 1971, Education: Master s degree in and PhD in Engineering Physics, Chalmers University of Technology, Gothenburg.