FINGERPRINT CARDS AB ANNUAL GENERAL MEETING

CHRISTIAN FREDRIKSON, CEO GOTHENBURG, SWEDEN APRIL 20 2017 Agenda

Inledning Kortsiktiga utmaningar 2016 i perspektiv Långsiktiga möjligheter

2 INTRODUCTION

3 We are highly competitive and fight for our market shares

OEMs implement dual sourcing which fuels competition Our products are competitive and so are our cost levels Market share from 55-60% in 2016 to around 50% in 2017 Unique system knowledge Biometric algorithms Asic/silicon chip development Software development Packaging expertise

4 SHORT TERM CHALLENGES

5 Short term congestion in our value chain

6 We are part of a long value chain

Fingerprints ”Sell-In” market Fingerprints ”Sell- Fingerprints Revenue recognition share measurement Through”

Packaging, SW

Fingerprint Distributor Mod House OEM Distr&Retail Cards AB (~ 5) (~ 10) (> 20) (100.000s)

wafers wafers modules

Approximately 4-6 months lead time

7 Note: Illustrative. Applies to mobile devices Inventory levels are a short term challenge

Inventory levels are expected to normalize during Q2

Consumer demand remains as expected and fingerprint sensor penetration is still increasing

8 2016 IN PERSPECTIVE

9 Fingerprints value creation

55-60% 579 MSEK Market share in taxes* #1 Innovative Swedish Company

Employee >10 Billion sat 80% touches per day 186 136 new talents in Fingerprints Devices launched in 2016 20 Sensor models

10 *From Income Statement. 498 MSEK cash-flow wise Value creation Key financials

Revenues of SEK 6,639 M (2,900), up 129% YoY Gross Margin 48% (43) Operating Profit of SEK 2,613 M (910), up 187% YoY Operating Margin of 39% (31) Earnings per share SEK 6.50 (2.52) 129% Cash flow from operating activities of SEK 1,130 M (910) Rev increase Net Cash SEK 1,162 M (1,031) 187% Profit increase

11 Fine from Nasdaq Stockholm Disciplinary Committee

Why? Nasdaq’s critique: company’s information disclosure routines

The specific reasons for the fine: Disclosure of 2016 guidance at CMD 2015 and incorrect statement from chairman in conjunction with the events that followed (December 2015) Twitter statements from non appointed Company spokesperson (September 2015, March 2016)

What? Fine corresponding to two annual fees (SEK 916 496) (To be commented later on in the agenda § 23)

Actions: More proactive in communication with Nasdaq Establish a Communication department and IR function

12 136 mobile devices launched in 2016

All in all 14 OEM-customers 10 launches by new OEM-customers Launch – Pixel 12 mobile devices launched in India by Chinese OEMs Rear mounted FPC1035 most frequent sensor - in 54 launches Mate 9 Pro with FPC1268 under glass

13 Progress in new segments

Samsung PC Notebook 9 launched PC-offer presented at CES (in Q1) Ultra thin Smart Card sensor series launched Smartcard prototypes at Money 20/20 Biometric module launched for IoT Partnerships established

14 LONG TERM OPPORTUNITIES

15 Megatrends that affect us

Biometrics Security and convenience Cloudification Online payment/banking Digitalization (IoT) CSR awareness

16 #1 COMPANY

17 The change we will face

#1 FINGERPRINT SENSOR COMPANY #1 BIOMETRICS COMPANY Market of 1.5 B units Market of 10-15 B units 10s of customers 100s of customers 3-5 major competitors 10-15 major competitors One technology Several technologies Focus on device Focus on cloud and device Business model: HW focus Business model: SW/system/HW One Business Line Several Business Lines Innovate or die Innovate or die Customer focus Customer & stakeholder focus Entrepreneur Innovative biometric company

18 Strategy for continued profitable growth

Segments Other segments PC Internet of Things Automotive Industrial and medical New Smartcards Sensor adaptation Utilize scale advantages Strong growth potential

Extended biometric Grow with the existing scope New offerings customer base Trackpad Other sensors Higher security M&A opportunities Existing Add new customers More features

Offering Existing New The big picture of biometrics

Biometric modalities Technologies Touch sensors

Capacitive 1 st generation Spray coated

Facial Iris Voice 2nd generation Ultrasonic Under glass

3rd generation Under thicker glass Optical

Palm vein Finger vein Fingerprint

20 THE PERFECT MATCH Fingerprint Cards acquires Delta ID

21 Long term financial objectives

22 Fingerprints’ Sustainability

2016 Highlights Several policies issued Code of Business Conduct for employees as well as for Suppliers Created a Sustainability Forum to bring management attention Sustainability Created a Sustainability Framework aligning our efforts and goals ISO14001 certified and reported to Carbon Disclosure Project

23 Talented people create results

24 Summering

Vi är konkurrenskraftiga och slåss för våra marknadsandelar

Vi har den bästa systemkompetensen inom biometri Kortsiktiga utmaningar

Alltför stora varulager i värdekedjan har försvagat efterfrågan från OEM

Normaliserade varulager i värdekedjan under Q2

Vi förblir konkurrenskraftiga i en mycket tuff marknad 2016 i perspektiv

Stabil ekonomi, men på en krokig väg

Marknadsledande med 55-60% av marknaden

En bred och växande produktportfölj Långsiktiga möjligheter

Tillväxten kommer från nya segment och av ny teknologi

Ökad ambition kring hållbarhetsarbete

Vår ambition är att vara det ledande biometribolaget 25 Stay in touch & connect E-mail: [email protected] For more information, visit us at www.fingerprints.com