FPC Reports Improvements in Sales, Inventories, and Cash Position in Q2

Fingerprint Cards (Fingerprints) has reported strong growth in its Q2 update for 2023. Revenues increased by a 74 percent compared to the previous quarter, contributing to a healthy cash position that rose by 20 percent to SEK 252 million since the end of Q1. The company also achieved a significant 26 percent reduction in inventories, positively impacting cash flow.

The improvements were, to some extent, expected: In its Q1 update, the company reported significant drops in revenues and EBITDA due to “intense price competition” and subdued demand for the phones and PCs that use its fingerprint sensor technology, but anticipated a gradual improvement starting in Q2.

Fingerprints experienced robust growth in its PC and Mobile segments in the latest quarter, although continued price pressure in the Mobile division and weaker quarterly sales in Payment and Access had a negative effect on the group’s gross margin.

In specific numbers, the Q2 2023 revenues amounted to SEK 203.3 million, down from SEK 228.1 million in the previous year’s Q2. EBITDA showed a negative SEK 57.7 million, compared to a positive SEK 6.5 million the year before. Similarly, the operating result was negative at SEK 75.7 million, while it was negative SEK 12.2 million in the previous year’s Q2. However, cash flow from operating activities saw a positive SEK 52.4 million, a significant improvement from the negative SEK 28.3 million in the same period last year.

Fingerprints’ CEO, Ted Hansson, expressed satisfaction with the company’s 74 percent sales increase in Q2 2023, mainly due to a rebound in the mobile business and healthy revenue growth in PCs. However, he acknowledged that mobile price competition remained intense, affecting gross margin. Despite this challenge, Fingerprints successfully defended its market share in the mobile segment, he asserted. The CEO also mentioned the impact of lower sales in the Payment and Access sectors on the gross margin, noting that these industries’ revenue development can be more uneven in the short term.

Hansson highlighted the company’s recent organizational development, which saw the introduction of a “New Business” unit led by Thomas Rex, aimed at exploring new revenue growth opportunities in areas such as new partners, add-on acquisitions, automotive, and monetizing intellectual property rights.

Moreover, Fingerprints secured new financing of at least SEK 340 million, with an option to increase it up to SEK 430 million, and management have decided to proceed with an early redemption of the company’s outstanding bond loan of SEK 300 million. Hansson framed these as strategic moves that have improved the company’s financial position and will support its growth efforts going forward.

–

July 25, 2023 – by the FindBiometrics Editorial Team