Interim Report January – September 2015

Net sales and operating profit at record high levels

Third quarter 2015

  · Order intake of SEK 119 (166) M, a decrease of 28 percent compared to last
year
  · Net sales of SEK 308 (158) M, an increase of 95 percent compared to last
year
  · Operating profit amounted to SEK 31.3 (15.2 [2]) M and the profit for the
period SEK 20.7 (10.4 [2]) M
  · The backlog* is approximately SEK 130 M, whereof the majority is expected to
be invoiced in 2015


Amounts in SEK M unless otherwise stated  Q3     Q3     9 months  9 months
                                          2015   2014   2015      2014
Order intake                              119    166    684       426
Net sales                                 308.0  158.3  692.1     409.8
Gross margin [1,3]                        22.0%  27.0%  21.2%     23.7%
Operating profit [2]                      31.3   15.2   40.4      8.7
Operating margin [2]                      10.1%  9.6%   5.8%      2.1%
Cash flow from operating activities       24.6   -34.8  8.7       -43.2
Profit for the period                     20.7   10.4   29.1      -50.4
Earnings per share (SEK)                  0.19   0.09   0.26      -0.46

[1] Excluding non-recurring costs of 0 for Q3 2014 and SEK 37.5 M for the period
ending 30 September 2014.
[2] Excluding non-recurring costs of SEK 4.1 M for Q3 2014 and SEK 56.9 M for
the period ending 30 September 2014.
[3] 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 M for Q3 2014 and SEK 8.4 M for the period ending 30
September 2014.


Comments from the CEO, Jonas Vestin
The third quarter was Pricer’s best ever, both when it comes to net sales and
operating profit. This results from delivering the previous quarters’ strong
order intake. With SEK 308 M in net sales during the quarter, we can see that
Pricer has already after three quarters surpassed the company’s previous record
from 2011 when it comes to net sales for a full fiscal year. The cash flow was
also considerably improved compared with the previous quarter and compared with
the corresponding quarter last year.

Order intake is weaker compared with last year as well as to this year’s two
previous quarters. Pricer’s business continues to be of a project oriented
nature where large projects will not be evenly distributed between quarters,
which will cause rather significant quarterly variations. Our customer’s
procurement and decision periods are prolonged with the complexity of the
solutions, by its value and strategic importance. Hence, individual quarters
will not always reflect the overall market growth. At the same time the product
mix has shifted slightly again with the share of segment labels, sold at lower
price but with higher margins, having increased compared with the first half
year.

The operating profit of SEK 31.3 M in the quarter gives an accumulated operating
profit of SEK 40.4 M, which is a clear improvement compared with 2014. The
operating margin rose to 10.1 percent in the third quarter. The high net sales
in combination with a gross margin improvement - although moderate - compared
with the second quarter, results in more than double earnings to the same period
2014.

The improved gross margin compared with the previous quarter confirms our
assessment that the gross margin has reached its bottom for Pricer. Our focus
continues to rest on sales and marketing activities and previously communicated
efforts to increase the gross margin, where we expect a slight improvement
during 2016. This mainly stems from our operational efforts within sales and
supply chain but also gradually as a result of our digital strategy with a
larger share of software and a differentiation that improves our competitive
position.

Going into the fourth quarter, the business situation indicates a somewhat
higher net sales than the existing order backlog. Sales with delivery and
invoicing within the period is generally strong during the fourth quarter.
However net sales will not in any way match the level of the present quarter. As
in previous reports, we do not provide any forecast for 2015.

Lastly, a progress report on the work with implementing our digital strategy. A
new production version of our key server software has been launched. The
software is central to Pricer's new digital solutions. We are now able to offer
a store completely new possibilities in a sharp live production environment.
Regardless of scale, size or number of stores, Pricer's infrastructure can
enable the retailer to display in real time on any mobile device where a product
is, where a person is located, and to make the product interact directly with
the person at the shelf-edge. We are thus ready for scalable production
deployments, where Pricer and our customers create completely new solutions.
Pricer has thereby taken another important step into the next generation of
retail.


* The order backlog consists of binding orders and call-offs under frame
agreements. Expected future value of frame agreements is not included.