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Precise Biometrics

Precise Biometrics

Read in Swedish

Strong Algo business despite component shortage paves the way for future initiatives

08:00 / 12 August 2021 Precise Biometrics Press release

INTERIM REPORT FOR THE PERIOD JANUARY TO JUNE 2021

SECOND QUARTER

  • Net sales totaled SEK 18.7 (23.6) million.
  • EBITDA totaled SEK -0.8 (2.0) million.
  • The operating profit/loss totaled SEK -4.6 (-1.1) million.
  • Earnings for the period totaled SEK -4.6 (1.5) million.
  • Earnings per share totaled SEK -0.01 (0.00).
  • Cash flow from operations totaled SEK -1.6 million (2.3).

INTERIM PERIOD

  • Net sales totaled SEK 39.0 (46.7) million.
  • EBITDA totaled SEK -0.8 (5.1) million.
  • The operating profit/loss totaled SEK -8.4 (-1.0) million.
  • Earnings for the period totaled SEK -8.1 (-1.2) million.
  • Earnings per share totaled SEK -0.02 (0.00).
  • Cash flow from operations totaled SEK -2.3 million (9.2).

SIGNIFICANT EVENTS DURING THE QUARTER

  • MasterCard Vendor Letter of Approval for smart payment card from KONA I with Precise’s fingerprint technology.
  • First installation of YOUNiQ in Norway together with RCO Security, a leading company in the field of access control systems.

SIGNIFICANT EVENTS AFTER THE END OF THE INTERIM PERIOD

  • Successful integration of YOUNiQ with ASSA ABLOY ARX.
  • First installation of YOUNiQ in Germany for facility access.

FINANCIAL DATA AND KEY INDICATORS
Amounts in SEK thousands unless otherwise stated

KEY INDICATORS


2021 2020 2021 2020 2020 Rolling
Amounts in SEK thousands unless otherwise stated Q2 Q2 Q1 - Q2 Q1 - Q2 Full-Year 12 mth
Net sales 18 668 23 615 38 980 46 680 92 349 84 649
Net sales growth, % -20,9% 75,6% -16,5% 82,4% 0,5% -25,1%
EBITDA -814 1 998 -792 5 059 6 862 1 012
Gross margin, % 73,3% 84,7% 75,4% 86,2% 84,2% 79,1%
Operating profit/loss -4 596 -1 128 -8 408 -980 -5 792 -13 220
Operating margin, % -24,6% -4,8% -21,6% -2,1% -6,3% -15,6%
Cash flow from the operating activities -1 628 2 266 -2 288 9 201 21 792 10 303
Cash and cash equivalents 62 466 76 259 62 466 76 259 76 258 62 466

See the Financial Glossary for definitions.

INVITATION TO PRESENTATION OF THE INTERIM REPORT

In connection with today’s interim report, Precise invites investors and the media to an informational conference call.

The conference call starts at 10:00 AM (CEST), August 12.

Link to all public information such as link to webcast and participant number for the telephone conference:

https://financialhearings.com/event/13404

To take part, click on the link above to listen to and follow the presentation online, or call one of the following numbers to follow by phone.

SE: +46856642707
UK: +443333009269

You will be asked to state your name when you connect to the conference call and there will be an opportunity to ask questions in Swedish. The conference call will be held in English.

Participating on behalf of Precise:
Stefan K Persson, CEO
Ulrik Nilsson, CFO

CEO COMMENTS

We had revenues with high margins in the Algo product area, reflecting our strong market position. Our royalty revenues were, however, reduced by the component shortage. We are at the same time continuing to win important projects together with our key partners with BioMatch Mobile, which is being integrated into different ranges of smart devices from leading OEM manufacturers. Even if the component shortage continues, we have good prospects of returning to earlier volumes. In the field of Digital Identity, we saw strong growth and a significant increase in interest, and we continue to develop our sales channels. Net sales during the second quarter totaled SEK 18.7 million, driven primarily by revenues from Algo.

Strong profitability in Algo provides an opportunity for the internally financed development of Digital Identity. Resources are shared evenly between the product areas, and with continued growth in Digital Identity combined with the recovery within Algo, we are seeing that the company will achieve profitability. Following initiatives in Digital Identity, combined with the impact of the component shortage, EBITDA totaled SEK -0.8 million despite a fall in royalty revenues. Adjusted for initiatives in Digital Identity, we see strong underlying profitability in the company.

Growth in the Digital Identity product area was 169%, and we are applying the SaaS (Software as a Service) model to guarantee stable, recurring revenues with high margins. It is also pleasing that our churn rate, the metric used to reflect the rate of customer losses, is zero per cent. All of the customers who have chosen YOUNiQ access are very satisfied, and we have multiple cases of upsales through additional installations. Our targeted marketing activities have contributed to increased awareness of and interest in YOUNiQ. We now have a very exciting pipeline with many projects together with partners such as Algeco, RCO, Assa Abloy Opening Solutions and many others. During the second quarter we continued to take many important steps along our journey of commercialization, laying a strong foundation for continued growth.

It is important that YOUNiQ works together with other systems, which is why it was developed from the outset as an open system in order to achieve the best possible scalability. The integration with ARX, which was communicated after the end of the quarter, is another example of YOUNiQ as a quality-assured product that the very largest actors in the industry value as an integral element of their offering. We continue to identify and work in close collaboration with selected partners, with YOUNiQ supplementing our partners’ product ranges with convenient and secure identification through facial recognition.

We continue to work in close collaboration with a small number of selected partners in the Algo product area. This is in line with our strategic priority to strengthen our relationship through extended collaboration with partners in key markets. We are working intensively to roll out the new generation of fingerprint software to our partners, assuming responsibility for bigger parts of the system, and we believe that sales will recover even if the component shortage continues.

It is clear that the general digitalization of our societies has been accelerated as a consequence of the pandemic, which paves the way for our products to become even more demanded. Our innovations contribute to a positive development towards more sustainable identification solutions, and I am therefore convinced that we will emerge from the pandemic as an even stronger company – well-positioned to capitalize on growing markets driven by global mega trends such as digitalization and sustainability.

With strong underlying profitability that is being reinvested in growth, I look forward to continuing to advance our positions as a leading global supplier of identification software in which you are the key. Finally, I would like to take this opportunity to thank Ulrik Nilsson for his efforts over the past few years and to extend a warm welcome to Annika Freij as the new CFO of Precise.

Stefan K Persson, CEO

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