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2014-04-24

Fingerprint Cards AB: Fingerprint Cards (FPC) Interim Report Q1 2014

Stronger first quarter than expected - now we're building the leading
biometrics company in the world

CEO's comments
The success of Fingerprint Cards (FPC) is continuing and, in terms of sales,
we can state that the first quarter of 2014 was our strongest ever first
quarter, with sales of SEK 18 M. Both the rapidly growing market of
smartphones and the traditional banking sector contributed to this relative
sales success. The development of our next generation of touch sensors, where
the FPC1020 is the first product, is progressing according to plan, and we
have now entered an intensive period together with our customers. Interest
from major manufacturers of smartphones is very strong, which continues to
confirm our previously stated forecasts of the size and growth in the market.

During the first quarter of 2014, we saw clear confirmation of how fingerprint
sensor technology is becoming integrated particularly in smartphones. At the
Mobile World Congress in February, the world's largest manufacturer of
smartphones, Samsung, confirmed that its next flagship model, the Galaxy S5,
would contain swipe sensors in the home button. In addition to basic
functions, such as unlocking the screen, the capability of making secure
mobile payments with PayPal is utilized, a possibility that was created from
the work in the FIDO alliance in which Fingerprint Cards is a driving and
highly active partner.

Secure mobile transactions are a clear direction in the expanding service
range that is now emerging due to the ecosystem surrounding fingerprint
sensor technology. FPC has the opportunity to serve as a strong and active
partner in the expansion of these services and has the intention of capturing
a leading position in this market segment.

The opportunities that will be created with fingerprint sensor technology,
primarily within smartphones, are by no means limited to the exclusive upper
segments. FPC believes that the market is rapidly approaching segmentation,
whereby touch sensors will be the dominant type of sensor in the more
expensive premium and high-end segments, while Swipe sensors will comprise a
large volume product in the less expensive market segments. As the
undisputed, independent market leader in touch sensors, combined with our
long tradition of delivering swipe sensors, I am delighted that our customers
have shown an interest in both of these types of implementation of
fingerprint technology.

The level of activity in our traditionally largest market, China, is intense
and interest in our products and fingerprint technology is generally very
high. The Chinese smartphone market is the single largest market globally
with slightly more than 450 million smartphones sold in 2014* and our
long-term and recognized leading market position in the Chinese bank market
also provides us with a strong foundation among leading Chinese OEM suppliers
of smartphones and tablets. A distinct trend is that Chinese manufacturers,
ranging from such global players as Huawei, ZTE and Lenovo to less well-known
brands as Xiaomi, Coolpad and Gionee, are all capturing market shares as they
gradually build up their technology and design expertise, which they add to
their low production costs. Premium smartphones are normally priced in excess
of USD 300 and often contain the latest and best functions, such as powerful
processors, high screen resolutions, the best cameras and fingerprint readers
that are usually touch sensors. Lee Seung-woo, an analyst at IBK Securities,
said in a recent comment to Reuters: "The winners in the current market
conditions will be those who show the best cost-efficiency, and in that sense
Chinese players will be in a better position than others."

We are continuing our organic expansion and are growing mainly in Sweden,
where we are recruiting all types of functions that support volume growth
expected imminently and the number of customers with high demands for
delivery reliability and support is increasing. During the second quarter, we
will significantly expand our sales and customer support organization,
primarily in Asia. In the first quarter, we also recruited Bill Gallione, VP
Americas, thus considerably strengthening our focus on customers, primarily
in North America.

Finally, I can conclude that 2014 has begun strongly and interest in our
solutions is greater than ever. Our full focus remains directed to generating
success for our shareholders, customers and personnel based on FPC's
technology and products.

Source: IDC China

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|Key figures Jan-Mar 2014 Jan-Mar 2013 |
|Net sales, SEK M 18.4 9.1 |
|Adjusted Gross profit, SEK M* 9.1 3.6 |
|Gross profit, SEK M 3.5 0.1 |
|Adjusted Gross margin, % * 50% 39% |
|Gross margin, % 19% 1% |
|Operating profit, SEK M -26.6 -12.1 |
|EBITDA, SEK M -22.4 9.1 |
|EBITDA, % -122 -100 |
|Profit after financial items, SEK M -26.0 -12.0 |
|Earnings per share, SEK -0.46 -0.23 |
| |
| Mar 31, 2014 Mar 31, 2013 |
|Cash and cash equivalents, SEK M 306 148 |
|Order backlog, SEK M 41 42 |
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Future prospects
FPC stands by its assessment that sales in 2014 will exceed SEK 500 M and that
the EBITDA margin will end up at +20% for the full-year. Sales are expected
to increase very sharply sequentially during the year. The vast majority of
the income is expected to occur during the second half of 2014, particularly
during the fourth quarter of 2014, since volume deliveries of the
significantly more income-generating touch senor FPC 1020 are scheduled to
start at the end of the second quarter. This forecast entails a renewal of
the previous forecast.

Sales for the second quarter of 2014 are anticipated to amount to SEK 30-50 M.
Volume deliveries of touch sensors for the Tier 1 flagship mobile phones will
start at the end of the second quarter and are expected to be launched on the
market in July 2014.

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|For further information, contact: Johan Carlström, President and CEO, |
|Fingerprint Cards AB (publ), +46 31-60 78 20,investrel@fingerprints.com |
| |
|Website:www.fingerprints.com/corporate/ |
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Fingerprint Cards AB (publ), Corp. Reg. No. 556154-2381, discloses this
information pursuant to the Swedish Securities Market Act (2007:528) and the
Swedish Financial Instruments Trading Act (1991:980). The information was
issued for publication on February 6, 2014, at 8:00 a.m. (CET)

Key information

Issuing, publishing or distributing this press release may be subject to
restrictions in certain jurisdictions.
Recipients of this press release are responsible for using this press release
and the information herein in accordance with applicable rules in each
jurisdiction.
This press release does not constitute an offer, or invitation to acquire or
subscribe for new securities in Fingerprint Cards in any jurisdiction.

FPC Interim Report Q1 2014
http://hugin.info/132202/R/1779487/608107.pdf

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Fingerprint Cards AB via Globenewswire

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