The group's sales increased both in Europe and in the US with an average increase of almost 12 percent compared to the second quarter of 2022, whilst gross margin increased to 71.6 percent. According to Svensson, this means that Tagmaster delivered a record result during the quarter.

Improved component delivery

"During the quarter, we have seen a continued improvement in the delivery situation for critical components and semiconductors, which continued to improve our delivery capability. However, we also had costs for purchases on the spot market during the second quarter, which is explained by the fact that previously ordered components were delivered during the quarter. Although we were still affected by some cost increases we managed to increase our gross margin by just over 1.2 percentage points to 71.6 percent during the quarter, due to price adjustments towards customers, internal efficiency and a favourable product mix. The move of our production for the US market from Mexico to Oakland, California, was completed during the quarter. That means we meet the Buy America requirements of the 2021 Infrastructure Investment and Jobs Act, which gives us an advantage in the US market."

During the quarter, the company continued to invest in the group's joint sales organisation and further integrated its operations. "By building One Tagmaster, we simplify and speed up processes with the aim of being able to better scale our commercial offers within our various sales units. Concretely, it is about integrating our CRM systems and our marketing, developing our sales efforts and spending more time with our prospects and customers both digitally and physically," continued Svensson.

Tagmaster's latest acquisition, Citilog, also showed continued growth in the quarter with good profitability. During the quarter, Citilog launched an update to its automatic incident management system for tunnels, bridges and highways, with additional modules for pedestrian recognition, among other things. The system is based on AI and Deep learning.

Investments in technology leadership

Svensson also commented on the company's strategy to invest in technology and sustainability. "During the period, we have continued to invest in technology leadership within our focus areas and develop more complete solutions that give our offer increased competitiveness. The focus is increasingly directed towards solutions that 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 and batteries, as well as the simplicity of the sensor systems, configuration via tablet or mobile, creates more business opportunities."

Group turnover during the second quarter amounted to SEK 98.2 million, demonstrating an increase of 11.6 percent compared to the same period in 2022.  The Traffic Solutions business accounted for around 84% of sales at SEK 83 million, an increase of approximately 5 percent compared to the corresponding quarter in the previous year. Rail Solutions accounted for the remaining 16 percent.

The gross margin for the quarter was at 71.6 percent and stock holding increased sequentially by approximately 18 percent as a result of the investment in maintaining a high level of service towards our customers and to manage imbalances in the delivery supply chain. 

Well-positioned for growth and profitability

In conclusion, Svensson made the following comment. "Today, Tagmaster is well positioned in a market with long-term good conditions for growth and good profitability, and we are determined to continue to make Tagmaster a stronger and more resilient company while aiming for a higher growth curve. The fact that we work to improve the traffic environment in cities and metropolitan areas around the world puts us in a very good position considering the massive investment packages that have been launched in Europe and the USA and which are largely focused on green investments."