Tagmaster year end financials show record margins

Stockholm, Sweden

Jonas Svensson, CEO, Tagmaster

In his statement on the final annual results January - December 2021, CEO of Tagmaster, Jonas Svensson comments that the year had been a successful one for the company, and despite the challenging component situation, the gross margin for both the quarter and the year was the best to date in the Group's history.

"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, " says Svensson.

The company experienced a gradual opening in its main markets during the first 75% of the year, after the lower activity during 2020.  This according to Svensson, led to increased sales, but during the final quarter, some markets closed once again due to new outbreaks of Covid-19. However, so far this has had a more limited impact and the company hopes that the developments in 2022 will lead to Covid-19 switching to an endemic, which will open up markets once again.

During the fourth quarter, we continued to work intensively with proactive and continuous measures to ensure a robust supply chain and estimate that the loss in sales of inhibited deliveries caused by component shortages amounted to approximately 6 percent of sales during the fourth quarter, corresponding to around SEK 5 million. Related increased component costs during the quarter could also affect the gross margin but Svensson stresses that whilst still maintaining the interests of the customer, the company has managed to compensate for the increased costs with certain price increases that partly had an impact during the quarter. 

In addition, the acquisition of Citilog during the second quarter sharpened the Tagmaster 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. And, Svensson says that the creation of a joint sales force for Citilog and the 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. The Traffic Solutions business amounted to SEK 58.6 million, which is an increase of 12.6 percent on 2020, and accounted for 70 percent of sales, while Rail Solutions, which had a strong quarter, accounted for 30 percent.

"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," concluded Jonas Svensson.


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