FINANCIAL REPORT FOR TAGMASTER AB (publ.) January-September 2014

Continued profitable growth

Third quarter

• Net sales increased by 17% during the third quarter and was 13,0 MSEK (11,2)

• Result before depreciation (EBITDA) was 1,4 MSEK (0,4), corresponding to a margin of 10,7% (3,8)

• Net result was 1,2 MSEK (0,0)

• Result per share was 0,01 (0,00)

January-September

• Net sales increased during the period by 19% to 43,8 MSEK (36,7)

• Result before depreciation (EBITDA) increased by 101% to 5,1 MSEK (2,5), which corresponds to a margin of 11,7% (6,9)

• Net result was 4,3 MSEK (1,3)

• Result per share was 0,04 (0,01)

• Cash flow from the business for the period January to September was 2,6 MSEK (-1,8)

Comments by the CEO

Our sales during the third quarter have seen a good growth on the total level and with one more positive quarterly result we feel the stability of our business increasing. We are still not satisfied with all parts of our growth, which we would like to improve further ahead. Our Rail business has been somewhat slower during the period but with an even flow of serial deliveries to several customers. New projects are discussed and our focus is to work more and tighter with our already established big partners, with whom we want to expand our business and become a more important business partner for them. We make the judgment that we will see some more new projects coming during the year. We have after analyzing the business made the judgment that our product offering is most successful in certain specific applications and we will therefore “drill deeper” in these applications and spend less time on the requests regarding our less efficient offerings. Being a small company it is very important that we focus on the right things and especially within Rail Solutions where the projects are complex, project specific and always demanding major resources.

Our Traffic business has developed good in the US market, while it has been somewhat weaker in the Chinese market. In the EMEA region the sales has been according to plan, but we intend to increase our efforts there supported by our newly launched UHF products and which we judge will have a positive impact on sales and result during the latter part of the year. In the Nordic market we increase our presence and we already see that our new UHF reader finds a great interest among established as well as new partners.

The innovation work will continue and we plan to launch more products in our new UHF family early next year. In focus for our product innovation we have the customer’s need for security and safety, reliability, functionality, design and life cycle cost. Our judgment is that further launches is that further launches is a must and that we thereby will increase our addressable market and this is a fundamental requisite for increasing our growth. To support our long time growth plans we continue to recruit new employees in especially technical development.

Our result of 1,4 MSEK (0,4), is an improvement compared to last year and considering that the third quarter with the summer season is normally our weakest quarter, I think we should be pleased by the quarterly result even if we are not satisfied and would like to see more ahead. Our cash flow has developed well during the quarter which can also be seen in our improved balance sheet.

Our new UHF products will contribute with the major part of our growth the next few years to come, but we also see selective acquisitions as a way to complement our product portfolio with the purpose to increase the value and the attraction of our customer offering.

Jonas Svensson

CEO

This report like all previous economic reports can be found at the company home page www.tagmaster.com

For further information, please contact:

Jonas Svensson, CEO, +46 8-6321950, jonas.svensson@tagmaster.com

About TagMaster

TagMaster is an application driven technology company that designs and markets advanced radio frequency identification (RFID) products and systems for demanding environments. Business areas include Traffic Solutions and Rail Solutions providing innovative applications in order to increase efficiency, security, convenience and to decrease environmental impact. TagMaster has dedicated agencies in the US and in China and exports mainly to Europe, 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. For more information about TagMaster, please visit www.tagmaster.com