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2015-08-20

Fingerprint Cards AB: Fingerprint Cards (FPC) Interim Report for the second quarter, April-June 2015

FPC reports an operating profit and sharply growing revenues

CEO's comments

Revenues for the second quarter of 2015 totaled SEK 445 M, up 912%
year-on-year, and 218% compared with the first quarter of 2015. The sharp
increase in revenues was due to a broad-based decision by smartphone
suppliers earlier this year to introduce touch fingerprint sensors in their
smartphones, which accelerated market growth, and to FPC's ability, through
our strong market position due to leading technology and a broad product
portfolio, to meet customer needs.

In the second quarter, the business generated an operating profit and a
continued positive cash flow from operations. Operating profit totaled SEK 65
M during the second quarter of 2015, compared with a loss of SEK 19 M in the
first quarter of 2015. The adjusted gross margin was 38% compared with 36% in
the first quarter of 2015, and the gross margin was 36% compared with 27% in
the first quarter of 2015. The improved gross margin was attributable to a
changed product mix.

The second quarter and period up to the interim report has, as continuously
communicated, been characterized by an increased order inflow from FPC's
module partners and at the end of the quarter, the order backlog amounted to
SEK 1,335 M. The reason for this is the growing number of smartphone
suppliers who have chosen to integrate FPC's touch fingerprint sensors in
smartphones. During the period, Huawei, HTC, Oppo, Newman, LeTV, Coolpad,
Meizu, Dazen, ZTE, Oneplus and ZUK launched smartphones with FPC's touch
fingerprint sensors, confirming FPC's position as the leading supplier of
touch fingerprint sensors to the smartphone market.

A further sign of our strong position is that customers in their marketing of
newly launched smartphones are increasingly announcing that they contain our
sensors, with the improved features of our new touch fingerprint sensors
receiving clear exposure. The performance and other features of the touch
fingerprint sensors enable our customers to offer consumers a great user
experience, making the touch fingerprint sensor a key component of their
mobile.

Another highly significant event during the quarter, from both a market
perspective and for FPC, was that Google unveiled the new features in the
next version of the Android operating system. The new version, known as
Android M and now named Marshmallow or Android 6.0, will feature complete
platform support for fingerprint sensors as well as Android Pay, a payment
service that uses the fingerprint sensor to verify the identification of the
user.

When Google demonstrated the new services at its preview event on May 28, the
prototype units used FPC's touch fingerprint sensor FPC1025, which further
underlines FPC's industry leadership. Google's introduction of support for
fingerprint sensors in Android M, combined with the major interest in secure
mobile payments from both consumers and smartphone suppliers, is considered a
strong driver for the rapidly increasing penetration of fingerprint sensors
in smartphones.

During the second quarter, we launched two new touch fingerprint sensors:
FPC1022 and FPC1035. These are primarily intended for rear-mounted
integration with smartphones, where we have established a very strong market
position, particularly with FPC1025 which has already been integrated with
numerous launched smartphones. As part of our ambitious technology
development, we can now also enable market-leading biometric performance for
our latest touch fingerprint sensors, where the size of the sensor is
significantly reduced compared with earlier sensors.

The smaller size makes our sensors highly competitive, since phone integration
will be easier. All launched touch fingerprint sensors to date in our product
portfolio are now in mass production.

The strong increase in sales means that, together with our suppliers and other
partners, we have delivered sharply growing volumes over a short time. This
requires a major effort from both FPC and our partners, but due to a variety
of measures, our assessment is that we are well-equipped to meet the growing
demand for our products.

Apart from the rapidly growing touch fingerprint sensor business for
smartphones, we are continuing to develop our offering for smartcards. This
is paving the way for new, complementary business opportunities over time in
cooperation with Zwipe and other business partners.

We remain confident in continuously growing volume deliveries and a large
number of new product launches featuring our touch fingerprint sensors.

Future prospects

Revenues for the third quarter of 2015 are expected to be approximately SEK
860 M, corresponding to year-on-year growth of more than 1200%.

Due to the continued increase in gross profit and effects of operating cost
allocation, operating profit is expected to further improve in the third
quarter compared with the second quarter.

Considering that forecast third-quarter revenues amount to approximately SEK
860 M, and that we also see sequential revenue growth during the fourth
quarter, the revenue forecast for 2015 has been raised from approximately SEK
2,200 M, as previously announced, to approximately SEK 2,500 M. The reason
for this is the growing interest from the market in integrating touch
fingerprint sensors and the company's strong product portfolio.

At present, the company does not anticipate any additional external capital
requirements, despite the sharp volume increase that is expected for the
remainder of the year.

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| Key figures * Apr-Jun 2015 Apr-Jun 2014 Change, % Jan-Jun 2015 Jan-Jun 2014 Change, % Jan-Dec 2014 |
| Revenue, SEK M 445.2 44.0 + 912 585.0 62.4 + 838 234 |
| Adjusted gross profit, SEK M 170.9 20.8 + 722 221.4 30.0 + 638 107 |
| Gross profit, SEK M 159.0 13.2 + 1,105 196.3 16.7 + 1,075 72 |
| Adjusted gross margin, % 38 47 38 48 46 |
| Gross margin, % 36 30 34 27 31 |
| Operating profit/loss, SEK M 65.4 -44.9 46.6 -71.5 -145 |
| EBITDA, SEK M 74.9 -24.1 68.1 -46.1 -84 |
| EBITDA, % 17 -54 12 -18 -36 |
| Profit/loss after financial items, SEK M 65.4 -44.8 46.6 -71.0 -144 |
| Earnings per share, SEK 1.12 -0.79 0.80 -1.25 -2.47 |
| |
| Jun 30, 2015 Jun 30, 2014 |
| Cash and cash equivalents, SEK M 166 238 |
| Equity/assets ratio, % 57 87 |
| Order backlog, SEK M 1,335 63 |
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For further information, contact:
Jörgen Lantto, CEO, Fingerprint Cards AB (publ),
+46 (0)31-60 78 20,investrel@fingerprints.com

Website:www.fingerprints.com/corporate/

Welcome to Fingerprint Cards Q2 2015 - Financial Report Webcast. The Webcast
starts at 15.00 CET on Thursday August 20th 2015. Participants use this link
to register and join the live event:
https://engage.vevent.com/index.jsp?eid=3483&seid=46

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). This information was
issued for publication on August 20, 2015 at 8:00 a.m. CET

Key information
Issuing, publishing or distributing this press release may be subject to
restrictions in certain jurisdictions. The recipient of this press release is
responsible for using this press release and the constituent information in
accordance with the rules and regulations prevailing in the particular
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 Q2 2015
http://hugin.info/132202/R/1946593/706427.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

HUG#1946593

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