TagMaster

• Net sales increased during the quarter by 1,1 % to 100,0 MSEK (99,0). The organic and currency adjusted growth amounted to -20,5%.
• Adjusted EBITDA decreased during the quarter to -2,1 MSEK (9,1) corresponding to an adjusted EBITDA margin by -2,1 % (9,2).
• Operating profit was -11,2 MSEK (-1,8), corresponding to an operating margin of -11,2 % (-1,8).
• Profit/loss for the quarter was -7,6 MSEK (-3,1).
• Result per share basic and diluted was -0,52 SEK (-0,21).
• Cash flow from operating activities for the period was 14,2 MSEK (25,9).

Comments by the CEO

The first quarter was impacted by subdued demand in our European segment, as well as in our U.S. operations. Demand for our solutions is dependent on long-term investment decisions and is therefore affected by the global economic uncertainty. This led to lower volumes at Group level during the quarter. Despite this, we continue to report stable gross margins and strong cash flow, and our latest acquisition, Quercus, delivered a solid quarter with a positive result and acceptable volumes. We consider the downturn being temporary but have nonetheless initiated measures to strengthen long-term resilience and to achieve our profitability targets.

Our latest acquisition Quercus Technologies, a company that develops and manufactures advanced digital solutions for the parking industry based on AI-powered video analytics, has performed well and was profitable during the quarter with acceptable volumes. Through this acquisition, we have further strengthened our offering in parking and access digitalization. In addition, we have increased our sales to corporate customers (B2B), complementing the Group’s current business, which is primarily focused on the public sector (B2G).

I also clearly see that the acquisition provides us with new and significant opportunities for organic growth through increased cross-selling. Quercus has a strong presence in Germany, Spain, and Australia, while our main strengths have traditionally been in the U.S., the U.K., and France. Together, we have the potential to offer our respective solutions in new markets and provide a broader range of products and AI-driven solutions to global customers.

In the latter part of the quarter, efforts to further improve Quercus’s profitability were intensified. During the quarter, we also launched a group-level efficiency program targeting the European part of the business. The aim of the program is to enhance organizational efficiency, simplify structures, and reduce costs, while continuing to invest in the development of industry-leading products and strengthening our commercial capabilities. These initiatives are expected to result in annual cost savings of approximately SEK 10 million, with full effect from the second half of 2025.

Our leading technological expertise in key areas of Intelligent Transportation Solutions (ITS) positions us well to meet the growing demand for multi-sensor solutions. Following the acquisition of Quercus, the Group now has a total of 58 development engineers, 29 of whom are focused on advancing AI-based video solutions. In the first quarter, investment in product development amounted to approximately 15 percent of the Group’s revenue. We see significant potential in continuing to develop both new products and our sales. During the quarter, we continued to invest in our sales organization and in further integration of our operations.

The Group's sales for the first quarter amounted to SEK 100 million, which represents an increase of 1.1 percent compared to the same period in 2024. The quarter's organic revenue change, adjusted for currency effects and acquisitions, was SEK -20.3 million, corresponding to a decrease of 20.5 percent. The Group's total costs increased by 10.9 million SEK compared to the same period last year, which is almost entirely explained by the inclusion of the newly acquired Quercus starting in December 2024.

Our Traffic Solutions business generated SEK 88.3 million in the first quarter, representing an increase of approximately 7 percent compared to the same quarter in 2024. During the quarter, Traffic Solutions accounted for 88 percent of sales, while Rail Solutions represented 12 percent.

The adjusted gross margin at group level for the quarter was 68.4 percent (66.2), with an adjusted EBITDA of SEK -2.1 million, corresponding to an adjusted EBITDA margin of -2.1 percent. Cash flow from operating activities amounted to SEK 14 million, and the group’s solvency ratio was 51.2 percent at the end of the period. The efforts to reduce working capital, primarily inventory levels that increased during the previous component shortage periods, remain a key focus. Sequentially, inventory for comparable units is at the same level, and compared to the same quarter last year, it has decreased by just over 19 percent.

Looking ahead, I can confirm that TagMaster is well-positioned to contribute to solutions for some of the major challenges facing the world’s transportation systems. These challenges include addressing traffic issues such as congestion in densely populated areas worldwide, increasing road safety to prevent accidents, and reducing emissions from traffic. As a result, the demand for our solutions is growing as crucial decisions regarding infrastructure investments are made across the world. We are committed to further strengthening TagMaster’s position as a leading company in intelligent transportation solutions (ITS). In the evolving trade environment, with rising global tariffs, we are focusing on managing what we can control.

Jonas Svensson, CEO

Auditor’s review

This report has not been reviewed by the company auditor.

Financial calendar

July 18, 2025: Interim report second quarter 2025
October 23, 2025: Interim report third quarter 2025
February 5, 2026: Earnings release 2025

This report and previous reports and press releases are found at the company home page www.tagmaster.com.