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Interim Report January - March 2015

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Record high net sales and order intake – The gross margin remains low – New strategy launched

First quarter 2015                                     

  • Order intake doubled in the quarter compared to the previous year SEK 269 (133) million.
  • Net sales increased by 42% to SEK 148 (104) million.
  • The operating profit amounted to SEK 0.9 (-9.2) million and the profit for the period amounted to SEK 1.3 (-10.0) million.
  • Launch of a new solution-focused strategy at the trade fairs NRF in New York in January and EuroCIS in Düsseldorf in February.
  • The first pilot stores equipped with new SmartFlash functionality.
Amounts in SEK M unless otherwise stated
Q 1
2015
Q 1
2014
Order intake 269,0 133,0
Net sales 147,5 103,6
Gross margin1)    24%    21%
Operating profit    0,9 -9,2
Cash flow 42,0 29,3
Profit for the period      1,3 -10,0
Earnings per share (SEK) 0,01 -0,09

1)       Depreciations of capitalized development costs were during 2014 reclassified from the research and development cost function to cost of goods sold. The effect of this is SEK 2.8 (2.7) million for quarter 1 2015

Comments from the CEO, Jonas Vestin
I am pleased to report that for the first quarter of 2015, Pricer is able to report the highest ever net sales for a first quarter. Net sales increased by 42 per cent compared to the same period last year. Further the order intake more than doubled – 102 per cent – compared to first quarter 2014. This trend creates stability for Pricer's efforts to broaden its range of products, aiming at more solution-oriented offering.

However, the company's result has been burdened by continued pressure on margins. Even though the company is now reporting a profit, it is insufficient. We are therefore focusing on improving the gross margin, something that a broader and higher growth creates opportunities for.

The gross margin is negatively affected by the strength of the US dollar, since the dollar is Pricer's main purchasing currency. This negative effect is not fully compensated by invoicing in dollars or by currency clauses. Measures have been implemented to balance this trend. The product mix and effect of some contracts concluded at lower margins are further reducing profit for the quarter.

Through a combination of operational and strategic measures relating to how we position ourselves and price our offer, we aim at gradually improving our operating profit and gross margin. Some contracts will continue to burden the gross margin in the coming quarters. However, with a stronger cash flow, a completely new and vital organization, a high level of confidence from our customers and, not least, our commitment to solutions that respond well to retailers’ needs for a digital upgrade, we are now in a good position to achieve increasing profitability. I would like to reiterate that this combined effect is expected to give a certain positive effect on sales and operating profit in 2015 and further improvements in 2016.

During the past six months, the management has focused on liquidity and tied-up capital. Pricer ends the quarter with a positive net cash position of SEK 90 million, meaning a positive cash flow of about SEK 100 million during for the last six months. Following the strong order intake, it is expected that the working capital will increase later in the year.

The result for the quarter was negatively affected by investments in marketing activities, such as participation in more trade fairs than previously and increased customer and partner activities.  

Pricer's system for more efficient collection of on-line orders (also called Click & Collect) and optimization of shelf space, have been success factors as Pricer's new solutions reached the market. The first pilot projects to study the effect on consumer behavior started up during the first quarter. Pricer’s ambition is to become a partner for digital solutions for the retail industry in price optimization, logistics and marketing at the shelf-edge.

As in previous reports, we do not issue any forecast for 2015.

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