Zwipe H1 2022 results - healthy commercial momentum

OSLO,Norway,Aug. 23,2022 --Zwipe AS ("Zwipe" or "the company") today announces its results for the first half 2022.

Operational highlights

Visa certifies Zwipe Pay Biometric Payment Card ("BPC") Platform and issues Letter of Approval ("LoA") to Zwipe.

Beautiful Card Corporation ("BCC"),TAG Systems and Inkript obtain Visa LoAs for their own card built on the Zwipe Pay platform.

Fraport AG,providing operational services to 31 airports globally,selected Zwipe Access as one of two solutions to test in a pilot of next generation access control solutions at Frankfurt Airport.

Zwipe Access platform was successfully integrated with LEGIC and HID solutions to provide seamless end-to-end biometric card-based access control security to enterprises and facilities.

Seven new issuers across Germany,India,the Middle East and Africa signed up with Zwipe to launch pilots.

Placard,the largest payment smart card supplier in Australia and New Zealand,selected the Zwipe Pay platform for delivering biometric payment cards to banks in the region.

Significant organizational development with Robert Puskaric joining as the new CEO in June,Danielle Glenn as the new CFO in May and Patrice Meilland as the new Chief Strategy and Product Officer in April.

Financial highlights

Review

In H1 2022,we signed seven new issuers for Zwipe Pay,from Germany to India and across the Middle East. All of them are planning pilots with our card manufacturing partners,although we have learned that pilot preparation is taking longer than previously expected. We also expanded our global delivery capabilities and market reach by signing one major SCM and onboarding two leading personalization solution providers as go-to-market ("GTM") partners.

Zwipe is pursuing an "execution first" approach focusing on launching announced pilots. In total,seven issuer pilots are progressing with good pace and according to issuer plans. Additional pilot launches are expected in the coming quarters,with launch dates entirely dependent on issuer decisions. We are also focused on "execution first" with our SCM customers - getting all certified and ready for mass volume production. While these remain our top priorities,Zwipe continues expanding our customer and issuer pipeline - critical to our medium-term success.

In March,Zwipe completed the certification process with Visa and obtained the Visa LoA. This certification marks a major milestone towards commercialization of Zwipe Pay and was followed by Visa LoAs obtained by lead customers BCC,TAG Systems and Inkript. This list is expected to grow significantly going forward. Zwipe has successfully completed additional testing with third party laboratories that should ease additional payment scheme certifications.

It is undeniable that market takeoff of biometric payment cards has been slower than envisioned. BPC volumes deployed are expected to remain fairly low into 2023,before growing exponentially thereafter. Zwipe is not immune to the delayed market takeoff,but our customers and partners remain committed to launching pilots and commercial propositions,even if somewhat later than originally planned. Furthermore,consumer demand for BPCs remains strong with 82% of individuals surveyed by Zwipe saying that they want their next card to be biometric and 60% saying they would consider switching to banks who offer biometric cards. Importantly,most third-party research continues to point to BPCs accounting for 15-20% of total EMV units shipped by 2030 (estimated at 3-4 billion units),highlighting just how large the market potential remains.

For Zwipe Access,we now have a healthy and growing list of opportunities within the data center and airport verticals as well as other security sensitive customer segments. The growing number of requests for Zwipe Access solutions is driven by increasing demand for stronger data privacy,higher security and better user experience. Indeed,Zwipe was recognized by Fraport,operating 31 international airports globally,as a potential provider for next generation security solutions at their airports. Fraport's initial trials have now been completed and they are evaluating possible next steps.

There were substantial changes in the executive management team at Zwipe during the first half,with three of the six-member C-suite newly joining the company - strengthening leadership,bringing industry expertise and positioning Zwipe well for the future.

Financial review

Zwipe reported total revenues of 0.8 mNOK during H1 2022 versus 1.4 mNOK in H1 2021. On an adjusted basis,total operating expenses increased by 13.3 mNOK to 48.4 mNOK in H1 2022 versus H1 2021. The majority of this increase was due to personnel expenses,which increased by 9.1 mNOK to 25.9 mNOK in H1 2022 versus H1 2021. Of the 9.1 mNOK,5.5 mNOK were one-off costs related to former executives leaving the company. The remaining increase in personnel expense is largely due to an increase in headcount by 13 people to meet the strong demand for the company's solutions and to prepare for piloting and deployment of our card payment solutions and services.

Zwipe's cash position remains strong,with cash and cash equivalents at 109.7 mNOK on 30 June 2022.

Total equity as of 30 June 2022 was 108.8 mNOK resulting in an equity ratio of 89%,roughly stable versus the position at the end of the first half of 2021.

The way forward

Zwipe is progressing well in many important areas even if the market for biometric payment cards is developing at a slower pace than expected. Operating expenses and headcount are not expected to increase substantially in H2 vs H1 2022 nor at the pace expected at the start of the year. Zwipe will,however,continue to invest intelligently - particularly in its people and technology.

For Zwipe Pay,second half priorities will center on pilot deployment with issuers,assisting SCMs in becoming mass production and delivery ready,and continuing to expand our customer and issuer pipeline. Further developing the dedicated customer project management function and standardized blueprint to improve pilot execution will be a key focus during H2 2022.

Going forward,Zwipe Access is expected to contribute a larger part of revenue than previously assumed. The pipeline for Zwipe Access is healthy and growing with prospects within the data center and airport verticals as well as other security sensitive customer segments.

Results presentation

CEO Robert Puskaric and CFO Danielle Glenn will present the H1 2022 results by webcast tomorrow,Wednesday August 24th,at 09:00 CEST.

Webcast details

Format: Webcast,Conference Call and Q&A

Language: English

Link: https://q4-emea.wavecast.io/zwipe-as/h1-2022-operational-update

Dial-in numbers:

Norway - +47.57.98.94.30

Sweden - +46.8.505.246.90

Sweden - Toll-Free- +46.20.0123749

United Kingdom - +44.20.3481.4247

United Kingdom - Toll-Free- +44.800.260.6466

Participants will be required to register to view the webcast and participate in the Q&A

This information is subject to the disclosure requirements in Regulation EU 596/2014 article 19 number 3 and the Norwegian Securities Trading Act section 5-12,and is information that Zwipe AS is obligated to make public pursuant to the continuing obligations of companies admitted to trading on Euronext Growth Oslo (Euronext Growth Oslo Rule Book - Part II) and on Nasdaq First North Growth Market. Certified Adviser on Nasdaq First North is FNCA Sweden AB,info@fnca.se,+46 (0) 8528 00 399. The information was submitted for publication,through the agency of the contact person set out below,at 12:15 on 27 June 2022.

About Zwipe

Zwipe believes the inherent uniqueness of every person is the key to a safer future. We work with great passion across networks of international organizations,industries and cultures to make convenience safe and secure. We are pioneering next-generation biometric card and wearables technology for payment and physical & logical access control and identification solutions. We promise our customers and partners deep insight and frictionless solutions,ensuring a seamless user experience with our innovative biometric products and services. Zwipe is headquartered in Oslo,with a global presence. To learn more,visit http://www.zwipe.com.

For more information,please contact:

Danielle Glenn,CFO and Head of IR

+47 909 98 201

danielle@zwipe.com

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Zwipe H1 2022 Report - FINAL

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20220823 Zwipe AS H1 2022 Results