Interim Report Pricer AB January – June 2017
Strong order growth in the quarter, operating margin affected by new pilot programs with a lower gross margin
Second quarter 2017
· Net sales of SEK 206.7 M (204.2), an increase of 1 percent compared to the same period of last year
· Operating profit of SEK 11.0 M (16.3), corresponding to an operating margin of 5.3 percent (8.0)
· Order intake of SEK 218 M (154), an increase of 41 percent compared to the same period of last year
· The backlog is approximately SEK 114 M (163), most of which is expected to be invoiced in the third quarter of 2017
· Profit for the period amounted to SEK 7.7 M (14.6)
· Earnings per share amounted to SEK 0.07 (0.13)
· Cash flow from operating activities was SEK -38.2 M (21.1)
The period January to June 2017
· Net sales of SEK 381.0 M (359.6), an increase of 6 percent compared to the same period of last year
· Operating profit of SEK 18.3 M (18.5), corresponding to an operating margin of 4.8 percent (5.1)
· Order intake of SEK 406 M (458), a decrease of 11 percent compared to the same period of last year
· Profit for the period amounted to SEK 11.8 M (15.7)
· Earnings per share amounted to SEK 0.11 (0.14)
· Cash flow from operating activities was SEK -42.7 M (41.9)
Comments from CEO, Andreas Renulf
It is very satisfying to report that order intake increased by 41% compared to the same period of last year. This high order intake is a good reflection of the rising activity we are noting in the market. Many players in the international retail industry are currently focused on cutting their costs for labor-intensive store processes such as in-store picking of e-commerce orders and restocking goods on the shelves. Pricer’s digital solutions are ideally suited to meet these needs, thereby improving the customer’s cost-benefit analysis and facilitating the decision to invest in shelf-edge digital technology.
Net sales were in line with the same period of last year, while the gross and operating margins fell short of the year-earlier levels. The somewhat lower margins are mainly a consequence of the contract mix, where Pricer saw an unusually large inflow of new customers in the second quarter of the year. Most of these customer projects are defined as pilot programs in which the system will be tested and evaluated in a full-scale store environment. Driving new pilot programs has a negative effect on margins but is often necessary for new customers and markets to enable rollouts on a wider scale.
Cash flow was impacted by the increased dividend of SEK 55 M that was paid out in the second quarter. Operating cash flow was also affected by a business-related increase in working capital, mainly inventories to meet higher deliveries and trade receivables.
France once again stood out as a very strong market for Pricer in the second quarter, with increased sales to DIY retailers, pharmacies and discount chains. Alongside Pricer’s established markets, new markets such as Switzerland, Spain and New Zealand contributed to the high order intake and delivery activity in the quarter.
In the second quarter grocery retailers remained the largest and most active segment, while DIY retailers are showing powerful growth. The opportunities to not only automate price updates but also optimize the efficiency of store processes with the help of Pricer’s shelf label flash feature and automated in-store positioning to find the right product are especially important in the DIY segment. Pricer has taken a leading position in the market for these digital omni-channel functions. A market segment where Pricer has previously had difficulty winning orders is consumer electronics, but we are pleased to say that Pricer has also started to gain ground here in pace with a growing interest in digital solutions in this segment.
The sharply increased order intake excludes a major order of around SEK 70 M from a leading US retailer which we announced after the end of the second quarter, and which will be included in order intake for the third quarter when deliveries are also scheduled to begin. We see our Americas region (USA, Canada, Latin and South America) as our largest growth market over time, and in the second quarter we also announced that we are strengthening our organization in the USA to serve this region.
For further information, please contact:
Andreas Renulf, CEO, or Helena Holmgren, CFO 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 and the Securities Markets Act. The information was submitted for publication, through the agency by the contact persons set out above, at 8:30 CET on July 21, 2017.