Fingerprint Cards AB (publ) (FINGB) Earnings Call Transcript & Summary

Hello, and welcome to the world of Fingerprint Cards. My name is Christian Fredrikson. I'm the CEO, and I'm happy to be going through a little bit about the stages of the company on our strategic priorities and, of course, a little bit facts on the company itself. So bear with me, and let's go forward. We have been, of course, in biometrics since 1997, so quite a while, and being part of driving a lot of innovation in this industry when it comes to biometrics. We do fingerprint sensors, the whole system, as well as iris where we do mainly the algorithms and the software surrounding the camera and the solutions. I'm going to run through a little bit more on the company as well now. We created together with the start from the Apple the -- actually, when we got into the whole fingerprint sensor business in mobile, that is the core of our business, being in mobile, of course. We have today delivered over 1.4 billion sensors, and consumers touch our sensors billions of times every day. We still continue to deliver over 1 million sensors every working day when it comes to the fingerprint area, so magnificent good volumes for us. We also deliver touchless solutions in the terms of iris into hospitals. We will start working and I have been working quite a while in the automotive industry and of course, into the access industry as well. We are the largest fingerprint sensor supplier also to the door lock market, which is part for us in the access market. And if I look at the mobile, we are delivering to 9 out of the 10 smartphone OEMs in the world. The only one we do not deliver to is Apple. 9 out of 10, and we have delivered -- over 545 mobile phones has been delivered globally with our sensors, in it over this time. We also are now strongly getting into the PC market. It is a great market for us, and it will grow substantially. And we have just announced the latest PCs with Dell earlier this week, Xiaomi and you will see many, many other names and that we have launched with so far with our sensors. And of course, not forgetting the fantastic contactless market in payment industry. And I can say on payment industry that we don't have to wait no more. It has happened. Banks have launched -- substantial banks have launched, and I'll talk about it soon, but the wait is over. The commercial launches have been done, and we are delivering on repetitive purchase orders in this industry. Of course, the speed of the industry relies now on getting many things done when it comes to new banks launched. But at least and finally and fantastically, we are out in the market, which is beautiful to be in this new industry of ours. I have to also say that we are back to growth. It is very good. I'm very pleased for that. A lot of hard work from many people and of course, tells you also our new legs are starting to grow for us as a company. It has been very nice to see back to growth for us. Of course, that's what we want as a company for our employees, for the consumers to get the services and of course, for the shareholders also to bring more value for all of this company. Now let me run through what we said last year. In 2020, we talked about what's going to happen in this industry of ours in the main 4 areas where we are. I can say now that we are back to growth. We are growing in all of our areas now, all of these 4 areas, and we will get now 4 legs for the company going forward instead of only 1 basically. And we can see this happening already when we get into next year. So there's a very positive momentum in all of our businesses, clearly now. If I look at the mobile, which is, of course, very well known and when we look forward, there will be still be growth in the mobile, even if it is not that big, of course, when it comes to the global mobile phone sales, but it's still growing a bit with the GDP growth in the world and still some feature phones that needs to get into smartphones. And of course, about 82% of mobile phones have biometry in them. So there's a little bit of growth there as well still going on. So altogether, we expect about 1.4 billion units per year to be produced when you get to 2026 and beyond with a little bit of growth in this area as well. Now PC market is a fantastic market. And of course, with the homeworking has actually grown already. Overall, the PC market is above 300 million units per year, and we expect a minimum 2/3, which is actually over 200 million units per year will have, and we'll have biometry in them. And this is a fantastic new market for us finally getting going, finally seeing the need, and we are very happy. Consumers want this solution, whether it's in the power button or wherever we put the fingerprint sensor now going forward in different form factors, building more security. This is a great place for us, and it fits us very well and just a fantastic growth story for us going forward in PC. I'm absolutely pleased about that one. And this is, of course, wonderful too because we all absolutely hate typing our passwords onto PCs. I personally and we, all of us, in our company, want to get rid of that, want you to get rid of that and enjoy just opening your PC easily, smoothly, safely and paying safely, identifying yourselves safely. Access market, if I take to the right here, is scattered, but there are many great growth areas in this place, whether it's the door locks, whether it is USB dongles, whether it's scooters with fingerprint sensors. And of course, the access market itself, there are many subsegments here, we will focus on a few of them, but there is a lot of growth. And with access cards, you pay, you touch a fingerprint on your access card, brings a lot of safety, smoothness and contactless access with it as well. And not to forget, of course, the biggest market that we see ahead of us is the payment markets with the payment cards. There is about 6 billion cards being produced every year going forward here in payment industry, and we expect about half of them to have biometric cards. And now finally, after such a long time, the company was started on the belief and innovation on here that we will get fingerprint sensors to cards. And now it is reality. This year, it happened. This is the year when the wait is over. I'm happy to say that, and I'm happy that we are part of it so strongly, once again, changing an industry and innovating in an industry. Now let me go through these 4 different areas a little bit shortly as well, right? So mobile devices, I'm not going to talk too much about, but still, of course, a fantastic market to be in, very competitive and an industry in high-volume market and still a lot to innovate in that space as well. PC, I talked about. Access and IoT, I will discuss as well. And payments, of course, I will run through these strategic priorities for us, building 4 new legs for the company, and all of them are now in growth. Mobile. We have -- as I said, 545 mobile devices launched with our technology, 1.4 billion sensors where a lot of it, of course, is from the mobile part. Our curved side-mounted sensor is a fantastic key addition to our portfolio. It's very well received in the market, and I look forward to strong volumes in this one and continued strong sales for us. Design is and continues to be key in this industry, foldable full screen 5G handsets, new sensors, shapes and forms and factors with curved, there's a lot that we can do in this industry, and we love bringing that to differentiate -- for the OEMs to differentiate and for the consumers to enjoy safely using their phones. PC. Yes, what a fantastic business, fantastic opportunity for us. We deliver now already to 3 out of the top 5 manufacturers in the world, and we just announced the Dell, some of the PCs coming out with our solutions. We will and we have assumed a strong position, and we will continue getting into this market even more. It is growing very well. It is a nice place to be. And we expect continued performance strongly in this segment. I am very pleased about this one, and we are, of course, happy to bring this to the consumers and the corporates in the world to make it easier and safer for them. There is an increasing interest in the biometric access and that market as well as the IoT applications. This is, of course, a scattered market. As I said, it's in the hundreds of millions of unit from 2026 and beyond, actually. But you need to choose a bit which market you go to here. So we are in door locks. We will work with physical and logical access control, USB dongle, and there are many things in the wearables and various IoT applications. So basically, everything that will carry electricity, will also carry a chip, and there is also, in many places, a need for some kind of identification and security. Because otherwise, these will be open holes into networks and safety is going to be needed there as well. This is a good segment and a very interesting and takes a lot of different innovation of form factors. So you need to be fast and flexible and innovative in this segment as well. And then finally, biometric payment cards, which we have, as I said, now entered the commercial phase. We have been certified by Visa and Mastercard of the Thales card. And that was, of course, has been a major milestones. We have 4 commercial launches so far, all with fingerprints technology. So 4 commercial launches, all with our technology: Cornèr Bank, BNP Paribas, Crédit Agricole and now BBVA Mexico. And let me just point out, BNP Paribas is the biggest bank in Europe. It is the seventh largest bank in the world. Crédit Agricole is the third largest bank in Europe and #10 in the world. These are no small banks. This is major, major movement already. And France has always been leading when it comes to launching new things in the card industry. And it is great to see once again that it's happening and wonderful to be part of that with our sensor together with our partners. BNP Paribas' launch is a great success, as stated already in the press. And it is fantastic to see the consumers who want the product. They love the product. They want to use it. It is easy, fast, simple, safe. No cap, no pain. It doesn't get much better than that, pay and enjoy. BNP Paribas is preparing to offer this now to all the customers in terms of their branches in France and so will Crédit Agricole as they have stated that they are starting now in this month in September to continue rolling out. BBVA Mexico has just, of course, only launched with the [ biometric ]. This is a way for banks to differentiate. And here you see, of course, some of the areas that BNP Paribas has been running. Beautiful to see these products getting into consumer hands, getting real feedback real-life situation. And I think it is a major, major thing that over half of the respondents in a recent study say that they are willing to switch banks to get access to a biometric card. How pleased are we not of that, and it is great to see, and we're very happy to be doing that as well in this industry. And just beautiful picture here, I have to admit, to watch wonderful consumers using no pin code. Now biometric payment cards is the next mass market for biometrics, and it is wonderful to see this leg taken piece finally getting ahead for us. As I said, the consumer feedback has been very favorable. And obviously, the cards were offered to limited number of customers and then you get to nationwide rollouts as is, which is now being planned and executed. It is interesting to see that the whole payment card ecosystem is moving towards biometric cards. And what we now need to do to get it in this industry is we know that performance is good. We know it works fast, smooth every time securely. It just works. It is wonderful to pay, and wonderful to see that happen. And I think that what is very clear for us now is to work on the enrollment, which way do you want to do enrollment to guide the users to make it very easy to get the new card into use. I think that is a focus area as well for the industry. We will also, as a company, focus now on driving the mass market, driving the capacity, driving the cost down. There is so much that we can innovate in this space. We have only gotten started. There is so much innovation to do. It is just puts a smile on the face of people in this company because we are only going to start now and we are finally out with these cards and there's so much more to be done. Fantastic journey, I look forward this one. We want to and we will be and we are the #1 in biometrics. It's been wonderful talking to you, and I look forward to seeing you, investors, customers on the world. Take care, stay safe, see you later. Thank you and bye.