Earnings Release TagMaster AB 2023
Press release, Sweden, Stockholm, 2 February 2024
Continued business focus and efficiency in combination with strategic acquisitions provide growth and profitability
October-December 2023
- Net sales increased during the quarter by 19,7 % to 125,3 MSEK (104,6). The organic and currency adjusted growth amounted to 2,5 %.
- Adjusted EBITDA increased during the quarter by 54,4 % and amounted to 22,7 MSEK (14,7) corresponding to an adjusted EBITDA margin by 18,1 % (14,0).
- Operating profit was 7,3 MSEK (2,6), corresponding to an operating margin of 5,8 % (2,4).
- Profit/loss for the quarter was 6,8 MSEK (38,0).
- Result per share basic and diluted was 0,47 SEK (2,59).
- Cash flow from operating activities for the period was 3,4 MSEK (1,2).
January-December 2023
- Net sales increased during the year by 12,9 % to 404,7 MSEK (358,6). The organic and currency adjusted growth amounted to 3,4 %.
- Adjusted EBITDA increased during the year by 112,0 % and amounted to 57,2 MSEK (27,0) corresponding to an adjusted EBITDA margin by 14,1 % (7,5).
- Operating profit/loss was 15,3 MSEK (-7,1), corresponding to an operating margin of 3,8 % (-2,0).
- Profit/loss for the year was 13,7 MSEK (24,2).
- Result per share basic and diluted was 0,93 SEK (1,65).
- Cash flow from operating activities for the year was 28,5 MSEK (-6,7).
- On August 31st TagMaster, through its US subsidiary Sensys Networks, acquired the radar division (RTMS) from Image Sensing Systems (ISS). The purchase price was 4,8 MUSD (51,5 MSEK).
- The board does not propose dividends for 2023.
| Amounts in TSEK | 2023 Oct-Dec |
2022 Oct-Dec |
2023 Full Year |
2022 Full Year |
| Net sales | 125 260 | 104 602 | 404 711 | 358 603 |
| Net sales growth, % | 19,7 | 25,2 | 12,9 | 9,7 |
| Gross margin, % | 61,4 | 68,5 | 68,5 | 68,3 |
| Adjusted gross margin, % | 66,7 | 68,5 | 70,1 | 68,3 |
| Adjusted EBITDA | 22 662 | 14 677 | 57 174 | 26 970 |
| Adjusted EBITDA margin, % | 18,1 | 14,0 | 14,1 | 7,5 |
| EBITDA | 16 029 | 10 871 | 48 296 | 23 164 |
| EBITDA margin, % | 12,8 | 10,4 | 11,9 | 6,5 |
| Equity ratio, % | - | - | 60,5 | 60,9 |
| Cash flow from operating activities, MSEK | 3,4 | 1,2 | 28,5 | -6,7 |
| Net debt/EBITDA, R12M | - | - | 0,9 | 0,8 |
| Number of employees at end of period | - | - | 115 | 120 |
Comments by the CEO
During the fourth quarter, we saw further evidence that our strategic investment in a combination of organic and acquired growth is working well. Turnover for TagMaster increased in the quarter by approximately 20 percent compared to the same period last year, and both turnover and profitability showed record figures. I can therefore state that 2023 turned out to be a successful year with growth of around 13 percent and an adjusted EBITDA result of SEK 57 million. We have therefore entered the new year with high hopes for increased growth despite geopolitical challenges.
TagMaster's good development was achieved via increased business focus and streamlining for profitable growth combined with strategic acquisitions to access complementary and deepening technologies and expertise. In 2021, we acquired Citilog in France with AI-based incident detection solutions for tunnels and bridges. Citilog showed increased profitability in 2023 and turnover was 25 percent better than in 2022. During the quarter, our recently acquired radar business also showed growth of around 25 percent compared to the corresponding quarter in 2022. Both these examples show that both our acquisition and integration model are working.
At group level, the fourth quarter produced record high sales combined with cost control and thus an improved adjusted EBITDA result that was 54 percent better compared to the same period in 2022. For the full year 2023, the improvement compared to 2022 was also good and the group's total turnover was SEK 404.7 million, which is an increase of 12.9 percent compared to the full year 2022. The result is also clearly satisfactory with an adjusted EBITDA result of SEK 57.2 million, which is an improvement of 112 percent compared to 2022.
The good development for both growth and results during the fourth quarter and the full year 2023 is very gratifying and shows that our hard and focused work is paying off. It also gives us high hopes for continued success in the new year. TagMaster is positioned to deliver solutions to some of the challenges facing the world's transport systems. It is about contributing to solve traffic problems such as congestion in densely populated areas, reducing accidents and reducing emissions from traffic.
With our latest acquisition, we strengthen our American operations' offering by being able to offer both sensor solutions for ground installation and a series of high-performance radar-based sensor solutions for installation above ground. We are therefore better positioned to meet the growing demand for multi-sensor solutions. We also see great potential in continuing to develop products and sales in both the American market and through our global partner network.
During the quarter, we continued to invest in the sales organization and further integration of our operations. By building ONE TagMaster, we simplify and speed up processes with the aim of being able to better scale up our commercial offer within the various sales units. In concrete terms, it is about advancing our commercial position in sales and marketing, developing our sales work and spending more time with our prospective and existing customers both digitally and physically.
The group's sales during the fourth quarter amounted to SEK 125.3 million, which is an increase of 19.7 percent compared to the same period in 2022. The quarter's organic growth, with adjustment for exchange rate effects and acquisitions, amounted to SEK 2.7 million, corresponding to an increase with 2.5 percent. The Traffic Solutions business amounted to SEK 104.6 million, which is an increase of approximately 21 percent compared to the corresponding quarter in 2022. During the quarter, Traffic Solutions accounted for 84 percent of sales, while Rail Solutions accounted for 16 percent. The positive development for our Traffic Solutions business underlines our strategic focus to invest further in this solution area organically and via acquisitions.
The adjusted gross margin at group level during the quarter landed at 66.7 percent with an adjusted EBITDA result of SEK 22.7 million, which corresponds to an adjusted EBITDA margin of 18.1 percent. The reduced gross margin is an effect of our recently acquired radar operation having a lower gross margin than other operations, but as the costs are lower the EBITDA effect is positive. Cash flow from current operations amounted to SEK 3.4 million and the group's equity ratio was 60.5 percent at the end of the period.
Sequentially, our stock has decreased by approximately 13 percent, but compared to the corresponding quarter of the previous year, it has increased by 55 percent. In this increase, the acquisition of ISS radar operations is included with approximately 25 percent.
Today, TagMaster is well positioned in a market with long-term good conditions for growth and good profitability, and we are determined to continue to make TagMaster a stronger and resilient company while aiming for a higher growth curve.
Jonas Svensson, CEO
Financial calendar
March 27, 2024: Annual Report 2023 available on web site
April 25, 2024: Interim report first quarter 2024
May 2, 2024: Annual general meeting, Kista
July 12, 2024: Interim report second quarter 2024
October 23, 2024: Interim report third quarter 2024
February 5, 2025: Earnings release 2024
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, [email protected]
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 8.00 a.m. CET on February 2, 2024.
About TagMaster
TagMaster is an application oriented technical company developing and selling advanced sensor systems and solutions based on radio, radar, magnetic and camera technologies for demanding environments. TagMaster works in two segments - Segment Europe and Segment USA – with the trademarks TagMaster, Citilog and Sensys Networks – with innovative mobility solutions for increased efficiency, security, safety, comfort and to reduce environmental impact in Smart Cities. TagMaster has subsidiaries in England, France and US and exports mostly to Europe, The Middle East, Asia and North America through a global network of partners and system integrators. TagMaster was founded in 1994 and has its head office in Stockholm. TagMaster is a listed company and the share is traded at Nasdaq First North Premier Growth Market in Stockholm. TagMasters certified adviser (CA) is FNCA.
