HALF-YEAR REPORT FOR TAGMASTER AB January-June 2013

Sales increase continues

The Second quarter

•  Net sales increased during the second quarter by 9% to 11,3 MSEK (10,4)
•  Result before depreciation (EBITDA) was 0,2 MSEK (0,4)
•  Net result was -0,2 (0,1)
•  Result per share was 0,00 SEK (0,00)

First half of the year

•  Net sales increased during the period by 30% to 25,7 MSEK (19,8), of which project work was 24%
•  Result before depreciation (EBITDA) increased to 2,1 MSEK (0,6)
•  Net result was 1,3 MSEK (-0,1)
•  Result per share was 0,01 (0,00)
•  Cash flow from the business was -2,6 MSEK (-2,3)

Comments by the CEO

Our positive sales development has continued but at slower pace. Some of our traditionally very important markets, like southern Europe, have had a very weak development connected to a generally low business activity in these countries. Our investment in the important North American market continues and the development is positive.

We have identified certain weaknesses in our present product offering and to strengthen our presence in mainly the Access/Parking (AVI) segment we will launch a new family of products in the UHF area. TagMaster has historically only worked in the premium segment, but as the market has developed and competition has increased, we see a need to offer the market products also in the “medium & entry level” segments where the growth is the strongest.

We judge that our addressable market could increase significantly by widening our product offering and at the same time address new applications increasing our competitiveness. Our new product family will of course have all the characteristics which the market connects with TagMaster products like robustness, easy installation and long lifetime.

The specification for our new product family has been finalized during the second quarter and we plan to launch towards the end of the year with gradually increased sales during the first half of 2014.

Our Transportation (Rail) business has had a slower order intake compared to last year. The project with Alstom is running well according to plan and we hope this cooperation should lead to new projects and future extensions. We have also started discussions with a new potential partner in the Rail business which could provide us with further market share in this segment. The work on new tags for ultra-long life time ( >20 years) continues and final discussions with our partners is expected to be finalized during summer.

As we have said before we are in the middle of a turnaround process, which will have influence on our quarterly figures during a number of quarters ahead. It is essential to be able to launch our new product family as soon as possible to strengthen our sales and thereby get a stable base to build a profitable growth company.

Jonas Svensson

CEO

This report and previous financial reports and press releases are to be found on 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) systems and information products for demanding environments. Application areas include vehicle access control, rail bound transportation and logistics, 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.

www.tagmaster.com