Interim Report Q1 2024 (January - March)
January – March 2024
- Revenue MSEK 125 (113)
- Order intake and Procurement Awards MSEK 318 (90)
- Operating profit (EBITDA) MSEK 3.7 (1.5)
- Operating profit (EBIT) MSEK -6.9 (-8.6)
- Total Comprehensive income MSEK 25.0 (0.5)
- Earnings per share, before and after dilution (SEK) -0.45 (-1.21)
- Cash flow from operating activities MSEK 55.0 (-7.8)
Comments from the CEO
Delivering on our ambition
We realised a strong order intake this quarter, one of the highest Q1 order intakes in our history of SEK 318 (90) million including procurement awards. Our sales team in the USA is making great commercial progress by signing nine new contracts this quarter. Furthermore, the execution of the two large contracts in Sweden and the Netherlands, with a combined contract value of SEK 1.25 billion, is on track to drive revenue for many years to come, starting in Q4 this year. Our deliveries to Saudi are completed and a memorandum of understanding, strengthening our customer relationship, is signed. Altogether, we are on track to meet our 2025 financial ambition.
Order Intake +253%
Order intake and procurement awards during the first quarter came in at MSEK 318 compared to MSEK 90 in Q1 2023, an increase of 253%. Of the total order intake SEK 275 million or 86% of the total order intake is TRaaS Managed Services order intake. In total, there are nine new contracts signed during the first quarter in our strategic US market. Of these contracts, four are new cities for a total contract value of SEK 154 million and five are renewal contracts with existing cities, for a total contract value of SEK 121 million. Overall, we see a strong order intake this quarter especially when looking at our TRaaS order intake in the USA. It demonstrates that our increased sales efforts in this strategic market are paying off.
Large backlog from home markets
In 2022, we received two large orders in our home markets, Sweden and The Netherlands. The combined value of the two contracts is SEK 1,250 million. The Swedish order of SEK 850 million is in its final development phase. The rollout of this project will commence in the third quarter and will continue for the next five years. The Dutch order, worth SEK 400 million, has started its rollout and will continue into the first half of 2025, depending on the acceptance schedule from our customer. Of the combined contract value of SEK 1.2 billion, approximately 5% has been delivered in total. The remaining revenue for these two large contracts still in the backlog is therefore approximately SEK 1.2 billion or 95%. Overall, our strong order intake this quarter and large backlog combined provide for solid revenue generation in the coming years.
Revenue is up 11%
Total Revenue for the quarter arrived at SEK 125 million. Compared to SEK 113 million in Q1 2023, this is an increase of 11%. Looking at Revenue by Nature, our System Sales for the quarter arrived at SEK 41 million. Compared to SEK 27 million in Q1 2023, this is an increase of 51%. Our TRaaS revenue for the quarter of SEK 84 million, was slightly lower than Q1 2022 at SEK 86 million. This recurring business equates to 67% of total sales in the quarter. The TRaaS revenue is primarily driven by our TRaaS Managed services in the US, which was up by 16% at SEK 50 million compared to SEK 43 million in Q1 2023. Our Tasmania Police project has contributed SEK 10 million, or 12% to our TRaaS sales.
Seasonality in US Managed Services
We normally see fewer citations in Managed Services at the beginning of the year. This is due to seasonal effects brought on by extreme weather, particularly in Ohio, Iowa, and Rhode Island, our top revenue-generating states. As a result of the extreme weather, people drive less and or more slowly. In addition, during the holiday season, schools are closed for several weeks, and automated traffic enforcement is deactivated by law. In Q2, we usually observe a return to increased citations and revenue levels.
Gross Margin suppressed due to start-up of System Sales deliveries
Our Gross Margin this quarter was 37.5% compared to 40% in Q1 2023. This is mainly due to lower margins on deliveries of system sales in the initial phase of a new contract. We typically start the rollout of a new System Sales program with the delivery and installation of systems, followed by acceptance by our customer. Only after customer acceptance, the systems go into operation and the Service & Maintenance part of the contract commences. This is a gradual process over a period of 12 to 18 months. The program will come to full fruition when all new systems have been installed and are in operation. The overall gross margin of the contract will gradually recoup during this phase.
Memorandum of Understanding with Saudi Customer
After a successful delivery of our unique Vehicle-in-Motion solution to our Saudi customer, we are extending our relationship to potentially introduce new enforcement solutions and a service level agreement to maintain the installed base. During the Intertraffic Industry Show in Amsterdam we signed a memorandum of understanding with Tahakom, our Saudi customer. With this MOU, Sensys Gatso will collaborate with Tahakom in multiple initiatives across Saudi Green initiative, Local Content and road to Saudi Vision 2030; reinforcing the strong partnership between the two entities that dates back to 2016. Sensys Gatso and Tahakom will provide the Kingdom with next-generation traffic safety solutions which can handle a variety of Smart Mobility features in all environments and weather conditions.
Successful Intertraffic show
Mid April the largest global show in our industry, The Intertraffic, was conducted in the Amsterdam RAI.
The day before the opening of the show, we organised our Partner Day in our Haarlem offices. Here we presented to more than 50 invited partners and customers our TRaaS software based product vision and 13 user stories. At our booth on the show, we presented a live demo of our new FLUX roadside system. The show was a great success for Sensys Gatso, renewing many existing customer relationships and developing promising new ones in various regions.
Outlook
Our order book is strong with a revenue backlog of SEK 1180 million from two large contracts in our home markets Sweden and Netherlands. Our profitable TRaaS business continues to grow and our strengthened team in the USA proves to be able to push our topline in this strategic market. On top, we see our new ground breaking roadside platform FLUX coming to fruition in the market.
We therefore retain our long-term plan and ambition to, by the end of 2025, grow our net sales to more than SEK 1 billion, of which TRaaS revenues is more than SEK 600 million. We also retain our ambition to increase our EBITDA margin to more than 15% by the end of 2025.
Ivo Mönnink
CEO, Sensys Gatso Group
Invitation to a presentation
On 26 April at 10 am CET Sensys Gatso Group invites press, analysts, shareholders, and stakeholders to participate in an audiocast. The company’s CEO Ivo Mönnink and CFO Simon Mulder will present the financial results in English. The presentation in connection with this report will be published on the website.
The presentation/audiocast can be joined online or via telephone and will be available on the company’s webpage: https://www.sensysgatso.com
If you wish to participate via webcast please use the link below.
https://ir.financialhearings.com/sensys-gatso-group-q1-report-2024
If you wish to participate via teleconference please register on the link below. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference. https://conference.financialhearings.com/teleconference/?id=5007666
This information is information that Sensys Gatso Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08.30 on 26 April, 2024.
For further information please contact:
Ivo Mönnink, CEO
e-mail: i.monnink@sensysgatso.com
e-mail IR: investors@sensysgatso.com
Telephone: +46 36 34 29 80
Sensys Gatso Group AB is a global leader in traffic management solutions for nations, cities and fleet owners. Sensys Gatso Group has subsidiaries in Australia, Costa Rica, Germany, the Netherlands, Saudi Arabia, Sweden and the USA, and a branch office in the United Arab Emirates and has 302 employees. The Sensys Gatso Group’s shares are listed on Nasdaq Stockholm.
For further information, visit www.sensysgatso.com
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