YEAR END REPORT FOR TAGMASTER AB (publ.) PERIOD 2013-01-01 – 2013-12-31

Best full year result since 2004

Fourth quarter

•  Net sales increased during the fourth quarter by 34% to 13,5 MSEK (10,0)
•  Result before depreciation (EBITDA) was 0,2 MSEK (-1,0)
•  Net result was 0,2 MSEK (-2,5)
•  Result per share was 0,00 (-0,02)
•  Cash flow from the business was 0,6 MSEK (2,0)

Full year

•  Net sales increased during the period by 27% to 50,2 MSEK (39,6)
•  Result before depreciation (EBITDA) increased to 2,8 MSEK (0,2)
•  Net result was 1,5 MSEK (-5,5)
•  Result per share was 0,01 (-0,05)
•  Cash flow from the business was -1,2 MSEK (-0,4)

(1,6 MSEK related to payments from provisions made in 2012)

•  No dividend is proposed

*1,6 MSEK related to payments from provisions made in 2012

Comments by the CEO

Our positive sales development has continued, but we are not yet satisfied with the growth. The growth has been acceptable in the Asia region, while Europe is still weaker in growth. Our investment in the important North American market continues and we also have an ambition to become stronger in our Nordic home markets. Our full year result is the best since 2004 with an EBITDA result of 2,8 MSEK and we have a year behind us with four positive quarters, which also is an important milestone.

Our work on the new product family within the UHF area continues according to plan and we see a great interest among our partners for getting a wider product offering from TagMaster. With our new product family we will be able to address the market segments where the growth is the biggest and the launch will start during the first quarter 2014. This is only the beginning of our investment in new products with the purpose to be able to offer attractive and innovative products meeting the customer needs of today and for the future. Product innovation will be one of our strongest driving forces for future growth. During 2013 we have absorbed close to 1 MSEK in external development cost in the result, which is the first time we have been able to do this in many years due to that we are now profitable.

During the period we have worked on a new stronger offering within our Transportation (Rail) business. Where we emphasize the different components included in our value proposition. Our delivery will in the future be composed of consulting or engineering, products and service. We will thereby increase the value for our customers providing the competence and experience which we have built up during a number of years. We already see this business model received positively and we already have discussions with a number of customers regarding different engineering projects.

As has been said also before we are still in a changing position, which will influence stability in our quarterly figures during some quarters ahead. Our profitability is still too low, but we see all the initiatives we work with in our different departments giving good results, which will also show up in our result. Fundamentally we need to increase our growth further to reach acceptable profits and much focus will be on implementation of our new partner management program during 2014. The program has the purpose to clarify our value proposition with transparent common targets and more explicit demands between TagMaster and our partners.

We have taken an important step forward with a profitable full year for TagMaster, which is the first step towards building a future growth company and we are looking forward to an exciting 2014 with new important product launches.

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) 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