QUARTERLY REPORT FOR TAGMASTER AB January-September 2015

Continued organic growth and an acquisition

Third quarter

• Net sales increased during the third quarter by 40,0% to 18,2 MSEK (13,0)
• Result before depreciation (EBITDA) was - 3,6 MSEK (1,4), corresponding to a margin of -19,6% (10,8)
• Of the operating profit was 2,3 MSEK non-recurring costs and attributable to the restructuring of CitySync Ltd  
• Net result after tax was -4,5 MSEK (1,1)
• Result per share was -0,03 (0,01)
• TagMaster acquires CitySync Ltd with access from 2015-07-09. The acquisition means that TagMaster takes over a business with a turnover just below 40 MSEK on a yearly basis for payment of 34,5 MSEK 

January - September

• Net sales increased during the period by 28,7% to 56,1 MSEK (43,6)
• Result before depreciation (EBITDA) decreased to 1,5 MSEK (5,1), which corresponds to a margin of 2,7% (11,7)
• Net result after tax was -0,6 MSEK (3,8)
• Result per share was 0,00 (0,04)
• Cash flow from the business was 7,3 MSEK (2,6)

Comments by the CEO

Our sales during the third quarter, for us a normally weaker quarter, has had some growth. The quarter has highly been recognized by the intensive work done at making the turnaround of CitySync Ltd, which was acquired early July.

Our Rail business has been quite even during the quarter with serial deliveries to some of our main customers. New projects are intensively discussed and the focus is on working more and tighter with our already established big partners where we will expand our business and become a more important business partner to them. We still make the judgement that new projects will be added during 2015 and which will go into serial deliveries during the years to come

Our Traffic business has continued to develop well in several of our markets. The US market has continued to develop well but also the Gulf state markets have had a continued growth. In the EMEA region and in the Nordic market sales has been according to plan and we continue to increase our efforts during 2015 supported by our recently launched UHF product which we believe will will have a positive influence on sales and margins during the years to come. We will also strengthen our sales efforts in the German speaking markets through a newly recruited regional manager.

We have during the quarter worked intensively on making a CitySync into a profitable growth business for the future. We work according to the same method that we used to make TagMaster profitable. We work on decreasing the cost level and the personnel has been reduced by 30% which will become visible already during quarter 4. We work on having new products very soon to allow us to address a wider market of applications. CitySync’s product offering consist of software (where the company is a world leader) and camera hardware where we have already launched new products, which we can sell already early next year. We focus our sales resources towards fewer markets and towards the segments in which also TagMaster is active to give us a stronger total product offering. We work on our delivery chain to get a more efficient use of the working capital and a faster delivery service to existing and future customers..

Our quarterly result of -3,6 MSEK (1,4), depends on a negative result for CitySync and on the onetime costs of 2,3 MSEK taken for the restructuring work we make.

TagMaster will continue the work to find more opportunities to selective acquisitions in adjacent technology areas like sensors, detectors and other identification technology with the purpose to increase our offering and become a more attractive supplier of the type of information which is a prerequisite for building the smart cities of the future.

Jonas Svensson

CEO

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 identificationsystems and solutions based on radio & vision technology (RFID & ANPR) for demanding environments. Business areas include Traffic Solutions and Rail Solutions providing innovative mobility solutions, sold under the brands Tagmaster & CitySync, 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, 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