Interim report January to March 2020
Press release Stockholm, Sweden April 29, 2020
Robust development despite challenging business climate
First quarter 2020
- Net sales increased during the first quarter increased by 79,9% to 78,9 MSEK (43,8)
- Adjusted EBITDA increased during the first quarter by 9,5% to 6,9 MSEK (6,3), corresponding to an adjusted EBITDA margin by 8,8% (14,3)
- Operating profit/loss was -3,8 MSEK (4,2) wich correspond to operating margin of -4,9% (9,6)
- Profit for the period was -8,7 MSEK (3,7)
- Result per share was -0,02 (0,02)
- Cash flow from operating activities for the period was 2,5 MSEK (5,3)
- The Covid-19 pandemic has had a negative impact on turnover from mid-March and measures have been taken for all parts of the business to mitigate the effects of the corona virus.
- As of January 1, 2020, TagMaster has changed accounting principles from BFNAR 2012: 1 (K3) to IFRS. This report is the first to be prepared in accordance with IFRS. The effects of the transition are shown in Note 6.
| Amounts in TSEK | 2020 Jan-March |
2019 Jan-March |
R12M April-March |
2019 Full year |
| Net sales | 78 861 | 43 848 | 297 968 | 262 955 |
| Net sales growth, % | 79,9 | -23,0 | 63,3 | 34,5 |
| Gross margin, % | 65,4 | 66,7 | 66,2 | 66,6 |
| Adjusted EBITDA | 6 905 | 6 264 | 36 701 | 36 060 |
| Adjusted EBITDA margin, % | 8,8 | 14,3 | 12,3 | 13,7 |
| EBITDA margin, % | 2,8 | 14,3 | 6,2 | 8,5 |
| Equity ratio, % | 56,3 | 60,9 | 0,0 | 0,0 |
| Cash flow from operating activities, MSEK | 2,5 | 5,3 | 1,1 | 3,9 |
| Net debt/EBITDA, R12M | 0,0 | 0,0 | 1,2 | 1,1 |
| Number of employees at end of period | 115 | 80 | 116 | 115 |
For description and reconciliation of key figures, see pages 36 - 37
Comments by the CEO
We look back at a quarter mostly dominated by handling the effects of Covid-19. Our focus has been on building safety and health for our employees, keep up deliveries to our customers and ensure long term financial stability. I am convinced that we all together, employees and partners will be well positioned when the market is turning again.
During the first months of the quarter business was not in any essential degree influenced by Covid-19 with exception from some delivery problems from China. Since mid-March we have seen trends of lower activity following close downs and restrictions in all our main markets.
We have since the mid of the quarter taken several precautions to adjust capacity of the business to the new situation, among others by evaluating and implementing the national support measures offered in different countries as well as other cost adjustments. The majority of our employees are since early April on short term layoff and work around 60% of normal work time. We have also initiated efficiency measures and cost reductions to prepare for a tougher situation ahead of us, but we also continue to invest in our technical leadership to further increase our competitiveness. We continuously monitor the situation and are prepared for further actions if so become necessary.
To increase our transparency and give a clearer view, TagMaster Group will from this quarter be presented in two business segments, Europe and USA.
Our sales during the quarter was 78,9 MSEK, an increase of 80% compared to the same quarter 2019. The strong growth is mainly explained by the acquisition of the American Sensys Networks (segment USA) finalized in June 2019. The organic growth in the European part (Segment Europe) was around 10% which is the same strong growth as in the fourth quarter 2019. The quarter shows a continued strong gross margin of 65,4% and with an adjusted EBITDA of 6,9 MSEK corresponding to an adjusted EBITDA margin of 8,8%. The cash flow from the business has continued to be positive and landed on 2,5 MSEK and solidity is good with a level of 56,3%.
Our Traffic solutions business amounted to 80% of our business, while Rail solutions amounted to 20%.
TagMaster is today well positioned in a market with long term good prerequisites for growth and good profits. To daily work on improving the traffic environment in cities and urban areas around the world provides us with lots of energy to continue hard and targeted work also in hard times like these.
Jonas Svensson
CEO
Auditor’s review
This report has not been reviewed by the company auditor.
Reporting
During the business year 2020 to 2021 TagMaster will report at the following dates:
2nd quarter report July 16
3rd quarter report October 22
Year-end report January 28, 2021
This report and previous reports and press releases are found at the company home page www.tagmaster.com
For further information 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 April 29, 2020.
About TagMaster
TagMaster is an application driven technology company that designs and markets advanced sensor systems and solutions based on radio, radar, vision and wireless magnetic technology for demanding environments. Business areas include Traffic Solutions and Rail Solutions sold under the brands TagMaster and Sensys Networks with innovative mobility solutions in order to increase efficiency, security, convenience and to decrease environmental impact within Smart Cities. TagMaster has subsidies in UK, France and US and exports mainly to Europe, The Middle East, Asia and North America via a global network of partners and systems integrators. TagMaster was founded in 1994 and has its headquarters in Stockholm. TagMaster is a public company and its shares are traded on Nasdaq First North Growth Market in Stockholm, Sweden. TagMasters certified advisor is Erik Penser Bank phone +4684638300, E-mail: certifiedadviser@penser.se www.tagmaster.com