Precise Biometrics AB (publ)

Så, då har klockan slagit 13.00 här på Precise huvudkontor i ett lite gråmuligt novemberlund. Hoppas det är bra med alla som lyssnar och det är dags att kicka igång våran Q&A för tredje kvartalet 2025. My name is Fredrik André and I keep Marketing Communication together on Precise and will be your guide through this question time today. With me here in the room I have our CFO Maria Wester and our CEO Joakim Nydemark. Is it good with you, Maria?

It's just fine, Fredrik.

Lovely. And Joakim? Yes, all the same. That sounds good. Some of you have probably been with us a little or a couple of times before, then you know how this works. We have some new members today on this Q&A session, so a little brief information before we get started with the questions. Cameras and microphones are off to keep things in order. And questions you ask through the Q&A function in the window here. Note that the chat function is off, so it's Q&A that counts. As usual, we have received a few questions in advance. I thought we would start with them, while you who are with us live warm up the question function here. So, the first question to you Joakim. Congratulations on good work and a fairly stable report. How does the environment affect and what events would you like to bring forward from the quarter?

Thank you. I think we still have a stability in our business. When that is said, we also see a lagging market situation, which means that some things take a little longer time and our OEM customers out there are a little more lagging with their volume orders because they have not been in large numbers. And then we have the American dollar, which has also worked here during the year against us. If you look at the figures, we show a positive EBITDA and a positive cash flow from the running business. I'm glad to be able to see that. If you look at the business in general and the offers, we continue to develop positively. We have new partnerships, we have new offers in our portfolio, we update our existing offers. So I think overall we have good progress.

Thank you Joakim, sounds positive. And we continue on the same topic. Another question that has come in here via mail. You say that you have a strong position and a strong offer, but the growth is bleak. What does it mean for the growth to move forward?

I would say that there is a lot that speaks for you. I agree that the growth so far this year has been visible. But what we see is that this caution is starting to let go. We are starting to turn around this nonsense that we have seen. We have the dollar to relate to and it is what it is. But now we are growing from that forward. We have a very nice growth prognosis on our ultraviolet sensors on the market that looks very promising for the coming years. Vi har också jobbat mycket med vårt digitala identitet i den här med både ompaketering och vi har ökat potentiell kraft och annat. Jag känner mig väldigt trygg i att det kommer ta fart framåt. Vi har haft migrering och så som har påverkat men framåt så tycker jag att det ser väldigt bra ut. National ID is also something that is ongoing here. We have signed new agreements, commercialization here during, especially next year, and the rollout of a couple of solutions and others. So there is a lot, I think, that speaks for us to have a good coming year for Mötes.

Thank you Joakim. Let's go to Maria. One of your favorite questions, Maria. It seems to be a favorite question from you who are listening, since it is a recurring question. Can you give a picture of cash flow and if there is a need for capital?

Kassaflödet från den löpande verksamheten ligger från kvartalet på 1,7 miljoner kronor och för delårsperioden ligger den på lite mer än 5 miljoner kronor vilket om du jämför med föregående år samma period uppgick till 4,3 miljoner så det är en förbättring med nästan en miljon. I dagsläget så har vi en stabil kassa för vår verksamhet och vi ska göra den näst sista betalningen av lånet gällande förvärvet av iskost i november i år. Så det finns med andra ord i nyläget inget kapitalbehov för den fortsatta driften.

Stort tack för det Maria. Vi fortsätter till Joakim. Kan du kommentera utvecklingen inom mobilaffären? Project profits, launches and technology and something like that.

Absolutely, so the mobile business is a big and important part of our business. If I look at the mobile market in general, it has not grown very much in terms of volume so far. It is a few percent. And if you look at the forecast for the whole year, it's probably somewhere in that range. But with that said, we have a special niche in mobile telephony, which is connected to these ultrasonic sensors. And it's an increase in what looks very good. During this year, what we have seen is that It exists in the more competent and more expensive mobile phone segment, but if we look forward to next year, it will bubble down in the intermediate segment as well. There are also new products on the way, ultra sound sensor products that will meet so to speak, these other segments that we are part of. So if I look into last year, I think it looks very promising in general terms.

Thank you for that. You talked about some uniqueness there Joakim. If we continue with a question related to uniqueness. How is your palm business developed?

Yes, that is a very exciting area as well. There we have a software solution and we have two tracks in it mainly. We have a slightly smaller partner in the USA where we do not invest in it, it happens at their expense, but we build together a common solution with our softwares and their hardware. And it will be a super product here for, among other things, our access systems. And it will go into production, what we call volume production here, in short. The other track is the collaboration with major players in the area who have this type of product in their roadmap. There is among other things one player who will launch a platform for biometrics with hand connection during the first half of next year. We are looking forward to this work. It will be aimed at both access solutions and payment solutions. It is a way for us to go out to the market through partner channels. We are really looking forward to it.

Tack för det också. Vi fortsätter på olika typer av erbjudanden. En fråga till till dig då Joakim. Något nytt inom nationella ID-program?

Det händer mycket inom Nationella ID-programmet också. Där är det vår branschbrukslösning som är huvudnumret. Det finns mer där, men det är där vi börjar så att säga. Vi har tecknat nya avtal under kvartalet. Vi märker mer och mer förfrågningar från andra delar. Det här är primärt Indien, men vi får förfrågningar från andra håll. Southeast Asia and others who have a need for this type of software. Which we think is very fun. So what you can see there is that the projects are rolling and there is commercialization here during, especially next year and forward. So it's also an area that is very exciting.

Myke kul på gång här framåt. Vänder nästa fråga till Maria. Också en fråga som kommit in i förväg här. Hur stor påverkan har valutakurserna haft och hur ser ni på det framåt?

Tack Fredrik. The currency costs affect both our results and the cash flow, since a large part of our income is in foreign currencies, especially US dollars. But most of our costs are in Swedish kronor, so when the krona is strengthened or weakened against the dollar, we get a direct effect on the result. During this part-time period, we have about 2.5 million kronor due to currency exchange effects that affect our movement costs. This means that our movement costs are 2.5 million kronor higher due to the currency. If you look at the other side, the revenues of currency exchange movements are also affected. But you don't see this as clearly in the revenues. Therefore, it has a negative effect on the turnover for the period.

Thank you very much for that. We interrupt with a question from Etern here. A question about the patent strategy. The question is, how is the patent strategy in the future and is it important with a strong patent portfolio? Joakim.

We have a patent portfolio that we maintain and a patent is something that we work with from time to time when we see that there are innovations that emerge that are patentable. How important it is, last but not least, I think that in the fast-moving world we live in, it is very much about being offensive in development and delivering on a state-of-the-art level and keeping pace in development. And if you can do that and keep the competitors on their toes in some way, then it is so important. Patent again, we have a patent portfolio and we take new patents in that regard. We see that there is a possibility to do so.

Thank you for that. A lot of talk about Biometric Technology and a bit of Finance, so far. We are switching tracks to Digital Identity. Joakim, what is the situation in Digital Identity?

There is a lot of excitement going on within Digital Identity. We have a slight growth here during the quarter compared to last quarter. If you look at the trend, I see a lot of positive things happening. A big reason for the growth has been a little worse for Digital Identity during this year. It is partly that we went on this competition earlier this year. It happens, but now it is a rather significant or larger customer to us, which got an effect on But what I think is important to point out is that we have worked in the last quarter or since this summer with what we call migration. That is to say that we move and contract our existing customers in the new monthly solution that we call online. That is to say that we have a non-premise solution that is what we have had and that many of the older customers are in. de vill vi gärna flytta in i vår online lösning. Det har tagit en del sällkraft men det är taktiskt och strategiskt väldigt rätt att göra så vi har lagt en del tid på det här. Om man tittar på The growth on our online is several tens of percent this year, so the growth there is very good, but it has not really been seen, but we will see it here now if we look forward. And the big point with online is that we Vi får en mycket bättre möjlighet att koppla på mer tjänster, göra det vi kallar app-sälj. Vi har möjlighet att lättare uppgradera våra lösningar. Vi sänker våra driftskostnader och underhållskostnader. Så där är stora fördelar, såväl för kunder som för oss i detta. Det gör att den här migreringen är klok att göra, men har kortsiktigt påverkat tillväxten.

Thank you very much. Back to Maria. Another question. How do you see the cost structure? Is there a need for further efficiency or re-prioritization?

Tack Fredrik. Vi ligger på en stabil kostnadsnivå. Om du tittar både för kvartalet och för perioden så har vi ökat våra kostnader med 1,6 %. Samtidigt så ser vi kontinuerligt över kostnadsmassan för att säkerställa att varje krona används där den gör mest nytta.

Thank you for that. Joakim, another prepared question. We will continue on that Joakim talked about sustainable growth before. I talked about a sustainable scale of people who are here. A few questions so far, but we have a few more that we got in last week. We have heard about Avigilon. Can you describe the collaboration with them and what it means?

Yes, please. We pressurized this earlier during the quarter. Avigilon is a strong player in the access system. They are a Motorola company, so there is power behind it. Vi har jobbat mot dem, utan försökt få till ett samarbete med dem under en tid. Nu har vi kommit i hamn, vilket vi är väldigt glada för. Det stora här är att vi tillsammans med Individuum kan erbjuda en multifactor authentication lösning. combine several different methods when you are going to access an access system. And then of course combined with biometrics. And then we are the only actor that NBG Elon works with that has the opportunity to offer this, which gives us a unique precision. So with that said, the starting point was that we were part of Vigilance Monitor here at GSX in the USA. And we developed a common solution there, so it was our software and their camera access system. We are also exposed on their web and will then be sold through their sales channels. Vi är väldigt hoppfulla här att detta ska kunna generera en bra skjuts för affären i USA.

Tackar för det Joakim. Vi har fått en fråga online, om online. Lite förtydligande kanske från din föregående fråga, Joakim, där vi pratade om Precise Visit. Är online klar för de gamla kunderna? Kanske skulle du nämna lite grann om Online, Contra Moln, Contra On-Prem, what was it?

Yes, exactly. So what this is about is that what we call On-Prem, then you are a bit separated from the world, so to speak. So it is an internal system. And this new one is a mon-based system. And it is against the goals that the world movement has made over time. Then there are those customers who want to stay, if there are very high security requirements and so on. And then you can of course do that, there is no problem. However, in the most possible way, we try to move the customers to this goal-based solution. Just to get all the benefits for the customer as described earlier.

And we can also add that when we talk about selling Precise Visit or Precise Visit by East Coast today, new sales, it is online that is the solution and that has recurring revenue. I hope that was a clear answer to that question. The time is running a bit. It's a bit quiet in the Q&A window here. But let us conclude with another question that has come in here in advance, which is a bit about the future. Joakim, what do you think about the future?

I am of course particularly hopeful about the future. We have these currency rate effects, interest rates and so on that we have to relate to, but I feel that it is, it turns in and the world adapts and so do we. So if we just look at the rest here, we are both positioned within security solutions and biometrics. I think we have the right orientation in our business with expansive segments and we are constantly looking at new and graphic markets to grow from where we already are. We also see that the high resolution screens for mobile phones, that trend is very clear, which, as I mentioned earlier, will drive the need for ultra-wide sensors, which is good for us. In general, I would also say that we have increased security requirements and tougher security standards that show up, which plays into our hands. We see BioLife and National ID as one example. We see that they tighten the security requirements for mobile, because the need exists. The mobile phone is an increasingly important part of of everyday life for most people, and that it is safe and secure is particularly important. And you have your eyes on that, and that's good for us. And then we have this with multi-factor authentication and physical access. More and more companies, both those who work with extremely secret things, but also ordinary companies, become more and more careful and want to ensure that a lot of and then you talk about what we call multi-factor authentication, where you want to combine it with biometrics to ensure that it really is the person who comes in who should be allowed to come in. So to summarize this, Vi fortsätter exekvera full fart framåt. Vi har en kommersialiseringsstrategi som bygger på fokus på lönsam tillväxt. Jag tycker med det att det ser väldigt lovande ut de kommande åren.

Kul att höra Joakim. Positivt med andra ord. Vi har utnyttjat den tiden som vi tänkte använda. Vi har inga fler frågor i frågelistan heller. Så jag tänkte tacka för oss här och önska en fortsatt trevlig dag. Och har ni fler frågor framåt eller ni tycker att det var någonting ni inte fick svar på, så finns vår IR-mailbox alltid tillgänglig. Tack så mycket och ha en härlig dag!