FINGERPRINT CARDS

SHB SMALL/MIDCAP SEMINAR, JUNE 7 2017

CHRISTIAN FREDRIKSON, CEO

Agenda

Introduction to Fingerprints

Business update

Inventories

Current business opportunities

The smartcard opportuntity

Long term view

Becoming the biometrics company

Market Opportunities

Strategy

The acquisition of Delta ID2

INTRODUCTION TO FINGERPRINTS

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Fingerprints of Sweden

- In biometrics since 1997

Founded 1997 in Gothenburg, Sweden

Public company listed on NASDAQ OMX

+400 employees

HQ in Gothenburg, R&D in Sweden and Denmark

Subsidiaries in China, South Korea, Taiwan, US

Financial highlights 2016 – 129% revenue growth

Revenues : 6,638 MSEK (2,900)

Gross Margin : 48% (43)

Operating margin : 39% (31)

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Our core business – advanced biometric system solutions, both HW and SW

Market position – global market leader

Key focus areas – smartphones, tablets, PCs, smartcards, IoT, automotive

Global brands use our products

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Unique System Knowledge

BIOMETRIC

ALGORITHMSSOFTWARE

DEVELOPMENT

ASIC/SILICON

CHIP DEVELOPMENT

PACKAGING

EXPERTISE

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BUSINESS UPDATE

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Short term congestion in our value chain –

expected to be normalized end of Q2

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Progress with Tier2 and Tier3 OEMs

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• Represents some 25% of the market

• Long tail of >150 OEMsLaunches with new OEM-

customers announced

New wins with FPC1028

important for low-end

smartphones and this segment

Teaming up with new partners

such as distributors, module-

houses and platform providers

First launch on Spreadtrum

platform – Qiku (April)

Market launches Q1 2017

18 mobile devices by 13 OEM customers

Launches by Huawei, Xiaomi, Lenovo and Oppo

Huawei P10 with FPC1268 under glass

First smartphone with sensor under continuous cover glass

Blackberry and Indian Micromax, new customers

Launch of FPC SENSETOUCH™

Eight features now launched

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Smartcard key success factors

Supporting a battery- and contact-less scenario

Very low power consumption required

High security and convenience

Solid biometric performance

Secure environment

Supporting EMVco* standards for payments

Complying with packaging and production requirements

Ultra-thin package

ISO- and CQM-certifications

Bendable and scratch resistant

Lean, effective and high yield card manufacturing

Meeting cost requirements

Highly price sensitive market demand curve

11 * ”EMVCo exists to facilitate worldwide interoperability and acceptance of secure payment transactions.” www.emvco.com

Mobilizing the smartcard value chain

Fingerprints

Gemalto

Oberthur

Kona-I

Others…

Banks

Corporations

Governments

Cardholder

Card manufacturers

examples

Card

Issuers

• HW (sensor module)

• On card SW (algorithms)

• SW (off card. Enrolment

& GUI)

• Packaging (Production

SW & tools)

Payment schemes and standardization bodies* i.e. MC, VISA, CUP, EMVCo, ISO, FIDO…

Solution providers

examples

G&D

HID

*Setting standards, are custodians of payment system integrity and act as catalysts for industry development initiatives like financial inclusion.

Applications :

ID, loyalty,

access,

payment

Cardlab

Others…

NXP

ZWIPE

THE LONG TERM VIEW

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Megatrends that affect us

Biometrics

Security and convenience

Cloudification

Online payment/banking

Digitalization (IoT)

CSR awareness

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#1 BIOMETRICS COMPANY

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New segments expand fingerprint sensor market

Continued strong market

growth in smartphones

The market for biometric smart

cards is expected to expand

rapidly in 2018

Growth opportunity in PC – low

penetration rate

Source: Strategy Analytics, IHS, Fingerprint Cards estimates Dec 2016.Total Addressable Market excludes Apple, includes all other OEMs and segments including swipe technology

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Fingerprints growth strategy

Grow with the existing

customer base

Add new customers

Other segmentsPC

Internet of ThingsAutomotive

Industrial and medical

New offerings

Other sensors

M&A opportunities

Segments

Existing

New

OfferingExisting New

SmartcardsSensor adaptation

Utilize scale advantagesStrong growth potential

Extended biometric

scope

Trackpad

Higher security

More features

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The big picture of biometrics

Technologies

Facial Iris Voice

Palm vein Finger vein Fingerprint

Capacitive

Ultrasonic

Optical

1 st generation

Spray coated

2nd generation

Under glass

3rd generation

Under thicker glass

Touch sensorsBiometric modalities

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THE PERFECT MATCHFingerprint Cards acquires Delta ID

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Summary

We expect the excess inventory in the value chain to

be normalized by the end of Q2

We remain competitive and have good traction also

with Tier 2/3 customers and entry level smartphones

Delta ID is a milestone to become a Biometrics

Company and the acquisition will be closed during Q2

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THANK YOU!Stay in touch & connect

E-mail: investrel@fingerprints.com

For more information, visit us at www.fingerprints.com