Strong end to an eventful year

YEAR-END REPORT FOR THE PERIOD JANUARY TO DECEMBER 2021

FOURTH QUARTER

  • Net sales totaled SEK 27.4 (22.5) million.
  • EBITDA totaled SEK 1.7 (0.7) million.
  • The operating profit/loss totaled SEK –2.7 (–2.6) million.
  • Earnings for the period totaled SEK –2.4 (–8.8) million.
  • Earnings per share totaled SEK –0.01 (–0.02).
  • Cash flow from operating activities totaled SEK 3.2 (12.2) million.

FULL-YEAR PERIOD, JANUARY-DECEMBER

  • Net sales totaled SEK 83.3 (92.3) million.
  • EBITDA totaled SEK 1.9 (6.9) million.
  • The operating profit/loss totaled SEK –14.1 (–5.8) million.
  • Earnings for the period totaled SEK –13.4 (–12.2) million.
  • Earnings per share totaled SEK –0.04 (–0.03).
  • Cash flow from operating activities totaled SEK –1.5 (21.9) million.

SIGNIFICANT EVENTS DURING THE QUARTER

  • Successful integration of YOUNiQ with the security platform Integra.
  • Precise signed and completed the acquisition of EastCoast Solutions for acceleration in the SaaS business area Digital Identity.
  • Precise paid SEK 18 million in cash in the first installment of the acquisition together with a share issue corresponding to an amount of SEK 6.5 million.
  • As part of the financing of the acquisition of EastCoast Solutions, Precise completed a directed issue to Swedish and international professional investors and family offices, for an amount of SEK 23 million.
  • Precise signed two commercial licensing agreements with two Original Design Manufacturers (ODMs) to provide fingerprint technology, Precise BioMatch, to the automotive industry.

SIGNIFICANT EVENTS AFTER THE END OF THE FULL-YEAR PERIOD

  • Precise entered into a partnership agreement with Infineon Technologies to provide fingerprint technology, Precise BioMatch, to the automotive industry.
  • Precise entered into a partnership with Certego regarding the integration of YOUNiQ in their security services.
  • The first installation of YOUNiQ for remote control of electricity and heating for Algeco in Kiruna.
  • The Board of Directors of Precise has appointed Patrick Höijer as the new CEO of the company, taking office no later than June 1, 2022.

FINANCIAL DATA AND KEY INDICATORS

Amounts in SEK thousands unless otherwise stated

2021202020212020
Amounts in SEK thousands unless otherwise statedQ4Q4Full-YearFull-Year
Net sales27 43422 49483 31992 349
Net sales growth, %22,0%-42,0%-9,8%0,5%
EBITDA1 6667031 8726 862
Gross margin, %77,4%84,7%76,3%84,2%
Operating profit/loss-2 693-2 625-14 073-5 792
Operating margin, %-9,8%-11,7%-16,9%-6,3%
Cash flow from the operating activities3 15612 215-1 49321 896
Cash and cash equivalents64 10276 25864 10276 258

See the Financial Glossary for definitions.

INVITATION TO PRESENTATION OF THE YEAR-END REPORT

In connection with today’s year-end report, Precise invites investors and the media to an informational conference call.

The conference call starts at 10:00 AM (CET) on February 18.

Link to all public information such as link to webcast and participant number for the telephone conference:

https://financialhearings.com/event/43357

To take part, click on the link above to listen to and follow the presentation online, or call one of the following numbers to follow by phone.

SE: +46856642692
UK: +443333009032
US: +16467224902

You will be asked to state your name when you connect to the conference call, and there will be an opportunity to ask questions in Swedish. The conference call will be held in English.

Participating on behalf of Precise:
Stefan K Persson, CEO
Annika Freij, CFO

CEO COMMENTS

2021 was an eventful year in which we made great progress within Digital Identity and Algo. At the end of the year we acquired EastCoast Solutions, a leading provider of visitor management systems, and we completed several successful YOUNiQ installations, including the first for Algeco in Germany. In terms of Algo, the component shortage impacting our customers also continued in the fourth quarter, which contributed to reduced royalty revenues. It is therefore pleasing that we, at the end of the year, signed licensing agreements with two new customers in the automotive industry. Net sales for Q4 2021 totaled SEK 27.4 (22.5) million, driven primarily by increased licensing revenues in Algo as a result of transactions in the automotive industry, combined with progress in Digital Identity.

Through the acquisition of EastCoast, we have increased our base of recurring revenues (ARR) with good profitability, and through our SaaS model we have ARR around SEK 13 million at the end of the year. Net sales in Digital Identity totaled SEK 4.7 (0.1) million during the quarter, which creates stable and diversified revenues as we enter 2022. In Digital Identity, we have an interesting pipeline that includes pilot projects with EastCoast, which are planned for commercialization during the first half of 2022, as well as additional projects with existing YOUNiQ customers.

As in the first nine months of 2021, the fourth quarter was also characterized by a continued component shortage among our customers, which had a negative impact on royalty revenues in Algo. We were also burdened by an increase in administrative costs attributable to the acquisition of EastCoast. Despite this, we achieved an EBITDA of SEK 1.7 (0.7) million, primarily resulting from two new customers in the automotive industry, as well as the acquisition of EastCoast, which delivered its best month of the year in December. By gradually broadening Algo into new applications based on fingerprint recognition and continuing to focus on growth in Digital Identity, we are securing a long-term profitable business.

We have continued to focus on strategic partnerships. After the end of the quarter, we entered into a partnership with Infineon to provide our fingerprint technology, Precise BioMatch, to the automotive industry. This partnership offers many opportunities going forward in a new vertical, which is fully in line with the expansion we are now undertaking in Algo, and we see potential for more application areas in the long term, even outside the automotive industry.

It has been a strong conclusion to an active and eventful year in which we continued to accelerate in Digital Identity while at the same time expanding the application areas in Algo. I would like to thank our shareholders, partners and employees for having been part of this Precise journey thus far. I am convinced that my successor will continue to advance the company’s positions as a leading global provider of identification software in which YOU are the key.

Stefan K Persson, CEO