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Precise Biometrics

Precise Biometrics

Leading developer of biometric software algorithms

Precise Biometrics is a developer of biometric software algorithms used for verifying identities using new digital technologies. The company offers software for fingerprint scanners in mobile devices, smart payment cards as well as biometric identity systems. The company has a long history of research and development in segments that are just starting to disrupt our digital world, and we believe that the company’s business model can achieve scalability as volumes increase.

Precise Biometrics is at the forefront of biometric algorithm solutions. It has a proven record in the mobile devices segment, which looks set to offer greater profitability in the future as optical and ultrasound fingerprint sensors replace capacitive sensors. Also, Precise has an opportunity for growth as biometrics start penetrating the smart card market, and it has the chance to establish itself as a leader in digital identity, where verification is based on iris, face, geographical and a behavioural profile, replacing the need for cards, keys and passwords.

R&D is crucial for Precise if it is to keep up with the ever-changing landscape of biometrics. As such, a failure to innovate could hurt the competitiveness of the company’s products. Currently, the Precise’s revenues mainly stem from the mobile device segment. Meanwhile, the market for the company’s two growth segments – biometric smart cards and digital identity – remain immature and predictions about growth and penetration remain uncertain. Lastly, apart from in 2016, the company has not been able to generate positive net cash flow without share issues.

SEKm 2019 2020e 2021e
Sales 92 95 114
Sales growth (%) 35,9 3,3 20,4
EBITDA 13 12 22
EBITDA margin (%) 14 12,7 19,1
EBIT adj 1 4 13
EBIT adj margin (%) 0,7 3,7 11,5
Pretax profit 0 3 12
EPS rep 0 0,01 0,03
EPS growth (%) 97,1 508,1 291,8
EPS adj 0 0 0,02
DPS 0 0 0
EV/EBITDA (x) 44,3 35,7 19,6
EV/EBIT adj (x) 876,6 121,2 32,4
P/E (x) -1029,8 199,6 50,9
P/E adj (x) -411,5 308,7 56
EV/sales (x) 6,2 4,5 3,7
FCF yield (%) -5,6 2,3 0,8
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -3,2 -4,4 -2,6
SEKm 2019 2020e 2021e
EBITA 0 3 12
Goodwill impairment charges 0 0 0
Other impairment and amortisation 1 1 1
EBIT 1 4 13
Other financial items 0 0 0
Net financial items -1 -1 -1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 0 3 12
Tax -1 -1 -3
Net profit -1 2 10
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders -1 2 10
EPS 0 0,01 0,03
EPS Adj 0 0 0,02
Total extraordinary items after tax 0 0 0
Tax rate (%) -1617,3 -19,6 -22
Gross margin (%) 86,4 88,1 90,2
EBITDA margin (%) 14 12,7 19,1
EBITA margin (%) -0,3 2,8 10,8
EBIT margin (%) 0,7 3,7 11,5
Pretax margin (%) 0 3,2 10,7
Net margin (%) -0,6 2,6 8,3
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 35,9 3,3 20,4
EBITDA growth (%) 199,3 -6,2 80,8
EBIT growth (%) 103,3 446,5 270,5
Net profit growth (%) 97,3 507,7 291,8
EPS growth (%) 97,1 508,1 291,8
Profitability 2019 2020 2021
ROE (%) -0,5 1,9 7,1
ROE Adj (%) -1,2 1,2 6,5
ROCE (%) 0,5 2,2 8
ROCE Adj(%) -0,2 1,7 7,4
ROIC (%) -15,5 3,6 13
ROIC Adj (%) -15,5 3,6 13
Adj earnings numbers 2019 2020 2021
EBITDA Adj 13 12 22
EBITDA Adj margin (%) 14 12,7 19,1
EBITA Adj 0 3 12
EBITA Adj margin (%) -0,3 2,8 10,8
EBIT Adj 1 4 13
EBIT Adj margin (%) 0,7 3,7 11,5
Pretax profit Adj -1 2 11
Net profit Adj -1 2 9
Net profit to shareholders Adj -1 2 9
Net Adj margin (%) -1,6 1,7 7,6
Sales 92 95 114
COGS -12 -11 -11
Gross profit 79 84 103
Other operating items -67 -72 -81
EBITDA 13 12 22
Depreciation on tangibles 0 0 0
Depreciation on intangibles -12 -8 -9
SEKm 2019 2020e 2021e
EBITDA 13 12 22
Net financial items -1 -1 -1
Paid tax 0 -1 -3
Non-cash items 0 0 0
Cash flow before change in WC 12 11 18
Change in WC -41 8 -5
Operating cash flow -28 19 13
CAPEX tangible fixed assets 0 0 0
CAPEX intangible fixed assets -6 -8 -9
Acquisitions and disposals 0 0 0
Free cash flow -34 11 4
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items -7 1 1
Decrease in net IB debt -41 11 4
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 42 42 42
Tangible fixed assets 8 8 8
Other fixed assets 0 0 0
Fixed assets 50 50 51
Inventories 0 0 0
Receivables 33 30 37
Other current assets 2 2 2
Cash and liquid assets 74 85 88
Total assets 158 167 177
Shareholders equity 126 129 138
Minority 0 0 0
Total equity 126 129 138
Long-term debt 0 0 0
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 0 0 0
Short-term debt 24 24 24
Accounts payable 0 1 1
Other current liabilities 0 5 6
Total liabilities and equity 158 166 177
Net IB debt -42 -53 -56
Net IB debt excl. pension debt -42 -53 -56
Capital invested 85 76 82
Working capital 35 27 32
EV breakdown 2019 2020 2021
Market cap. diluted (m) 612 484 484
Net IB debt Adj -42 -53 -56
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 571 431 428
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 58 58,4 66,5
Capital invested turnover (%) 144,4 117,9 144,2
Capital employed turnover (%) 64,4 59,5 69
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 14,6 2,5 4,6
Payables / sales (%) 2,5 0,5 0,9
Working capital / sales (%) 15,5 32,3 25,4
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -33 -40,9 -40,7
Net debt / market cap (%) -7,8 -10,9 -11,7
Equity ratio (%) 79,8 77,3 78,1
Net IB debt adj. / equity (%) -33 -40,9 -40,7
Current ratio (%) 447,1 390,4 407,3
EBITDA / net interest (%) 2103,5 2231,9 2182,2
Net IB debt / EBITDA (%) -324,8 -437,1 -258,3
Interest cover (%) -39,7 499,4 1232,2
SEKm 2019 2020e 2021e
Shares outstanding adj. 360 360 360
Fully diluted shares Adj 362 361 361
EPS 0 0,01 0,03
Dividend per share Adj 0 0 0
EPS Adj 0 0 0,02
BVPS 0,35 0,36 0,38
BVPS Adj 0,23 0,24 0,27
Net IB debt / share -0,1 -0,1 -0,2
Share price 1,49 1,34 1,34
Market cap. (m) 537 483 483
Valuation 2019 2020 2021
P/E -1029,8 199,6 50,9
EV/sales 6,21 4,54 3,74
EV/EBITDA 44,3 35,7 19,6
EV/EBITA -2350,3 159,7 34,7
EV/EBIT 876,6 121,2 32,4
Dividend yield (%) 0 0 0
FCF yield (%) -5,6 2,3 0,8
P/BVPS 4,83 3,75 3,49
P/BVPS Adj 7,26 5,53 5,02
P/E Adj -411,5 308,7 56
EV/EBITDA Adj 44,3 35,7 19,6
EV/EBITA Adj -2350,3 159,7 34,7
EV/EBIT Adj 876,6 121,2 32,4
EV/cap. employed 3,6 2,7 2,5
Investment ratios 2019 2020 2021
Capex / sales 6,4 8,5 8,2
Capex / depreciation 48,2 96,4 110,2
Capex tangibles / tangible fixed assets 0 5,9 2,7
Capex intangibles / definite intangibles 13,8 18,2 21,6
Depreciation on intangibles / definite intangibles 28,6 20,1 20,1
Depreciation on tangibles / tangibles 0 0 0

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Main shareholders - Precise Biometrics

Main shareholders Share capital % Voting shares % Verified
Avanza Pension 6.4 % 6.4 % 31 Jul 2020
Nordnet Pensionsförsäkring 2.4 % 2.4 % 31 Jul 2020
Swedbank Försäkring 1.3 % 1.3 % 31 Jul 2020
Curt Blixt 0.9 % 0.9 % 31 Jul 2020
Douglas Storckenfeldt 0.8 % 0.8 % 31 Jul 2020
Roger Eriksson 0.7 % 0.7 % 31 Jul 2020
Nils Arvidsson 0.7 % 0.7 % 31 Jul 2020
Livförsäkringsbolaget Skandia 0.6 % 0.6 % 31 Jul 2020
Emil Natchev 0.6 % 0.6 % 31 Jul 2020
Christer Jönsson 0.6 % 0.6 % 31 Jul 2020
Source: Holdings by Modular Finance AB

Insider list - Precise Biometrics

Name Quantity Code Date
Åsa Helena Elisabeth Schwarz Ahlin + 9 538 BUY 17 Dec 2019
Åsa Helena Elisabeth Schwarz Ahlin + 65 000 BUY 16 Dec 2019
Åsa Helena Elisabeth Schwarz Ahlin + 5 462 BUY 16 Dec 2019
Synnöve Trygg + 60 000 BUY 19 Nov 2019
Stefan Persson + 100 000 BUY 18 Nov 2019
Erik Torgny Folkesson Hellström + 50 000 BUY 19 Aug 2019
Erik Torgny Folkeson Hellström + 36 831 BUY 19 Aug 2019
Erik Torgny Folkeson Hellström + 13 169 BUY 19 Aug 2019
Åsa Helena Elisabeth Schwarz Ahlin + 20 000 BUY 16 Aug 2019
Åsa Helena Elisabeth Schwarz Ahlin + 30 000 BUY 16 Aug 2019

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