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Precise Biometrics

Precise Biometrics

Leading developer of biometric software algorithms

Precise Biometrics is a developer of biometric software algorithms used for verifying identities using new digital technologies. The company offers software for fingerprint scanners in mobile devices, smart payment cards as well as biometric identity systems. The company has a long history of research and development in segments that are just starting to disrupt our digital world, and we believe that the company’s business model can achieve scalability as volumes increase.

Precise Biometrics is at the forefront of biometric algorithm solutions. It has a proven record in the mobile devices segment, which looks set to offer greater profitability in the future as optical and ultrasound fingerprint sensors replace capacitive sensors. Also, Precise has an opportunity for growth as biometrics start penetrating the smart card market, and it has the chance to establish itself as a leader in digital identity, where verification is based on iris, face, geographical and a behavioural profile, replacing the need for cards, keys and passwords.

R&D is crucial for Precise if it is to keep up with the ever-changing landscape of biometrics. As such, a failure to innovate could hurt the competitiveness of the company’s products. Currently, the Precise’s revenues mainly stem from the mobile device segment. Meanwhile, the market for the company’s two growth segments – biometric smart cards and digital identity – remain immature and predictions about growth and penetration remain uncertain. Lastly, apart from in 2016, the company has not been able to generate positive net cash flow without share issues.

SEKm 2021 2022e 2023e
Lease adj. FCF yield (%) -2,1 -3,5 -2,5
Lease adj. ND/EBITDA 0,4 -3,5 -1,6
Sales 83 119 140
Sales growth (%) -9,8 43,4 17,3
EBITDA 2 14 22
EBITDA margin (%) 2,2 11,7 15,8
EBIT adj -14 -3 6
EBIT adj margin (%) -16,9 -2,7 4,3
Pretax profit -13 -4 5
EPS rep -0,34 -0,08 0,08
EPS growth (%) -0,4 75,8 195,6
EPS adj -0,34 -0,08 0,08
DPS 0 0 0
EV/EBITDA (x) 328,4 29,2 19
EV/EBIT adj (x) -42,3 -128,5 69,6
P/E (x) -40,7 -83,9 87,8
P/E adj (x) -40,7 -83,9 87,8
EV/sales (x) 7,1 3,4 3
FCF yield (%) -5,6 -3,2 -2,2
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 27 4,5 3,4
SEKm 2021 2022e 2023e
Depreciation and amortisation -16 -17 -16
Of which leasing depreciation -1 -1 -1
EO items 0 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 21 13 21
EBITDA lease Adj margin (%) 25,6 10,9 15,1
EBITA -14 -3 6
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT -14 -3 6
Other financial items 0 0 0
Net financial items 1 -1 -1
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit -13 -4 5
Tax 0 0 -1
Net profit -13 -4 4
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders -13 -4 4
EPS -0,34 -0,08 0,08
EPS Adj -0,34 -0,08 0,08
Total extraordinary items after tax 0 0 0
Tax rate (%) 0,7 5,2 -22
Gross margin (%) 76,3 81,8 79
EBITDA margin (%) 2,2 11,7 15,8
EBITA margin (%) -16,9 -2,7 4,3
EBIT margin (%) -16,9 -2,7 4,3
Pretax margin (%) -16 -3,3 3,6
Net margin (%) -16,1 -3,5 2,8
Growth rates Y/Y 2021 2022 2023
Sales growth (%) -9,8 43,4 17,3
EBITDA growth (%) -73,5 673,9 57,9
EBIT growth (%) -143 77,3 290
Net profit growth (%) -10,4 69,3 195,6
EPS growth (%) -0,4 75,8 195,6
Profitability 2021 2022 2023
ROE (%) -11,1 -3,3 3,1
ROE Adj (%) -11,1 -3,3 3,1
ROCE (%) -7,1 -1,2 2
ROCE Adj(%) -7,1 -1,2 2
ROIC (%) -11,2 -1,8 2,4
ROIC Adj (%) -11,2 -1,8 2,4
Adj earnings numbers 2021 2022 2023
EBITDA Adj 2 14 22
EBITDA Adj margin (%) 2,2 11,7 15,8
EBITA Adj -14 -3 6
EBITA Adj margin (%) -16,9 -2,7 4,3
EBIT Adj -14 -3 6
EBIT Adj margin (%) -16,9 -2,7 4,3
Pretax profit Adj -13 -4 5
Net profit Adj -13 -4 4
Net profit to shareholders Adj -13 -4 4
Net Adj margin (%) -16,1 -3,5 2,8
Sales 83 119 140
COGS -20 -22 -29
Gross profit 64 98 111
Other operating items -62 -84 -89
EBITDA 2 14 22
Depreciation on tangibles 0 0 0
Depreciation on intangibles -12 -12 -9
Leasing payments 20 -1 -1
SEKm 2021 2022e 2023e
Lease liability amortisation 20 -1 -1
Other intangible assets 135 145 159
Right-of-use asset 0 0 0
Total other fixed assets 0 0 0
Leasing liability 40 109 109
Total other long-term liabilities 0 0 0
Net IB debt excl. leasing 8 -45 -34
Net IB debt / EBITDA lease Adj (%) 39,5 -348,2 -158,7
EBITDA 2 14 22
Net financial items 1 -1 -1
Paid tax 0 0 -1
Non-cash items 0 0 0
Cash flow before change in WC 2 13 20
Change in WC -4 0 0
Operating cash flow -1 13 20
CAPEX tangible fixed assets 0 0 0
CAPEX intangible fixed assets -30 -26 -31
Acquisitions and disposals 1 2 3
Free cash flow -31 -11 -8
Dividend paid 0 0 0
Share issues and buybacks 1 2 3
Other non cash items 0 0 0
Decrease in net IB debt -4 -3 -3
Balance Sheet (SEKm) 2021 2022 2023
Goodwill 0 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 48 54 64
Tangible fixed assets 11 13 14
Other fixed assets 0 0 0
Fixed assets 147 158 173
Inventories 1 1 1
Receivables 26 26 26
Other current assets 4 4 4
Cash and liquid assets 64 118 106
Total assets 241 305 309
Shareholders equity 128 124 128
Minority 0 0 0
Total equity 128 124 128
Long-term debt 0 0 0
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 0 0 0
Short-term debt 73 73 73
Accounts payable 0 0 0
Other current liabilities 0 0 0
Total liabilities and equity 241 305 309
Net IB debt 49 64 75
Net IB debt excl. pension debt 49 64 75
Capital invested 177 188 203
Working capital 30 30 30
EV breakdown 2021 2022 2023
Market cap. diluted (m) 546 346 346
Net IB debt Adj 49 64 75
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 595 410 422
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 42,3 43,7 45,6
Capital invested turnover (%) 114,4 124,1 131,2
Capital employed turnover (%) 59,4 63,5 69,8
Inventories / sales (%) 0,6 0,5 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 0 0,5 1
Working capital / sales (%) 30,1 25,1 21,4
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 38,2 51,3 58,9
Net debt / market cap (%) 11 18,4 21,8
Equity ratio (%) 53,1 40,6 41,3
Net IB debt adj. / equity (%) 38,2 51,3 58,9
Current ratio (%) 129,7 203,9 187,7
EBITDA / net interest (%) -250,4 1919,5 2216
Net IB debt / EBITDA (%) 2697 453,2 340,1
Interest cover (%) 1943,8 -436,3 606
SEKm 2021 2022e 2023e
Lease adj. FCF yield (%) -2,1 -3,5 -2,5
Shares outstanding adj. 40 50 50
Fully diluted shares Adj 40 50 50
EPS -0,34 -0,08 0,08
Dividend per share Adj 0 0 0
EPS Adj -0,34 -0,08 0,08
BVPS 3,23 2,47 2,55
BVPS Adj -0,19 -0,41 -0,63
Net IB debt / share 1,2 1,3 1,5
Share price 11,25 6,9 6,9
Market cap. (m) 445 346 346
Valuation 2021 2022 2023
P/E -40,7 -83,9 87,8
EV/sales 7,15 3,43 3,01
EV/EBITDA 328,4 29,2 19
EV/EBITA -42,3 -128,5 69,6
EV/EBIT -42,3 -128,5 69,6
Dividend yield (%) 0 0 0
FCF yield (%) -5,6 -3,2 -2,2
P/BVPS 4,27 2,8 2,71
P/BVPS Adj -73,57 -16,8 -11,03
P/E Adj -40,7 -83,9 87,8
EV/EBITDA Adj 328,4 29,2 19
EV/EBITA Adj -42,3 -128,5 69,6
EV/EBIT Adj -42,3 -128,5 69,6
EV/cap. employed 2,5 1,3 1,4
Investment ratios 2021 2022 2023
Capex / sales 36,3 22 22
Capex / depreciation 196,7 157,2 204,2
Capex tangibles / tangible fixed assets 0 0 0
Capex intangibles / definite intangibles 22,3 18,2 19,4
Depreciation on intangibles / definite intangibles 11,4 11,6 9,5
Depreciation on tangibles / tangibles 0 0 0

Equity research

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Media

Precise Biometrics - Company presentation with VP Sales Fredrik Sjöholm
Precise Biometrics - Company presentation with CEO Stefan K. Persson

Main shareholders - Precise Biometrics

Main shareholders Share capital % Voting shares % Verified
Avanza Pension 5.6 % 5.6 % 27 Jul 2022
Nordnet Pensionsförsäkring 3.1 % 3.1 % 27 Jul 2022
Maida Vale Capital AB 1.9 % 1.9 % 27 Jul 2022
EastCoast International AB 1.8 % 1.8 % 9 Jun 2022
Lars Ingvarsson 1.4 % 1.4 % 27 Jul 2022
Henrik Svensson Fastigheter AB 1.2 % 1.2 % 27 Jul 2022
Swedbank Försäkring 1.0 % 1.0 % 27 Jul 2022
Skandia Fonder 0.9 % 0.9 % 31 Jul 2022
Kurt Blixt 0.9 % 0.9 % 27 Jul 2022
Lars Odqvist 0.8 % 0.8 % 27 Jul 2022
Source: Holdings by Modular Finance AB

Insider list - Precise Biometrics

Name Quantity Code Date
Ulrik Nilsson - 300 000 SELL 6 Apr 2021
Stefan Persson + 49 959 BUY 18 Dec 2020
Ulrik Nilsson + 50 000 BUY 14 Dec 2020
Ulrik Nilsson + 50 000 BUY 10 Dec 2020
Ulrik Nilsson + 50 000 BUY 1 Dec 2020
Stefan Persson + 50 000 BUY 1 Dec 2020
Stefan Persson + 60 000 BUY 17 Nov 2020
Ulrik Nilsson + 50 000 BUY 17 Nov 2020
Åsa Helena Elisabeth Schwarz Ahlin + 9 538 BUY 17 Dec 2019
Åsa Helena Elisabeth Schwarz Ahlin + 65 000 BUY 16 Dec 2019

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