Interim Report January - June 2013
Strategically important deals won
- Market environment slows net sales and earnings
- Carrefour resumes ESL deployment
- Strategic deal with an electronics chain – order value SEK 60 M
- New contracts in Southern Europe – estimated order value SEK 50 M
- Soriana expands installations with an additional 120 stores
- Gross margin affected by customer and product mix
- New outlook for 2013: Net sales in line with and an operating profit lower than 2012
Order entry: SEK 154 M (198)
Net sales: SEK 127.9 M (157.7)
Gross margin: 31.4 percent (33.5)
Operating profit: SEK 9.1 M (28.7)
Operating margin: 7.1 percent (18.2)
Net profit: SEK 7.7 M (27.1)
Cash flow: SEK -25.4 M (22.7)
Basic earnings per share: SEK 0.07 (0.25)
January - June
Order entry: SEK 296 M (324)
Net sales: SEK 221.1 M (283.2)
Gross margin: 28.9 percent (33.1)
Operating profit: SEK 5.3 M (41.3)
Operating margin: 2.4 percent (14.6)
Net profit: SEK 3.8 M (38.0)
Cash flow: SEK 21.4 M (43.2)
Basic earnings per share: SEK 0.03 (0.35)
Comments from the CEO, Fredrik Berglund
The weak state of the economy in Europe in combination with a slower pace of customer projects is having a negative impact on sales and earnings. Meanwhile, order intake has been slightly stronger in the second quarter than in the first. During the quarter we secured a number of significant business deals. The delivery schedules we have indicate an increase in sales and a boost to profits for the second half of the year compared with the first.
The first half of the year clearly shows how Pricer’s business can have a significant effect on order intake and sales, which can be explained by the fact that a major portion of sales consists of installation projects that take longer to complete. An example of this is that one of our most important customers, Carrefour of France, opted last year to freeze their installations but are now resuming them. At the same time, Pricer also has a considerable customer base which means the order intake and sales trends usually even out over time. We will see this in the second half of the year.
During the quarter we secured significant deals in Southern Europe. Two supermarket chains have selected Pricer solutions at an estimated combined value of SEK 50 million. We are also pleased that Mexico’s second largest supermarket chain, Soriana, decided, following a re-evaluation, to continue to deploy our solution in an additional 120 outlets. The order value is estimated at SEK 30 million. We are also continuing to screen trade in consumer discretionary items, which we believe to have equal benefits from our solutions as consumer staples. We had a breakthrough here during the second quarter as one of the largest electronics retailers chose the Pricer solution for installation in the second half of the year. As part of an initial stage, we secured an order worth SEK 60 million.
In the first half of the year, the number of pilot installations remained at a high level, although we have noticed that the weak state of the economy, particularly in Europe, has prolonged the time for decision-making and deployment projects.
Sales of graphic labels is growing significantly, which combined with the customer mix and general market conditions is affecting margins negatively. At the same time, graphic displays are providing greater market potential in both existing and new market segments.
Despite the expectation of an improvement in the second half of the year, we believe that we will achieve a sales figure in 2013 which is on a par with and an operating profit that is lower than in 2012.
In its capacity as issuer, Pricer AB is releasing the information in this interim report for January – June 2013 in accordance with the Swedish Securities Exchange Act (2007:528). The information was distributed to the media for publication at 8.50 CEST on Friday 23 August 2013.
For further information, please contact:
Fredrik Berglund, CEO or Harald Bauer, CFO, Pricer AB +46 8 505 582 00