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CURRENT QUESTIONS & ANSWERS
Published: May 7, 2018
Q: There are rumors and media articles to the effect that Fingerprints is planning to sue one of its Chinese competitors for patent infringement in a Chinese court. Is there any truth to these rumors?
A: We never comment on rumors, but if we find proof of patent infringement, we are prepared to defend our intellectual property.
Published: November 1, 2017
Fingerprints Technology Update: The event will be webcast live through the following link: https://fingerprint.creo.se/171101
It will be possible to ask questions via the webcast, and after the live webcast an on-demand version will be accessible.
Published: September 21, 2017
For more information about smart cards and T-shape i conjunction to today's press release, please see the recorded version of our webinar.
Published: September 18, 2017
For questions regarding communication of a revenue interval for the third quarter, please see press release. Please note information about webcast 09:30 CEST. A recording of the webcast will be posted here when available.
Published: September 13, 2017
Q: What is your comment regarding Apples’ s launch?
A: We think it is good that Apple introduces a touchless biometric technology. It is line with our strategy and a positive sign as it means that the biometrics market is evolving. They have launched two phones with a fingerprint sensor and a very high end phone with face ID. None of them had both modalities, which surprised us a bit as it is a trend which clearly enhances both security and convenience. Important to state is also that we have our customer base in the Android community which represents some 85 percent of the smartphone market. So, although Apple is an admirable company we should be careful not to overestimate their influence when it comes to biometric authentication. There are plenty of other companies that will have a say as well.
Q: What do you think of Apple’s face ID?
A: As it is touchless it complements a fingerprint sensor in a natural way from a usability point of view. We have chosen iris as it is more secure and not sensitive to visual changes of the face due to age or facial hair, and it can separate twins for that matter. We also note that Apple solutions is being introduced in a high-end smartphone which comes with a significant price tag while our iris-implementation is less costly.
Q: Will face ID and/or iris replace the fingerprint sensor?
A: No, we are convinced that the next step in biometric authentication is about using complementing technologies and modalities, not about replacing them. By introducing touchless technologies, like iris-identification, in mobile devices and use them together with the fingerprint sensor we will bring security and convenience to the next level. According to our recently conducted world-wide user studies, more than 80 percent of the users still by far consider fingerprint to be the most convenient authentication method. Users have simply gotten used to the fingerprint sensor and appreciate the convenience and the extra features it brings. Multimodality is the way to go and that’s the path we have chosen.
Published: September 11, 2017
Q: How is Fingerprints affected by changes in currency rates?
A: Our customers pay us in US dollars, USD. We also make our purchases of goods and services in the same currency. The majority of our employees are based in Sweden and therefore most of our operating expenses, such as salaries and rents, are in Swedish kronor, SEK. As the company reports in SEK, "Revenues" and "Cost of sold goods" in the income statement are therefore affected when the SEK/USD exchange rate changes. For the reasons above, some other items such as accounts receivables and accounts payables are also linked to the USD. In addition, we have some liquid funds, like loans and cash on bank accounts, in the same currency. These are adjusted for changes in currency rates and the differences that arise are reported as currency translation differences, gains or losses, and are also included in the income statement. Partly under "Other operating income and expenses" and partly under "Financial income and expenses".
Q: How does Fingerprints protect itself against the effect of currency fluctuations?
A: Exchange rate fluctuations are one of the risks we are exposed to and which we regularly assess how to deal with. You can choose to hedge your currency exposure against changing exchange rates but to date we have not done so. Please see the Annual Report pages 59, 61, 63 and 86 for more information.
Published: August 22, 2017
Q: What is the status regarding Fingerprints’ buyback program of own shares?
A:The annual general meeting, AGM, decided to authorize the Board to decide on repurchasing and transfer of own shares Series B, it was not a decision to initiate the actual repurchasing. The purpose of the mandate was to give the board more latitude regarding the company's capital structure and the mandate is valid until the next AGM.
Q: How is the market informed when the buyback begins?
A: When the Board decides to use the authorization, the decision is made public. The repurchases are reported to Nasdaq OMX and in conjunction which this, this information is also made public.
Published: May 31, 2017
Q: What is the status regarding the acquisition of Delta ID?
A: We still expect the deal to be closed during the second quarter
Q: How do you communicate when it comes to launches of smartphones equipped with your sensors?
A: Please see Questions & Answers regarding information disclosure and product launches: https://www.fingerprints.com/investors/ir-faq/
Published: May 29, 2017
Information about our inventory
Q: Why has Fingerprints own inventory increased?
A: Our own inventory has increased as a result of the inventory build-up throughout the value chain. When our customers decrease their orders on us we have to decrease our orders towards our own suppliers. We have done so, but it takes 3-4 months before this has an effect since that is the planning horizon our suppliers are operating with. Until it takes effect, the inventory increases and this is what has happened in the first quarter.
Q: What do you do about it?
A: At the moment we to a large extent deliver from our own inventory and as stated, we expect to be able to sell the products we have there. It is however customary, and prudent, to make charges for obsolescence, i.e. that some products cannot be sold. We do this on a regular basis and in the first quarter we, as stated in the interim report for the first quarter, made an obsolescence charge (“partial”) corresponding to approximately 3 percentage points of revenues.
Q: How big inventory is “normal” for Fingerprints?
A: As we said at the first quarter’s earning’s call it is hard to say what is normal for us. We have been growing extremely fast and it has been challenging to keep up with customer demand which naturally result in low inventory levels. Lately, we have had the opposite situation, resulting in too much inventories. In addition, our product portfolio has grown and we have, as stated in the interim report, ongoing product exchanges which is also a factor to take into account. Inventory is part of Working Capital and Fingerprints' track “Working Capital/Revenues” which we want to keep below 10 percent. Currently it isn’t, and our inventory is an obvious reason.
Q: Will the profit increase when you sell out the inventory?
A: No, the decrease of our own inventory does not affect the profit but it has a positive effect on the company’s cashflow as revenues will be related to already purchased, stocked and paid for products.
Published: April 12, 2017
Questions regarding fingerprint sensors and security
Q: How safe are Fingerprints’ sensors? A new study claims that fingerprint sensors in smartphones can be hacked by artificial fingerprints?
A: For Fingerprints, security is a key priority and we are the industry-leader within fingerprint sensors. We continuosly conduct security analysis of our solutions and keep ourselves updated on the latest biometrics research. The mentioned study, which has received attention, presents a method by which a “masterprint”, a synthetic or real partial fingerprint, is used with varying success to access fingerprint biometric systems with partial fingerprints. The analysis is based on a system using minutia points, that are often low in number for such small image sizes (i.e. in smartphones). It also uses information about these minutia points to create the “masterprints”, and the analysis has been done for a specific matcher. Fingerprints’ system does not rely on minutia points, but is based on a proprietary system with significantly improved security, and therefore the analysis is not valid to our systems. In addition, we offer FPC SafeTouch, a function which increases security against spoof attacks. Fingerprints is very meticulous with analyzing the security of its biometric systems and having partial images and more than one finger enrolled is certainly part of that analysis. The standard security level of our systems is at 1/100 000 False Acceptance Rate.
Read more about security and biometric authentication here: (from page 5) https://fingerprints-cbqmhmjyrs2rynk.netdna-ssl.com/wp-content/uploads/2016/11/Fingerprints-Biometric-Technologies-Whitepaper-January-2017-RevB.pdf
Published: April 7, 2017
Q: What is the status of the Delta ID acquisition and when is it expected to be completed?
A: We have no new information regarding the acquisition of Delta ID but the approval is currently with the American authorities. We expect it to be closed in Q2 but we are not controlling the process at the moment.
Published: April 5, 2017
Questions regarding the smartcard demonstration:
Q: Is the power in the cards generated by a technology that Fingerprints has developed?
A: Others have developed the technology to generate power in this way through a point-of-sales terminal. That particular technology is already used in payment cards on the market today. The unique thing we demonstrate here is that we can perform a fingerprint authentication thanks to our extremely power efficient solution.
Q: Will Fingerprints sell these smart cards, on the market?
A: Fingerprints does not intend to sell smartcards as such, these cards have been developed to show what is possible, and are used in demonstrations for customers and partners to drive the smartcard market forward.
Published: April 3, 2017
Q: The new smartcard that is demonstrated in the video in the newsroom, what companies have you partnered with?
A: This is our demo-product and we don’t comment on who we have worked with to make it work.
Q: How can I request a printed copy of the Annual Report?
A: Please send an email to investrel@fingerprints.com with your mailing address and write “Annual Report” as subject. The Annual Report will be available for the AGM April 20, and a printed copy will be sent to you after that date.
Q: Is Delta ID supplying the iris solution for Samsung S8?
A: Unfortunately, we cannot comment on Delta's iris solution used by Samsung. The acquisition of Delta ID is awaiting approval by the US authorities, and as long as the acquisition is not closed, we cannot speak for them, or tell them what to communicate.
Q&A regarding Fingerprints’ information disclosure and product launches
Q: Do you announce the launch of all products that contain one of your products?
A: In cases where the end customer has given us permission to announce that one of our products is an integrated component in their products, we always announce our involvement through our own channels. Depending on the scope of the product launch, we do this either in the form of a news update on our website or by publishing a press release. Please find all news updates and press releases here: https://www.fingerprints.com/newsroom/
Q: Why have you chosen not to announce information in advance when new products containing your sensors are set to be launched in the market?
A: It is always at the discretion of our end customers, such as Huawei, Google or OPPO to name a few of our customers, when they choose to announce the launch of their products and how they wish to communicate this in connection with the launch.
Q: Why wait so long before confirming that one of Fingerprint Cards’ products is included as a component in a product? A simple yes or no would confirm this.
A: It is always at the discretion of our end customers when they choose to announce the launch of their products and how they wish to communicate this in connection with the launch. In practice, this means that even if one of our sensors is integrated in a certain product, we do not always have the permission of the customer in question to confirm this. In cases where we have the opportunity to confirm our involvement, we communicate this information as soon as possible through our own channels, either in the form of a press release or a news update on our website. Some customers prefer to first have the launch event and then allow their partners to communicate their involvement in the product. This explains the delay that occurs sometimes, for example, between the official launch of a new telephone model and our announcement that our products are installed in the phone.
Q: Why does Fingerprint Cards choose not to comment on articles in the media?
A: Future trends in the biometrics industry are a hot topic of discussion. It is the duty of the mass media to examine, provide information and comment on society and industry. Just like other major listed companies, Fingerprint Cards is often the subject of these investigative reports, analyses and comments. We respect the duties of the mass media and therefore choose to refrain from commenting on individual articles. Furthermore, we do not comment on rumors, speculation or share analyses. Our goal is however to maintain long-term and solid media relationships by providing the media and external stakeholders with accurate information regarding the company. We also endeavor to continuously raise awareness of the biometrics industry by disseminating our knowledge.
Q: Why do you refrain from commenting on the latest updates and comments of share analysts?
A: It is up to the players in the stock market to assess and comment on the company and share. Hence, Fingerprint Cards does not comment on individual analyses or the price of its share.
Five quick questions to Christian Fredrikson CEO of Fingerprints. Currently on a business trip in China
Hi Christian, what are you doing in China?
I visit customers and partners and take the pulse on the market. I do this several times every quarter. It's inspiring to see how much is happening here and in our sector, it is important to stay close to customers and partners all the time.
What is the latest news when it comes to the excess inventories in the value chain that has affected you so much?
It's not just us, it has affected most of the semiconductor sector. As we have said earlier, we expect inventories in the value chain to be normalized by the end of this quarter.
There seems to be fewer launches of phones equipped with your sensors so far this year. Are you losing market share?
We are receiving quite a few questions about launches right now. We generally try to communicate all launches we are allowed to talk about *. They can therefore provide a good overview of our customer base, but they are not a good measure of market share because customers' strategy regarding launch timing and how many variants to launch will vary. For example, it may be that they just rename a model for a particular operator or for a specific country. Should that count as a launch or not? Several of our customers have launched significantly fewer variants this year and then the statistics may look a little strange.
How do you think market shares should be measured?
In the end, it's not the number of models that matters but the volume, so we focus on the number of sensor equipped phones and our OEM customers. We are still market leaders and still estimate that our market share is around 50 percent.
A final typical sports question; how does it feel?
As I said in connection with this year's first quarterly report, we have closed several important deals recently, and it feels good to know that we are competitive. At the same time, it is also extremely stimulating to engage in the business development currently underway in new segments, such as smartcards, and with new technologies such as iris recognition through Delta ID.
Then I obviously wonder what the situation is regarding the acquisition of Delta ID?
As we have said previously, we expect to close the acquisition process during this quarter and I am looking forward to that. At the same time, work is being done around the integration of the business and it currently engage many of us.
* Fingerprints do not always get permission from customers to disclose their inclusion in their products.
Published: June 2 2017
Q&A regarding adjusted revenue guidance
Published Dec 8 2016
Q: Why was the revenue guidance provided for 2016 so wholly incorrect?
A: Fingerprint Cards’ revenues during the fourth quarter are expected to grow at a slower pace than expected. The expected, strong seasonal volume growth in the fourth quarter seems not to occur and is impacted by earlier inventory build-up throughout the supply chain. Some of the company’s customers have also been affected by component shortages, which affected their volumes of smartphones. Increased competition also affects the company’s revenues negatively. Competition has increased, mainly due to some OEMs choosing to use two suppliers, so called “dual sourcing”.
Q: Why did you wait until now to adjust the revenue guidance?
A: We were not aware of this when we reported the Q3 figures. The development occurred fairly quickly and it also took time for us to fully understand the impact on the company.
Q: How much of the adjusted revenue forecast is due to increased competition?
A: A minor part. The major part is due to a slowdown in the market during Q4.
Q: Have you lost any customers?
A: We have not lost any customers, but we have lost a certain amount of market share among some of our customers as they implement dual source supply of sensors.
Q: What is your view of the revenue trend for 2017?
A: We expect the current situation to continue to impact us in Q1 2017. The forecast for 2017 is continued growth and SEK 7,500-9,500 M in revenues.
Q: Many shareholders have said that they feel cheated by your adjusted revenue guidance for 2016. What are your comments on this?
A: We regret if anybody feels cheated. Like all other companies, we aim to deliver correct forecasts. We communicate on the basis of the conditions that prevail at any given time, in the most correct and transparent manner possible and in compliance with existing regulations. At the same time, it is important to point out that we are operating in a period of extremely robust growth. Since 2014, our revenue has increased from SEK 233.6 M to between SEK 6.6 and 6.8 billion in 2016.
Q: Was the adjusted revenue guidance for 2016 the reason why the Extraordinary General Meeting was cancelled?
A: No. The Extraordinary General Meeting was cancelled because the Board decided to withdraw the suggested remuneration program following dialogue with the company’s owners.
Q: What measures have you taken to ensure that a misleading forecast will not be provided again?
A: We work tirelessly to diversify our analysis work to include facts, statistics and data from customers, partners and distributors as well as the entire ecosystem in which we operate.
Q: What measures do you intend to take to regain the trust of the stock market?
A: We’re receptive to the viewpoints and criticism leveled at us. We aim to provide accurate forecasts and deliver in accordance with them.
Q&A from the Capital Markets Day
Published Dec 14 2016
Q: Does your 2017 revenue guidance include the effects from potential acquisitions?
A: No.
Q: Why do you not communicate more with your shareholders?
A: We communicate when we have new information to share with the market, for example in conjunction with our interim reports, product launches or organizational changes. To the greatest extent possible, we also try to meet media’s request for interviews in order to reach out this way with information about the market, our technology and the company. Since Christian Fredrikson started in August, he has had high availability towards the press. In addition to interviews with news bureaus such as Direkt, Bloomberg and Reuters, he has also participated in a large amount of articles in Swedish business press such as Dagens Industri, Affärsvärlden and Svenska Dagbladet. When we communicate, we do so on the basis of the conditions that prevail at any given time, in the most correct and transparent manner possible and in compliance with existing regulations for issuers. You can always find the latest news and updates from us in our newsroom.
Q: Why do you not use Twitter as a means to communicate more?
A: Twitter is primarily used for product marketing and to spread news published on our website. We are a listed company and www.fingerprints.com is our official channel for communication.
Q: I am a shareholder and worried about my investment in Fingerprint Cards. I want to know more about the future of the company and want to talk with management and the Board. I have e-mailed and called you. Why have you not called me back?
A: Fingerprint Cards is not able to come back with a personal reply to all incoming questions. Neither are companies listed on the stock exchange allowed to provide any sorts of investment advice to its shareholders. We conduct regular investor revents and meet the analyst in order to increase knowledge about the company. Some of these events are open and accessible to all. To get access to the analysts and their research reports, one usually need to be a customer at the bank the analyst work for. However, for example Redeyes analysis of the company is available for all. Please visit www.redeye.se/bolag/fingerprint-cards (all information available in English) to take part of Redeye’s latest updates. The company's performance is communicated to all shareholders on a quarterly basis and through press releases and news. In conjunction with the quarterly reports, a telephone conference with the CEO and the CFO is held. During the telephone conference the company’s finances and future outlook are commented on, based on the latest published information. The company's financial reports and documentation from various investor events can be found at https://www.fingerprints.com/investors/reports-presentations/presentations/
Q: The share has plummeted in the past year. Why has no member of company management commented on this?
A: We never comment on Fingerprint Cards’ share, its market capitalization or the estimates of analysts.
Q: Do you not understand that the lack of communication hurt the shareholders’ confidence towards the company?
A: We are obviously aware that there is a great interest both for the company and for the share price development. We strive to create stable, long-term value in the company and hence focus on doing our best every day to the drive the business forward. Although it was disappointing to have to adjust the forecast for 2016, the company remains the market leader, has a high operating margin and continues to grow. We communicate with the market when we have new information to share, this is typically in conjunction with quarterly reports, product launches or organizational changes.
Q: Will any dividend be awarded in 2017?
A: This is a question for the 2017 Annual General Meeting, which will be held on April 20th 2017, in Gothenburg.
Q: Will the board to be replaced in 2017?
A: As for all listed Swedish companies, it is the Company’s nomination committee that will submit proposals for Chairman of the Board and board members. Read more about the Swedish Code of Corporate Governance. The nomination committee of Fingerprint Cards will present its suggestions for Chairman of the Board and board members prior to the Annual General Meeting 2017.
Q: Do the Board and Management Group have a low level of confidence in the company’s share?
A: No. There is a high level of confidence in the share. Seven out of eight member of the Management Group and five out of a total of nine members of the Board own shares in the company. Furthermore, the majority of the members of the Management Group are included in a warrants program that can be redeemed now in December 2016. An up-to-date overview of share and warrant holdings is presented on the company’s website.
Q&A regarding AGM 2017
Published April 21 2017 AGM 2017 – CEO presentation, Christian Fredrikson
Published March 15 2017
Read more about AGM and the work of the Board of Directors here : https://www.fingerprints.com/investors/corporate-governance/
Q: How to submit proposals for Annual General Meeting (AGM)?
A: First, you need to distinguish between Matters and Proposals. If a Matter is to be dealt with at the AGM, it need to be included in the notice. A Proposal related to a Matter already included in the notice can normally be made as late as at the AGM - exceptions apply to certain matters, such as new issues of shares etc., where the full proposal must be made public no later than three weeks prior to the AGM. The notice of the Annual General Meeting (AGM) will be sent out in the end of March. As a main principle, written matters and proposals shall be handed in seven weeks prior to AGM to be included in the notice. Proposals that are being received later than this, will only be dealt with at the AGM if the company has had time to prepare them and the shareholder is present at the AGM to present them. There is nothing stopping a shareholder from presenting proposals during the AGM but if it is a new matter not included in the notice, or a proposal of a certain type that require a full presentation three weeks ahead of the AGM, it will not be dealt with at the meeting.
Q: Is it possible to submit a written proposal, and how does it work then?
A: Yes, as stated above. It is OK to submit proposals via e-mail as long as we know who the sender is. If you include your phone number, we can call and confirm that it is you who submitted the proposal. Please send your proposal to: agm2017@fingerprints.com
Q: How are the Boards members elected?
A: The nomination committee proposes new board members.
Q: Can I propose a new Board Member?
A: Proposal for new board members can be made as late as at the Annual General Meeting as stated above.
Q: How is the nomination Committee elected?
A: The largest shareholders elects the Nomination Committee in accordance with the nomination committee instruction the 2016 AGM resolved upon.
Q: When is the deadline to register shares so that they become eligible to vote before the AGM?
A: The record date is five days (Saturday counts as a working day) before the Meeting, i.e. April 12th, 2017. On that day you need to be registered as the owner (not trustee registered). Please talk to your trustee in good time before this date.
Q: If shareholders want to raise questions at the AGM, must these issues have been shared to the board in advance?
A: No, you can ask your questions at the meeting. Do you want CEO / Board to have the opportunity to be prepared, you can submit questions in advance, but you still have to ask them at the meeting.
Q: Is it possible to ask spoken questions during the meeting?
A: Yes
Q: To whom can I send questions about the meeting?
Q: If the meeting decides on share repurchases, when can they begin?
A: If the meeting decides to repurchase shares, these can theoretically begin to be implemented the day after the meeting.
Q: If the meeting decides on dividends, when can they begin?
A: If the meeting decides about dividends, the record date can theoretically earliest take place 24 April and the dividend can earliest be distributed 27 April.
Q: When will the annual report be published?
A: According to the law framework, the annual report must be published no later than three weeks prior the AGM. We aim for it to be published on our website three weeks before the AGM, 31 March.
Q: How shall I sign up for attendance of the AGM?
A: Information on how to sign up will be included in the notice of AGM.
Q: When will the notice be sent out?
A: The notice of the AGM will be sent out in the end of March.