INTERIM REPORT FOR THE PERIOD JANUARY TO JUNE 2021
SIGNIFICANT EVENTS DURING THE QUARTER
SIGNIFICANT EVENTS AFTER THE END OF THE INTERIM PERIOD
FINANCIAL DATA AND KEY INDICATORS
Amounts in SEK thousands unless otherwise stated
|Amounts in SEK thousands unless otherwise stated||Q2||Q2||Q1 - Q2||Q1 - Q2||Full-Year||12 mth|
|Net sales||18 668||23 615||38 980||46 680||92 349||84 649|
|Net sales growth, %||-20,9%||75,6%||-16,5%||82,4%||0,5%||-25,1%|
|EBITDA||-814||1 998||-792||5 059||6 862||1 012|
|Gross margin, %||73,3%||84,7%||75,4%||86,2%||84,2%||79,1%|
|Operating profit/loss||-4 596||-1 128||-8 408||-980||-5 792||-13 220|
|Operating margin, %||-24,6%||-4,8%||-21,6%||-2,1%||-6,3%||-15,6%|
|Cash flow from the operating activities||-1 628||2 266||-2 288||9 201||21 792||10 303|
|Cash and cash equivalents||62 466||76 259||62 466||76 259||76 258||62 466|
See the Financial Glossary for definitions.
INVITATION TO PRESENTATION OF THE INTERIM REPORT
In connection with today’s interim report, Precise invites investors and the media to an informational conference call.
The conference call starts at 10:00 AM (CEST), August 12.
Link to all public information such as link to webcast and participant number for the telephone conference:
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.
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
We had revenues with high margins in the Algo product area, reflecting our strong market position. Our royalty revenues were, however, reduced by the component shortage. We are at the same time continuing to win important projects together with our key partners with BioMatch Mobile, which is being integrated into different ranges of smart devices from leading OEM manufacturers. Even if the component shortage continues, we have good prospects of returning to earlier volumes. In the field of Digital Identity, we saw strong growth and a significant increase in interest, and we continue to develop our sales channels. Net sales during the second quarter totaled SEK 18.7 million, driven primarily by revenues from Algo.
Strong profitability in Algo provides an opportunity for the internally financed development of Digital Identity. Resources are shared evenly between the product areas, and with continued growth in Digital Identity combined with the recovery within Algo, we are seeing that the company will achieve profitability. Following initiatives in Digital Identity, combined with the impact of the component shortage, EBITDA totaled SEK -0.8 million despite a fall in royalty revenues. Adjusted for initiatives in Digital Identity, we see strong underlying profitability in the company.
Growth in the Digital Identity product area was 169%, and we are applying the SaaS (Software as a Service) model to guarantee stable, recurring revenues with high margins. It is also pleasing that our churn rate, the metric used to reflect the rate of customer losses, is zero per cent. All of the customers who have chosen YOUNiQ access are very satisfied, and we have multiple cases of upsales through additional installations. Our targeted marketing activities have contributed to increased awareness of and interest in YOUNiQ. We now have a very exciting pipeline with many projects together with partners such as Algeco, RCO, Assa Abloy Opening Solutions and many others. During the second quarter we continued to take many important steps along our journey of commercialization, laying a strong foundation for continued growth.
It is important that YOUNiQ works together with other systems, which is why it was developed from the outset as an open system in order to achieve the best possible scalability. The integration with ARX, which was communicated after the end of the quarter, is another example of YOUNiQ as a quality-assured product that the very largest actors in the industry value as an integral element of their offering. We continue to identify and work in close collaboration with selected partners, with YOUNiQ supplementing our partners’ product ranges with convenient and secure identification through facial recognition.
We continue to work in close collaboration with a small number of selected partners in the Algo product area. This is in line with our strategic priority to strengthen our relationship through extended collaboration with partners in key markets. We are working intensively to roll out the new generation of fingerprint software to our partners, assuming responsibility for bigger parts of the system, and we believe that sales will recover even if the component shortage continues.
It is clear that the general digitalization of our societies has been accelerated as a consequence of the pandemic, which paves the way for our products to become even more demanded. Our innovations contribute to a positive development towards more sustainable identification solutions, and I am therefore convinced that we will emerge from the pandemic as an even stronger company – well-positioned to capitalize on growing markets driven by global mega trends such as digitalization and sustainability.
With strong underlying profitability that is being reinvested in growth, I look forward to continuing to advance our positions as a leading global supplier of identification software in which you are the key. Finally, I would like to take this opportunity to thank Ulrik Nilsson for his efforts over the past few years and to extend a warm welcome to Annika Freij as the new CFO of Precise.
Stefan K Persson, CEO