Fingerprint Cards AB: Interim report, third quarter 2016
Fingerprint Cards AB (Publ.)
Interim report, third quarter of 2016
Third quarter 2016
· Revenues totaled SEK 1,862.3 M (964.0), up 93 percent compared with the third quarter of 2015.
· The gross margin was 49 percent (45)
· Operating profit amounted to SEK 766.8 M (346.2) and the operating margin to 41 percent (36)
· Earnings per share increased to SEK 1.91 (1.12).
· Cash flow from operating activities was SEK 134.5 M (298.1)
· Revenues totaled SEK 5,019.6 M (1,549.0), up 224 percent compared with the year-earlier period.
· The gross margin was 49 percent (40)
· Operating profit amounted to SEK 2,065.5 M (392.8) and the operating margin to 41 percent (25)
· Earnings per share increased to SEK 5.16 (1.27).
· Cash flow from operating activities was SEK 944.3 M (367.9)
· The revenue guidance for 2016 has been made more precise at SEK 7,200-7,500 M compared with the previously communicated SEK 7,200-8,300 M.
· The operating margin for 2016 is estimated to be about 40 percent, which is an update from the previously communicated estimate that it would exceed 37 percent.
Continued strong profitable growth
During the third quarter of the year, revenues continued to rise to SEK 1,862.3 M, equal to growth of 93 percent compared with the corresponding quarter of 2015 and to sequential growth of 12 percent. The operating margin for the quarter was 41 percent and the high gross margin of 49 percent is evidence of our leadership in a market where the competition is gradually increasing. I am particularly gratified to note that the 121-percent rise in operating profit exceeded the increase in revenues. Cash flow amounted to SEK 134.5 M and was adversely impacted by increasing working capital and a large tax payment. For full-year 2016, we estimate that revenues will end up between SEK 7,200 M and SEK 7,500 M, which is in the lower region of the previously stated range of SEK 7,200-8,300 M. The main reason for this is that a couple of our customers have reduced their short-term production forecasts for already launched smartphones. At the same time, we are raising our guidance for the full-year operating margin to being about 40 percent.
The market continues to develop well and, above all, I note continued substantial growth potential in the smartphone segment. For this year, we, in common with independent industry analysts, expect sales of smartphones to total approximately 1.5 billion, of which slightly more than half will feature an integrated fingerprint sensor. Aided by our new low-cost sensors, we will make it possible for our OEM customers to supply even cheaper smartphones equipped with fingerprint sensors and we will thus continue to drive the market.
During the quarter, our OEM customers launched 36 mobile units equipped with an integrated sensor from Fingerprint Cards, meaning that we surpassed 100 launches for the full year. We are the largest supplier of sensors and estimate that our market share for 2016 will be in the mid-range of 50-70 percent of the addressable market, meaning the market excluding Apple. Thanks to our new products, such as the previously launched low-cost sensor and more advanced sensor solutions that will be used under glass, we are continuing to be chosen as a supplier by both existing and new customers.
I also see major potential outside the smartphone segment. PCs represent an obvious opportunity in the near future, since this will enable us to build on existing products and business relations. I see a lot of market activities around smartcards, but it will take time before it has developed into a mass market since it will require both new products and new approaches in other value chains. We are already conducting active product and business development together with relevant partners in these areas and are accelerating our investments to become the leader in these new segments. This means continued and increasing investments in primarily research and development (R&D), sales and business development.
Overall, we continue to be the market leader and to grow with strong profitability despite gradually increasing competition. We have also made considerable progress towards achieving the company's long-term financial objectives. I have firm confidence in our ability to be innovative and drive the biometrics market.
Christian Fredrikson, President and CEO
For further information, contact:
Christian Fredrikson, CEO, Fingerprint Cards AB (publ),
+46(0)31-60 78 20, email@example.com
Welcome to the presentation of Fingerprint Cards' interim report for the third quarter 2016, on October 27th 2016, 03:00 pm CEST. Participants can enter by using this link and register:
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