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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 79 92 111
Sales growth (%) 16,1 17 20,9
EBITDA 3 8 23
EBITDA margin (%) 4 8,9 20,7
EBIT adj -10 0 14
EBIT adj margin (%) -12,1 -0,1 12,6
Pretax profit -10 -1 13
EPS rep -0,03 0 0,03
EPS growth (%) 48,1 92,8 1414,8
EPS adj -0,03 0 0,03
DPS 0 0 0
EV/EBITDA (x) 166,4 64,7 22,6
EV/EBIT adj (x) -55,3 -7210 37,2
P/E (x) -55 -758,4 57,7
P/E adj (x) -55 -758,4 57,7
EV/sales (x) 6,7 5,8 4,7
FCF yield (%) -2,7 -0,1 1,6
Dividend yield (%) 0 0 0
Net IB debt/EBITDA -18,4 -6,9 -2,8
SEKm 2019 2020e 2021e
EBITA -10 0 14
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT -10 0 14
Other financial items 0 0 0
Net financial items 0 -1 -1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit -10 -1 13
Tax -1 0 -3
Net profit -11 -1 10
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders -11 -1 10
EPS -0,03 0 0,03
EPS Adj -0,03 0 0,03
Total extraordinary items after tax 0 0 0
Tax rate (%) 8,9 -22 -22
Gross margin (%) 84,2 88,5 89,9
EBITDA margin (%) 4 8,9 20,7
EBITA margin (%) -12,1 -0,1 12,6
EBIT margin (%) -12,1 -0,1 12,6
Pretax margin (%) -12,5 -1,1 11,7
Net margin (%) -13,6 -0,8 9,1
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 16,1 17 20,9
EBITDA growth (%) 126,2 158 181,5
EBIT growth (%) 52,2 99,2 19198,8
Net profit growth (%) 52 92,8 1414,9
EPS growth (%) 48,1 92,8 1414,8
Profitability 2019 2020 2021
ROE (%) -8,9 -0,7 8,5
ROE Adj (%) -8,9 -0,7 8,5
ROCE (%) -7,6 -0,1 10,9
ROCE Adj(%) -7,6 -0,1 10,9
ROIC (%) -21,7 -0,1 19,2
ROIC Adj (%) -21,7 -0,1 19,2
Adj earnings numbers 2019 2020 2021
EBITDA Adj 3 8 23
EBITDA Adj margin (%) 4 8,9 20,7
EBITA Adj -10 0 14
EBITA Adj margin (%) -12,1 -0,1 12,6
EBIT Adj -10 0 14
EBIT Adj margin (%) -12,1 -0,1 12,6
Pretax profit Adj -10 -1 13
Net profit Adj -11 -1 10
Net profit to shareholders Adj -11 -1 10
Net Adj margin (%) -13,6 -0,8 9,1
Sales 79 92 111
COGS -12 -11 -11
Gross profit 66 81 100
Other operating items -63 -73 -77
EBITDA 3 8 23
Depreciation on tangibles 0 0 0
Depreciation on intangibles -12 -7 -8
SEKm 2019 2020e 2021e
EBITDA 3 8 23
Net financial items 0 -1 -1
Paid tax -1 0 -3
Non-cash items 0 0 0
Cash flow before change in WC 2 7 19
Change in WC -11 -1 -1
Operating cash flow -9 7 18
CAPEX tangible fixed assets 0 0 0
CAPEX intangible fixed assets -6 -7 -9
Acquisitions and disposals 0 0 0
Free cash flow -16 -1 9
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items -8 0 0
Decrease in net IB debt -25 -2 8
Balance Sheet (SEKm) 2019 2020 2021
Goodwill 23 23 23
Indefinite intangible assets 0 0 0
Definite intangible assets 19 19 20
Tangible fixed assets 1 2 2
Other fixed assets 5 5 5
Fixed assets 57 58 59
Inventories 0 0 0
Receivables 27 32 39
Other current assets 2 2 2
Cash and liquid assets 63 61 69
Total assets 149 152 168
Shareholders equity 115 114 124
Minority 0 0 0
Total equity 115 114 124
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 2 2 2
Accounts payable 5 6 7
Other current liabilities 20 23 28
Total liabilities and equity 190 159 149
Net IB debt -58 -57 -65
Net IB debt excl. pension debt -58 -57 -65
Capital invested 55 56 58
Working capital 3 4 4
EV breakdown 2019 2020 2021
Market cap. diluted (m) 586 586 586
Net IB debt Adj -58 -57 -65
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 527 529 521
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 51 61 69,3
Capital invested turnover (%) 163,8 165,7 195,1
Capital employed turnover (%) 62,3 74 86,2
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 29,6 23,2 22,8
Payables / sales (%) 5,9 5,6 5,5
Working capital / sales (%) -3 3,7 3,7
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) -50,9 -49,6 -52,2
Net debt / market cap (%) -10,9 -9,7 -11,1
Equity ratio (%) 77,1 74,9 73,8
Net IB debt adj. / equity (%) -50,9 -49,6 -52,2
Current ratio (%) 334,7 299,8 292,3
EBITDA / net interest (%) 1256,8 892 2301,7
Net IB debt / EBITDA (%) -1842,7 -691,4 -281,6
Interest cover (%) -3782,3 -8 1401,7
SEKm 2019 2020e 2021e
Shares outstanding adj. 360 360 360
Fully diluted shares Adj 362 362 362
EPS -0,03 0 0,03
Dividend per share Adj 0 0 0
EPS Adj -0,03 0 0,03
BVPS 0,32 0,32 0,34
BVPS Adj 0,2 0,2 0,22
Net IB debt / share -0,2 -0,2 -0,2
Share price 1,49 1,62 1,62
Market cap. (m) 537 584 584
Valuation 2019 2020 2021
P/E -55 -758,4 57,7
EV/sales 6,72 5,76 4,69
EV/EBITDA 166,4 64,7 22,6
EV/EBITA -55,3 -7210 37,2
EV/EBIT -55,3 -7210 37,2
Dividend yield (%) 0 0 0
FCF yield (%) -2,7 -0,1 1,6
P/BVPS 5,08 5,12 4,7
P/BVPS Adj 8,07 8,17 7,23
P/E Adj -55 -758,4 57,7
EV/EBITDA Adj 166,4 64,7 22,6
EV/EBITA Adj -55,3 -7210 37,2
EV/EBIT Adj -55,3 -7210 37,2
EV/cap. employed 4,2 4,3 3,9
Investment ratios 2019 2020 2021
Capex / sales 8,5 8,5 8,2
Capex / depreciation 57 107,7 113,8
Capex tangibles / tangible fixed assets 30 25,9 11,1
Capex intangibles / definite intangibles 32,9 38,3 44,2
Depreciation on intangibles / definite intangibles 61,3 37,7 39,8
Depreciation on tangibles / tangibles 0 0 0

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Main shareholders - Precise Biometrics

Main shareholders Share capital % Voting shares % Verified
Avanza Pension 7.0 % 7.0 % 31 Dec 2019
Nordnet Pensionsförsäkring 2.3 % 2.3 % 31 Dec 2019
Swedbank Försäkring 1.3 % 1.3 % 31 Dec 2019
Curt Blixt 0.8 % 0.8 % 31 Dec 2019
Emil Natchev 0.8 % 0.8 % 31 Dec 2019
Torgils Bonde 0.6 % 0.6 % 31 Dec 2019
Nils Arvidsson 0.6 % 0.6 % 31 Dec 2019
Christer Jönsson 0.5 % 0.5 % 31 Dec 2019
Darko Malesev 0.5 % 0.5 % 31 Dec 2019
Bengt Andersson 0.5 % 0.5 % 31 Dec 2019
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 Folkeson Hellström + 13 169 BUY 19 Aug 2019
Erik Torgny Folkesson Hellström + 50 000 BUY 19 Aug 2019
Erik Torgny Folkeson Hellström + 36 831 BUY 19 Aug 2019
Åsa Helena Elisabeth Schwarz Ahlin + 30 000 BUY 16 Aug 2019
Åsa Helena Elisabeth Schwarz Ahlin + 20 000 BUY 16 Aug 2019

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