Press release, Stockholm, Sweden, 3 February 2022
Good growth despite challenges
Fourth quarter 2021
- Net sales increased during the fourth quarter by 23,2% to 83,5 MSEK (67,8). Currency translations had a positive effect of 1,4 MSEK on net sales.
- Adjusted EBITDA decreased during the fourth quarter by 7,1% to 5,1 MSEK (5,5), corresponding to an adjusted EBITDA margin by 6,1 % (8,1)
- Operating profit/loss was -1,7 MSEK (-1,0) which correspond to operating margin of -2,0% (-1,5)
- Profit for the quarter was -4,3 MSEK (-2,6)
- Result per share was -0,29 (-0,18) SEK1
- Cash flow from operating activities for the period was 13,7 MSEK (10,6)
January – December 2021
- Net sales increased during the year by 14,1% to 326,9 MSEK (286,5). Currency translations had a negative effect of 10,7 MSEK on net sales.
- Adjusted EBITDA increased during the year by 24,3% to 34,0 MSEK (27,3), corresponding to an adjusted EBITDA margin by 10,4% (9,5)
- Operating profit/loss was 9,6 MSEK (-14,6) which correspond to operating margin of 2,9% (-5,1)
- Profit for the year was 5,9 MSEK (-20,4)
- Result per share was 0,4 (-1,39) SEK1
- Cash flow from operating activities for the period was 26,2 MSEK (27,4)
- On April 30, 2021, TagMaster acquired Citilog SAS with a yearly turnover of approximately 5,8 M€
- At the Annual General Meeting on April 29, 2021, it was decided to carry through a reversed split of Series B shares 1:25. May 6 was the first day of trading after the reversed split. The number of Series B shares after the reversed split amounts to 14,647,526, which means a quota value of approximately 1,25 SEK per share.
- The Board does not propose dividends 2021
| Amounts in TSEK | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Full Year |
2020 Full Year |
| Net sales | 83,531 | 67,788 | 326,886 | 286,453 |
| Net sales growth, % | 23.2 | -18.8 | 14.1 | 8.9 |
| Gross margin, % | 72.7 | 68.0 | 68.4 | 65.7 |
| Adjusted EBITDA | 5,079 | 5,470 | 33,958 | 27,329 |
| Adjusted EBITDA margin, % | 6.1 | 8.1 | 10.4 | 9.5 |
| Equity ratio, % | – | – | 54,4 | 55.8 |
| Cash flow from operating activities, MSEK | 13.7 | 10.6 | 26.2 | 27.4 |
| Net debt/EBITDA, R12M | – | – | 0.3 | -0.2 |
| Number of employees at end of period | – | – | 137 | 99 |
1Adjusted retroactively for the reversed split 1:25
Comments by the CEO
2021 was a successful year for TagMaster. Thanks to great flexibility and our committed employees, we managed to handle imbalances in the supply chain in a good way while maintaining focus on our strategy. Despite the challenging component situation, the gross margin for both the quarter and the year is the best to date in the Group’s history. This is combined with a robust EBITDA result, which increased by 24.3 percent on an annual basis. During the year, we continued our investments in mobility solutions for Smart Cities based on advanced sensor technology, where the acquisition of Citilog has added additional expertise in AI and Deep Learning. Our solutions contribute to the necessary transition to a more sustainable transport system, which gives us a strong position.
During the first three quarters of the year, we experienced a gradual opening in our main markets after the lower activity during the pandemic year 2020, which has led to increased sales. During the fourth quarter, some markets closed once again due to new outbreaks of Covid-19. So far, this has had a more limited impact and we hope that the development in 2022 will lead to Covid-19 switching to an endemic, which will open our markets even more and increase investments in solutions that we develop.
During the fourth quarter, we continued to work intensively with proactive and continuous measures to ensure a robust supply chain and have therefore managed to avoid serious disruptions to customer delivery. We estimate that the loss in sales of inhibited deliveries caused by the component shortage amounted to approximately 6 percent of sales during the fourth quarter, corresponding to around SEK 5 million.
We continued to experience increased costs for both components and input goods during the quarter, which affects the gross margin. Keeping our commitment to the customer is always the most important thing, but we have still managed to compensate for the increased costs with certain price increases that partly had an impact during the quarter. This shows that our offer of solutions and products can withstand price increases without losing attractiveness. We expect continued challenges in the coming quarters and will compensate for this with price adjustments.
During the year, we have invested in technology leadership in all our areas and developed more complex solutions that give our offering increased competitiveness and bring us up in the value chain. The focus is increasingly on solutions that can contribute to a more sustainable transport system where analysis, AI and Deep Learning play an important role.
The acquisition of Citilog during the second quarter has sharpened our offering on the technology side and adds value and synergies on the sales and customer side. Citilog contributed to an improvement in the Group’s gross margin during the fourth quarter. Citilog’s products are included as part of several different ITS (Intelligent Transport System) applications such as Incident Management, Traffic Signal Control and Infomobility.
Some of Citilog’s customer projects were slightly postponed during the quarter, which had a negative impact on both Sales and EBITDA of approximately SEK 4.4 million and SEK 3.5 million, respectively. The work of creating a joint sales force for Citilog and our American subsidiary Sensys Networks, as well as the work of integrating joint development roadmaps for these two companies, is proceeding according to plan.
The Group’s Sales during the fourth quarter amounted to SEK 83.5 million, which is an increase of 23.2 percent compared with the same period in 2020, of which organic 6.3 percent. Our Traffic Solutions business amounted to SEK 58.6 million, which is an increase of 12.6 percent compared with the corresponding period in 2020. During the quarter, Traffic Solutions accounted for 70 percent of sales, while Rail Solutions, which had a strong quarter, accounted for 30 percent.
The fourth quarter shows a gross margin of 72.7 percent with an adjusted EBITDA result of SEK 5.1 million, which corresponds to an adjusted EBITDA margin of 6.1 percent. Cash flow from operating activities amounted to SEK 13.7 million and the Group’s solvency ratio was 54.4 percent at the end of the period. Efforts to reduce working capital had continued focus and inventories decreased during the quarter compared with the corresponding quarter in 2020. However, accounts receivable increased during the quarter due to the consolidation of Citilog and high sales during the latter part of the quarter.
TagMaster is today well positioned in a market with long-term good conditions for growth and good profitability. The fact that we work to improve the traffic environment in cities and metropolitan areas around the world gives us a very good position in the face of the massive restart packages that are being launched in Europe and the USA and which are largely focused on green investments. Our investments in growth through innovation, commercial focus and acquisitions mean 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.
Reporting
During the business year 2022 TagMaster will report at the following dates:
April 28, 2022: Annual general meeting, Kista
April 28, 2022: Interim report first quarter 2022
July 15, 2022: Interim report second quarter 2022
October 27, 2022: Interim report third quarter 2022
February 2, 2023: Earnings release 2022
Annual General Meeting 2022
The Board has decided that the Annual General Meeting will be held on April 28, 2022 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, Jonas.svensson@tagmaster.com
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 February 3, 2022.
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 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: info@fnca.se www.tagmaster.com
