Thank you. Good morning and warm welcome to Precise Q4 and year-end 2020 presentation. I will, together with our CFO, Ulrik Nilsson, present the financial results and also give you some highlights on how we see the next coming quarters. Next slide, please. Once again, I'm happy to present another quarter with a positive EBITDA. The sales is in line with our early communication, and we had the total sales of SEK 22.5 million in this fourth quarter. We have a very good cost control, and we've been able to continue our investment in the YOUNiQ with clear focus in the access area. We have also positive cash flow, and by that, been able to strengthen the cash situation for the company during 2020.
We continue to roll out the YOUNiQ with focus on building the platform and ecosystems around the product offering with different collaboration, such as recently announced the [uncertain] . They have installed a system at their headquarters to be able to show it to customers. We continue to open up for integration and different cooperation. This is the key area for us in the go-to-market strategy, to be able to accelerate the rollout of YOUNiQ access product. We have also launched a new marketing profile with focus on YOU are the key, which means a very clear message to the end customer and partners. Easy to remember and easy to understand. Simplicity in all aspects. In our mobile area, we have now introduced our next generation algorithm to some of our partners. This means we, together with these partners now, have the possibility to win even more contracts.
In general, a very tough environment with a lot of players involved, so it's tricky to estimate and forecast the 2021 revenue. Even if the industry have been hit by the coronavirus situation, we have been able to continue to deliver our software to our partners, and we have today a very stable way of working with strong teams in Asia, Europe, and U.S. Due to that, we have been able to deliver Q4 as early communicated, which means we ended 2020 with a small growth and with a strong cash situation, so our investment in YOUNiQ continue as planned. Next slide, please. The vision. We continue to communicate our strategy and vision in all forums. No matter who you are and where you are and what you do, you should always have access to a digital identity owned and controlled by you in a safe way.
We have now started to communicate even more about the benefit of that. YOU are the key. One identity verified by your biometrics and used in different applications and resources. A digital end-to-end solution controlled and owned by the user. Next slide, please. The Digital Identity. 2021 will be the year we focus on larger account in YOUNiQ area. 2020, we sold indirectly to end customer to get enough reference and installations for the future. The focus will be on installation partners and distribution partners. We have six main verticals we address: constructions, apartment blocks, commercial buildings, gym, industrial buildings, and public. Due to the coronavirus situation, we see a slowdown in the gym and commercial buildings/offices. Gym market suffers a lot and more people working from home, which means less opportunity in the commercial buildings right now.
The construction and industrial buildings is still open and very interesting in upgrade and of new installation of YOUNiQ. Today, we have integration with RCO, Telcred, Axis, and S2, and there will be more coming around the corner. The idea is to have a light integration with all access system and then deeper integration with the major larger player. To make sure we have an open platform so other players can integrate with us. We recently launched our affiliate program together with direct sales and via distributed end integrators and platform companies, we will address the whole market. We have today 50 installations and more to come. Next step now is more installation with Algeco, for instance, previous temp space company, but there are also other accounts ongoing.
The plan now is via our homepage present all installations going forward, so you can follow the progress in real time. We all signed the first contract in U.S., which is a very important milestone. Our focus is still Nordic and especially Swedish market, but via our sales office in U.S., we can see an opportunity in U.S. also. We will start in a very controlled way now with integration with S2 in U.S. We entered the market last year, 2020, and it will take some time to get up large volume, but the market is there, and we have just started a very interesting journey for Precise in this area. Next slide, please. Mobile. We just launched our new generation of algorithm, which we have delivered to our customer and to some of the re-ents partners.
As always, it's very tricky to predict the volume and so far for 2021. Much better situation compared to some years ago. The new algorithm helps our customer with pre-processing capability. We can get better total quality for the re-ents. We continue to deliver according to our brand, high quality and high security. We can also see an increased interest in the liveness part. A clear trend now, more and more of people interact is via the mobile phone, such as payment, et cetera. Therefore, higher security is a must. Multi-tapping and continuously authentication will come. Maybe also multi-modality, where you combine different type of biometrics. We strongly believe in fingerprints for the personal devices such as mobile and computer. Face for public environment. A stable mobile business in combination with acceleration in YOUNiQ give us a very interesting future. The next slide, please. Smart card.
The pandemic situation increased the need for contactless payment. It's actually more relevant than ever, we don't foresee any volume this year in the card area. Precise is not pending on this segment. We see it as a bonus if it will happen. The ease of use and reliability to work in all environment is a must. We also need to see a clear cost down to mass production and volume. As earlier communicated, our prediction together with the partners is that 2021 will be very limited volume in this area. There are more technology and optimization in the industry needed before launch. We can also see a strong increase of other digital payments such as via mobile phones or direct via face is gaining more and more attraction.
Precise don't need volumes in the smart card area for future success, and it will be a bonus if and when it happens. The important part is that you are the key for future payment, independent of carrier, phone, card or just your biometrics. By that, I hand over to our CFO, Ulrik.
Thank you, Stefan. Execution of our strategy continue and our Algo business is healthy, profitable, and our work towards expanding our role with taking responsibility for larger parts of the delivery shows success. YOUNiQ has received very good reception in the market, and we continue to add customers and do up-sales to the existing customer base. Please turn to page eight. Net sales in the quarter totaled SEK 22.5 million versus SEK 38.8 million last year. Net sales was split between royalty revenues of SEK 10.9 million versus SEK 20 million, license fees, including support and maintenance of SEK 10.7 million versus SEK 17.8 million, and other SEK 0.9 million versus SEK 1.0 million previous year. The decrease in royalty in the isolated quarter comes from a more even royalty distribution in 2020.
We have a negative impact from the appreciation of the SEK versus the US dollar of 12%, which is approximately SEK 1.5 million on the royalty revenue. This is in accordance with the sensitivity analysis that we gave in the annual report for 2019. Additionally, quarter four in 2019 was fairly high. Fall in license fees is a result of previously communicated strategy in which we focus on deeper collaboration with fewer customers. We have in this change as well successfully implemented an increase in the base license fee. Annual license fee as well as support and maintenance are sold as a license to the customer, which is paid in advance three-12 months, whereas royalty is a usage-based license, invoiced based upon usage and consequently paid in arrears.
Based on the way we sell the combination of annual license fee and support and maintenance, they should be analyzed together, which is the rationale behind that we now combine the two lines. Gross margin during the quarter totaled 84.7% versus 91.9% previous year. Change primarily related to the change in the product mix. Total amortization and write-downs on capitalized development expenses was SEK 2.6 million versus SEK 2.8 million previous year, and the amortization of acquired intangible assets totaled SEK 0.2 million versus SEK 0.2 million previous year.
Please turn to the next page. We continue executing the strategy and the work in deeper collaboration with key customers is allowing us full leverage on the scalability. We are developing our capabilities within Digital Identity and improving our ways of working. Overall operating expenses for the quarter decreased by SEK 1.4 million and totaled SEK 21.7 million versus SEK 23.1 million previous year.
We continue to improve the ways of working, driving both the efficiency and effectiveness, and we're leveraging on the digitalization tools. Digital Identity, we see that the potential is further confirmed and our strategy is investing in the capabilities. We see that in R&D as well as in developing our sales channel capabilities. Operating profit and loss for the quarter totaled minus SEK 2.6 million versus SEK 12.5 million previous year. Decrease in the operating profit loss is explained primarily by the lower net sales and the lower gross margin. EBITDA is positive for the sixth consecutive quarter and totals SEK 0.7 million versus SEK 16 million previous year. Please turn to next page. Financial position and liquidity. Well, cash and cash equivalents increased at the end of the period and totaled SEK 76.3 million versus SEK 73.7 million end of last year.
Our business model shows efficiency, allowing growth with minimal need for incremental working capital. The cash flow for the quarter from current operations totaled SEK 12.2 million versus SEK 14.3 million previous year, of which SEK 10.6 million is attributable to reduced capital tied up. The group invested SEK 0.6 million in property, plant, and equipment during the quarter. Back to you, Stefan.
Thank you, Ulrik. Back to next slide, the summary. The summary, a growth year-on-year and a strengthened financial position, which means we continue our journey according to our strategy. We have a very solid position within mobile, a very competitive market, and we have successfully developed a new generation of fingerprint technology available for the market this year. Due to the success in 2020, we have invested a lot in YOUNiQ and the digital identity for the future growth. This is key for our future success, and we will continue to invest in this area during 2021. We have, as you know, identified an addressable market potential of SEK 1 billion by 2025, just alone in Sweden for a unique access product. We continue to secure the future with strategic collaboration for YOUNiQ and the sales activities will be our main focus with 2021.
A stable mobile business in combination with acceleration in YOUNiQ gives us a very interesting future. Next slide, please. Thanks a lot for listening in, and now we open up for questions.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. We have a question from the line of Jesper Birch-Jensen from ABG. Please go ahead.
Good morning, Stefan and Ulrik. I have a couple questions here. First off, Stefan, you touched a little bit. Do you expect to see top line growth in 2021? I know you said it's hard to forecast here. Any input on that would be great. Also, what kind of contribution do you see from Egis Technology during 2021, seeing as it's been a strong driver in 2020 and Q4 2019?
Thanks for the question. When it comes to the top line there, it's very tricky to do any forecast for 2021. It's a very challenging market in the mobile. The mobile will be the major driver also for 2021 until we have accelerated the YOUNiQ and even out the sales for the two different business units there. As you said, Egis is the major contributor to the top line. Egis is our main customer in the mobile area. We can't do any forecast when it comes to the Egis sales and they have not done it themselves. We have a deep collaboration with them. We have supplied our latest Algo to them. We have a high expectation that we will follow them. To forecast their success is absolutely impossible.
I understand. Thank you. Also moving on to the Digital Identity Segment. You mentioned now the installations are up to around 50 versus 40 in Q3. Is this the sort of pace which you should expect during 2021, or do you see this ramping up here on a quarter-to-quarter basis?
For last year, we had a lot of installation with smaller accounts where we were focusing on getting out the product, be able to communicate about the product, the different customers who test the product. So far, we just have very good feedback when it comes to all our customers. Our ambition is, of course, to increase the sales this year. We increase it via our distribution channels, installation partners, and also via our own sales. The plan is to address a larger account this year. Of course, the process internally for larger account is a little bit more complex, but the ambition is to have much more installations end of this year than we had end of 2020.
Got you. Thank you. On the same topic there, would it be possible to get any type of revenue split for Digital Identity as of right now, compared to overall revenues?
Right now, we have not communicated any split there. We are looking into how to handle that in the future. We should remember that we started 2020 with zero, so the installation there was zero, and that will be a continuous growth. The ambition is, of course, that down the road here, the Precise Access, then YOUNiQ will be the majority of this company, but that will take some time before we reach that level. Right now, very important to continue the stabilization with the mobile, and then over time, acceleration of the YOUNiQ will help us to stabilize the company and grow the company. What we have decided now also is that we will, on a regular basis, update our homepage when it comes to all installations, so you can see that and follow the progress there with our customers.
Got you. Thank you. Last question on the smart card segment. I know you mentioned in the past that you stand ready to kind of deliver your solution here, but the other players, the value chain is not really ready for a larger rollout have you seen. Further, has it changed during Q4 as the second wave of COVID, has this kind of driven all the other players in the value chain here to move forward and prepare for a larger rollout?
A very good question. No, we have not seen that. As I said earlier, we are not dependent on any success in that area. It's just a bonus if it will happen. It's still a very tricky market. The ease of use, the stability in the quality, and the cost structure need to be there before we see any large volume. When we discuss with our partners and potential customers, they don't see any large volume during 2021.
I understand. Okay. Thank you. Those were all the questions for me.
Thank you.
Just as a final reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. We have one more question from the line of Jan Grapengiess from Redeye. Please go ahead.
Hi, Stefan. I have a couple of questions, if that is okay. I start with one question about Qualcomm. You often tell and write about your cooperation with Qualcomm, and I wonder if you can tell us anything about your cooperation with Qualcomm. What are you working with Qualcomm?
When it comes to Qualcomm, we have, as earlier communicated, a deep collaboration with Qualcomm, and that continues. When there will be any interesting new news in that partnership, we will communicate that. Nothing has changed. We have delivered our new Algo to Qualcomm, and they are satisfied with what they have seen. It's a huge improvement compared to our earlier Algo, which was good already at that time. We have, of course, a continuously interesting discussion with Qualcomm about the possibility to win royalty now and in the future together.
Does that mean that you are not involved in Qualcomm's latest ultrasonic fingerprint sensor?
I can't comment anything about that. It's that we have a collaboration with these guys, and we're working together to get the best experience for our customers together. When there will be more information about that, I will announce that to the market.
Okay. Yeah. I'm also wondering about your progress about extending your share of the value chain in terms of software for fingerprint sensors like pre-processing and liveness detection and stuff like that. Have you managed to sell that to any new customers?
Yeah. Actually, I received a similar question from another person via mail here. The total Algo is, we can say, divided into three areas: pre-processing and the Algo as such, and the liveness detection. It is impossible to sell only the pre-processing part, ISP part. You sell that together with Algo, but you can buy only the Algo, or you can buy only the liveness detection. Different customers are using different parts of Algo. Some are only using the Algo, some are only using the liveness detection, and some are actually using both the ISP Algo and the liveness. That we have the possibility to do right now. We have been able to ship all three parts to customers right now, and hopefully we will see some volumes in this area. That is something new.
We invested a lot of time and effort into that last year. As I said, now during this year, we have started to ship to our customer that have presented for the mobile phone manufacturers.
Okay, thanks. Now about YOUNiQ Access. I heard that sometimes you say that your focus is the Swedish market, sometimes you say it's the Nordic market. Can you explain what you mean? What is Precise Biometrics focus?
Yeah. A very good question. A clarification that might be needed. The focus is Sweden. Absolutely, right now. The market is huge. We should remember that we need to utilize the resources in the right way to be able to handle the whole value chain there. Sweden is the focus. Via our partners and platform partners, we have actually been able to address Norway also. We have started to look into Norway and have a dialogue in Norway. That we do via our partners as such. Therefore we are talking about the Nordics. The focus is Sweden. When it comes to U.S., that is via our sales office in U.S. We have done the first integration with the S2. That market is huge. We need to take that step by step because we can't handle everything.
We have started with S2. S2 is the integration done for the first customers there, the Clarkson University, and now we will try to roll out that implementation in U.S. It will not have any impact on the sales for 2021. That is more long-term. Focus now 2021 is Sweden.
Okay, thanks. Can you give any new estimates regarding the Earlier you said that it's like SEK 1 billion for 2025, but if you now extend your focus area to at least Norway and also U.S., can you give any new numbers for 2025?
No, we will not do that. We have not done it. It's of course even a larger opportunity than we have communicated earlier. Just Sweden is an enormous big opportunity for us. The good thing with this product is that it's a software, it's a revenue which is on a monthly fee. We have direct contact with the end customer, and it's cloud-based, which means it's rather easy to scale it when we have the capability and capacity to do that. To enter new market is rather easy. We will not do that now because we need to keep the focus.
Okay, thanks. If you exclude Precise Access, can you tell us anything about any progress with YOUNiQ? Any other areas for YOUNiQ?
Yeah. YOUNiQ ID is still ongoing. Less focus, of course, because the focus is access. There is still a huge need and interest for that type of solution. We said that during 2020, especially now when it comes to COVID situation and all that, it has been a little bit more tricky to address this type of product to the bank and financial institute, et cetera. We still have the cooperation with Covr, the focus is access, and it will continue to be that during 2021. It doesn't mean that we have stopped anything when it comes to the ID, right now it's about access.
Okay. Yeah, thanks. I also have some specific questions regarding some corporations. We can start with Covr Security. Do you have any news about that?
As I said earlier, we still have a dialogue and discussion with Covr. Covr focusing on their part of the total value chain. Of course, it's possible to utilize our biometric part of the ID into their solution. We have a regular discussion with the guys, but not any direct projects ongoing right now.
Okay, thanks. Next question is about Infinity Optics, the very interesting area, combining biometrics and hash.
Can you tell us anything about that?
Yeah. When it comes to the distribution of biometrics in a very controlled and secure way is absolutely of highest interest for us, especially in the future, to be able to get access without any on-prem registration and all that. This is absolutely something that we will continue to work with. Right now, there are different technologies that are interesting. hash is one, and as I said earlier, this is on a research state, and there is no commercializations around the corner for this right now. We should remember that this must be extremely good quality and high security before we announce and launch this. Because if you distribute your biometrics and can't control it will have a very negative impact. For Precise, the brand and security and quality is absolutely a must before we do enter any new areas.
It's a very interesting area for the future also.
Yeah. Okay, thanks. I've seen news from the fingerprint sensor company called Suprema about their products for the car industry. Can you give us any updates on your cooperation with Suprema?
We have some actions, but very limited in the embedded area because of our focus in the mobile phone and the computers when it comes to Algos. We still continue to monitor it and still have cooperation in this area. The volume as such is very small, and the cost pressure is very high. It's tricky to get the ROI in these areas. We have several companies we working together with in the embedded area, but no major sales for 2020 and plan for 2021.
Okay. Last question is about your new webpage. I'm wondering if you're planning to bring up all the companies you have cooperation with in your partner list. Because I'm missing a lot of companies that you have had collaborations with. Either the collaboration has ended or why don't you update the full list?
What we have done is that we have a list of the major relevant partners and also with strategic partners on that list, and it will be continuously updated, of course. We have a lot of contracts for tryout licenses and all that with different companies. When there will be any major changes in terms of volume or opportunity or from a strategic point of view, we will update that. We will not have a list of all the companies that we just have a tryout license with.
Okay. A question or suggestion. Is it possible to get your partner list based on business areas like mobile partners, smart card partners, and YOUNiQ partners?
That's of course possible. I'm not sure if we're going to do it. It's already now pretty clear in which area we operate with different partners. We will bring that back home and see if we can clarify even further on our homepage.
Okay. Thank you very much.
Thank you.
As there are no further questions, I'll hand it back to the speakers for closing remarks.
Thank you. I don't think there are any further questions. Thanks a lot for listening in and have a great day, and I hope to talk to you soon again. Thank you. Bye bye.
This concludes