Interim report January to September 2017
Press release, Stockholm, Sweden, 27 October 2017
Continued profitable growth
Third quarter
- Net sales increased during the third quarter by 57,2% to 45,0 MSEK (28,6)
- Result before depreciation (EBITDA) increased during the third quarter by 135,3% to 4,0 MSEK (1,7), corresponding to a margin of 9,0% (6,0)
- Net result after tax was 2,3 MSEK (-0,1)
- Result per share was 0,01 (-0,00)
- Cash flow from the business for the period was 4,3 MSEK (1,0)
January - September
- Net sales increased during the period by 86,2% to 137,5 MSEK (73,8)
- Result before depreciation (EBITDA) was 14,1 MSEK (-1,2), corresponding to a margin of 10,2% (-1,6)
- Net result after tax was 9,5 MSEK (-4,4)
- Result per share was 0,05 (-0,03)
- Cash flow from the business for the period was 15,8 MSEK (-1,2)
Significant events after the end of the reporting period
- TagMaster intent to acquire Magsys in France. Magsys has a yearly turnover of approx. 25 MSEK with a positive EBITDA and the transaction is expected to be closed before year end.
Comments by the CEO
Our sales during the third quarter has been influenced by the vacation months, but with acceptable volumes for TagMaster, Balogh and CitySync. CA Traffic has been influenced by the change work started after the acquisition.
During the quarter the turnaround work with Balogh has continued and we start to see improvement in both volumes and result. We estimate the work to be done in the beginning of 2018, which is a bit later than has been communicated earlier. The change work is intended to lower both personnel costs and other costs, to reduce the number of products and to simplify the business processes.
CitySync has won and started several parking projects with several large international customers and deliveries have continued during the quarter. We see a strong trend among other in Scandinavia that ANPR systems become a key component in future parking systems, “free-flow parking”, where barriers and ticket machines disappear.
CA Traffic has during the quarter started a change work to make the business more scalable and more profitable also for lower sales volumes. We will outsource production and assembly and we will simplify the product program and also invest more in the new and profitable products, which also fit better in the export markets. We have moved the ANPR development to the same facilities as CitySync, which will give better scalability in our future development. We estimate the change work to be finalized during the second quarter 2018.
Our Rail business has been somewhat lower during the quarter and we also see a somewhat lower level for the quarters to come. We will during the fourth quarter start small deliveries of our new RailTag, with 20-year lifetime. We already see indications that our acquisition of Balogh will increase our total offering to the rail market and that our complementary product assortment is well received by our common customers. Balogh has during the period had a somewhat lower flow of new projects for delivery during 2017 and 2018, but we expect volumes to increase in the beginning of 2018 mainly driven by our new simplified and upgraded product assortment.
Our Traffic business has had an acceptable volume development during the quarter with a continued positive margin development. The US market has continued to do well and the Indian market has been strong in products for toll road solutions. We continue to develop more products in both RFID and in ANPR and several of these will be launched already during the first half of 2018.
Our quarterly result of 4,0 MSEK (1,7) and our cash flow from the running business of 4,3 (1,0) is an acceptable result to be satisfied with, while we still have work to do and it is always worth mentioning that the variation between quarters could be significant since especially our Rail business is volatile to its character.
Jonas Svensson
CEO
This as well as previous financial reports could be found at the company homepage www.tagmaster.com
For further information, please 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 October 27, 2017.
About TagMaster
TagMaster is an application driven technology company that designs and markets advanced identification systems and solutions based on radio & vision technology (RFID & ANPR) for demanding environments. Business areas include Traffic Solutions and Rail Solutions sold under the brands TagMaster, CitySync and Balogh with innovative mobility solutions in order to increase efficiency, security, convenience and to decrease environmental impact within Smart Cities. TagMaster has dedicated agencies in the US and in China and exports mainly to Europe, The 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. TagMasters certified advisor is Remium AB.