Interim Report January-September 2021 – Pricer AB (publ)
High delivery activity despite challenges in supply and logistics chains
Third quarter 2021
· Net sales amounted to SEK 496.0 M (565.7), a decrease of 12 percent compared to the same period last year.
· Operating profit amounted to SEK 40.1 M (75.1), which corresponds to an operating margin of 8.1 percent (13.3).
· Order intake was SEK 307 M (440), a decrease of 30 percent compared to the same period last year.
· Order backlog amounted to SEK 396 M (754), of which the majority is expected to be delivered in Q4 2021.
· Profit for the period was SEK 32.0 M (69.3).
· Earnings per share (basic) were SEK 0.29 (0.63). Earnings per share (diluted) were SEK 0.29 (0.62).
· Cash flow from operating activities was SEK -94.5 M (38.2).
· Net sales amounted to SEK 1,277.9 M (1,079.2), an increase of 18 percent compared to the same period last year.
· Operating profit amounted to SEK 80.1 M (85.9), which corresponds to an operating margin of 6.3 percent (8.0).
· Order intake was SEK 1,157 M (1,135), an increase of 2 percent compared to the same period last year.
· Profit for the period was SEK 64.9 M (77.3).
· Earnings per share (basic) were SEK 0.59 (0.70). Earnings per share (diluted) were SEK 0.58 (0.69).
· Cash flow from operating activities was SEK -175.3 M (61.7).
Comments from CEO Helena Holmgren
Net sales in the third quarter amounted to SEK 496 M, and we are pleased to note that we successfully maintained a high degree of delivery activity despite the many challenges we are experiencing within component supply chains and shipping. The difficulty matching last year’s tough comparative figure of SEK 566 M was expected given the large customer projects that were carried out during the second half of 2020. Disregarding individual quarters, we see that the long-term trend for net sales growth for a rolling twelve-month period through September 2021 is approaching 50 percent compared to the corresponding period last year. In terms of volume, the increase in the number of sold labels during the same period was an impressive 65 percent.
Order intake of SEK 307 M (440) in the third quarter does not fully reflect the activity we are experiencing on the market, even if it is a historically high figure for a quarter that does not have individual large orders. As we previously communicated, large customer projects are unevenly distributed over time, which can create some fluctuation between quarters. We are also noting somewhat of a deferral in investment decisions given the current macroeconomic situation, with major disruptions in the retail trade’s supply chains, but the long-term trends toward greater automation and digitalization of the retail trade continues to be strong.
Cost increases due to the global shortage of a number of standard components, combined with the global challenges in the transport sector, are pushing the gross margin in the third quarter down to 21.6 percent (23.6), which also has a direct impact on the operating profit. The increase in lead times results in higher inventory and thus higher capital tie-up. Our suppliers are forecasting that this situation will most likely continue through the first half of 2022, after which things will then begin to improve. As this occurs, we can also expect our key ratios to gradually normalize.
Despite these challenges in the short term, we continue to see strong demand for our solutions on several strategic markets. Growing e-commerce combined with limited access to staffing, higher payroll expense, and the need for more frequent price adjustments are driving the development. In order to meet the expected market growth in coming years, we are continuing to strengthen our market presence in a number of strategic locations, ensure market-leading product development, and build a scalable and efficient production and logistics chain.
With the goal of increasing our competitiveness through shorter lead times, greater possibilities for customization, decreased exposure to geopolitical risks, and more sustainable production, we have started a cooperation with a German partner to complete the final assembly of a number of products for Europe. This supplements our established partnerships for final assembly in China and Thailand and improves our production capacity in order to meet a continued increase in volume, which is expected in coming years.
In addition to greater demand for new system installations, we are pleased to see an increase in the utilization rate of our systems at several of our existing customers. For example, a growing number of stores are using the system’s functionality for product positioning and blink to improve the efficiency of e-commerce order handling. The increase in the number of areas of use for our solutions and our continuous efforts together with customers to develop new functionality create an important basis for achieving our strategic ambition of increased service and software related income.
We are continuing with undiminished strength and energy to work to give our customers the best possible conditions to emerge stronger from the transformation that the retail trade is currently undergoing. Nothing makes us prouder and happier than satisfied customers, and we have plenty!
President and CEO
For further information, please contact:
Helena Holmgren, President and CEO, +46(0)702870068
Susanna Zethelius, CFO, +46 (0)704 440 092
This information is information that Pricer AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted through the agency of the contact persons mentioned above for publication on October 22, 2021, at 08:30 CET.
Every care has been taken in the translation of this document. In the event of discrepancies, the Swedish original will supersede the English translation.
Pricer AB is a leading global technology company serving the rapidly growing smart retail market with in-store digital solutions that enhance both store performance and the shopping experience. Through electronic shelf labels, advanced technology, such as optical wireless communication and AI, and continuous innovation, Pricer offers the foundation for in-store communication and efficiency. The industry leading Pricer platform delivers benefits from 30 years of deployment experience and is fast, robust, interconnectable and scalable. Pricer was founded in Sweden in 1991 and is listed on Nasdaq Stockholm. For further information, please visit www.pricer.com.