Interim report Pricer AB January-September 2018
Record high net sales for an individual quarter and continued strong order intake
Third quarter 2018
· Net sales of SEK 406.0 M (193.8), an increase of 110 percent compared to the same period of last year
· Operating profit of SEK 31.0 M (20.5), corresponding to an operating margin of 7.6 percent (10.6)
· Order intake of SEK 286 M (234), an increase of 22 percent compared to the same period of last year
· The order backlog increased to SEK 338 M (144), most of which is expected to be invoiced before the end of 2018
· Profit for the period amounted to SEK 27.4 M (16.1)
· Earnings per share amounted to SEK 0.25 (0.15)
· Cash flow from operating activities was SEK -52.6 M (10.0)
· Net sales of SEK 808.0 M (574.8), an increase of 41 percent compared to the same period of last year
· Operating profit of SEK 60.1 M (38.8), corresponding to an operating margin of 7.4 percent (6.7)
· Order intake of SEK 994 M (641), an increase of 55 percent compared to the same period of last year
· Profit for the period amounted to SEK 61.5 M (27.9)
· Earnings per share amounted to SEK 0.56 (0.25)
· Cash flow from operating activities was SEK 24.5 M (-32.8)
Comments from CEO Helena Holmgren
It is gratifying to announce that the record-high order intake in the second quarter generated record sales for a single quarter of SEK 406 M in the third quarter. Sales growth thus rose to 110 percent for the third quarter compared to the corresponding period of last year. The ongoing major American customer project made the biggest individual contribution to the strong growth during the period.
Market demand remained at a high level which resulted in an order intake of SEK 286 M for the third quarter, which equals a growth of 22 percent compared to the corresponding period last year. The order backlog therefore remains at a high level of SEK 338 M, most of which is scheduled for delivery before the end of the year. As previously announced, several customer contracts have been finalized during the quarter, some of which resulted in order intake in the third quarter while others will be spread over the project period.
The high order backlog at the close of the third quarter indicates a continued high pace of production and deliveries also for the fourth quarter. Combined with the high sales growth in the third quarter, this has resulted in a negative cash flow from operating activities which is primarily a function of capital tied up in inventories and trade receivables, offset by trade payables. As mentioned previously, cash flow should therefore be analyzed over time. Worth noting is Pricer’s ability to significantly increase delivery capacity at short notice. This is a result of the focused efforts that have been underway for a long time in order to improve terms and scalability in the supply chain.
The gross margin for the third quarter amounted to 18.5 percent, a level that reflects both product and contract mix as well as increased component prices as communicated in conjunction with the report for the second quarter. The product mix in the period is mainly a function of a high proportion of larger sizes of delivered labels and the fact that the amount of services and licenses in relation to products was low. The contract mix, with a high proportion of major customer projects with graphic labels, also had a negative impact on the gross margin. The product and contract mix look different in the order backlog at the end of the third quarter with a higher proportion of segment labels, a slightly smaller average label size, and a broader distribution across a number of different customers.
Despite the pressure on the gross margin we conclude that Pricer’s operating profit for the first nine months of the year has never been higher and we thus have yet another record to be pleased about. Our strong financial situation provides a key foundation for our credibility as a long-term partner to our customers and enables continued innovation, both in terms of product and market development.
For further information, please contact:
Helena Holmgren, CEO, Pricer AB +46 8 505 582 00
This information is information that Pricer AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency by the contact person set out above, on October 26, 2018 at 08:30 CET.