Fingerprint Cards AB (publ) publishes year-end report for January – December 2023
08 Februar 2024 - 7:00AM
Fingerprint Cards AB (publ) publishes year-end report for January –
December 2023
Highlights, fourth quarter
- Ten percent constant currency
revenue increase
- Transformation plan execution
commenced
- Diversification - sales to the PC
sector increased by two-thirds
- Cost optimization program initiated;
OPEX includes SEK 37.5 M attributable to restructuring
measures
Fourth quarter of 2023
- Revenues amounted to SEK 200.3 M
(190.3)
- The gross margin was 9.5 percent
(8.8)
- EBITDA amounted to negative SEK 83.8
M (neg: 74.3)
- Adjusted EBITDA amounted to negative
SEK 46.3 M (neg: 74.3)
- The operating result was negative
SEK 105.2 M (neg: 527.3)
- Earnings per share before and after
dilution amounted to a negative SEK 0.22 (neg: 1.48)
- Cash flow from operating activities
was negative SEK 60.4 M (neg: 103.9)
January-December 2023
- Revenues amounted to SEK 705.4 M
(861.8)
- The gross margin was 12.7 percent
(19.3)
- EBITDA amounted to negative SEK
242,2 M (neg: 116.0)
- Adjusted EBITDA amounted to negative
SEK 204.7 M (neg: 116.0)
- The operating result was negative
SEK 320.4 (neg: 631.0)
- Earnings per share before and after
dilution amounted to a negative SEK 0.74 (neg: 1.92)
- Cash flow from operating activities
was negative SEK 88.3 M (neg: 334.1)
- The Board proposes to the Annual
General Meeting that no dividend be paid for the 2023 fiscal
year
CEO’s comments
Execution of our Transformation Plan As
announced in our previous interim report, we commenced execution of
our Transformation Plan during Q4, including cost optimization,
profitability, organizational changes and strategy evolution.
Accordingly we began to see initial signs of transformational
impact. We saw a modest gross margin improvement compared to the
corresponding quarter last year, and fully expect improved
profitability going forward as we focus our capital and investments
outside of Mobile sensor hardware, in our higher-margin existing
lines of business along with new diversification areas. As
highlighted in our last report, gross margin in the Mobile product
group is unsustainably low. The negative outlook for Mobile looks
set to endure, along with ongoing geopolitical risks, further
reinforcing the need for this transformation plan.
The cost optimization program is progressing according to plan,
and we incurred SEK 37.5 M in costs related to restructuring
measures implemented in the fourth quarter. As previously
announced, our cost optimization program is expected to yield
savings of approximately SEK 204 M on an annual basis with full
effect from the second half of 2024, resulting in an OPEX run rate
of approximately SEK 180 M on an annual basis. We continued to
decrease our inventory in the fourth quarter, from SEK 156 million
at the end of September 2023 to SEK 134 million at the end of
December 2023. This means that we are entering 2024 with an
acceptable inventory given current industry demand. However, there
is still excessive stock at a sector level, and we continued to see
aggressive destocking measures by several suppliers during the
quarter.
We also made some important organizational changes during the
quarter, transitioning to a functional organizational model and
appointing world-class talent. This focus enables the timely
execution of our pivot from a mobile biometrics component provider
to a broader biometrics platform player.
Revenue growth and continued diversificationI’m
pleased that revenue grew by 5 percent in the fourth quarter
compared to the corresponding period last year and by 8 percent
sequentially (both of which were an increase of 10 percent on a
constant currency basis). This increase was driven by higher sales
in our Mobile and PC product groups as well as in our Access
business outside of Asia. Our Payment business, however, has yet to
show a meaningful revenue ramp-up. This is despite us maintaining a
market leading position with very high performance in terms of
transaction speed, power efficiency and security, as proven in
several commercial launches. Our primary focus in 2024 in the
Payment area will be on targeted go-to-market activities, as the
market requires more time to achieve widespread adoption of
biometric payment cards.
At the same time, we are already seeing our diversification bets
start to bear fruit. PC is showing a reliable growth and
profitability profile, delivering considerably higher gross margin
than Mobile. Biometric solutions for PCs have quickly emerged as an
important new product area for Fingerprints, and we anticipate
continued market growth since the share of computers with
fingerprint sensors is expected to continue rising and our premium
offering is valued. We also made significant progress in further
enhancing our highly competitive offering to PC OEMs by launching
our newly developed, complete biometric system for PC makers in
October 2023. The development project has been endorsed from the
start by our key PC customers, as total system ownership by
Fingerprints will allow for better overall system performance.
Customer feedback has been very favourable, especially in terms of
the enhanced speed that our biometric system offers. This results
in much quicker unlocking, providing a seamless, secure means of
accessing PCs. Selectively expanding the scope of our solutions to
capture a bigger portion of the value in the industry is a key part
of our Platform Strategy, and I believe that our biometric PC
system illustrates this approach - we are no longer just selling
biometric sensors to our PC customers, but a complete system
solution which also integrates Fingerprints’ in-house
microcontroller unit (MCU).
In terms of other elements of our platform portfolio, Access,
whilst project driven, has shown a consistent growth trend, with
more opportunities to unlock, particularly in logical access – a
huge new market in which we have great value to offer as an
incremental near-term opportunity. I’d also like to highlight our
assets in touchless solutions including our iris recognition
software. We see an increased interest in our iris authentication
solution, both in relation to Driver Monitoring Systems (DMS) where
IR-cameras will be added in most cars, as well as iris
authentication in relation to AR/VR devices, triggered by the
launch of the Apple Vision Pro device where authentication is made
by an iris solution called Optic ID. Regarding DMS, we announced an
agreement with a tier 1 automotive supplier in July 2023, with the
objective of further developing Fingerprints’ iris recognition
technology so that it can be seamlessly integrated into DMS to
handle authentication. The development phase of the project is now
complete, and the solution will be promoted to automotive OEMs as
an add-on feature. We will be making other bets this year beyond
these current markets. As you look holistically at this portfolio,
we see strong potential for the short, medium and long-term,
particularly as we complement them with additional technologies to
expand the platform.
Adam Philpott, President and CEO
Today at 09:00 CET, Fingerprints’ CEO Adam Philpott 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 presentation will be webcast, and participants can register
via this link:
https://edge.media-server.com/mmc/p/c3j3y979
For media and analysts: Registration for the teleconference is
carried out via this link:
https://register.vevent.com/register/BI2499f066045c41f88c2425a2c417bbbd
For
information, please contact:Adam Philpott, CEOPer
Sundqvist, CFOStefan Pettersson, Head of Investor Relations:
+46(0)10-172 00 10investrel@fingerprints.comPress: +46(0)10-172 00
20 press@fingerprints.comThis is the type of information that
Fingerprint Cards AB is obligated to disclose pursuant to the EU’s
Market Abuse Regulation. The information was submitted for
publication, through the agency of the contact person set out
above, on February 8, 2024 at 07:00 a.m. CET. |
About
Fingerprints Fingerprint Cards AB (Fingerprints) – the
world’s leading biometrics company, with its roots in Sweden. We
believe in a secure and seamless universe, where you are the key to
everything. Our solutions are found in hundreds of millions of
devices and applications, and are used billions of times every day,
providing safe and convenient identification and authentication
with a human touch. For more information visit our website, read
our blog, and follow us on Twitter. Fingerprints is listed on
Nasdaq Stockholm (FING B). |
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