Interim report January to March 2024
Strong development for the most recent acquisition and a good cash flow
- Net sales increased during the first quarter by 4,9 % to 99,0 MSEK (94,4). The organic and currency adjusted growth amounted to -14,5 %.
- Adjusted EBITDA increased during the quarter by 16,0 % and amounted to 9,1 MSEK (7,9) corresponding to an adjusted EBITDA margin by 9,2 % (8,3).
- Operating profit was -1,8 MSEK (0,0), corresponding to an operating margin of -1,8 % (0,0).
- Profit/loss for the quarter was -3,1 MSEK (0,3).
- Result per share basic and diluted was -0,21 SEK (0,02).
- Cash flow from operating activities for the period was 25,9 MSEK (15,6).
| Amounts in TSEK | 2024 Jan-March | 2023 Jan-March | R12M April-March | 2023 Full Year |
| Net sales | 99 000 | 94 390 | 409 320 | 404 711 |
| Net sales growth, % | 4,9 | 18,7 | 9,6 | 12,9 |
| Gross margin, % | 66,2 | 70,4 | 67,5 | 68,5 |
| Adjusted gross margin, % | 69,0 | 70,4 | 69,8 | 70,1 |
| Adjusted EBITDA | 9 144 | 7 879 | 58 438 | 57 174 |
| Adjusted EBITDA margin, % | 9,2 | 8,3 | 14,3 | 14,1 |
| EBITDA | 6 381 | 7 879 | 46 798 | 48 296 |
| EBITDA margin | 6,4 | 8,3 | 11,4 | 11,9 |
| Equity ratio, % | 60,6 | 61,5 | 60,6 | 60,5 |
| Cash flow from operating activities, MSEK | 25,9 | 15,6 | 38,7 | 28,5 |
| Net debt/EBITDA, R12M | - | - | 0,6 | 0,9 |
| Number of employees at end of period | 118 | 117 | 118 | 115 |
Comments by the CEO
The first quarter brought a mixed performance for the TagMaster Group. Our newly acquired American radar business (RTMS) showed significant growth, with a 125 percent increase compared to the same quarter last year. Meanwhile, our French subsidiary, Citilog, experienced a somewhat slower start to the year. Other operations performed in line with expectations. At group level, net sales increased by just under 5 percent to SEK 99 million, equivalent to a currency-adjusted organic growth of minus 14.5 percent. Thanks to effective cost control, we have increased adjusted EBITDA to 9.1 million SEK, corresponding to an adjusted EBITDA margin of 9.2 percent.
The development during the first quarter continued to demonstrate that our strategic focus on a combination of organic and acquired growth is yielding positive results. Our most recent acquisition of the radar business (RTMS) from American Image Sensing Systems (ISS), completed during the third quarter of last year, has performed very well. Through the acquisition, we have strengthened our offering and can now deliver both ground-installed sensor solutions and a series of high-performance radar-based sensor solutions for above-ground installation. Already during the final quarter of 2023, it yielded significant benefits, which were confirmed during the first quarter of this year when RTMS sales more than doubled compared to the first quarter of the previous year.
As I mentioned in the introduction to this comment, most of the group's operations have proceeded as expected, with total sales reaching nearly SEK 100 million, which is commendable considering that the first quarter is typically weaker than the rest of the year due to fewer installations of our solutions during winter. On the downside, we can report that our French subsidiary, Citilog, has had a slower start to the year, resulting in a negative currency-adjusted organic growth for the quarter at group level and a lower EBITDA margin. However, we should bear in mind that it is inherent to the nature of our business that projects, such as tunnels and bridges where our solutions are included, come in with some irregularity as they are capital-intensive investments. We have continued to work on increased cost control, and therefore, the group has seen a modest increase in expenses for the quarter compared to the same period last year despite higher turnover.
Looking ahead, I can affirm that TagMaster is well positioned to contribute to solutions for some of the major challenges facing the world's transportation systems. This involves addressing traffic issues such as congestion in densely populated areas worldwide, reducing and preventing accidents, and cutting emissions from traffic. This will lead to an increase in demand for our solutions.
Our latest acquisition in the USA, as described above, also puts us in a better position to meet the growing demand for multi-sensor solutions, where we see significant potential in continuing to develop both new products and our sales both in 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 expedite processes with the aim of better scaling up our commercial offering across different sales units. Specifically, this involves advancing our commercial position in sales and marketing, developing our collaborative sales efforts, and spending more time with prospective and existing customers both digitally and physically.
The group's sales for the first quarter amounted to SEK 99 million, representing an increase of 4.9 percent compared to the same period in 2023. The quarter's organic turnover change, adjusted for currency effects and acquisitions, amounted to SEK 13.7 million, equivalent to a decrease of 14.5 percent. The Traffic Solutions business reached SEK 82.5 million, marking an increase of approximately 6.5 percent compared to the same quarter in 2023. During the quarter, Traffic Solutions accounted for 83 percent of sales, while Rail Solutions accounted for 17 percent. The positive development in the Traffic Solutions business underscores our strategic focus to further invest in this segment both organically and through acquisitions.
The adjusted gross margin at group level amounted to 69.0 percent with an adjusted EBITDA result of 9.1 million SEK, corresponding to an adjusted EBITDA margin of 9.2 percent. The somewhat reduced gross margin is a result of our recently acquired radar business (RTMS) having a lower gross margin, but since the costs are lower, the EBITDA effect is positive. Cash flow from operating activities amounted to SEK 25.9 million, and the group's solvency was 60.6 percent at the end of the period.
Sequentially, our stock has decreased by approximately 12 percent, but compared to the corresponding quarter of the previous year, it has increased by 23 percent. Approximately 42 percent of the increase is attributable to the acquisition of RTMS.
Today, TagMaster is well positioned in a market with long-term prospects for growth and profitability, and we are determined to continue making TagMaster a leading company in intelligent transport solutions (ITS).
Auditor’s review
This report has not been reviewed by the company auditor.
Financial calendar
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.