Fingerprint Card — Interim / Quarterly Report 2017

Oct 26, 2017

Interim report January-September 2017

Leading position in a challenging smartphone market and positive trend for smart cards

• Challenging smartphone market and weakened gross margin, but sequential volume growth
• Positive cash flow, decreased inventory and strong cash position
• Positive trend for smart cards
• Increased investment in strategic R&D projects

Third quarter 2017

• Revenues amounted to SEK 841.4 M (1,862.3), down 55 percent compared with the third quarter of 2016
• The gross margin was 33 percent (49)
• Operating profit amounted to SEK 52.4 M (764.5) and the operating margin was 6 percent (41)
• Earnings per share before dilution totaled SEK 0.16 (1.89)
• Cash flow from operating activities amounted to SEK 174.7 M (134.5)

January-September 2017

• Revenues totaled SEK 2,350.7 M (5,019.6), down 53 percent compared with the year-earlier period
• The gross margin was 37 percent (49)
• Operating profit amounted to SEK 195.2 M (2,058.2) and the operating margin declined to 8 percent (41)
• Earnings per share before dilution totaled SEK 0.44 (5.04)
• Cash flow from operating activities amounted to SEK 378.6 M (944.3)

	Jul-Sep	Jul-Sep		Jan-Sep	Jan-Sep		Jan-Dec
SEK M	2017	2016	Change	2017	2016	Change	2016
Revenue	841.4	1,862.3	-55%	2,350.7	5,019.6	-53%	6,638.3
Gross profit	276.8	904.2	-69%	858.8	2,450.4	-65%	3,165.3
Gross margin %	3 3	4 9		3 7	4 9		4 8
Operating profit	52.4	764.5	-93%	195.2	2,058.2	-91%	2,578.5
Operating margin %	6	4 1		8	4 1		3 9
Profit before tax	65.5	767.1	-91%	182.5	2,066.1	-91%	2,613.5
Profit for the period	50.1	597.5	-92%	136.8	1,611.4	-92%	2,034.7
Earnings per share before dilution, SEK	0.16	1.89	-92%	0.44	5.04	-91%	6.40
Cash and cash equivalents	1,011.2	931.7	9 %	1,011.2	931.7	9 %	1,162.2
Cash flow from operating activities	174.7	134.5	30%	378.6	944.3	-60%	1,130.3
Equity/assets ratio, %	6 4	6 4		6 4	6 4		6 4
Average number of employees	406	259	57%	358	221	62%	237

"Challenging smartphone market"

"Cash and cash equivalents in excess of SEK 1 billion"

"Trend toward multiple biometric methods"

"T-ShapeTM – next step toward mass production of smart cards"

CEO's comments

Leading position in a challenging smartphone market and positive trend for smart cards

As previously announced, earnings for the third quarter were impacted negatively by the cautious market situation and noticeable price pressure. Yet on a positive note, we continued to reduce our own inventories and maintained a strong cash flow. We are operating in a mature mass market where we will remain a leader in terms of volumes and we are implementing a number of initiatives to enable us to restore our growth and improve our profitability. Firstly, we are pursuing a combination of technology and product development in order to cut production costs and develop new, innovative products. Secondly, we are focusing on business development in order to increase the number of application areas for our technology and broaden our customer base. Finally, we will focus on increasing efficiency and lowering costs throughout the supply chain. We are also aiming to implement a number of efficiency measures in order to reduce our costs.

When it comes to the market, there were a number of concurrent technological trends and uncertainty factors that caused our Chinese OEM customers to adopt a highly cautious approach during the quarter. As a result of this uncertainty, our customers have opted to shorten their planning horizons and component inventories in the value chain have decreased from normal levels. We are also seeing signs of consolidation in the value chain. This impeded market growth and our deliveries during the quarter. For example, we are seeing a trend toward smartphone screens that cover the entire front of the device and many OEM customers are therefore looking to move the fingerprint sensor to the back of the phone. Back-mounted sensors are sold at a lower price which – in combination with the general price pressure – has resulted in a decline in the average selling price (ASP). The rate of decline in ASP amounts to approximately 30 percent annually for 2017. Looking at the fourth quarter, I expect our overall delivery volumes to decline compared with the third quarter due to seasonal effects in the component industry.

Our OEM customers are also evaluating other technologies, such as the possibility of fully integrated in-display fingerprint sensors. As of yet, there are no commercial in-display solutions suitable for mass production, but we are engaged in a number of development projects in the area. Iris and face recognition are also being evaluated as alternative biometric methods.

We are seeing no signs that our OEM customers plan to replace the fingerprint sensor with other solutions. Instead, there is talk of offering complementing biometric methods for authentication, known as multimodality. Our iris solution would work well in such a scenario, and our major OEM customers and customers in other segments have expressed significant interest in this possibility.

Fingerprints' market position remains very strong. During the quarter, 27 mobile devices equipped with our sensors were launched and we announced the first product launch of FPC1028, a high-performance, cost-efficient sensor.

Fingerprints' smart card offering is attracting considerable and growing interest, even though it will take time for market volumes to become comparable with those we are currently seeing in the smartphone market. As the only player in this space with extensive experience in the mass production of sensors, Fingerprints has a very strong starting position in the promising smart card market. During the quarter, we took the next step toward high-volume production of Fingerprints' smart card sensors through the launch of the new module design T-Shape™. We also joined the standardization work being carried out by Eurosmart and announced that our sensors will be used in AirPlus's pilot project for contactless payment cards.

To create the conditions for profitable growth, we are pursuing a number of technology and market initiatives and are continuing to invest in new innovations. We will talk more about this at our Technology Update on November 1 in Stockholm.

Christian Fredrikson, CEO

Revenues and operating profit

Revenues

In the third quarter, consolidated revenues amounted to SEK 841.4 M (1,862.3), corresponding to a year-on-year decline of 55 percent compared to the third quarter last year.

The decreased Average Selling Price (ASP) of sensors had a significant impact on revenues. The ASP decline is due to the change in product mix and the general price pressure. The rate of decline in ASP amounts to approximately 30 percent annually for 2017.

The significant inventory build-up throughout the supply chain during 2016 had a negative impact on the revenue comparison with the third quarter 2016. The OEM customers have adopted a significantly more cautious approach this year, resulting in reduced component inventories in the value chain. The fact that basic smartphones are not being fitted with fingerprint sensors to the same degree as previously expected also had a dampening effect on market growth. Compared to last year, the company's market share has decreased as a result of our OEM customers implementing dual sourcing strategies. Taken together, these factors have led to lower volumes being delivered, compared to the third quarter 2016.

Trend in operating profit

For the third quarter, gross profit amounted to SEK 276.8 M (904.7) and the gross margin was 33 percent (49). The weaker gross margin compared with the yearearlier quarter is attributable to a lower ASP, due to general price pressure, as well as a changed product mix. Moreover, gross profit was negatively impacted by SEK 29.0 M due to a production materials write-off and sales of older products at a negative margin.

Including a negative currency impact of SEK 48.1 M (positive 12.1), operating expenses for the quarter amounted to SEK 224.4 M (139.7). The increase in costs in relation to the corresponding year-earlier period is primarily due to the higher number of employees, mainly in R&D. During the quarter, SEK 53.0 M (6.4) of development costs were capitalized, corresponding to 40 percent, compared with 11 percent in the year-earlier quarter.

Financial income and expenses

Net financial items totaled SEK 13.1 M (2.6). In addition to interest income and interest expenses, this item also includes the effect of changes in exchange rates on currency accounts and the translation of loans in foreign currency. During the third quarter, this exchange-rate difference amounted to a positive SEK 18.9 M (2.6). Earnings were charged with interest expenses for loans amounting to SEK 5.8 M (-).

"Dampening effect on market growth"

Profit for the reporting period and earnings per share

quarter totaled SEK 50.1 M"

Profit for the period totaled SEK 50.1 M (597.5). Earnings per share for the period "P amounted to SEK 0.16 (1.89). rofit for the third

Cash flow and balance sheet

Cash flow

Operating profit and reduced working capital had a positive impact of SEK 174.7 M (134.5) on cash flow from operating activities.

Cash flow from investing activities for the third quarter amounted to a negative SEK 79.9 M (neg: 7.9), of which SEK 53.0 M (neg: 6.4) pertained to capitalized development expenditure. In addition, SEK 19.0 M of the withheld purchase consideration in relation to the Delta ID acquisition was paid during the third quarter. Cash flow from financing activities amounted to SEK - M (neg: 815.5).

Exchange-rate fluctuations had a negative impact of SEK 17.3 M (pos: 2.3) on cash and cash equivalents for the quarter.

"Cash and cash equivalents of SEK 1,011.2 M"

"Cash flow of SEK

174.7 M"

Liquidity and shareholders' equity

At September 30, 2017, the Group's disposable cash and cash equivalents totaled SEK 1,011.2 M (931.7). Consolidated working capital at the end of the third quarter amounted to SEK 1,610.9 M (1,668.3). At period-end, consolidated shareholders' equity had risen to SEK 2,342.4 M (1,772.2) and the equity/assets ratio for the Group was 64 percent (64).

Investments, fixed assets and depreciation/amortization

Investments in intangible fixed assets during the quarter amounted to SEK 53.0 M (6.4). Investments in tangible fixed assets during the third quarter totaled SEK 7.9 M (1.5). Depreciation/amortization according to plan during the third quarter amounted to SEK 24.8 M (15.2).

"27 mobile devices launched"

Other events in the third quarter

Business development

During the third quarter, 27 mobile devices equipped with the company's sensors were launched by 14 OEM customers. Three of these customers were new. The first product launch of Fingerprints' FPC1028 touch fingerprint sensor was carried out during the quarter. This cost-effective sensor is integrated into Huawei's new smartphone Maimang 6. In addition, a computer mouse and two door locks equipped with fingerprint sensors from Fingerprints were launched.

During the quarter, the company took the next step toward high-volume production of Fingerprints' smart card sensors through the launch of the new module design T-Shape™. The first T-Shape™ module is already being offered in the form of samples shared with the company's business partners and will be available for supply in commercial volumes at the end of this year. In September, Fingerprint was accepted as a member of the international association Eurosmart, which brings together companies from a variety of sectors, including digital identities, data protection, cybersecurity, Internet of Things (IoT) and payments. Fingerprints has been appointed to lead the Biometrics Committee and will thus actively contribute to ensuring the acceptance of biometrics in the security infrastructure of electronic payment transactions, e-government, e-banking and corporate identity access management. AirPlus International launched a payment card during the quarter that allows the cardholder to verify transactions both with contact and contactless using Fingerprints' FPC1300 sensor.

To broaden the company's network and continue expanding its operations, the company initiated a collaboration with the new module supplier Truly Group (Truly). Truly is headquartered in Hong Kong with production facilities located in Shanwei in the Guangdong Province of China.

Changes in personnel

Thomas Rex was appointed as SVP Business Line Smartcards and joined the company's Executive Management Group. Thomas Rex previously served as the company's EVP Sales and Marketing for nearly five years. Stefan Pettersson was also appointed as Head of Investor Relations.

Notable events after the close of the quarter

No notable events were reported after the close of the quarter.

January-September 2017

Revenues for the past three quarters amounted to SEK 2,350.7 M (5,019.6), corresponding to a decrease of 53 percent compared with the year-earlier period. Gross profit totaled SEK 858.8 M (2,450.4) and the gross margin was 37 percent (49). Operating profit for the past three quarters was charged with transaction costs of SEK 17.7 M for the acquisition of Delta ID as well as currency exchange-rate differences of SEK 76.5 M (pos: 4.2). Cash flow from operating activities for the past three quarters amounted to SEK 378.6 M (944.3)

Organization and personnel

The number of employees on September 30, 2017 was 408 (281). In addition to full-time employees, consultants were also used during the third quarter, primarily in technical development and sales, corresponding to 157 (111) full-time positions. Accordingly, including employees and consultants, the company had 565 (392) employees on September 30, 2017.

"Cash flow for January-September of SEK 378.6 M"

LTIP 2017 (Long Term Incentive Program)

The AGM resolved in accordance with the proposal to adopt a long-term incentive program (the "LTIP 2017") for up to 25 personnel in the Fingerprint Group. The participants were given an opportunity to receive Class B shares free of charge within the framework of LTIP 2017, also known as "Performance Shares," on condition that certain terms and conditions are fulfilled. See the official notice of the AGM for more information,

https://corporate.fingerprints.com/nyhetsrum/pressreleaser/

Acquisitions

On June 7, Fingerprint Cards acquired all of the shares in Delta ID Inc.

The preliminary acquisition analysis identified intangible assets totaling SEK 331.7 M. Goodwill amounted to SEK 697.6 M.

SEK 19.0 M of the withheld purchase consideration was paid during the third quarter and the remainder will be paid over the next five quarters.

A comparison of the preliminary calculation of working capital on the acquisition date and the final figure revealed a difference of SEK 0.6 M, which is to be settled through a cash payment from the sellers to Fingerprints.

Since the acquisition date on June 7, 2017, Delta ID has contributed revenues of SEK 8.4 M and resulted in SEK 8.8 M being charged against operating profit. If the acquisition had been completed at the beginning of the year, the contribution to revenues would have amounted to SEK 14.2 M.

AQUISITION ANALYSIS

SEK M	Jul-Sep 2017	Jul-Sep 2016	Jan-Sep 2017	Jan-Sep 2016	Jan-Dec 2016
Fair value of acquired assets and liabilities		-		-	-
Intangible assets	0.0	-	331.7	-	-
Tangibel assets	0.0	-	0.0	-	-
Total fixed assets	0.0	-	331.7	-
Current assets	-0.6		5.5
Total current assets	-0.6		5.5
Deferred tax liability		-	-85.8	-	-
Total deferred tax liability	0.0		-85.8
Total fair value of acquired assets and liabilities, net	-0.6		251.4
Goodwill	-0.6	-	697.6	-	-
Total purchase price	-0.6	-	949.0	-	-
Cash and cash equivalents in acquired company		-	15.7	-	-
Adjustment working capital	0.6	-	3.2	-	-
Adjustment for unpaid purchase price (Holdbacks)	19.0	-	-121.3	-	-
Adjustment for accrued earn-out		-	-29.5	-	-
Cash flow from acquistions of companies/businesses	19.0	-	817.0	-	-

Share capital trend

On the balance sheet date of December 31, 2016, 870,000 Class B shares, corresponding to share capital of SEK 34,800, from the final exercise occasion for the TO6 warrants program were under registration. These were registered on January 3, 2017.

In accordance with a resolution passed at the 2017 AGM, shares were canceled, and a bonus issue was implemented during May 2017. The company's registered share capital has not changed but the number of shares has decreased. The share capital was reduced by canceling a total of 10,424,000 Class B shares that the company held in treasury. Through the cancelation, the share capital was reduced by SEK 416,960 from SEK 12,975,667 to SEK 12,558,707. The share capital was increased through a bonus issue of SEK 416,960, without issuing new shares. Following the cancelation and the bonus issue, the number of shares amounts to 313,967,675, of which 6,000,000 are Class A shares and 307,967,675 are Class B shares. The total number of votes is 367,967,675. The share capital remains unchanged following the aforementioned measures and amounts to SEK 12,975,675.

NUMBER OF SHARES

	2017	2016	2017	2016	2016
Number of shares, (000s)
Number of shares at period end	313,967	322,696	313,967	322,696	323,521
Of which class A-shares	6,000	6,000	6,000	6,000	6,000
Of which class B-shares	307,967	316,696	307,967	316,696	317,521
Number buyback shares at period end	-	-10,424	-	-10,424	-10,424
Number of shares outstanding at period end	313,967	312,272	313,967	312,272	313,097
Number of shares outstanding, diluted at period end	313,967	314,772	313,967	314,772	313,967
Average number of shares outstanding (000s)
Average number of shares	313,967	322,696	313,967	321,576	321,830
Average number of buyback shares	-	5,792	-	1,996	-4,104
Average number of shares outstanding, basic	313,967	316,904	313,967	319,580	317,726
Average number of shares outstanding, diluted	313,967	318,949	313,967	318,485	321,408

Jul-Sep

Jul-Sep

Jan-Sep

Jan-Sep

Jan-Dec

Accounting policies

This condensed interim report for the Group was prepared in accordance with IAS 34 Interim Financial Reporting, and applying the provisions of the Annual Accounts Act. The interim report for the Parent Company was prepared in accordance with the Annual Accounts Act, Chapter 9, Interim reports. The application of these accounting policies complies with what is presented in the Annual Report for the fiscal year ending December 31, 2016 and must be read together with the Annual Report. In addition to the financial statements and the associated notes, disclosures according to IAS 34.16A are also presented in other parts of the interim report. No new or revised IFRSs that have become effective in 2017 have had any significant impact on the Group. The European Securities and Markets Authority's "Guidelines – Alternative Performance Measures" are applied for measures that are not defined by the IFRS.

Related-party transactions

There were no material transactions between the company and related parties in the Group or the Parent Company during the reporting period.

Parent Company

The Parent Company's revenues for the third quarter of 2017 amounted to SEK 833.3 M (1,862.3) and profit after financial items for the period declined to SEK 74.5 M (764.0). Profit for the period totaled SEK 56.7 M (595.4). The Parent Company's disposable cash and cash equivalents at period-end amounted to SEK 976.5 M (912.6).

Significant uncertainties and risks – Group and Parent Company

To anticipate risks and minimize their impact, Fingerprints has processes for continuously identifying and managing risks that could impact the operations. This includes probability and consequence assessments of operational risks, market risks, financial risks and legal and other risks.

The described risks and uncertainties are not ranked in any order of significance; nor are they claimed to be the only risks or uncertainties to which the company is exposed. Additional risks and uncertainties that the company is currently unaware of or that are currently not adjudged to be material could develop into factors that might in the future have a material impact on the company's operations, earnings, financial position or future outlook. The following description does not claim to be complete or exact, since risks and their degree of impact vary over time:

Market risks:	Geopolitical instability, Supplier costs, Economic fluctuations, Currency risk, Loss of customers and price pressure due to increased competition.
Operational risks:	Delivery capacity of suppliers, Competency provision, Loss of key competencies, Reduced technological lead, Information leaks
Financial risks:	Funding risk, Credit risk.
Legal risks:	Product defects and product liability, Patent risk, Corruption.
Other risks:	Conflict minerals, Restrictions on planned business development, Biometrics and integrity, Scalability internally, Discrimination and lack of diversity.

For further information concerning the risks facing the Group, see the 2016 Annual Report, which is available on our website www.fingerprints.com

"Volumes tend to be higher in the third quarter than in the fourth."

Seasonality

As the penetration of fingerprint sensors in the smartphone segment has grown, the company's market has increasingly displayed the same pattern and seasonal fluctuations as the other parts of the mobile phone industry, albeit subject to a certain time lag. The fourth quarter tends to account for a large share of the annual volume of mobile phones and the second quarter is usually the weakest.

For component suppliers to mobile phone manufacturers, such as Fingerprints, the third quarter tends to be the strongest quarter of the year in terms of volumes, which tend to be around 10 percent higher than in the fourth quarter.

Financial calendar

Year-end report 2017 Oct-Dec: February 9, 2018

AGM May 29, 2018

For further information, contact:

This information is information that Fingerprint Cards AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 7:00 a.m. CEST on October 26, 2017.

Welcome to Fingerprint Cards' presentation of the interim report for the third quarter of 2017 on October 26 at 3:00 p.m. CEST. The presentation will be webcast, and participants can register via the link below.

https://engage.vevent.com/rt/fingerprints/index.jsp?seid=113

For further information, please contact:

Stefan Pettersson, Head of Investor Relations Tel: +46 (0) 101 720 010 Investrel@fingerprints.com

Also refer to: www.fingerprints.com/corporate

Issuance, publication or distribution of this press release in certain jurisdictions could be subject to restrictions. The recipient of this press release is responsible for using this press release and the constituent information in accordance with the rules and regulations prevailing in the particular jurisdiction. This press release does not constitute an offer, or invitation to acquire or subscribe for new securities in Fingerprint Cards AB in any jurisdiction. or visit www.fingerprints.com/corporate

Certification

The Board of Directors and the CEO certify that this interim report provides a fair and accurate review of the operations, financial position and earnings of the Parent Company and the Group and that it describes the significant risks and uncertainties facing the Parent Company and the companies included in the Group.

Gothenburg, October 25, 2017

Jan Wäreby Alexander Kotsinas Urban Fagerstedt Chairman of the Board Board Member Board Member

Carl-Johan von Plomgren Tomas Mikaelsson Ann-Sofie Nordh Board Member Board Member Board Member

Board Member Board Member Board Member

Åsa Hedin Michael Hallén Dimitrij Titov

Christian Fredrikson CEO

Auditors' review report

This interim report has not been examined by the company's auditors.

Financial statements

Condensed consolidated statement of comprehensive income Condensed consolidated statement of financial position Condensed consolidated statement of changes in shareholders' equity Condensed consolidated cash-flow statement The Group's operating segments Consolidated statement of income and comprehensive income for the past nine quarters Consolidated statement of financial position for the past nine quarters Consolidated cash-flow statement for the past nine quarters Fair value and carrying amount of financial liabilities and assets Condensed income statement, Parent Company Condensed balance sheet, Parent Company

Key figures

Key consolidated data Key consolidated figures for the past nine quarters Rolling 12-month key figures for the Group for the past nine quarters

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SEK M	Jul-Sep 2017	Jul-Sep 2016	Jan-Sep 2017	Jan-Sep 2016	Jan-Dec 2016
Revenue	841.4	1,862.3	2,350.7	5,019.6	6,638.3
Cost of goods sold	-564.6	-958.1	-1,491.9	-2,569.2	-3,473.0
Gross profit	276.8	904.2	858.8	2,450.4	3,165.3
Gross Margin, %	3 3	4 9	3 7	4 9	4 8
Selling expenses	-58.6	-43.1	-172.9	-125.8	-176.6
Administrative expenses	-33.0	-27.4	-105.0	-79.5	-117.2
Development expenditure	-84.7	-81.3	-291.5	-191.7	-304.2
Other operating income/expenses 1)	-48.1	12.1	-94.2	4.8	11.2
Operating profit	52.4	764.5	195.2	2,058.2	2,578.5
Gross Margin, %	6	4 1	8	4 1	3 9
Finance income/expenses 1)	13.1	2.6	-12.7	7.9	35.0
Profit before tax	65.5	767.1	182.5	2,066.1	2,613.5
Income tax	-15.4	-169.6	-45.7	-454.7	-578.8
Profit for the period	50.1	597.5	136.8	1,611.4	2,034.7
Other comprehensive income	-12.6	0.1	-20.1	0.4	0.3
Total comprehensive income for the period	37.5	597.6	116.7	1,611.8	2,035.0
Profit for the period attributable to:
Parent Company shareholders	37.5	597.6	116.7	1,611.8	2,035.0
Profit for the period	37.5	597.6	116.7	1,611.8	2,035.0
Earnings per share for the period
Before dilution, SEK	0.16	1.89	0.44	5.04	6.40
After dilution, SEK	0.16	1.87	0.44	5.01	6.33
1 ) Exchange rate effects on bank balances are reported under financial income and expenses as from 2017. Transaction costs acquisition of 17,7 MSEK reported as Other operarinng

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	30-Sep	30-Sep	31-Dec
SEK M	2017	2016	2016
Assets
Intangible fixed assets	1,134.7	80.2	71.4
Tangible fixed assets	40.0	23.6	29.2
Financial fixed assets	0.1	0.1	0.0
Total fixed assets	1,174.8	103.9	100.6
Inventories	669.6	373.0	672.7
Accounts receivable	592.9	1,341.5	1,132.1
Other receivables	210.9	23.7	413.7
Prepaid expenses and accrued income	23.7	9.5	21.7
Cash and cash equivalents	1,011.2	931.7	1,162.2
Total current assets	2,508.3	2,679.4	3,402.4
Total assets	3,683.1	2,783.3	3,503.0
Shareholders' equity and liabilities
Shareholders' equity	2,342.4	1,772.2	2,226.1
Deferred tax liabilities	200.0	-	136.3
Long-term liabilities	243.3	-	-
Accounts payable	362.9	697.6	821.6
Current tax liabilities	0.8	42.8	54.1
Other current liabilities	359.1	4.9	6.7
Accrued expenses	174.6	265.8	258.2
Total current liabilities	897.4	1,011.1	1,140.6
Total shareholders' equity and liabilities	3,683.1	2,783.3	3,503.0

income/expenses.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

SEK M	Jul-Sep 2017	Jul-Sep 2016	Jan-Sep 2017	Jan-Sep 2016	Jan-Dec 2016
Opening shareholders' equity	2,304.9	1,990.1	2,226.1	1,146.8	1,146.8
Comprehensive income for the period	37.5	597.6	116.7	1,611.8	2,035.0
Exercise of warrants	-	-	-0.4	66.8	97.5
Buyback of own shares	-	-815.5	-	-1,053.2	-1,053.2
Closing shareholders' equity	2,342.4	1,772.2	2,342.4	1,772.2	2,226.1

CONDENSED CONSOLIDATED STATEMENT CASH-FLOWS

SEK M	Jul-Sep 2017	Jul-Sep 2016	Jan-Sep 2017	Jan-Sep 2016	Jan-Dec 2016
Profit before tax	65.5	767.1	182.5	2,066.1	2,613.5
Adjustment for non-cash items	17.9	13.1	107.2	25.2	14.6
Income tax paid	-62.7	-401.4	-289.0	-522.2	-498.0
Change in inventory	148.8	-129.5	3.1	-220.2	-519.7
Change in current receivables	-99.4	-255.2	969.4	-720.1	-913.0
Change in current liabilities	104.6	140.4	-594.6	315.5	432.9
Cash flow from operating activities 3 )	174.7	134.5	378.6	944.3	1,130.3
Cash flow from investing activities	-79.9	-7.9	-995.5	-64.8	-78.3
Cash flow from financing activities 4)	0.0	-815.5	507.7	-986.5	-955.7
Change in cash and cash equivalents	94.8	-688.9	-109.2	-107.0	96.3
Cash and cash equivalents on the opening date	933.7	1,618.3	1,162.2	1,031.3	1,031.3
Effect of exchange rate changes on cash	-17.3	2.3	-41.8	7.4	34.6
Closing cash and cash equivalents	1,011.2	931.7	1,011.2	931.7	1,162.2

THE GROUP'S OPERATING SEGMENTS

	Jul-Sep	Jul-Sep		Jan-Sep	Jan-Sep
SEK M	2017	2016	Change, %	2017	2016	Changes %
Revenue
Sensors	841.4	1,862.3	-55	2,350.7	5,019.6	-53
Other	-	-	-	-	-	-
Group	841.4	1,862.3	-55	2,350.7	5,019.6	-53
	Jul-Sep	Jul-Sep		Jan-Sep	Jan-Sep
SEK M	2017	2016	Change, %	2017	2016	Changes %
Operating profit
Sensors	52.4	764.5	-93.1	195.2	2,058.2	-91
Other	-	-	-	-	-	-
Group	52.4	764.5	-93.1	195.2	2,058.2	-91
	Jan-Mar	Jan- Mar		Jan-Jun	Jan-Sep
SEK M	2017	2016	Change, %	2017	2016	Changes %
Sensors	65.5	767.1	-91.5	183	2,066.1	-91
Other	-	-	-	-	-	-
Group	65.5	767.1	-91.5	183	2,066.1	-91

CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME FOR THE PAST NINE QUARTERS

SEK M	Jul-Sep 2017	Apr-Jun 2017	Jan-Mar 2017	Oct-Dec 2016	Jul-Sep 2016	Apr-Jun 2016	Jan-Mar 2016	Oct-Dec 2015	Jul-Sep 2015
Revenue	841.4	823.4	685.9	1,618.7	1,862.3	1,666.1	1,491.2	1,351.5	964.0
Cost of goods sold	-564.6	-523.5	-403.8	-903.8	-958.1	-852.4	-758.7	-723.3	-533.3
Gross profit	276.8	299.9	282.1	714.9	904.2	813.7	732.5	628.2	430.7
Gross margin, %	3 3	3 6	4 1	4 4	4 9	4 9	4 9	4 6	4 5
Selling costs	-58.6	-55.8	-58.5	-50.8	-43.1	-45.8	-36.9	-35.9	-27.1
Administrative costs	-33.0	-37.2	-34.8	-37.7	-27.4	-34.5	-17.6	-19.2	-13.3
Development costs	-84.7	-101.3	-105.5	-112.5	-81.3	-60.0	-50.3	-48.2	-43.1
Other operating income/expenses 2)	-48.1	-33.6	-12.5	6.1	12.1	1.7	-9.0	-2.2	-2.8
Operating profit	52.4	72.0	70.8	520.0	764.5	675.1	618.7	522.7	344.4
Operating margin, %	6	9	1 0	3 2	4 1	4 1	4 1	3 9	3 6
Finance income/expenses	13.1	-24.7	-1.1	27.4	2.6	34.7	-29.5	-5.1	1.5
Profit before tax	65.5	47.3	69.7	547.4	767.1	709.8	589.2	517.6	345.9
Income tax	-15.4	-14.5	-15.8	-124.1	-169.6	-155.4	-129.7	-113.2	1.5
Profit for the period	50.1	32.8	53.9	423.3	597.5	554.4	459.5	404.4	347.4
Other comprehensive income	-12.6	-7.3	-0.2	0.0	0.1	0.3	-	-	-
Total comprehensive income
for the period	37.5	25.5	53.7	423.3	597.6	554.7	459.5	404.4	347.4
2) Exchange rate effects on bank balances are reported under financial income and expenses as from 2017.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE PAST NINE QUARTERS

	30-Sep 2017	30-Jun 2017	31-Mar 2017	31-Dec 2016	30-Sep 2016	30-Jun 2016	31-Mar 2016	31-Dec 2015	30-Sep 2015
SEK/USD exchange rate, balance date	8.11	8.47	8.93	9.10	8.62	8.48	8.15	8.35	8.39
Assets
Intangible fixed assets	1,134.7	1,148.4	87.7	71.4	80.2	87.1	65.8	49.7	47.3
Tangible fixed assets	40.0	40.5	37.8	29.2	23.6	23.1	24.4	20.6	20.1
Financial fixed assets	0.1	1.4	1.3	0.0	0.1	1.0	1.0	1.0	0.0
Total fixed assets	1,174.8	1,190.3	126.8	100.6	103.9	111.2	91.2	71.3	67.4
Inventories	669.6	818.4	1,047.5	672.7	373.0	243.7	193.9	153.0	95.0
Accounts receivable	592.9	451.0	641.6	1,132.1	1,341.5	1,086.7	725.2	617.9	448.7
Other receivables	210.9	157.8	388.4	413.7	23.7	24.5	23.6	28.6	28.3
Prepaid expenses and accrued income	23.7	26.3	28.8	21.7	9.5	8.3	9.3	8.0	5.8
Cash and cash equivalents	1,011.2	933.7	798.4	1,162.2	931.7	1,618.3	1,321.2	1,031.3	498.7
Total current assets	2,508.3	2,387.2	2,904.7	3,402.4	2,679.4	2,981.5	2,273.2	1,838.8	1,076.5
Total assets	3,683.1	3,577.5	3,031.5	3,503.0	2,783.3	3,092.7	2,364.4	1,910.1	1,143.9
Shareholders' equity and liabilities
Shareholders' equity	2,342.4	2,304.9	2,279.4	2,226.1	1,772.2	1,990.1	1,673.1	1,146.8	731.5
Deferred tax liabilities	200.0	207.0	135.5	136.3	0.0	0.0	0.0	0.0	0.0
Long-term liabilities	243.3	254.1	-	-	-	-	-	-	-
Accounts payable	362.9	234.9	405.5	821.6	697.6	617.7	465.7	548.5	351.7
Current tax liabilities	0.8	0.4	0.8	54.1	42.8	273.9	126.6	109.6	0.0
Other current liabilities	359.1	392.6	6.1	6.7	4.9	5.4	3.3	4.0	5.0
Accrued expenses	174.6	183.6	204.2	258.2	265.8	205.6	95.7	101.2	55.7
Total current liabilities	897.4	811.5	616.6	1,140.6	1,011.1	1,102.6	691.3	763.3	412.4
Total shareholders' equity and liabilities	3,683.1	3,577.5	3,031.5	3,503.0	2,783.3	3,092.7	2,364.4	1,910.1	1,143.9

CONSOLIDATED CASH-FLOW STATEMENT FOR THE PAST NINE QUARTERS

SEK M	Jul-Sep 2017	Apr-Jun 2017	Jan-Mar 2017	Oct-Dec 2016	Jul-Sep 2016	Apr-Jun 2016	Jan-Mar 2016	Oct-Dec 2015	Jul-Sep 2015
Profit before tax	65.5	47.3	69.7	547.4	767.1	709.8	589.2	517.6	345.9
Adjustment for non-cash items	17.9	76.3	13.0	-10.6	13.1	-24.3	36.5	17.0	9.7
Income tax paid	-62.7	-156.2	-70.1	24.2	-401.4	-8.1	-112.7	-4.2	0.0
Change in inventory	148.8	229.1	-374.8	-299.5	-129.5	-49.8	-40.9	-58.0	8.5
Change in current receivables	-99.4	560.1	508.7	-192.9	-255.2	-361.3	-103.6	-171.7	-213.0
Change in current liabilities	104.6	-228.6	-470.6	117.4	140.4	264.1	-89.0	241.8	147.0
Cash flow fr. operating activities 2 )	174.7	528.0	-324.1	186.0	134.5	530.4	279.5	542.5	298.1
Cash flow from investing activities	-79.9	-874.8	-40.8	-13.5	-7.9	-30.1	-26.8	-15.9	-3.6
Cash flow from financing activities	0.0	508.1	-0.4	30.4	-815.5	-237.8	66.8	11.1	36.4
Change in cash and cash equiv.	94.8	161.3	-365.3	202.9	-688.9	262.5	319.5	537.7	330.9
Cash and cash equiv. on the opening date	933.7	798.4	1,162.2	931.7	1,618.3	1,321.2	1,031.3	498.7	166.0
Effect of exchange rate changes on cash2)	-17.3	-26.0	1.5	27.6	2.3	34.6	-29.6	-5.1	1.8
Closing cash and cash equivalents	1,011.2	933.7	798.4	1,162.2	931.7	1,618.3	1,321.2	1,031.3	498.7
2) Change rate effects on bank balances are reported under financial income and expenses as from 2017.

FAIR VALUE AND CARRYING AMOUNT OF FINANCIAL LIABILITIES AND ASSETS

	9/30/2017		9/30/2016
	Carrying	Fair	Carrying	Fair
SEK M	amount	amount	amount	amount
Financial assets
Loan receivables and accounts receivable
Accounts receivable	592.9	592.9	1,341.5	1,341.5
Cash and cash equivalents	1,011.2	1,011.2	931.7	931.7
Total financial assets	1,604.1	1,604.1	2,273.2	2,273.2
Financial liabilities	481.6	481.6	-	-
Current financial liabilities:
Accounts payable	362.9	362.9	697.6	697.6
Total financial liabilities	844.5	844.5	697.6	697.6
By category:
Loan receivables and accounts receivable	1,604.1	1,604.1	2,273.2	2,273.2
Total financial assets	1,604.1	1,604.1	2,273.2	2,273.2
Financial liabilities at amortized cost	844.5	844.5	697.6	697.6
Total financial liabilities	844.5	844.5	697.6	697.6

CONDENSED INCOME STATEMENT, PARENT COMPANY

SEK M	Jul-Sep 2017	Jul-Sep 2016	Jan-Sep 2017	Jan-Sep 2016	Jan-Dec 2016
Revenues	833.3	1,862.3	2,342.2	5,019.6	6,638.3
Cost of goods sold	-556.3	-958.1	-1,481.3	-2,569.2	-3,473.0
Gross profit	277.0	904.2	860.9	2,450.4	3,165.3
Selling expenses	-56.8	-42.4	-170.9	-125.1	-176.6
Administrative expenses	-36.3	-29.9	-115.9	-87.6	-129.0
Development expenditure	-80.6	-82.8	-286.4	-192.4	-304.2
Other operating revenues/expenses	-47.7	14.4	-76.1	12.2	11.3
Operating profit	55.6	763.5	211.6	2,057.5	2,566.8
Finance revenues/expenses	18.9	0.5	-5.8	0.5	35.2
Profit after financial items	74.5	764.0	205.8	2,058.0	2,602.0
Appropriations	0.0	0.0	0.0	0.0	-650.0
Profit before tax	74.5	764.0	205.8	2,058.0	1,952.0
Tax	-17.8	-168.6	-45.9	-453.3	-433.7
Profit for the period	56.7	595.4	159.9	1,604.7	1,518.3

CONDENSED BALANCE SHEET, PARENT COMPANY

	30-Sep 2017	30-Sep 2016	31-Dec 2016
SEK M
Assets
Intangible fixed assets	181.6	78.4	69.8
Tangible fixed assets	33.4	21.3	25.9
Financial fixed assets	825.8	5.1	11.8
Total fixed assets	1,040.8	104.8	107.5
Inventories	669.6	373.1	672.7
Accounts receivable	583.0	1,341.5	1,132.1
Current receivables	232.5	30.2	434.4
Cash and cash equivalents	976.5	912.6	1,142.3
Total current assets	2,461.6	2,657.4	3,381.5
Total assets	3,502.4	2,762.2	3,489.0
Shareholders' equity and liabilities
Shareholders´s equity	1,858.5	1,754.8	1,699.0
Tax allocation fund	650.0	-	650.0
Long-term liabilies	243.3	-	-
Accounts payable	360.6	697.1	820.7
Tax liabilities	0.0	42.4	53.9
Other current liabilities	390.0	267.9	265.4
Total current liabilities	750.6	1,007.4	1,140.0
Total shareholders' equity and liabilities	3,502.4	2,762.2	3,489.0

KEY CONSOLIDATED DATA

	Jul-Sep 2017	Jul-Sep 2016	Jan-Sep 2017	Jan-Sep 2016	Jan-Dec 2016
Revenue, SEK M	841.4	1,862.3	2,350.7	5,019.6	6,638.3
Revenue change, %	-55	9 3	-53	224	129
Gross margin, %	3 3	4 9	3 7	4 9	4 8
Operating margin, %	6	4 1	8	4 1	3 9
Profit margin, %	6	3 2	6	3 2	3 1
EBITDA, SEK M	77.2	779.7	251.5	2,091.0	2,627.1
Return on equity, %	2	4 1	5	110	121
Cash flow from operating activities, SEK M	174.7	134.5	378.6	944.3	1,130.3
Equity/assets ratio, %	6 4	6 4	6 4	6 4	6 4
Investments, SEK M	-79.9	-7.9	-995.5	-64.8	-78.3
Average number of employees	406	259	358	221	237
Shareholders' equity per share, SEK
- before dilution	7.46	5.68	7.46	5.68	7.11
- after dilution	7.46	5.56	7.46	5.51	7.09
Cash flow from operating activities/share, SEK
- before dilution	0.56	0.42	1.21	2.95	3.56
- after dilution	0.56	0.42	1.21	2.94	3.52
Number of shares at period end, 000s (1)	313,967	312,272	313,967	312,272	313,097
Average number of shares, 000s
- before dilution	313,967	316,904	313,967	319,580	317,726
- after dilution	313,967	318,949	313,967	321,554	321,408
Share price at period end	22.81	100.50	22.81	100.50	62.85

KEY CONSOLIDATED FIGURES FOR THE PAST NINE QUARTERS

SEK M	Jul-Sep 2017	Apr-Jun 2017	Jan-Mar 2017	Oct-Dec 2016	Jul-Sep 2016	Apr-Jun 2016	Jan-Mar 2016	Oct-Dec 2015	Jul-Sep 2015
Revenue, SEK M	841.4	823.4	685.9	1,618.7	1,862.3	1,666.1	1,491.2	1,351.5	964.0
Revenue increase, %	-55	-51	-54	2 0	9 3	274	966	1,187	1,358
Gross margin, %	3 3	3 6	4 1	4 4	4 9	4 9	4 9	4 6	4 5
Operating margin, %	6	9	1 0	3 2	4 1	4 1	4 1	3 8	3 6
Profit margin, %	6	4	8	2 6	3 2	3 3	3 1	3 0	3 6
EBITDA, SEK M	77.2	88.9	85.4	535.8	779.7	685.8	625.6	534.8	354.1
Return on equity, %	2	1	2	2 5	4 1	3 5	3 3	4 4	6 4
Cash flow from operating activities, SEK M	174.7	528.0	-324.1	186.0	134.5	530.4	279.5	542.5	298.1
Equity/assets ratio, %	6 4	6 4	7 5	6 4	6 4	6 4	7 1	6 0	6 4
Investments, SEK M	-79.9	-874.8	-40.8	-13.5	-7.9	-30.1	-26.8	-15.9	-3.6
Average number of employees	406	374	339	293	259	224	179	140	121
Shareholders' equity per share, SEK
- before dilution	7.46	7.34	7.26	7.11	5.68	6.22	5.18	3.63	2.36
- after dilution	7.46	7.34	7.26	7.09	5.60	6.13	5.14	3.54	2.28
Cash flow from operating activities, SEK
- before dilution	0.56	1.68	-1.03	0.60	0.42	1.65	0.87	1.72	0.96
- after dilution	0.56	1.68	-1.03	0.59	0.42	1.63	0.86	1.68	0.93
Number of shares at period end, 000s	313,967	313,967	313,967	313,097	312,272	320,007	322,696	316,195	309,870
Share price at period end	22.81	30.77	36.14	62.85	100.50	81.30	94.40	118.20	61.80

ROLLING 12-MONTH KEY FIGURES FOR THE GROUP FOR THE PAST NINE QUARTERS

	Oct-Sep 2016/17	Jul-Jun 2016/17	Apr-Mar 2016/17	Jan-Dec 2016	Oct-Sep 2015/16	Jul-Juni 2015/16	Apr-Mar 2015/16	Jan-Dec 2015	Oct-Sep 2014/15
Revenues, SEK M	3,969.4	4,990.3	5,833.0	6,638.3	6,371.1	5,472.8	4,251.8	2,900.6	1,654.1
Gross profit, SEK M	1,573.7	2,201.1	2,714.9	3,165.3	3,078.6	2,605.1	1,950.4	1,255.3	627.1
Gross margin, %	4 0	4 4	4 7	4 8	4 8	4 8	4 6	4 3	4 0
Operating result, SEK M	715.4	1,427.5	2,030.6	2,578.5	2,581.0	2,160.9	1,556.4	913.1	390.4
Operating margin, %	1 8	2 9	3 5	3 9	4 1	3 9	3 7	3 1	2 2
EBITDA, SEK M	787.5	1,490.0	2,086.9	2,627.1	2,625.8	2,200.2	1,594.6	963.8	429.0

About Fingerprint Cards

Fingerprint Cards AB, Fingerprints, with its Swedish roots, is the leading global biometric company, whose mission is to spearhead the development of biometric interaction that facilitates the convenience and integrity of the individual. Its value is proven daily in millions of devices, through billions of touches, who are their own key – quite simply, with a human touch.

Fingerprints develops biometric systems comprising sensors, algorithms, software and packaging technologies. It success is based on product development at the cutting edge of technology, which results in world-leading products in terms of security, convenience and performance. The current product range consists largely of fingerprint sensors and customers are primarily manufacturers of smartphones and tablets, where the company is market leading. As the use of biometric solutions increases, Fingerprints is working to broaden its offering by using different biometric techniques, or modalities, and to identify other market segments where the solutions can be used, such as smartcards, PCs, automotive and online devices (IoT).

Vision

A secure and seamless universe, where you are the key to everything.

Mission

To provide secure and convenient identification and authentication with a human touch.

Business concept

Fingerprints develops and sells biometric solutions to companies globally that develop products and services interfacing with people.

Glossary available on the company's website: www.fingerprints.com

Definitions

Most of these key figures are Alternative Performance Measures according to ESMA's definition. How these key figures are used is described below, as is how they are calculated. The alternative performance measures are used to provide a more comprehensive description of how the operational activities are developing, such as gross margin, gross profit, operating margin, EBITDA and revenue increase, while other alternative performance measures focus on the owner perspective, such as return on equity, and cases where certain balance-sheet items or cash flow items are placed in relation to the number of shares. In addition, the equity/assets ratio is provided to describe the financial position and long-term financial sustainability.

Average number of shares after dilution Average number of shares plus an increase by the average number of shares that could be issued as a result of current remuneration and personnel programs.

Average number of shares outstanding The Parent Company's average weighted number of shares at the end of the period.

Cash flow from operating activities/share Cash flow from operating activities after changes in working capital/average number of shares before and after dilution.

Cost of goods sold Cost for materials, production expenses and amortization according to plan of capitalized development expenditure.

Earnings per share Profit/loss for the period/average number of shares outstanding at period-end.

Earnings per share after dilution Earnings per share plus adjustment for the number of shares and the paid exercise price resulting from current remuneration and personnel programs. Earnings per share after dilution can never be better than earnings per share before dilution.

EBITDA Earnings before interest, taxes, depreciation and amortization. Operating profit before financial income/expense, taxes, depreciation/amortization and impairment losses.

Equity/assets ratio Shareholders' equity divided by total assets.

Gross margin Gross profit as a percentage of revenues.

Gross profit Revenues less cost of goods sold.

Number of shares outstanding at period-end Number of shares less bought back shares held in treasury.

Operating margin Operating profit as a percentage of revenues.

Operating profit Operating profit before financial income/expenses and tax.

Profit for the period Profit after financial income/expenses and tax.

Profit margin Profit for the period as a percentage of revenues.

Return on equity Profit for the period in relation to average equity during the period. Average equity is defined as shareholders' equity at the start of the period plus shareholders' equity at the end of the period divided by two.

Revenue increase This shows the increase in revenues compared with the corresponding year-earlier period shown as a percentage.

Shareholders' equity per share Shareholders' equity attributable to the Parent Company's shareholders divided by the number of shares outstanding, before dilution, at period-end.

Shareholders' equity per share after dilution Shareholders' equity per share adjusted for the number of shares and the paid exercise price resulting from ongoing remuneration and personnel programs.

Working capital Current assets less current non-interest-bearing provisions and liabilities.