Interim Report Pricer AB January – September 2017
Continued strong order intake, lower net sales and operating profit
Third quarter 2017
· Net sales of SEK 193.8 M (210.0), a decrease of 8 percent compared to the same period of last year
· Operating profit of SEK 20.5 M (29.0), corresponding to an operating margin of 10.6 percent (13.8)
· Order intake of SEK 234 M (145), an increase of 62 percent compared to the same period of last year
· The backlog is approximately SEK 144 M (100), most of which is expected to be invoiced in the fourth quarter of 2017
· Profit for the period amounted to SEK 16.1 M (23.6)
· Earnings per share amounted to SEK 0.15 (0.21)
· Cash flow from operating activities was SEK 10.0 M (68.8)
The period January to September 2017
· Net sales of SEK 574.8 M (569.9), an increase of 1 percent compared to the same period of last year
· Operating profit of SEK 38.8 M (47.5), corresponding to an operating margin of 6.7 percent (8.3)
· Order intake of SEK 641 M (603), an increase of 6 percent compared to the same period of last year
· Profit for the period amounted to SEK 27.9 M (39.3)
· Earnings per share amounted to SEK 0.25 (0.36)
· Cash flow from operating activities was SEK -32.8 M (110.7)
Comments from acting CEO, Helena Holmgren
We are delighted to note the high order intake of SEK 234 M for the quarter, which is an increase of 62% compared to the same period of last year. In previous years, order intake was driven partly by large individual customer projects that have created volatility in figures between quarters. In the current year we have seen a more steady growth trend where order intake is attributable to a large number of customers across multiple geographic markets.
Order intake includes approximately SEK 70 M for the rollout of Pricer’s system with graphic labels for a new American customer, as announced at the beginning of July. Deliveries to this customer started according to plan in the third quarter, but due to the stipulations in the contract, no sales related to this order were recognized in the quarter. Deliveries will continue in Q4 and our assessment is that sales will be realized in this quarter. The contract, which was won in fierce competition, demonstrates Pricer’s ability to meet the industrial expectations on solutions for store digitalization in the American market.
Activity in the market remains high and we have numerous pilot projects underway around the world. It is resource-intensive to drive these activities, which is exerting pressure on profitability. The sales cycle to win a new major customer typically extends over more than a year, where a considerable share of the time is devoted to the pilot testing phase. This year, a larger share of sales has been generated via our extensive global network of partners and distributors. This development is part of our strategy to continue establishing Pricer’s system in more markets, both geographic regions and customer segments, than the core markets where we are represented with our own staff.
Net sales of SEK 194 M fell short of the previous year’s level. The drop in sales is explained by the fact that a few of our key customers have not made any significant investments during the year. We judge this to be temporarily, however, short-term we were not able to offset this shift in sales with sales to other customers. However, it is satisfying that several of our largest customers expand features and capabilities of existing systems with automated product positioning, as one example. It testifies that our solutions are responding well to customers’ needs to further automate their store processes and improve the in-store shopping experience.
The fact that we achieved sales of SEK 194 M in the quarter, despite the lack of large individual deliveries, is evidence of growth in the underlying business that is creating better conditions for stability and predictability in our operations. Having said that, however, we can’t rule out the occurrence of sizeable future fluctuations in the growth curve on a quarterly or annual basis as a result of large individual contracts.
Cash flow from operating activities of SEK 10 M has been affected by the ongoing American customer project. Large deliveries demand high capital tied-up in the early stages of the projects. Cash flow should therefore be seen over time and not on the basis of individual quarters.
For further information, please contact:
Helena Holmgren, acting 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 and the Securities Markets Act. The information was submitted for publication, through the agency by the contact person set out above, at 8:30 CET on October 25, 2017.