Press release, Stockholm, Sweden, 30 January 2020
TagMaster’s profitable growth continues – the best result to date
Fourth quarter
- Net sales increased during the fourth quarter by 89,6% to 83,5 MSEK (44,1)
- Adjusted EBITDA amounted to 8,7 MSEK (0,9), corresponding to a margin of 10,4% (2,0)
- EBITDA for the fourth quarter amounted to 4,3 MSEK (0,9), corresponding to a margin of 5,2% (2,0)
- Net result after tax was -9,4 MSEK (-0,5) whereof amortizations of goodwill in accordance with the standard accounting principles (K3) applied by TagMaster amounted to -9,7 MSEK
- Result per share was -0,03 (0,00)
- Cash flow from operating activities before changes in working capital for the period was 12,0 MSEK (3,7)
January – December
- Net sales increased during the period by 34,5% to 263,0 MSEK (195,6)
- Adjusted EBITDA amounted to 22,3 MSEK (12,7), corresponding to a margin of 8,5% (6,5)
- EBITDA was 12,9 MSEK (12,7), corresponding to a margin of 4,9% (6,5)
- Net result after tax was -25,1 MSEK (3,4) whereof amortizations of goodwill in accordance with the standard accounting principles (K3) applied by TagMaster amounted to -25,6 MSEK
- Result per share was -0,07 (0,02)
- Cash flow from operating activities before changes in working capital for the period was 21,1 MSEK (14,2)
- The acquisition of Sensys Networks was completed on June 13. The purchase price was USD 16 million on a debt and cash free basis with adjustment of net working capital as of the closing date against normalized net working capital.
- Share capital increased by 5 534 530,50 SEK and the number of shares by 110 690 610 shares by a directed equity issue. An issue of equity with preferential rights for existing shareholders increased the share capital by 2 581 250 SEK by issuing 51 625 000 shares.
Other
- During 2020, TagMaster intends to change accounting standard from BFNAR 2012: 1 (K3) to IFRS. The purpose of the planned transition to IFRS is, among other things, to simplify the analysis and evaluation of the Group’s financial ratios and development.
Comments by the CEO
Our sales during the quarter was 83,5 (44,1) MSEK, which is almost double compared to the fourth quarter 2018. The strong growth is mainly explained by the acquisition of the American Sensys Networks finalized in June, but good growth also in our other business had a positive impact on the quarter.
Gross margin for the quarter was a record of 70,0% (64,7) and with an adjusted EBITDA margin of 10,4% (2,0). It means that both the quarterly and yearly results are the best in the company history.
During the quarter we have continued to streamline the organizational structure of the company and our business in Great Britain (TagMaster UK), France (TagMaster France) and Sweden (TagMaster) will for the future be presented as one unit, Segment Europe. Sensys Networks will continue under its present name and will be presented as Segment USA.
Our European business has during the quarter had a growth of just over 10% compared to last year.
Different markets have developed differently, with weaker sales in TagMaster UK, depending on a delay for some projects. Recruitments to strengthen sales and marketing efforts in the UK market have been made during the quarter giving us a good platform to speed up growth during 2020.
Our French business – TagMaster France – has had a quarter slightly below plan with lower sales than plan, but with better gross margins. The integration of all parts of the French business continues. We expect to be fully ready with the integration during the first quarter 2020. With a fully integrated business and further recruitments on the sales side we will get stronger impact in the French market.
Our Swedish business – TagMaster – Has had a good quarter in Volume as well as in gross margin and profitability.
Sensys Networks quarter resulted in a sales according to plan, but with a better gross margin. Cost level has been somewhat higher connected to the integration work during the quarter. The integration work is going well and according to plan and Sensys Networks and the other businesses in the TagMaster Group has already identified and started a number of initiatives regarding cooperation within development and logistics.
With the acquisition of Sensys Networks we have created a TagMaster company almost double in sales. Through the acquisition we have created a platform of our own in the US and we will have competence within technology which is both wider and deeper. The acquisition gives us a higher organic growth potential and we become a more interesting partner for building the Smart Cities of the future.
TagMaster is today an important player in a market with good prerequisites for growth and good profits. To work daily with improving the traffic environment in cities and urban areas around the world provides us with lots of energy to continue hard and targeted work.
Jonas Svensson
CEO
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 January 30, 2020.
About TagMaster
TagMaster is an application driven technology company that designs and markets advanced sensor systems and solutions based on radio, radar, vision and magnetic technology for demanding environments. Business areas include Traffic Solutions and Rail Solutions sold under the brands TagMaster, CitySync, Balogh, CA Traffic, Magsys, Hikob and Sensys Networks with innovative mobility solutions in order to increase efficiency, security, convenience and to decrease environmental impact within Smart Cities. TagMaster has subsidies in UK, France and US and exports mainly to Europe, The Middle East, Asia and North America via a global network of partners and systems integrators. TagMaster was founded in 1994 and has its headquarters in Stockholm. TagMaster is a public company and its shares are traded on Nasdaq First North Growth Market in Stockholm, Sweden. TagMasters certified advisor is Erik Penser Bank phone +4684638300, E-mail: certifiedadviser@penser.se www.tagmaster.com
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