Quarterly report for TagMaster AB January-September 2016
Press release, Stockholm, Sweden 27 October, 2016
Strong quarter for TagMaster
Third quarter
- Net sales increased during the third quarter by 56,8% to 28,6 MSEK (18,2)
- Result before depreciation (EBITDA) was 1,7 MSEK (-3,6), corresponding to a margin of 6,0% (-19,6)
- Net result after tax was -0,1 MSEK (-4,5)
- Result per share was -0,00 (-0,03)
- The mother company made its best quarter ever with result before depreciation (EBITDA) of 3,8 MSEK (1,5)
- Cash flow from the business for the period was 1,0 MSEK (0,1)
- The Balogh Group was acquired from August 30, 2016. The acquisition means that TagMaster is taking over a business of just below 35 MSEK yearly.
January - September
- Net sales increased during the period by 31,5% to 73,8 Mkr (56,1)
- Result before depreciation (EBITDA) was -1,2 Mkr (1,5), corresponding to a margin of -1,6% (2,7)
- Net result after tax was -4,4 Mkr (-0,6)
- Result per share was -0,03 (0,00)
- Cash flow from the business for the period was -1,2 Mkr (7,3)
Comments by the CEO
Our sales during the third quarter has been good for the TagMaster part, but still weak in the CitySync part. We do, however, see that the restructuring program, which we informed about in the second quarter has good effect and that the interest for CitySync’s new products is big. We have during the quarter also finalized our acquisition of Balogh, which is now included with one month and wit a small positive contribution in the consolidated result.
As we have described earlier we focus in CitySync on building a scalable business model supported by several product launches this year and during 2017. During Q3 we have restructured the business including personnel reductions and changes in the product management, in development and in sales and administration, Several functions have been centralized to TagMaster and the cost reductions are estimated to 3,5 MSEK on a yearly basis.
Our rail business has been good during the quarter and product deliveries have started for the big rail project we announced at the end of last year. Deliveries will continue during the rest of 2016 and during part of 2017. We also work on a new rail tag with 20 year lifetime to be used in the same project, but also in future projects. We already see indications of that our acquisition of Balogh will increase our total offering to the rail market and that our complimentary product assortments are received positively by our common customers. We now start the work to integrate our sales and development resources within Rail and we expect that our joint offering should contribute positively already during 2017.
Our Traffic business has stayed unchanged during the quarter, while margins are developing positively for important product groups. The US market has developed according to plan while the markets in the ME region and in the Nordics have been disappointing. We will continue to increase our market activities among others through participation in several fairs during 2017. During the fourth quarter we will start the launch of our UHF products in the French market through the market channels of Balogh and in the beginning of 2017 we plan to let our different sales forces sell all our product assortment, i.e. both RFID and ANPR products. We also continue the work to develop more products during the first half of 2017.
Our quarterly result of 1,7 MSEK (-3,6) is a clear improvement compared to the last quarter, but we still have work to do. We will during the coming quarter initiate cost reductions in Balogh, including personnel reductions as well as other cost reductions like rental costs.
Jonas Svensson
CEO
For further information, please contact:
Jonas Svensson, CEO, +46 8-6321950, jonas.svensson@tagmaster.com
This information is information that TagMaster AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 8.30 a.m. CET on October 27, 2016.
About TagMaster
TagMaster is an application driven technology company that designs and markets advanced identification systems and solutions based on radio & vision technology (RFID & ANPR) for demanding environments. Business areas include Traffic Solutions and Rail Solutions sold under the brands TagMaster, CitySync and Balogh with innovative mobility solutions in order to increase efficiency, security, convenience and to decrease environmental impact within Smart Cities. TagMaster has dedicated agencies in the US and in China and exports mainly to Europe, The Middle East, Asia and North America via a global network of partners, systems integrators and distributors. TagMaster was founded in 1994 and has its headquarters in Stockholm. TagMaster is a public company and its shares are traded on First North stock exchange in Stockholm, Sweden. TagMasters certified advisor is Remium AB.