PRECISE BIOMETRICS CORPORATE PRESENTATION Hkan Persson | CEO - - PowerPoint PPT Presentation

PRECISE BIOMETRICS CORPORATE PRESENTATION

Håkan Persson | CEO October 13, 2016

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Convenient and secure identity authentication, for everyone, everywhere

Founded in 1997 Head Office in Lund, Sweden USA, Asia, Europe 35 employees & consultants Nasdaq OMX Stockholm

COMPANY OVERVIEW

FINGERPRINT TECHNOLOGY MOBILE SMART CARD SOLUTIONS

PRECISE BIOMATCH™ MOBILE PRECISE BIOMATCH™ EMBEDDED MATCH-ON-CARD™ TACTIVO™ FOR iOS TACTIVO™ FOR ANDROID

BUSINESS AREAS AND PRODUCTS

FINGERPRINT TECHNOLOGY

1) Image enhancement and extraction of the fingeprints unique features, which are stored in a secure zone 2) Matching of the fingerprints unique features with the stored template 3) If it´s a match, the phone opens/the person is given access to the chosen application

POWERFUL ALGORITHMS THAT PROVIDE THE BEST USER EXPERIENCE

PROVEN STRONG PATENTS USER EXPERIENCE TECHNOLOGY INDEPENDENT WORLD-LEADING R&D

Precise Biometrics is the leading independent supplier of fingerprint software – Our software has become somewhat of a de facto standard among sensor vendors

THE LEADER IN FINGERPRINT SOFTWARE

Precise BioMatch Mobile is used by leading mobile device manufacturers such as Coolpad, Google, Huawei, HTC, Lenovo, LG, Oppo, Sony, ZTE and Xiaomi.

INTEGRATED IN OVER 150 DIFFERENT MOBILE DEVICES FROM 40 VENDORS

Primary customers – sensor vendors Market solutions directly to OEM:s and other suppliers in their eco-system Revenues:

Annual license fee Royalty Support and maintenance

BUSINESS MODEL & CUSTOMERS

Addressable market of 800 million smartphones, tablets and laptops with fingerprint technology in 2017 Compound Annual Growth Rate of 35 % to 2020 Growth opportunities for Precise Biometrics short and long term

Source: Redeye 200 400 600 800 1000 1200 1400 2014 2015 2016 2017 2018 2019 2020 Million Units CAGR 2015-2020

CONTINUED MARKET GROWTH

§Total Mobile

handsets, tablets,laptops (excl Apple)

CAGR 35 %

Fingerprint technology is entering new product areas, smart cards and payment cards in particular, but also wearables, cars and IoT Annual addressable market of one billion credit cards Demand for efficient and light algorithm solutions with high performance We are collaborating with our customers on several projects related to smart cards, wearables and cars This market can become as large as the market for mobile devices

GREAT POTENTIAL IN NEW PRODUCT AREAS

Continued positive development with new customer agreements 19 license agreements with sensor manufacturers and security companies Well positioned to benefit from market growth and to capture a considerable market share Continuous evaluation of new potential partners

NEW CUSTOMERS CREATE GROWTH OPPORTUNITIES

TRENDS AND DEVELOPMENT

Increased competition will drive differentiation of fingerprint solutions – technology, industrial design and use case Emerging technologies – ultra sound, optical solutions Fingerprint sensors are going under glass and could go under plastic and metal Anti fraud – Liveness solutions will become increasingly important Adoption of other biometric modalities will increase and become complementary to fingerprint technology

TECHNOLOGY LEADERSHIP

Significant performance improvements of our core algorithm solution Customer specific optimizations – new sensor technologies Reference implementations and integration support to make integration of fingerprint software more efficient Established local integration and support organization for China & Taiwan Investigating new requirements and specifications for future mobile payment solutions

MOBILE SMART CARD SOLUTIONS

Smart card reader for smartphones and tablets (iOS & Android) Increased information security through secure & convenient login using two-factor authentication Improved organizational efficiency and work environment, while reducing cost

TACTIVO CUSTOMERS

Defense Logistics Agency (US DOD) US Navy National Health Service (UK) Municipalities and county councils in Sweden

TACTIVO ENABLES MOBILITY IN ORGANIZATIONS USING SMART CARDS

FINANCIAL DEVELOPMENT

NET SALES

(PER QUARTER / 12 MONTHS ROLLING)

Net sales increased to 21.9 (10.0) MSEK in Q2 – up 119 % Strong sales increase in Fingerprint Technology Business Area – up 174 % compared to Q2 15

(MSEK) 5 10 15 20 25 30

Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16

(MSEK)

Net sales 12 months rolling increased to 87.9 (31.8) MSEK – up 176 % compared to Q314 – Q215

10 20 30 40 50 60 70 80 90 100

Q3’14- Q215 Q4’14- Q3’15 Q1’15- Q4’15 Q3’15- Q2’16 Q2’15- Q1’16

Gross margin increased to 88% (81%) Increased sales of fingerprint software has led to an increase in gross margin

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16

CONTINUED HIGH GROSS MARGIN

• 6
• 4
• 2

2 4 6 8 10

Q2'15 Q3 '15 Q4 '15 Q1 '16 Q2 '16

(MSEK)

Operating profit for Q2 2016 increased to 4.4 MSEK from - 7.9 MSEK in Q2 2015 EBITDA for Q2 2016 increased to 6.2 MSEK from -5.2 MSEK in Q2 2015 EBITDA 12 months rolling increased to 26.5 (-27.3) MSEK

(MSEK)

• 30
• 20
• 10

10 20 30 Q3’14- Q215 Q4’14- Q3’15 Q1’15- Q4’15 Q3’15- Q2’16 Q2’15- Q1’16

OPERATING PROFIT & EBITDA

(EBITDA PER QUARTER / 12 MONTHS ROLLING)

HÅKAN PERSSON CEO

TOMMY NILSSON CFO RUTGER PETERSSON R&D DIRECTOR DANIEL EDLUND CORPORATE MARKETING MANAGER PATRIK LINDEBERG COO

PRECISE BIOMETRICS MANAGEMENT

OUTLOOK

OUTLOOK

Continue to strengthen position as the leader in fingerprint software Increased revenue opportunities as more customers gain market share – reduced dependency on specific customers Great opportunities in new product areas that requires a small fingerprint sensor in constrained environments Growth over time in our business area Mobile Smart Card Solutions Well positioned for profitable growth and continued positive company development

THANK YOU!

precisebiometrics.com

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