Year-end Report 2012

Weak European economy has affected development during the year

• In Norway deliveries worth SEK 100 M were made to the retailer REMA 1000 for all its 500 stores
• Pricer won the largest project ever in the market – the estimated value exceeds SEK 300 M over three to five years
• Belgian Delhaize, one of the world’s leading retailers, has selected Pricer’s graphic e-paper labels for both its integrated and franchise stores
• The Board proposes a dividend of 0.25 (0.25) SEK
• Outlook for 2013: Higher net sales, but slightly lower operating profit than 2012 caused by lower gross margin due to adjusted product mix

Fourth quarter                
Order entry: SEK 76 M (148)
Net sales: SEK 144.2 M (191.9)
Gross margin: 27.7 percent (32.2)
Operating profit: SEK 11.5 M (26.5)
Operating margin: 8.0 percent (13.8)
Net profit 1): SEK -16.0 M (102.5)
Cash flow: SEK 9.3 M (29.7)
Basic earnings per share 1): SEK -0.15 (0.95)

Full year
Order entry: SEK 512 M (548)
Net sales: SEK 549.2 M (613)
Gross margin: 31.2 percent (32.4)
Operating profit: SEK 69.7 M (76.7)
Operating margin: 12.7 percent (12.5)
Net profit: SEK 35.6 M (150.3)
Cash flow: SEK 23.0 M (5.9)
Basic earnings per share: SEK 0.33 (1.40)

1) The reduced corporate tax rate in Sweden from 2013 reduces the value of capitalised tax losses by SEK 19 M

Comments from the CEO Fredrik Berglund
We maintain our position as the leading supplier of electronic shelf labels. During 2012 we have achieved our second best result in the history of the company, despite the subdued development in the euro-area. In France, our largest market, Carrefour elected not to do any installations during the year affecting the development. The economic slowdown has led to both order entry and net sales declining during the year. We have also experienced some pressure on gross margin.

We have won several important contracts and Pricer has not lost any larger Request-For-Proposals during the year. The number of pilots remains at a high level, a clear indication of future deals, and the projects span over several continents and business segments. However, the difficult economic climate makes the investments take longer. There is more time between pilot projects and orders and projects are slower than planned.

In September 2012 we installed the first store in the world with labels containing NFC, (Near Field Communication). We have focused on developing new solutions, based on customer requests, a number of which will be launched during 2013. We have continued to strengthen our sales and marketing organization.

Our graphic labels represent an increasing share of net sales. We are confident that the functionality and the possibilities with the graphic displays will broaden the market for electronic shelf labels. Short term net sales will be affected positively but margins negatively, something we have noted the effect of already in the fourth quarter.

We stand strong for the future with our strengthened sales organization and product mix. At the same time the economic decline makes the complete picture unclear. Our outlook is that net sales will grow in 2013. However, gross margin will come under pressure as the share of graphic labels will increase leading to the operating result for 2013 expected to be lower.