Fingerprint Cards retracts forecasts amid worsening market, financials
Sweden’s Fingerprint Cards has retracted its previous sales and EBITDA margin forecasts made in November 2021 as the market outlook continues to be uncertain and the COVID-19 situation in China hit sales. The 2022 Q1-Q2 interim report released today lists the firm’s difficulties along with some positives such as its first move into under-display fingerprint biometrics.
China’s ongoing COVID-19 restrictions had a significant impact on Fingerprint Cards’ sales, albeit with a strengthening of the gross margin due to increased sales in its PC and Access divisions. The downturn in the Chinese mobile market has led to cost adjustments.
The company has retracted its 22 November 2021 forecast of Group revenues for 2022 of SEK 1.6 to 2 billion based on an exchange rate of SEK/US$ 8.70, and an expected EBITDA margin of 14-18 percent for Q4 2022.
EBITDA totaled a negative SEK 3.6 million (US$346,000) for January to June 2022 compared to positive SEK 26.7 million last year. Gross margin was down from 28.3 percent in Q1-Q2 2021 to 25 percent this year. Revenues fell from SEK 644.9 million for the period last year to SEK 528.3 million ($50.8 million).
“Extensive COVID-19-related restrictions were in effect in China for much of the second quarter, which had a significant negative impact on Fingerprints’ sales in the mobile segment in China,” comments CEO Christian Fredrikson.
“Sales in the second quarter fell 21 percent year on year (down 33 percent in constant currency terms), and 24 percent relative to the first quarter of 2022 (down 28 percent in constant currency terms). The gross margin was 31.1 percent, compared with 27.7 percent in the year-earlier period. The increase is primarily due to the significant growth of the share of sales attributable to the PC and Access segments.”
Four of the world’s six largest PC manufacturers are using Fingerprint Cards’ biometrics, notes the CEO, as the proportion of computers fitted with fingerprint sensors continues to rise. The firm will soon announce the first computer to feature its biometric Match-on-Chip solution, added to Microsoft’s approved vendor list for Windows Hello Enhanced Sign-in Security.
The firm has made significant progress with biometric payment cards. So far in 2022, the firm has experienced a spate of new or extended partnerships worldwide for its biometric payment card technology with Feitian, BCC and Transcorp. Fredrikson notes that these still only make up a modest proportion of sales: “We are still only in the infancy of this development, and we will continue to strengthen our world-leading position in this emerging mass market for biometric solutions.”
Entry into under-display fingerprint biometrics market
Fingerprint Cards also announced that a major Asian smartphone original equipment manufacturer is developing products incorporating its optical under-display fingerprint sensor, the first time for the FPC 1632 biometric module.
The firm expects to begin shipments in the fourth quarter of 2022.
The decision follows successful qualification tests with the OEM, announced in April 2022. At the time, the company noted that it expected capacitive fingerprint sensors to dominate as the biometric solution in the Android smartphone market, and the under-display fingerprint sensor segment to grow in parallel, reaching an annual total addressable market of 600 million units in 2026.
“Since many years, Fingerprints is a well-established world leader in capacitive fingerprint sensors,” says Ted Hansson, President Mobile, PC & Access China at Fingerprint Cards.
“The design win we are announcing today marks our entry into a new market segment: optical under-display fingerprint sensors. This will open up attractive new growth opportunities for us going forward, and our goal is to capture a significant share of this market.”
Fingerprint Cards has been working on ‘pol-less’ or ‘polarizer-less’ OLED displays for its under-display biometric sensers for mobile devices which may allow a thinner display layer and greater brightness.
The company no doubt welcomes the good news after a member of the board of directors was found guilty of insider trading and given a prison sentence.