A multifaceted company

We can look back upon a year of strong growth and profitability. Few companies have the privilege of experiencing such development.

The growth has obviously a price, and it is a result of the hard work of dedicated employees. The growth has been both challenging and educational. We have progressed from offering the market only a couple of sensors to slightly more than 20 versions. We have faced a number of challenges, such as finding time for all the customizations and being able to deliver, which requires creating flexibility in the production capacity of our partners suppliers based on the product mix and its varying volumes.

MARKET MATURING AT A FAST PACE

The market maturity of a new technology is placing growing demands on the suppliers with accelerating competition. One important factor is that some smartphone manufacturers use two or more suppliers, known as dual sourcing, which is a common practice in the industry to secure delivery, while exposing suppliers to competition. Fingerprints is no exception; however, with constant innovation, I am convinced that we at Fingerprints have the capacity to maintain our strong position. In a rapidly changing environment, planning ahead is also a challenge, something that applies particularly in this incredibly dynamic, consumer-driven smart phone market. The expected, strongly seasonal volume growth in the fourth quarter, failed to materialize. At the same time, we were impacted by the order situation of stockpiling throughout the supply chain and that some of our customers experienced a shortage of components, which affected their volumes of smartphones.

GROWING MARKET

We continue to see healthy potential in the mobile segment, since the penetration rate for biometrics is continuing to increase. Work on this strategic change is ongoing. We are developing our business to be a multifaceted company. We intend to maintain our strong lead in the mobile segment and simultaneously develop into a biometric company with several technology platforms for an increasing number of market segments. Next in line is realizing the implementation into PCs, smart cards, the automotive market and a growing quantity of online devices.

INCREASING SECURITY REQUIREMENTS

Due to cloud services and an increasing number of online devices via the WiFi networks of households, companies and organizations, the focus is being paced on the security aspect. Securing all entrances to the WiFi network is essential. The comparison can be made with your home; not just the front door should be locked and the alarm activated, but also all the windows and other entrances must have must have the same security. Against this background, our mission is obvious – to create solutions that result in a user-friendly and reliable authentication feature for the authorized user.

ENTRY INTO THE PC MARKET

A clear sign that customers are using our solutions in more products, is Samsungs’ new Notebook 9, high end production series, comprising of portable computers featuring Windows 10, which are now equipped with our FPC1025 touch sensor and associated software that supports Windows Hello, Microsoft’s biometric security systems.

A YEAR OF EFFICIENCY AND INVESTMENTS

2017 will be a year for investment in research and development. The aim is to develop more solutions that can be applied to more products in more industries and with a broader geographic spread. We also believe that 2017 will mark the start of the smart card business. We will also focus on increasing the efficiency of our processes and our organization. For that reason, we are enabelling our organization to focus on a number of parallel market. Executive Management is reenforced with three new Vice Presidents for the Business Lines. We will continue to invest in employees and improve our efficiency, to succeed in driving innovation in all areas.

ADDITIONAL BIOMETRIC MODALITIES

In line with the aim of building a biometric company, 2017 started with a strategic acquisition of the biometric company Delta ID – an acquisition that in my view is a key step in our business development. Delta ID’s world-leading technology for iris recognition complements our current biometric technology platform for fingerprint sensors, strengthens our offering and is an important step in the building of a biometric company. We will not only be able to offer another system solution, but we will eventually also be able to offer a multimodal solution that further enhances security. The acquisition is subject to approval by the US Competition Authority, whose decision is expected during spring 2017.

BUSINESS WITH SUSTAINABLE RESULTS

Our business development is conducted within the ethical framework. A self-evident step for Fingerprints was joining the UN Global Compact in 2016, aligning with its principles concerning human rights, labor issues, environment and anti- corruption. Our framework for sustainability encompasses all ten principles of the Global Compact. We will obviously run our business in a responsible way. It is therefore gratifying that the greatest difference we can make for our customers and primarily the end users is to provide our solutions, to enable security and thus integrity in an increasingly exposed digital environment.

LEADING THE MARKET FOR BIOMETRIC SYSTEMS

We aim to become the leader in biometric technology and solutions. We are currently at the beginning of the biometric era, driven by a growing volume of online devices. Our prerequisites are good; we are experts in biometrics and we are continuously advancing. Nevertheless, the feature that is the greatest enabler is all our members of staff, who are Smart, Brave, Open and United. I would like to direct my gratitude to all of you – our members of staff – for your commitment and hard work.

Gothenburg, March 2017

Christian Fredrikson
President and CEO