Year End Report 2022
Press release, Sweden, Stockholm, February 2, 2023
Record quarter for TagMaster
October-December 2022
- Net sales increased during the fourth quarter by 25,2% to 104,6 MSEK (83,5). The currency adjusted growth amounted to18,5 percent.
- Adjusted EBITDA increased during the fourth quarter by 189,0% to 14,7 MSEK (5,1), corresponding to an adjusted EBITDA margin by 14,0 % (6,1).
- Operating profit/loss was 2,6 MSEK (-1,7) which correspond to operating margin of 2,4% (-2,0).
- Profit/loss for the quarter was 38,0 MSEK (-4,3) of which 30,7 MSEK is an effect of valued previous years tax loss carry-forward.
- Result per share, basic and diluted was 2,59 (-0,29) SEK.
- Cash flow from operating activities for the period was 1,2 MSEK (13,7).
January-December 2022
- Net sales increased during the year by 9,7% to 358,6 MSEK (326,9). The currency adjusted growth amounted to 1,0 percent.
- Adjusted EBITDA decreased during the year by 20,6% to 27,0 MSEK (34,0), corresponding to an adjusted EBITDA margin by 7,5% (10,4).
- Operating profit/loss was -7,1 MSEK (9,6) which correspond to operating margin of -2,0% (2,9).
- Profit for the year was 24,2 MSEK (5,9) of which 30,7 MSEK is an effect of valued previous years tax loss carry-forward.
- Result per share, basic and diluted was 1,65 SEK (0,4).
- Cash flow from operating activities for the year was -6,7 MSEK (26,2).
- The Board does not propose dividends 2022.
| Amounts in TSEK | 2022 Oct-Dec |
2021 Oct-Dec |
2022 Full Year |
2021 Full Year |
| Net sales | 104 602 | 83 531 | 358 603 | 326 886 |
| Net sales growth, % | 25,2 | 23,2 | 9,7 | 14,1 |
| Gross margin, % | 68,5 | 72,7 | 68,3 | 68,4 |
| Adjusted EBITDA | 14 677 | 5 079 | 26 970 | 33 958 |
| Adjusted EBITDA margin, % | 14,0 | 6,1 | 7,5 | 10,4 |
| Equity ratio, % | - | - | 60,9 | 54,4 |
| Cash flow from operating activities, MSEK | 1,2 | 13,7 | -6,7 | 26,2 |
| Net debt/EBITDA, R12M | - | - | 0,8 | 0,3 |
| Number of employees at end of period | - | - | 120 | 137 |
Comments by the CEO
During the quarter, we experienced good demand for our solutions and sales for the quarter were record high. Sales increased by just over 18 percent compared to same period 2021 and the margin on adjusted EBITDA level of 14 percent is the highest we have achieved in a single quarter. Both Segment Europe and Segment USA show growth during the quarter.
TagMaster, like so many other technology companies, was affected during the quarter by a continued component shortage and by a capacity shortage at our main supplier. Through focused sourcing and great flexibility, we still manage to maintain high delivery power towards our customers, which contributes to our strong growth.
During the quarter, we were affected by cost increases for both electronic components and consumables. With price increases to customers and internal efficiency, we managed to reach an acceptable gross margin of 68.5 percent during the period, which is, however, lower than in the fourth quarter of 2021.
Considering the challenging purchasing situation and the deficiency of capacity in our outsourced production, we are very satisfied with the continued good gross margin. For the full year, we have the same gross margin as last year. It shows that our offer can withstand price increases without losing attractiveness.
During the third quarter, an efficiency program was initiated in France aimed at increasing organizational efficiency, simplified structure and reduce costs while continuing to invest in the development of industry-leading products and increased commercial capacity. These measures were executed during the fourth quarter and will result in annual cost savings of just over SEK 11 million with full effect from the second quarter 2023, and net approximately SEK 7 million after increased investments in sales. Among other things, the efficiency program has led to our latest acquisition, Citilog, reaching profitability during the fourth quarter. Associated non-recurring costs amounted to SEK 3.8 million.
We have continued to invest in technology leadership in our areas and develop more complete solutions that give our offer increased competitiveness and move us up the value chain. The focus is increasingly directed towards solutions that can contribute to a more sustainable transport system where analysis, AI and Deep Learning play an important role. We also see that our investment in energy-saving sensor systems, where most of our solutions can be powered by solar energy, as well as the simplicity of the sensor systems, configuration via tablet or mobile, creates more business opportunities. Cost efficiency is also necessary to enable investments in technology leadership and strengthen our endurance and increased competitiveness.
The group's turnover during the fourth quarter amounted to SEK 104.6 million, which is an increase of 25.2 percent compared to the same period in 2021. The quarter's organic turnover change, with adjustment for exchange rate effects of SEK 5.6 million, amounted to SEK 15.5 million kronor corresponding to an increase of 18.5 percent. The Traffic Solutions business amounted to SEK 86.4 million, which is an increase of approximately 47 percent compared to the corresponding quarter in 2021. During the quarter, Traffic Solutions accounted for 83 percent of sales, while Rail Solutions accounted for 17 percent.
In the quarter, the gross margin was 68.5 percent with an adjusted EBITDA result of SEK 14.7 million, which corresponds to an adjusted EBITDA margin of 14 percent. The cash flow from current operations amounted to SEK 1.2 million and the group's solvency ratio was 60.9 percent at the end of the period.
The cash flow was affected negatively by changes in working capital linked to increases in stock and that a large part of the invoicing took place at the end of the quarter and that accounts receivable thus increased. Our stock increased during the quarter by approximately 3 percent as a result of our investment in maintaining a high level of service to our customers and being able to deliver even in times of severe delivery disruptions. The work to reduce the working capital has continued focus going forward.
Today, TagMaster is well positioned in a market with long-term good conditions for growth and good profitability, and we are determined to continue making TagMaster a stronger and more resilient company while striving for higher growth. The fact that we work to improve traffic environment in cities and metropolitan areas around the world puts us in a very good position in the face of the massive restart packages being implemented in Europe and the USA and which are largely focused on green investments.
Our strategy and the value-creating potential have not changed due to the short-term limitations in the supply chain, and our investment in growth via innovation, commercial focus and acquisition means that we have a positive view of the company's development for the coming years.
Jonas Svensson
CEO
Auditor’s review
This report has not been reviewed by the company auditor.
Financial calendar
April 28, 2023: Interim report first quarter 2023
May 16, 2023: Annual general meeting, Kista
July 14, 2023: Interim report second quarter 2023
October 31, 2023: Interim report third quarter 2023
February 2, 2024: Earnings release 2023
Annual General Meeting 2023
The Board has decided that the Annual General Meeting will be held on May 16, 2023 in Kista. Invitation will be given in due course.
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, 2023.
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, 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.