In 2009 we consolidated our position as a world leader in Match-on-Card technology. We achieved a record-high turnover, improved margins, and won a major prestigious order. With almost 100 million contracted licenses, our technology has become the natural choice for many people to protect their integrity. Organizations and companies throughout the whole world rely on our solutions to safeguard information. Our leading product portfolio, global coverage and robust finances have put us in an excellent position in a market experiencing rapid growth.

Just the beginning

2009 was Precise Biometrics’ best year ever. Net sales rose 50 per cent to a record level of SEK 68.7 million, while the gross margin was reinforced at 52 per cent. Growth accelerated during the year and in the fourth quarter sales increased by 179 per cent to SEK 32.1 million with a positive operating profit.

This success is the result of all the hard work that has been done in Precise Biometrics up until now. For several years we have successfully managed the development of technology protected by various patents, we have ensured that our products are well-suited for their industrial applications and that end users find them easy to use.

We introduced our first commercial product in 1999 and as a pioneer we have built up the market’s largest user platform, which every day brings us new experiences and new knowledge. We have benefited from this by refining our technology and increasing our lead. Now, ten years later, we have reached a turning point in the market. We have several large, renowned customers and cooperation with strategic partners in areas with huge potential. And we have also built up an organization that reaches out to the whole world.

Three driving forces

The market for our products has three driving forces; the determination of people to protect their integrity, the need for organizations to secure information, and new legal requirements in all markets. The fact that our technology is already in place is demonstrated by almost 100 million contracted users.

Establishment of standards

The market is expanding rapidly, and an additional tipping-point upwards for demand will come when new standards are established. During the year we took a major step towards this as US government agencies are assessing new standards. This can make the technology easier to integrate into the surrounding infrastructure, while it also may lead to greater competition. As a market leader, Precise Biometrics is engaged in this process and participates in different standardization initiatives.

Scalable business model

We are working to ensure that our technological lead will benefit our customers and our shareholders. We are achieving this through a combination of a scalable business model and a global coverage in sales.

Our business model is scalable through licensed sales and profitable hardware sales. We get paid per user via licenses. We cultivate small customers to create stability in our sales, and larger customers to achieve full leverage on our resources.

More explicit focus

In 2010 we will be clarifying our focus additionally. We are creating new business areas to move from a geographically divided organization towards bringing global responsibility allocated to specific segments. This is a step towards becoming less reliant on individual projects and becoming more focused on prioritized areas where we can also exert more influence on our own.

The objective is to strengthen our focus on applications with recurrent earnings, and to expand in additional applications. This will give a new dimension to Precise Biometrics.

Global coverage

Our technology is used in five international ID cards; the US State Department’s ID card for employees at embassies and consulates, the SAS check-in system for domestic flights in Scandinavia, and several other ID cards for government agencies and companies.

During the year we won our largest order ever for a value of USD 6 million from US government agencies within the framework for the Cyber Security program. Strategically it was a very important order, since it gives us a reference customer and opens doors, but also because the size of it gives us a critical mass in our production. We are now utilizing this momentum and engaging in discussions with other US organizations.

Our sales organization reaches out on the international arena. We are involved in all the negotiations in progress by governments for national ID cards that specify Match-on-Card, and we are in contact with a large number of banks and companies. But the market is much larger, and we are working to increase our coverage in prioritized areas. For this reason we are continuing to reinforce our sales organization. We are actively working to create stable growth and even if we continue to maintain a positive development on annual basis, our sales will still fluctuate between quarters because of long lead times and the size of contracts.

Great confidence and robust finances

We have robust finances. Last year we completed a new issue of shares that infused over SEK 50 million into the Company after issue costs. The fact that the issue was subscribed, without guarantees to 178 per cent, points to a great deal of confidence. It gives us resources to invest in sales and to expand.

Well-placed for 2010

We enter 2010 as a world leader in our sector, with almost 100 million contracted licenses for our Match-on-Card technology. The overall potential in Precise Biometrics is greater than ever.

We are working to distribute our technology to a vastly greater number of users in several areas, and with today’s prospects we have come a good bit of the way. Last year’s success was only the beginning.

Thomas Marschall
President and CEO Precise Biometrics

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