Slide 1: Q1 2024 Webcast
Q1 2024 Webcast, 7 May 2024 Adam Philpott, CEO Fredrik Hedlund, CFO
Slide 2: Agenda
AGENDA EXECUTIVE SUMMARY STRATEGIC INITIATIVES • Transformation to drive profitable growth • Why are we winding down Mobile? • We have a great Core business • Refresh of Biometric solutions Q1 2024 FINANCIALS • Revenue and clients • Key figures FINANCIAL & OPERATIONAL CHANGES • Cost optimization • I
Slide 3: Executive summary – Q1 2024
Executive summary – Q1 2024 Q1 2024 Key figures Revenue increase of 25%, driven by 80% growth in higher margin Q1 Q1 PC product group SEKm 2024 2023 Change Margin pressure in Mobile caused the total Group gross margin to Revenue 146.4 117.0 25% decline by six percentage points (but up one point vs.
Slide 4: Strategic Initiatives
STRATEGIC INITIATIVES @ FINGERPRINTS
Slide 5: Transformation to drive profitable growth
Transformation to drive profitable growth Strategic transformation Three phase plan 1 2 STABILITY PHASE Portfolio Refresh Cost Optimization Focus on cost optimization, financial discipline, and ONE Core high margin products 3 4 Strengthen Balance ACCELERATE GROWTH PHASE Strategy TWO Sheet Strategica
Slide 6: Why are we winding down Mobile?
Why are we winding down Mobile? Mobile Commoditization Mature market / Geopolitics Illustrative Average Selling Price - Mobile Capacitive Units ASP $3.00 CAGR1 Highly commoditized / price sensitive / -12% high-volume business $0.00 2016 2019 2023 Capital intensive / low investment returns FPC Group
Slide 7: We have a great Core business
We have a great Core business PC • Leading innovative premium solution provider PC • Large and growing market / high margins • Large, global client base: 4 out of top 5 Windows PC OEMs • Strong growth potential, +80% from Q1’23 to Q1’24 Core Access business Access • • Leader in the eco system with t
Slide 8: Refresh of Biometric solutions
Refresh of Biometric solutions 2022 2023 Product portfolio Gross margin Sales, % Transformation strategy Sales, % New product portfolio Commentary Historically unfavorable market conditions due to Chinese exposure DISCONTINUATION Non-profitable MOBILE 81% Unsustainably low margins, prompting 74% PRO
Slide 9: Q1 2024 Financials
Q1 2024 FINANCIALS @ FINGERPRINTS
Slide 10: Revenue and clients (Q1 results)
Revenue and clients (Q1 results) Revenue by product group Q1 Dynamics Q1 Q1 FY PC: Continued strong revenue and margin performance SEKm Change 2024 2023 2023 Exceptional demand from top clients PC 28.5 15.9 80% 96.9 Won Lenovo Best Supplier Award, ASUS MoC PC launch Complete MCU system ready for mas
Slide 11: Key figures (Q1 results)
Key figures (Q1 results) Key figures Q1 Dynamics Q1 Q1 FY Revenue growth: 25% increase in revenue primarily driven by SEKm 2024 2023 Change 2023 80% growth in higher-margin PC, reflecting strong market demand and product innovation Revenue 146.4 117.0 25% 705.4 Margin pressure in Mobile: Persistent
Slide 12: Financial & Operational Changes
FINANCIAL & OPERATIONAL CHANGES 12
Slide 13: Cost optimization
Cost optimization Strategic cost efficiency programme Gross Opex1 (SEKm) General: The strategic transformation plan features two key areas related to cost optimization: 469 451 Slim down the organization, going from a large company structure to a small and agile one, and 46 113 105 Target 96 Progres
Slide 14: Improving capital structure
Improving capital structure Convertible bonds Positive post redemption effects SEKm In Q3’23, the Company issued convertible Reduced Interest Costs: Early redemption will save the bonds of approximately SEK 160 million company money in the long run by alleviating ongoing bond interest expenses Curre
Slide 15: Focused Biometric Authentication and Identification solutions provider
Focused Biometric Authentication and Identification solutions provider Integration of modalities Integration of data through FPC-owned modalities through partnerships partnerships Fingerprint Other Integrated Integrated Integrated Integrated Modalities & & owned external external modality 1 modality
Slide 16: Talent, organization and incentives
Talent, organization and incentives Chairman of the Board: Guiding the Experienced senior management: A dynamic transformation process with wisdom and expertise, team of seasoned executives, carefully selected to ensuring alignment with shareholder interests and lead the Fingerprints’ transformation
Slide 17: Summary
Summary Winding down Significant decline in Mobile's gross margin due to falling ASPs and slower Mobile COGS reductions Implemented immediate cost-saving measures to become a smaller, more Cost optimization agile, and profitable company Focus on higher Concentrating on Core business segments with ro
Slide 18: Fingerprints
FINGERPRINTS