Interim report January to March 2021

Press release Stockholm, Sweden April 29, 2021

 

Strong start of the year

First quarter 2021

• Net sales decreased during the first quarter by 5,7% to 74,4 MSEK (78,9)
• Adjusted EBITDA increased during the first quarter by 43,3% to 9,9 MSEK (6,9), corresponding to an adjusted EBITDA margin by 13,3% (8,8)
• Operating profit/loss was 4,8 MSEK (-3,8) which correspond to operating margin of 6,5% (-4,9)
• Profit for the period was 4,5 MSEK (-8,7)
• Result per share was 0,01 (-0,02)
• Cash flow from operating activities for the period was 3,4 MSEK (2,5)

Subsequent events

• TagMaster acquires Citilog SAS with admission date April 30, 2021. The purchase price was 3,4 M€ on a debt and cash free basis with adjustment of net working capital as of the closing date against normalized net working capital. The acquisition means that TagMaster takes over a business with a yearly turnover of approximately 5,8 M€.

Amounts in TSEK	2021 Jan-March	2020 Jan-March	R12M April-March	2020 Full Year
Net sales	74 405	78 861	281 997	286 453
Net sales growth, %	-5,7	79,9	-5,4	8,9
Gross margin, %	66,7	65,4	66,1	65,7
Adjusted EBITDA	9 865	6 905	30 289	27 329
Adjusted EBITDA margin, %	13,3	8,8	10,7	9,5
Equity ratio, %	57,9	56,3	57,9	55,7
Cash flow from operating activities, MSEK	3,4	2,5	28,4	27,4
Net debt/EBITDA, R12M			-0,2	-0,2
Number of employees at end of period	98	115		99

Comments by the CEO

We have had a strong start of the year in spite of the fact that the first quarter was characterized by continued lock downs in our European main markets. TagMaster, however, once again showed resilience and the strong margins we delivered during the quarter emphasizes that our actions to increase our flexibility, focus and growth orientation have already worked out. We have during the quarter continued to increase our investments in IT solutions for smart cities based on advanced sensor technology. The solutions contribute to the necessary change towards a more durable transport system, which gives us a very interesting position since the very massive restart programs launched in Europe and in the United States to a great deal are oriented towards green investments.

During the pandemic we have continued to focus on the health and safety of our employees while we also work intensively to secure continuity in our business.

With proactive and continuous actions for a robust delivery chain we have so far been able to handle the global shortage of semiconductors without any major impact on our customer deliveries. We expect the challenges to secure the delivery chain will continue during the coming months. We will therefore continue to monitor the development and proactively take actions where possible to limit the impact.

The efficiency program implemented during 2020 with structural changes such as reallocation of resources to new business opportunities, optimizing of offices and reduction of staff to adopt the business to a more long term change and a more agile working has resulted in cost reductions of around 5 MSEK during the first quarter.

We continue to invest in our technical leadership to increase our competitiveness. Our focus is more and more towards solutions which could contribute to more durable transport systems and to move us up in the value chain where analytics, AI and deep learning play an important role.

We have during the quarter launched the first product in a new family (CT series) of ANPR cameras also in the US. The new camera is IP based with our own software based on AI and deep learning. The camera family is specially designed for applications within parking, access and security and also for intelligent traffic monitoring systems like Clean Air Zones (CAZ).

The Group turnover during the quarter was 74,4 MSEK, which is a reduction with 5,7% compared to the same quarter 2020. The reduction is explained by our Rail solutions business decreasing during the quarter because of delayed deliveries due to component shortage. Our Traffic solutions business was, in spite of lock downs in France and UK, during the quarter 62,5 MSEK which is identical to the first quarter 2020. During the quarter 84% of the sales came from Traffic and 16% from Rail.

The quarter shows a continued strong gross margin of 66,7% and with an adjusted EBITDA of 9,9 MSEK corresponding to an EBITDA margin of good 13,3%. The cash flow from the business 3,4 MSEK and with a solidity of good 57,9%. The work to reduce working capital has continued successfully and the inventories have been reduced by 30% compared to the corresponding quarter 2020.

TagMaster is today well positioned in a market with long term good prerequisites for growth and good profits. To work with improving the traffic environment in cities and metropolitan areas around the world provides a very good position for the massive restart packages launched in Europe and the US and which in great part are directed towards green investments.  Our direction of growth through innovation, commercial focus and acquisitions gives us a very positive view on the company’s development during the years to come.

Jonas Svensson

CEO

Auditor’s review

This report has not been reviewed by the company auditor.

Reporting

During the business year 2021 TagMaster will report at the following dates:

July 16, 2021:                                   Interim report second quarter 2021

October 27, 2021:                            Interim report third quarter 2021

February 3, 2022:                             Earnings release 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, [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 8.30 a.m. CET on April 29, 2021. 

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 and Sensys Networks – with innovative mobility solutions for increased efficiency, security, safety, comfort and to reduce environmental impact in Smart Cities. TagMaster has daughter companies in England, France, US and Sweden 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, telephone +46852800399, E-mail: [email protected] www.tagmaster.com