Focus and closeness to customers yields result

YEAR-END REPORT FOR THE PERIOD JANUARY TO DECEMBER 2019

FOURTH QUARTER

  • Net sales totalled SEK 38.8 (13.9) million.
  • Net operating profit/loss totalled SEK 12.5 (-14.3) million.
  • The profit/loss totalled SEK 13.4 (-15.0) million.
  • Earnings per share totalled SEK 0.04 (-0.04).
  • Cash flow from operating activities totalled 14.3 (-9.1) million.

FULL-YEAR PERIOD, JANUARY - DECEMBER

  • Net sales totaled SEK 91.9 (67.6) million.
  • Net operating profit/loss totaled SEK 0.7 (-20.0) million.
  • The profit/loss totaled SEK 1.0 (-22.2) million.
  • Earnings per share totaled SEK 0.00 (-0.06).
  • Cash flow from operating activities totaled SEK -0.5 (-26.1) million.

SIGNIFICANT EVENTS DURING THE QUARTER

  • Cooperation agreement with Infinity Optics
  • Liveness detection integrated into Precise’s identification software for access control systems
  • Cooperation agreement with Innovatrics

SIGNIFICANT EVENTS SINCE THE END OF THE FULL-YEAR PERIOD

No significant events after the end of the period

KEY INDICATORS


2019201820192018
Amounts in SEK thousand unless otherwise statedQ4Q4Full-yearFull-year
Net sales38 81613 94891 92767 645
Net sales growth, %178.3%-1.6%35.9%10.8%
Gross margin, %91.9%80.5%86.4%85.2%
Operating profit/loss12 534-14 261651-19 958
Operating margin, %32.3%-102.2%0.7%-29.5%
Cash flow from the operating activities14 257-9 067-477-26 055
Cash and cash equivalents73 67679 54373 67679 543

Definitions, see financial glossary.

PRESENTATION OF THE INTERIM REPORT

In connection with today’s interim report, we include an invitation to a telephone conference/webcast today at 10:00 AM.

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

Link to all public information such as link to audiocast and participant number for the telephone conference.

https://financialhearings.com/event/11726

To take part, click on the link above to listen to and follow the presentation online, or call +443333009267 to follow it over the phone.

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
Ulrik Nilsson, CFO

CEO COMMENTS
I am delighted to be able to present a strong quarter for Precise. Our new strategy of working in a more focused way and getting close to the end customer – combined with positive market development – has contributed to a high rate of growth for the company during 2019. We are also seeing the result of the cost savings carried out during the year, which have had a positive impact on profits. Despite increased investments within the Digital Identity business area, there was an operating profit for the full year 2019, totalling SEK 0.7 million.

Net sales in the fourth quarter totalled SEK 38.8 million, an increase of 178 per cent compared with the corresponding period in the previous year, resulting in a positive cash flow for the period of SEK 12.8 million. The significant increase is primarily attributable to increased revenue from Egis Technology, who during the quarter carried out additional integrations of our identification software for their optical sensors, which were in turn implemented in various mobile devices from leading OEM manufacturers.

We expect further integrations of our software in partnership with Egis during 2020, if not at the same rate of increase as seen during the last quarter. We also expect the uncertain situation in Asia – resulting from the Corona virus and the consequences this is having on our partners in Asia – to have an impact on order input during the first half of 2020. It is, however, pleasing to note that optical sensors are gaining more and more ground on the mobile side, where we feel very secure in the delivery of our identification software. We have good collaboration with a large number of customers who focus on optical and ultrasonic sensors, and we will continue to focus on these areas.

Through our investments in the Digital Identity business area, during the year we have taken important steps towards broadening our offering to encompass more application areas. Among other things, we see great potential for biometric identification in the access application area. During the quarter we concluded a partnership agreement with Innovatrics to integrate their facial recognition technology with our identification software, making it possible to offer a product that guarantees users’ identity in a safe, convenient way. As communicated previously, we have received the first commercial orders in this application area – where the value per order totals SEK 50-100 thousand per annum, depending on the scale – and we expect the first installations to take place during the first half of 2020. At the same time, we are now increasing the pace of commercialization work, with one step involving displaying more of the product at various trade fairs in the Nordic region.

During the quarter we also signed a partnership agreement with Infinity Optics with a view to working jointly to combine biometrics with cryptography and so-called hash technology. This work is based on developing a technology that makes it possible to encrypt a user’s fingerprint in the same way as a password is encrypted – in contrast to the currently accepted method of a reference image of the user’s fingerprint being saved locally, thus representing a security risk. This collaboration is an example of our innovative ability, where Precise holds a leading position.

In conclusion, I take a positive view of developments this year and of what we have achieved during 2019. The strong financial result for the fourth quarter is evidence that our strategy is having an effect, and we are motivated to maintain our momentum. We will work even harder during 2020 to increase the gap to our competitors and secure our position as the preferred supplier of identification software for secure and convenient identification, wherever you are, whoever you are and whatever you are doing.

Stefan K Persson, CEO