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Interim Report January - September 2013


Increasing net sales during the third quarter - Success with graphic displays slows down margin and earnings · French Intermarché selects Pricer’s solut...

Increasing net sales during the third quarter
- Success with graphic displays slows down margin and earnings

  • French Intermarché selects Pricer’s solution – Estimated value SEK 50 M
  • Japanese Inageya upgrades – Estimated value exceeds SEK 35 M
  • Strategic deal with electronics chain – Value SEK 60 M
  • Carrefour resumes deployment
  • Gross margin affected negatively by product and customer mix

Subsequent events
Canadian hardware retail chain Patrick Morin choses Pricer – Estimated value SEK 10 M

Third quarter
Order entry: SEK 113 M (112)
Net sales: SEK 151.6 M (121.8)
Gross margin: 22.1 percent (30.9)
Operating profit: SEK 6.9 M (16.9)
Operating margin: 4.6 percent (13.9)
Net profit: SEK 5.3 M (13.6)
Cash flow: SEK -17.4 M (-29.3)
Basic earnings per share: SEK 0.05 (0.12)

January - September
Order entry: SEK 409 M (436)
Net sales: SEK 372.7 M (405.0)
Gross margin: 26.1 percent (32.4)
Operating profit: SEK 12.2 M (58.2)
Operating margin: 3.3 percent (14.4)
Net profit: SEK 9.1 M (51.6)
Cash flow: SEK 4.0 M (13.9)
Basic earnings per share: SEK 0.08 (0.47)

Comments from the CEO, Fredrik Berglund
A third quarter full of many bright spots. This despite the fact that decisions and installation processes continued to be postponed as a consequence of the weak economy in Europe. In the third quarter we can report a rise in sales, while order intake remains stable. However, earnings for the quarter have slowed through increased sales of graphic displays. These displays cost the customer more but also have a higher cost of manufacturing which has led to a lower margin as a percentage. The situation will resolve itself over time as we expect that the manufacturing costs become progressively lower. Graphical displays are based on more advanced technology with electronic paper, which is still significantly more expensive than conventional LCD technology.

The graphic displays of Pricer, which have existed in the market since 2007, reach a breakthrough this year. Compared with the same quarter last year, the percentage increased from 10 to 40 per cent. Graphical displays enable the retail trade to communicate a greater amount of information beyond price, such as product information and promotional offers. It also opens up for greater market potential in both existing and new market segments.

We have continued to secure several important deals – particularly for consumer discretionary items, which we have been working on for a long time. Here it is worth highlighting the ongoing installations at an electronics chain and the recent success at the construction supply chain Patrick Morin in Canada. At the same time, supermarkets are continuing to invest in our systems. Carrefour – an important customer for several years – has resumed its installations this year. The increasingly extensive customer base means the dependency on individual customers is reducing and sales are originating from more and more customers worldwide.

During the year, the number of pilot installations remained at a high level, providing optimism for the future, despite the uncertain economic situation.

Our overall assessment is that sales in 2013 will be in line with last year and that operating profit will be lower than in 2012.

Attached files