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Pricer

Interim / Quarterly Report Oct 22, 2021

3098_10-q_2021-10-22_d9324d1e-664f-4c75-b959-f795a36633b2.pdf

Interim / Quarterly Report

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SEK 496.0 M

Net sales in the quarter (-12%)

8.1%

Operating margin in the quarter

SEK 32.0 M

Net profit for the quarter

Q3INTERIM REPORTJanuary–September 2021

High delivery activity despite challenges in supply and logistics chains

Third quarter 2021

  • Net sales amounted to SEK 496.0 M (565.7), a decrease of 12 percent compared to the same period last year.
  • Operating profit amounted to SEK 40.1 M (75.1), which corresponds to an operating margin of 8.1 percent (13.3).
  • Order intake was SEK 307 M (440), a decrease of 30 percent compared to the same period last year.
  • Order backlog amounted to SEK 396 M (754), of which the majority is expected to be delivered in Q4 2021.
  • Profit for the period was SEK 32.0 M (69.3).
  • Earnings per share (basic) were SEK 0.29 (0.63). Earnings per share (diluted) were SEK 0.29 (0.62).
  • Cash flow from operating activities was SEK -94.5 M (38.2).

January–September 2021

  • Net sales amounted to SEK 1,277.9 M (1,079.2), an increase of 18 percent compared to the same period last year.
  • Operating profit amounted to SEK 80.1 M (85.9), which corresponds to an operating margin of 6.3 percent (8.0).
  • Order intake was SEK 1,157 M (1,135), an increase of 2 percent compared to the same period last year.
  • Profit for the period was SEK 64.9 M (77.3).
  • Earnings per share (basic) were SEK 0.59 (0.70). Earnings per share (diluted) were SEK 0.58 (0.69).
  • Cash flow from operating activities was SEK -175.3 M (61.7).
Amounts in SEK M unless Q3 Q3 9 mths 9 mths Rolling Full year
otherwise stated 2021 2020 2021 2020 4 Q 2020
Order intake 307 440 1 157 1 135 1 611 1 588
Net sales 496,0 565,7 1 277,9 1 079,2 1 958,2 1 759,5
Gross margin, % 21,6% 23,6% 23,2% 25,1% 22,9% 24,0%
Operating profit 40,1 75,1 80,1 85,9 149,3 155,2
Operating margin, % 8,1% 13,3% 6,3% 8,0% 7,6% 8,8%
Cash flow 1) -94,5 38,2 -175,3 61,7 27,8 264,9
Net profit for the period 32,0 69,3 64,9 77,3 115,1 127,5
Earnings per share, SEK 2) 0,29 0,63 0,59 0,70 1,04 1,16

1) Cash flow from operating activities

2) Basic earnings per share

The long-term trend toward greater automation and digitalization of the retail trade continues to be strong

Comments from CEO Helena Holmgren

Net sales in the third quarter amounted to SEK 496 M, and we are pleased to note that we successfully maintained a high degree of delivery activity despite the many challenges we are experiencing within component supply chains and shipping. The difficulty matching last year's tough comparative figure of SEK 566 M was expected given the large customer projects that were carried out during the second half of 2020. Disregarding individual quarters, we see that the long-term trend for net sales growth for a rolling twelve-month period through September 2021 is approaching 50 percent compared to the corresponding period last year. In terms of volume, the increase in the number of sold labels during the same period was an impressive 65 percent.

Order intake of SEK 307 M (440) in the third quarter does not fully reflect the activity we are experiencing on the market, even if it is a historically high figure for a quarter that does not have individual large orders. As we previously communicated, large customer projects are unevenly distributed over time, which can create some fluctuation between quarters. We are also noting somewhat of a deferral in investment decisions given the current macroeconomic situation, with major disruptions in the retail trade's supply chains, but the long-term trends toward greater automation and digitalization of the retail trade continues to be strong.

Cost increases due to the global shortage of a number of standard components, combined with the global challenges in the transport sector, are pushing the gross margin in the third quarter down to 21.6 percent (23.6), which also has a direct impact on the operating profit. The increase in lead times results in higher inventory and thus higher capital tie-up. Our suppliers are forecasting that this situation will most likely continue through the first half of 2022, after which things will then begin to improve. As this occurs, we can also expect our key ratios to gradually normalize.

Despite these challenges in the short term, we continue to see strong demand for our solutions on several strategic markets. Growing e-commerce combined with limited access to staffing, higher payroll expense, and the need for more frequent price adjustments are driving the development. In order to meet the expected market growth in coming years, we are continuing to strengthen our market presence in a number of strategic locations, ensure market-leading product development, and build a scalable and efficient production and logistics chain.

With the goal of increasing our competitiveness through shorter lead times, greater possibilities for customization, decreased exposure to geopolitical risks, and more sustainable production, we have started a cooperation with a German partner to complete the final assembly of a number of products for Europe. This supplements our established partnerships for final assembly in China and Thailand and improves our production capacity in order to meet a continued increase in volume, which is expected in coming years.

In addition to greater demand for new system installations, we are pleased to see an increase in the utilization rate of our systems at several of our existing customers. For example, a growing number of stores are using the system's functionality for product positioning and blink to improve the efficiency of e-commerce order handling. The increase in the number of areas of use for our solutions and our continuous efforts together with customers to develop new functionality create an important basis for achieving our strategic ambition of increased service and software related income.

We are continuing with undiminished strength and energy to work to give our customers the best possible conditions to emerge stronger from the transformation that the retail trade is currently undergoing. Nothing makes us prouder and happier than satisfied customers, and we have plenty!

Helena Holmgren President and CEO

As the penetration rate of digital labels increases in one market, this pressures others to stop using analogue paper labels

Market development

Delivery activity continued to be high on several markets in the third quarter. In the USA, we are approaching the final phase of the large customer project that encompassed almost 1,000 stores. It began in 2020 and progressed according to schedule despite an ongoing pandemic and the resulting challenges. During the quarter we also delivered large volumes to Canada, where we have both a large ongoing customer project and several framework agreements that are strong contributors to the underlying flow of orders and deliveries. As more of Canada's largest retail chains are making decisions to install digital shelf label systems, the strength of the market increases, and the volume of customer dialogues indicate continued high demand.

Although France is the country in the world with the highest degree of penetration of digital labels to date, activity in the French market continues to be very high. The strength of the market is driven by a large number of customers in several different retail verticals and comes in the form of both new installations and upgrades of existing systems. The fact that Carrefour is delayed with its planned investments in Pricer's system also provides good conditions for continued strength and high activity in the French market going forward.

Italy is another country that distinguished itself during the quarter. As mentioned before, the Italian authorities provide a form of tax subsidy for technological investments, which has boosted the market for digital labels in recent years. The regulatory framework for continued subsidies is reviewed annually, but as the penetration rate increases in one market, this puts pressure on other chains to maintain their competitiveness by eliminating analogue paper labels, in the same way as has been observed in Canada. It is therefore our intention to further strengthen our presence in Italy.

In addition to providing the world's leading high-performance system for digital store communication, a growing part of our business is related to data analysis and the possibility of making better and faster decisions in-store. The imbalances in access to data between ecommerce platforms and physical stores is a growing challenge for many retail chains. The ability to compile and analyze more data in-store is key for getting closer to e-commerce in terms of an improved and more personalized buying experience in stores.

We believe that the need to compile and analyze data will increase significantly in the next few years with the aim of both streamlining store operations and creating loyalty and greater customer commitment. Interest in our shelf-edge-mounted camera, combined with our patented solution to use the digital labels for product recognition, is increasing steadily and being evaluated by a number of customers around the world. This, combined with our cloud-based platform Pricer Plaza, constitutes the base for our broadened customer offer as a complement to our system for digital labels.

Why invest in Pricer?

  • Strong underlying growth on a market with low penetration rate for ESL systems. Digitalization of physical stores is viewed as necessary in order to maintain a competitive edge.
  • Best system on the market. Unique functionality and a technological solution that is difficult to copy. Based on reliable, scalable, energy-efficient and interference-free communication.
  • Blink functionality of the labels combined with dynamic positioning of products in the store enables not only cost reductions but also increased sales and improved customer satisfaction.
  • Long-standing track record of producing solutions that work well in retail.
  • Strong balance sheet enables continued innovative strength.
  • Global presence with a large installed base.

Order intake, SEK M

Order intake in the third quarter and the period January–September 2021

Third quarter

Order intake amounted to SEK 307 M (440) in the third quarter, a decrease of 30 percent compared to the same quarter last year. Adjusted for exchange rate fluctuations, order intake decreased by 29 percent. Order intake is spread across a large number of customers on several geographic markets, with Canada, France and Italy the largest individual contributors.

Order backlog as at September 30, 2021, amounted to SEK 396 M (754), of which the majority is intended to be delivered in Q4 2021.

January–September 2021

Order intake amounted to SEK 1,157 M (1,135) during the first nine months of the year, an increase of 2 percent compared to the same period last year. Adjusted for exchange rate fluctuations, order intake rose 9 percent. Canada, France, Norway and Italy are the largest countries. The order intake has a wide geographic spread and includes several new customers that signed during the year.

Net sales and profit in the third quarter and the period January 1–September 30, 2021

NET SALES BY GEOGRAPHICAL REGION

Q3 Q3 9 mths 9 mths Full year
Amounts in SEK M 2021 2020 2021 2020 2020
Europe, Middle East & Africa 242,6 249,8 723,9 559,7 839,5
Americas 233,7 300,6 491,3 494,2 883,0
Asia & the Pacific 19,7 15,3 62,7 25,3 37,0
Total net sales 496,0 565,7 1 277,9 1 079,2 1 759,5

NET SALES AND PROFIT

Q3 Q3 9 mths 9 mths Full year
Amounts in SEK M 2021 2020 2021 2020 2020
Net sales 496,0 565,7 1 277,9 1 079,2 1 759,5
Cost of goods sold -388,9 -432,0 -981,6 -808,8 -1 336,4
Gross profit 107,2 133,7 296,3 270,4 423,1
Gross margin, % 21,6% 23,6% 23,2% 25,1% 24,0%
Operating expenses -64,1 -65,0 -212,7 -192,6 -282,1
Other income and expenses -2,9 6,4 -3,6 8,2 14,2
Operating profit 40,1 75,1 80,1 85,9 155,2
Operating margin, % 8,1% 13,3% 6,3% 8,0% 8,8%

ADJUSTED FOR F/X

Reported
current Reported Adjusted
Amount in SEK M unless otherwise stated period change for F/X
Third quarter compared with the same period last year
Net sales 496,0 -12% -11%
Cost of goods sold -388,9 -10% -8%
Gross profit 107,2 -20% -18%
Operating expenses -64,1 -1% -1%
Other income and expenses -2,9 - -
Operating profit 40,1 -47% -44%
January - September compared with the same period last year
Net sales 1 277,9 18% 25%
Cost of goods sold -981,6 21% 29%
Gross profit 296,3 10% 13%
Operating expenses -212,7 10% 12%
Other income and expenses -3,6 - -
Operating profit 80,1 -7% 0%

Third quarter

Net sales amounted to SEK 496.0 M (565.7) in the quarter, a decrease of 12 percent compared to the same quarter last year. Adjusted for currency fluctuations, net sales decreased by 11 percent. Net sales in Q3 2021 were spread across a large number of customers. The majority of the sales took place in the USA, Canada and France.

Gross profit amounted to SEK 107.2 M (133.7), and the gross margin amounted to 21.6 percent (23.6) for the quarter. The change in the gross margin continued to be primarily an effect of the product and contract mix. Access to shipping solutions continued to be restricted during the quarter, with regard to both air and sea, which combined with the shortage of certain standard components shared by several different industries affected both lead times and price development. The majority of the company's costs for goods sold were in USD, while net sales were generated primarily in USD and EUR. The currency effects on gross profit were negative compared to last year.

Operating expenses decreased to SEK -64.1 M (-65.0) for the quarter, a decrease of 1 percent compared to the same quarter last year. Costs have increased for personnel and consultants due to investments in product development, a greater market presence to enable a broader customer service offer, and IT structural investments. Due to the lower-than-expected outcome for variable and share-based remuneration as well as lower costs than previously expected for organizational changes, personnel costs decreased in the period despite an increase in the number of employees. Operating expenses are primarily in SEK, but they are also in EUR and USD.

Other income and expenses amounted to SEK -2.9 M (6.4) and consisted of the net effect of realized and unrealized currency revaluations of trade receivables and trade payables.

Operating profit amounted to SEK 40.1 M (75.1), which corresponded to an operating margin of 8.1 percent (13.3). A decrease in gross profit resulted in a decrease in both operating profit and the operating margin.

Financial items, primarily consisting of currency revaluation of balance sheet items, such as cash and cash equivalents, had a negative impact on the quarter and amounted to SEK -1.3 M (-5.2), which was primarily a result of negative revaluation effects on currency accounts and interest expenses for leasing liabilities and overdraft facility.

Tax in the quarter amounted to SEK -6.9 M (-0.6), of which SEK -6.0 M (0.7) refers to deferred tax and SEK -0.9 M (-1.3) refers to current tax. The current tax rate amounted to -2 percent (-2), and the reported total tax rate amounted to -18 percent (-1). A deferred tax asset is reported for all of the parent company's tax loss carry-forwards from the end of 2020; therefore, the reported total tax rate in the quarter was higher than in the same quarter in previous years. Deferred tax assets related to capitalized losses carried forward amounted in the balance sheet on September 30, 2021, to SEK 53.8 M (70.4).

Profit for the period was SEK 32.0 M (69.3). The decrease compared to last year can be traced to a decrease in the operating profit and an increase in the tax expense.

Translation differences in other comprehensive income of SEK 4.5 M (0.5) consisted of currency revaluation of net assets in foreign operations.

January 1–September 30, 2021

Net sales amounted to SEK 1,277.9 M (1,079.2) during the first nine months of the year, an increase of 18 percent compared to the same period last year. Adjusted for changes in exchange rates, net sales increased by 25 percent. Net sales were spread across a large number of customers. The majority of sales occurred in France, Canada, the USA and Norway.

Gross profit amounted to SEK 296.3 M (270.4), and the gross margin amounted to 23.2 percent (25.1) for the period. The change in the gross margin continued to be primarily a consequence of the product and contract max as well as the increased component and logistics costs. The majority of the company's costs for goods sold were in USD, while net sales were generated primarily in USD and EUR. The currency effects on gross profit were negative compared to last year.

Operating expenses increased to SEK -212.7 M (-192.6) in the period, an increase of 10 percent compared to the same period last year. The increase was primarily a result of increased costs for staff and consultants related to product development, an enhanced market presence, and investments in a broader customer service offer.

Other income and expenses amounted to SEK -3.6 M (8.2) for the period and consisted of the net effect of realized and unrealized currency revaluations of trade receivables and trade payables.

Operating profit amounted to SEK 80.1 M (85.9), which corresponded to an operating margin of 6.3 percent (8.0). An increase in net sales with lower gross margin along with an increase in operating expenses resulted in a decrease in both the operating profit and the operating margin.

Financial items impacted the period positively and amounted to SEK 0.2 M (-6.6), which primarily referred to positive translation effects on foreign currency accounts, as well as interest expenses for leasing liabilities and overdraft facility.

Tax for the period amounted to SEK -15.4 M (-2.0), of which SEK -12.6 M (1.0) refers to deferred tax and SEK -2.8 M (-3.0) to current tax. The current tax rate amounted to -4 percent (-4), and the reported total tax rate amounted to -19 percent (-3). A deferred tax asset is reported for all of the parent company's tax loss carry-forwards from the end of 2020; therefore, the reported total tax rate for 2021 was higher than in previous years.

Profit for the period was SEK 64.9 M (77.3). The decrease compared to last year can be traced to a decrease in the operating profit and an increase in the tax expense.

Translation differences in other comprehensive income of SEK 9.2 M (1.8) consisted of currency revaluation of net assets in foreign operations.

Cash flow, investments and financial position

Third quarter

Cash flow from operating activities amounted to SEK -94.5 M (38.2) for Q3. The change in working capital during the quarter had a negative impact on cash flow from operating activities of SEK -148.6 M (-45.0). A continued high production rate combined with significantly longer lead times for transport resulted in increased inventory. Receivables from suppliers (for component purchases that are re-invoiced) has decreased which has had a positive effect on cash flow, while trade payables attributed to production has decreased which has had a negative effect on cash flow. Since there is a major timing effect from operating activities, the cash flow should be analyzed over time.

Cash flow from investing activities amounted to SEK -13.3 M (-15.2) in the third quarter and consisted primarily of capitalized development expenditure of SEK -9.5 M (-10.9) in product development and investments in property, plant and equipment of SEK -3.8 M (-4.3) attributable primarily to production equipment.

Cash flow from financing activities amounted to SEK 62.2 M (-2.8) during the third quarter and referred to amortization of lease liabilities of SEK -3.1 M (-2.8) and a change in utilized bank credit facilities of SEK 65.3 M (0.0).

Exchange rate differences in cash and cash equivalents amounted to SEK -0.0 M (-2.5).

Cash and cash equivalents amounted to SEK 40.4 M (150.5) on September 30, 2021. In addition to cash and cash equivalents, the company had on September 30, 2021, bank overdraft facilities of SEK 100.0 M (150.0), of which SEK 65.3 M (0.0) was utilized and SEK 34.7 M (150.0) was unutilized.

January 1–September 30, 2021

Cash flow from operating activities amounted to SEK -175.3 M (61.7) for the period. The change in working capital had a negative impact of SEK -289.4 M (-55.4) on cash flow from operating activities, primarily due to an increase in inventory, which reduced cash flow. Trade payables were also paid during the first quarter of the year for the large deliveries that occurred in Q4 2020, where customer payments were made before the end of the year.

Cash flow from investing activities amounted to SEK -52.7 M (-52.4) during the period and consisted primarily of capitalized development expenditure of SEK -34.9 M (-39.5) and investments in property, plant and equipment of SEK -17.8 M (-12.9) attributable to production equipment and investments in increased production capacity.

Cash flow from financing activities amounted to SEK 3.2 M (-50.4) during the period and referred to the dividend of SEK -55.0 M (-44.1), amortization of lease liabilities of SEK -9.1 M (-8.5), reduction of treasury shares of SEK 2.1 M (2.1), and a change in utilized bank credit facilities of SEK 65.3 M (0.0). According to a resolution by the Annual General Meeting, the dividend was divided into two payouts of SEK 0.50 (0.40) per share each, which are paid in May and November 2021.

Exchange rate differences in cash and cash equivalents amounted to SEK 2.7 M (-2.7), which was a result of positive translation effects on currency accounts.

Equity

Stated in thousands of shares Class A Class B Total
Outstanding shares at the beginning of the year 226 110 746 110 972
Issued and converted shares in the year - - -
Issued at the end of the period 226 110 746 110 972
Treasury shares - -648 -648
Outstanding shares at end of period 226 110 098 110 324

Class A share carries five votes and class B share carries one vote

During December 2020, a total of 400,000 Class B shares were repurchased.

From the 2018 performance-based share plan, 228,858 Class B shares were transferred free of charge in June 2021 to the participants. Due to the fulfillment of the performance-based share plan, Pricer decreased its treasury shares by 228,858 Class B shares.

Pricer's holdings of treasury shares amounted on September 30, 2021, to 648,278 (477,136) Class B shares. These shares are held to be able to meet obligations on matching and performance shares under the outstanding performance-based share plans.

Transferred free of
Performance Maximum of charge to the
share plan (LTI) shares Vesting period participants
LTI 2019 240 000 Jun 2019 - May 2022 Jun 2022
LTI 2020 330 000 Jun 2020 - May 2023 Jun 2023
LTI 2021 279 000 Jun 2021 - May 2024 Jun 2024

The value of the promise is expensed during the vesting period. For more information about the performance share plans from 2019 and 2020, please refer to Note 4 of the 2020 Annual Report. Read more under Note 5 2021 Share Performance Plan in this interim report.

Employees

The average number of employees during the third quarter was 176 (146), and the number of employees at the end of the period was 180 (147). The average number including hired staff and consultants was 210 (167) in the third quarter and 214 (176) at the end of the period. The organization was strengthened in several areas, such as customer project development, support, product development, and sales. We strengthened our presence in a number of geographic markets with the aim of managing both the increased demand and the growing installed customer base. The company has recruited Susanna Zethelius as CFO and she took office on August 30, 2021. These risks apply primarily to the development of the market for not only digital shelf edge ISSUED AND OUTSTANDING SHARES

Parent Company

The Parent Company's net sales amounted to SEK 1,153.5 M (1,200.2), and the profit for the period amounted to SEK 48.9 M (61.9). The Parent Company's cash and cash equivalents amounted to SEK 1.3 M (134.6) at the end of the period.

Risks and uncertainty factors

Pricer's earnings and financial position are affected by various risk factors that must be considered when assessing the Group and the Parent Company and their future potential.

labels and systems and large currency fluctuations but also to political factors affecting trade such as import duties. In view of the client structure and the scope of the agreement, a delay in the installations or large fluctuations in exchange rates can have a significant effect in any given quarter. More information regarding risks is available in the 2020 Annual Report; see page 32 and Note 20.

Access to standard components that are used by several different industries is restricted, which has affected both lead times and prices. Access to logistics solutions is also significantly reduced.

Uncertainty about the course of the coronavirus pandemic is still high. Pricer is continuing to follow the guidelines and recommendations set up in each country where the company is active. The health of the staff has continued to be Pricer's top priority.

Forecast

No forecast is provided for 2021.

New accounting principles

The same accounting principles and bases for calculation were applied for the Group and the Parent Company as in the latest annual report.

Annual General Meeting (AGM)

The Annual General Meeting is planned for May 11, 2022. The notice will be duly distributed.

Events after the end of the reporting period

In October 2021, Pricer signed new credit agreements with Nordea, primarily to manage the working capital need driven by higher demand combined with longer lead times as a result of limited access to shipping and some standard components. The permanent credit facilities were extended on October 11 from SEK 50 M to SEK 100 M and fall due on December 31, 2021, with an automatic twelve-month extension. A temporary credit facility was also opened for an additional SEK 100 (for a total credit facility of SEK 200 M) through June 30, 2022, and thereafter SEK 50 M (for a total credit facility of SEK 150 M) during the period July 1–December 31, 2022. As a result of this, chattel mortgages were secured for an additional SEK 40.4 M, whereby total chattel mortgages pledged to Nordea amount to SEK 100 M.

Otherwise, no significant events occurred after the end of the reporting period.

Financial Calendar

February 11, 2022 Year-End Report 2021 No later than April 19, 2022 Annual Report 2021 May 11, 2022 Annual General Meeting

April 26, 2022 Interim Report January–March 2022 July 21, 2022 Interim Report January–June 2022 October 27, 2022 Interim Report January–September 2022

Publication of Year-End Report February 11, 2022

The Board of Directors and the CEO hereby certify that this interim report provides a true and fair view of the results of the operations, financial position and performance for the Parent Company and the Group and describes the significant risks and uncertainties to which the Parent Company and other companies in the Group are exposed.

This interim report for Pricer AB (publ) was submitted on the authorization of the Board of Directors.

Stockholm, October 22, 2021

Pricer AB (publ)

Helena Holmgren President and CEO

This information is information that Pricer AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted through the agency of the contact persons mentioned below for publication on October 22, 2021, at 8:30 AM CET.

For more information, please contact: Helena Holmgren, President and CEO, +46 (0)702 870 068 Susanna Zethelius, CFO, +46 (0)704 440 092 Email: [email protected]

Auditor's review

Pricer AB, CIN 556427-7993

Västra Järnvägsgatan 7 111 64 Stockholm

Introduction

We conducted a review of the summary interim financial information (interim report) for Pricer AB as at September 30, 2021, and the nine-month period ending on this date. The Board of Directors and the CEO are responsible for preparing and presenting this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion about this interim report based on our review.

Focus and scope of the review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and a substantially narrower scope than that of an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices.

The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that may have been identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Conclusion

Based on our review, no circumstances have come to our attention that bring cause for us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.

Stockholm, October 22, 2021

Ernst & Young AB

Jakob Wojcik Authorized Public Accountant

Financial Reporting

CONSOLIDATED INCOME STATEMENT IN SUMMARY

Q3 Q3 9 mths 9 mths Full year
Amounts in SEK M 2021 2020 2021 2020 2020
Net sales 496,0 565,7 1 277,9 1 079,2 1 759,5
Cost of goods sold -388,9 -432,0 -981,6 -808,8 -1 336,4
Gross profit 107,2 133,7 296,3 270,4 423,1
Selling expenses -33,2 -32,6 -108,3 -104,1 -148,7
Administrative expenses -15,9 -21,2 -58,8 -54,9 -78,0
Research and development costs -15,0 -11,3 -45,6 -33,6 -55,4
Other income and expenses -2,9 6,4 -3,6 8,2 14,2
Operating profit 40,1 75,1 80,1 85,9 155,2
Net financial items -1,3 -5,2 0,2 -6,6 -21,5
Net profit before tax 38,9 69,9 80,3 79,3 133,6
Income tax -6,9 -0,6 -15,4 -2,0 -6,2
Net profit for the period 32,0 69,3 64,9 77,3 127,5
Net profit for the period attributable to:
Owners of the Parent Company 32,0 69,3 64,9 77,3 127,5
EARNINGS PER SHARE
Q3 Q3 9 mths 9 mths Full year
2021 2020 2021 2020 2020
Basic earnings per share, SEK 0,29 0,63 0,59 0,70 1,16
Diluted earnings per share, SEK 0,29 0,62 0,58 0,69 1,15
Number of shares before dilution, millions 110,3 110,5 110,2 110,4 110,3
Diluted number of shares, millions 111,2 111,7 111,0 111,5 111,2
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Q3 Q3 9 mths 9 mths Full year
Amounts in SEK M 2021 2020 2021 2020 2020
Net profit for the period 32,0 69,3 64,9 77,3 127,5
Items that are or may be reclassified to profit or loss for the period
Translation differences 4,5 0,5 9,2 1,8 -19,1
Other comprehensive income for the period 4,5 0,5 9,2 1,8 -19,1
Net comprehensive income for the period 36,5 69,8 74,1 79,1 108,4
Net comprehensive income for the period attributable to:

CONSOLIDATED BALANCE SHEET IN SUMMARY

Amounts in SEK M Sep 30
2021
Jun 30
2021
Mar 31
2021
Dec 31
2020
Sep 30
2020
ASSETS
Intangible assets 352,9 349,3 346,6 338,0 352,3
Property, plant and equipment 41,6 40,9 30,5 30,3 30,0
Right-of-use assets 37,5 40,0 43,3 43,7 46,3
Deferred tax assets 62,4 68,4 71,8 75,0 77,4
Total non-current assets 494,5 498,6 492,2 487,0 506,0
Inventories 546,3 444,3 274,2 301,5 464,3
Trade receivables 288,6 295,1 263,2 235,6 312,6
Prepaid expenses and accrued income 14,3 17,6 13,3 9,5 13,4
Other current receivables 223,3 269,5 133,8 98,5 200,9
Cash and cash equivalents 40,4 86,1 189,9 262,4 150,5
Total current assets 1 112,9 1 112,6 874,4 907,5 1 141,8
TOTAL ASSETS 1 607,3 1 611,2 1 366,6 1 394,5 1 647,7
EQUITY AND LIABILITIES
EQUITY
Share capital 111,0 111,0 111,0 111,0 111,0
Other capital contributions 392,6 392,8 394,9 393,2 408,3
Reserves 25,0 20,5 25,4 15,8 36,7
Accumulated profits including profit for the year 253,8 221,8 316,8 299,1 249,0
Shareholder's equity attributable to the Parent Company's
shareholders 782,4 746,1 848,1 819,0 805,0
LIABILITIES
Non-current provisions 23,5 26,6 25,6 24,0 18,7
Non-current lease liabilities 26,6 29,5 32,9 33,5 36,0
Total non-current liabilities 50,1 56,1 58,5 57,6 54,7
Liabilities to credit institutions 65,3 - - - -
Advances from customer 13,2 16,1 12,6 6,4 9,8
Trade payables 523,3 602,0 309,7 384,4 609,8
Current lease liabilities 12,8 12,3 12,2 11,8 11,8
Other current liabilites 71,2 70,6 14,6 19,5 57,2
Accrued expense and deferred income 65,0 81,7 86,7 73,0 79,8
Current provisions 24,1 26,2 24,3 22,8 19,7
Total current liabilities 774,8 808,9 460,1 517,9 788,1
Total liabilities 824,9 865,1 518,6 575,5 842,8
TOTAL EQUITY AND LIABILITIES 1 607,3 1 611,2 1 366,6 1 394,5 1 647,7
Basic shareholders' equity per share, SEK
Diluted shareholders' equity per share, SEK
7,09
7,04
6,76
6,72
7,70
7,64
7,44
7,37
7,29
7,21

CHANGES IN CONSOLIDATED EQUITY IN SUMMARY

Amounts in SEK M 9 mths
2021
6 mths
2021
3 mths
2021
Full year
2020
9 mths
2020
Equity at the beginning of the period 819,0 819,0 819,0 810,2 810,2
Net profit for the period 64,9 32,9 17,7 127,5 77,3
Other comprehensive income for the period 9,2 4,7 9,6 -19,1 1,8
Net comprehensive income for the period 74,1 37,6 27,3 108,4 79,1
Repurchase of own shares - - - -16,0 -
Decreased number of treasury shares 2,1 2,1 - 2,1 2,1
Dividend -110,2 -110,2 - -88,3 -88,2
Share based payments, equity settled -2,6 -2,4 1,7 2,6 1,7
Total transactions with owners of the Group -110,7 -110,5 1,7 -99,6 -84,3
Equity at the end of the period 782,4 746,1 848,1 819,0 805,0
Attributable to:
- Owners of the parent company 782,4 746,1 848,1 819,0 805,0

CONSOLIDATED CASH FLOW STATEMENTS IN SUMMARY

Q3 Q3 9 mths 9 mths Full year
Amounts in SEK M 2021 2020 2021 2020 2020
OPERATING ACTIVITIES
Operating profit 40,1 75,1 80,1 85,9 155,2
Adjustment for non-cash items 15,5 10,3 38,2 35,8 54,1
- of which depreciations and amortizations 14,0 12,9 42,1 32,4 45,5
- whereof other non-cash items 1,5 -2,6 -3,9 3,4 8,6
Interest received - - 0,0 0,1 0,2
Interest paid -0,5 -0,3 -1,1 -1,0 -1,3
Paid income tax -1,0 -1,8 -3,1 -3,7 -4,6
Cash flow from operating activities before changes in working
capital 54,1 83,2 114,1 117,1 203,6
Cash flow from changes in working capital
Increase(-)/decrease(+) inventories -98,7 -51,7 -240,1 -246,9 -87,3
Increase(-)/decrease(+) trade receivables 5,3 -161,0 -60,2 -169,5 -77,0
Increase(-)/decrease(+) other current receivables 49,9 138,2 -129,4 -133,4 -28,7
Increase(+)/decrease(-) trade payables -77,9 16,4 157,2 462,2 217,6
Increase(+)/decrease(-) other current liabilites -27,2 13,2 -16,9 32,2 36,6
Cash flow from changes in working capital -148,6 -45,0 -289,4 -55,4 61,2
Cash flow from operating activities -94,5 38,2 -175,3 61,7 264,9
INVESTING ACTIVITIES
Acquisition of intangible assets -9,5 -10,9 -34,9 -39,5 -45,6
Acquisition of tangible assets -3,8 -4,3 -17,8 -12,9 -16,3
Cash flow from investing activities -13,3 -15,2 -52,7 -52,4 -61,9
FINANCING ACTIVITIES
Amortization of lease liabilities -3,1 -2,8 -9,1 -8,5 -11,0
Dividend paid - - -55,0 -44,1 -88,3
Decreased number of treasury shares - - 2,1 2,1 2,1
Repurchase of treasury shares - - - - -16,0
Change of overdraft facility 65,3 - 65,3 - -
Net cash used in financing activities 62,2 -2,8 3,2 -50,4 -113,2
Net cash flow for the period -45,7 20,2 -224,7 -41,1 89,7
Cash and cash equivalents at beginning of period 86,1 132,9 262,4 194,2 194,2
Exchange rate losses/gains in cash and cash equivalents 0,0 -2,5 2,7 -2,7 -21,5
Cash and cash equivalents at end of period 40,4 150,5 40,3 150,5 262,4
Unutilized bank overdraft facility 34,7 150,0 34,7 150,0 50,0
Available funds at end of period 75,1 300,5 75,1 300,5 312,4

KEY FIGURES CONSOLIDATED

Q3 Q2 Q1 Q4 Q3
Amounts in SEK M 2021 2021 2021 2020 2020
Order intake 307 408 443 454 440
Order intake - rolling 4 quarters 1 611 1 744 1 660 1 588 1 978
Net sales 496,0 389,0 392,9 680,3 565,7
Net sales - rolling 4 quarters 1 958,2 2 027,8 1 926,5 1 759,5 1 317,0
Operating profit 40,1 22,6 17,3 69,3 75,1
Operating profit - rolling 4 quarters 149,3 184,3 165,2 155,2 109,9
Net profit for the period 32,0 15,2 17,7 50,2 69,3
Cash flow from operating activities -94,5 -18,2 -62,6 203,1 38,2
Cash flow from operating activities - rolling 4 quarters 27,8 160,6 200,1 264,9 187,6
Number of employees, end of period 180 173 163 150 147
Equity/assets ratio 49% 46% 62% 59% 49%

PARENT COMPANY INCOME STATEMENT IN SUMMARY

9 mths 9 mths Full year
Amounts in SEK M 2021 2020 2020
Net sales 1 153,5 1 200,2 1 672,1
Cost of goods sold -954,4 -1 025,0 -1 392,2
Gross profit 199,1 175,3 279,8
Selling expenses -48,4 -46,0 -65,1
Administrative expenses -41,1 -38,1 -54,3
Research and development costs -45,6 -33,6 -55,4
Other income and expenses -3,7 8,2 14,3
Operating profit 60,4 65,8 119,3
Result from financial items:
Interest income and similar profit/loss items 1,5 0,8 0,2
Interest expenses and similar profit/loss items -0,3 -5,8 -20,6
Profit/loss before tax 61,6 60,8 99,0
Income tax -12,7 1,1 -1,5
Net profit for the period 48,9 61,9 97,4

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME

9 mths 9 mths Full year
Amounts in SEK M 2021 2020 2020
Net profit for the period 48,9 61,9 97,4
Comprehensive income for the period
Items that are or may be reclassified to profit or loss for the period
Comprehensive income for the period - - -
Net comprehensive income for the period 48,9 61,9 97,4

PARENT COMPANY BALANCE SHEET IN SUMMARY

Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
Amounts in SEK M 2021 2021 2021 2020 2020
ASSETS
Non-current assets
Intangible assets 95,4 93,7 88,2 84,7 86,2
Property, plant and equipment 39,0 39,1 28,7 28,5 27,6
Financial assets
Participations in group companies 190,3 190,3 191,2 190,9 186,7
Recevables from group companies 10,3 10,0 9,3 11,7 10,6
Deferred tax assets 61,1 65,4 70,1 73,8 76,4
Total financial assets 261,6 265,8 270,6 276,4 273,7
Total non-current assets 396,1 398,6 387,5 389,6 387,5
Current assets
Inventories, etc. 404,1 228,5 138,2 184,8 184,9
Current receivables
Trade receivables 141,8 148,4 106,7 79,9 158,2
Receivables from current group companies 154,3 242,1 166,8 153,2 299,0
Other current receivables 218,0 267,3 129,5 91,7 194,9
Prepaid expenses and accrued income 10,7 13,7 8,8 7,0 8,8
Total current receivables 524,7 671,4 411,8 331,9 660,9
Cash and cash equivalents 1,3 40,8 147,0 225,1 134,6
Total current assets 930,1 940,7 697,0 741,7 980,4
TOTAL ASSETS 1 326,1 1 339,3 1 084,5 1 131,3 1 367,9

PARENT COMPANY BALANCE SHEET IN SUMMARY

Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
Amounts in SEK M 2021 2021 2021 2020 2020
EQUITY AND LIABILITIES
Shareholders' equity
Restricted equity
Share capital 111,0 111,0 111,0 111,0 111,0
Statutory reserve 104,8 104,8 104,8 104,8 104,8
Legal reserve for internally generated development expenditure 94,3 92,1 86,9 83,7 84,4
Total restricted equtiy 310,1 307,9 302,7 299,5 300,2
Non-restricted equity
Share premium reserve 195,7 195,9 197,9 196,2 211,3
Retained earnings 47,0 49,2 164,6 70,4 69,8
Net profit for the year 48,9 32,1 16,3 97,4 61,9
Total non-restricted equity 291,5 277,2 378,8 364,0 343,0
Total equity 601,7 585,0 681,5 663,5 643,2
PROVISIONS
Provisions 36,0 38,6 35,7 33,5 28,9
Total provisions 36,0 38,6 35,7 33,5 28,9
NON-CURRENT LIABILITES
Non-current liabilities 0,1 0,1 0,1 0,1 0,1
Total non-current liabilites 0,1 0,1 0,1 0,1 0,1
CURRENT LIABILITES
Liabilities to credit institutions 65,3 - - - -
Advances from customer 0,1 1,1 5,0 0,5 -
Trade payables 517,4 598,6 305,2 378,2 605,3
Liabilities to group companies 14,8 13,4 12,0 18,1 9,2
Other current liabilities 58,7 60,2 2,8 3,1 45,7
Accrued expenses and deferred income 32,2 42,4 42,1 34,4 35,6
Total current liabilities 688,4 715,6 367,1 434,3 695,8
TOTAL EQUITY AND LIABILITIES 1 326,1 1 339,3 1 084,4 1 131,3 1 367,9

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY IN SUMMARY

9 mths 6 mths 3 mths Full year 9 mths
Amounts in SEK M 2021 2021 2021 2020 2020
Equity at the beginning of the period 663,5 663,5 663,5 665,6 665,6
Net comprehensive income for the period 48,9 32,1 16,3 97,4 61,9
Repurchase of own shares - - - -16,0 -
Decreased number of treasury shares 2,1 2,1 - 2,1 2,1
Dividend -110,2 -110,2 - -88,3 -88,2
Share based payments, equity settled -2,6 -2,4 1,7 2,6 1,7
Equity at the end of the period 601,7 585,0 681,5 663,5 643,2

Note 1 – Accounting Principles

This interim report for the Group was prepared in accordance with IAS 34 Interim Financial Reporting and applicable provisions of the Annual Accounts Act. The interim report for the Parent Company was prepared in accordance with Chapter 9 of the Annual Accounts Act and RFR 2, Accounting for Legal Entities, issued by the Swedish Financial Reporting Council. The same accounting principles and bases for calculation were applied for the Group and the Parent Company as in the latest annual report.

Note 2 — Revenue from contracts with customers

BREAKDOWN OF REVENUE

Q3 Q3 9 mths 9 mths Full year
Amounts in SEK M 2021 2020 2021 2020 2020
Revenue from goods 472,3 540,5 1 202,9 1 021,7 1 670,4
Revenue from services 19,3 20,0 58,0 46,2 72,5
Revenue from licenses 4,4 5,2 17,0 11,3 16,6
Total 496,0 565,7 1 277,9 1 079,2 1 759,5

The company has allocated discounts proportionally for all performance obligations in the agreement except for when there is observable proof that the entire discount refers to one or several, but not all, performance obligations.

NET SALES BY SALES CHANNEL

Q3 Q3 9 mths 9 mths Full year
2021 2020 2021 2020 2020
Direct customers 59% 73% 57% 68% 72%
Resellers 41% 27% 43% 32% 28%
Total 100% 100% 100% 100% 100%

Note 3 — Leases

RIGHT-OF-USE ASSET

Sep 30 Sep 30 Dec 31
Amounts in SEK M 2021 2020 2020
Premises 32,9 42,6 40,4
Cars 4,6 3,7 3,3
Total 37,5 46,3 43,7

LEASE LIABILITY

Sep 30 Sep 30 Dec 31
Amounts in SEK M 2021 2020 2020
Within one year 12,8 11,8 11,8
Between one and five years 26,6 33,4 31,4
More than five years - 2,6 2,1
Total 39,4 47,8 45,3

Note 3 — Leases (cont'd)

COST AND CASH FLOW INFORMATION

Q3 Q3 Full year
Amounts in SEK M 2021 2020 2020
Depreciation of right-of use assets 3,2 3,0 11,8
(of which premises) 2,8 2,6 10,4
(of which cars) 0,4 0,4 1,3
Interest expense for lease liabilities 0,3 0,3 1,1
Amortization of lease liabilities 3,1 2,8 11,0

Note 4 — Financial instruments

For financial instruments measured at amortized cost — trade receivables, other current receivables and cash and cash equivalents, liabilities to credit institutions, trade payables, lease debt, and other current interest-free liabilities — the fair value is assessed to correspond to the carrying amount. The fair values of other non-current and current liabilities are not assessed to deviate substantially from their carrying amounts. Liabilities to credit institutions refers to bank overdraft facilities.

FINANCIAL INSTRUMENTS

Sep 30 Sep 30 Dec 31
Amounts in SEK M 2021 2020 2020
Loan and trade receivables 544,6 660,2 589,6
Total financial assets 544,6 660,2 589,6
Liabilities to credit institutions 65,3 - -
Lease liabilities 39,4 47,8 45,3
Other financial liabilities 578,9 654,1 400,9
Total financial liabilities 683,6 701,8 446,2

Note 5 – Share Performance Plan 2021

The Annual General Meeting on April 29, 2021, resolved to establish an incentive program in the form of a share performance plan (LTI 2021) for certain senior executives and key employees, whereupon the participants, after an initial investment in Pricer's Class B shares, receive one matching share right and one performance-based share right per invested Class B share. Following the vesting period of three years, the share rights entitle the participants to receive one matching share and up to five performance shares depending on the outcome of the performance conditions. From the 2021 performance share plan, a maximum of 279,000 shares can be transferred free of charge to the participants in June 2024 in the event the predefined performance targets are fully met. The value of the promise is expensed during the vesting period.

Note 6 — Related party transactions

Significant related party transactions are described in Note 23 of the consolidated financial statements in the 2020 Annual Report. No related party relationships changed, and no significant transactions took place with related parties that significantly affect the Group's or Parent Company's financial position or earnings compared to the description in the 2020 Annual Report.

Note 7 — Pledged assets and contingent liabilities

Floating charges (chattel mortgages) are a type of general collateral in the form of an undertaking to the bank. In the case of the Parent Company, guarantees are issued to customs authorities and landlords. During Q4 2021, chattel mortgages were secured for an additional SEK 40.4 M, whereby total chattel mortgages amount to SEK 100 M at the publication of this report.

PLEDGED ASSETS AND CONTINGENT LIABILITIES

Parent company Group
Sep 30 Sep 30 Dec 31 Sep 30 Sep 30 Dec 31
Amounts in SEK M 2021 2020 2020 2021 2020 2020
Pledged assets
Floating charges 59,6 59,6 59,6 59,6 59,6 59,6
Blocked funds - - - - 0,9 -
Total 59,6 59,6 59,6 59,6 60,5 59,6
Contingent liabilities
Bank guarantee - - - - 0,9 -
Customs authorities 0,1 0,1 0,1 5,4 5,5 5,1
Landlords 1,7 1,7 1,7 1,7 1,7 1,7
Total 1,8 1,8 1,8 7,1 8,2 6,8

CONSOLIDATED INCOME STATEMENT IN SUMMARY

Q1 Q2 Q3 Q4 Q1 Q2 Q3
Amounts in SEK M 2020 2020 2020 2020 2021 2021 2021
Net sales 225,9 287,6 565,7 680,3 392,9 389,0 496,0
Cost of goods sold -155,1 -221,8 -432,0 -527,5 -298,9 -293,8 -388,9
Gross profit 70,9 65,9 133,7 152,7 94,0 95,1 107,2
Gross margin, % 31,4% 22,9% 23,6% 22,5% 23,9% 24,5% 21,6%
Selling expenses -38,7 -32,8 -32,6 -44,6 -36,2 -39,0 -33,2
Administrative expenses -17,1 -16,6 -21,2 -23,1 -23,4 -19,5 -15,9
Research and development costs -9,7 -12,7 -11,3 -21,7 -14,7 -15,8 -15,0
Other income and expenses 2,0 -0,2 6,4 6,0 -2,4 1,7 -2,9
Operating profit 7,3 3,5 75,1 69,3 17,3 22,6 40,1
Operating margin, % 3,3% 1,2% 13,3% 10,2% 4,4% 5,8% 8,1%
Net financial items 8,2 -9,7 -5,2 -14,9 4,7 -3,2 -1,3
Net profit before tax 15,6 -6,2 69,9 54,4 22,0 19,4 38,9
Income tax -0,7 -0,7 -0,6 -4,2 -4,3 -4,2 -6,9
Net profit for the period 14,8 -6,9 69,3 50,2 17,7 15,2 32,0
Net profit for the period attributable to:
Owners of the Parent Company 14,8 -6,9 69,3 50,2 17,7 15,2 32,0
EARNINGS PER SHARE
Q1 Q2 Q3 Q4 Q1 Q2 Q3
2020 2020 2020 2020 2021 2021 2021
Basic earnings per share, SEK 0,13 -0,06 0,63 0,46 0,16 0,14 0,29
Diluted earnings per share, SEK 0,13 -0,06 0,62 0,45 0,16 0,14 0,29
Number of shares before dilution, millions 110,3 110,3 110,5 110,2 110,1 110,2 110,3
Diluted number of shares, millions 111,2 111,4 111,7 111,1 111,0 111,0 111,2
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Amounts in SEK M 2020 2020 2020 2020 2021 2021 2021
Net profit for the period
Items that are or may be reclassified to profit or loss for the
period
14,8 -6,9 69,3 50,2 17,7 15,2 32,0
Translation differences 21,1 -19,8 0,5 -20,9 9,6 -4,9 4,5
Other comprehensive income for the period 21,1 -19,8 0,5 -20,9 9,6 -4,9 4,5
Net comprehensive income for the period 35,9 -26,6 69,8 29,3 27,3 10,3 36,5
Net comprehensive income for the period attributable to:
Owners of the Parent Company 35,9 -26,6 69,8 29,3 27,3 10,3 36,5

CONSOLIDATED CASH FLOW STATEMENTS IN SUMMARY

Q1 Q2 Q3 Q4 Q1 Q2 Q3
Amounts in SEK M 2020 2020 2020 2020 2021 2021 2021
OPERATING ACTIVITIES
Operating profit 7,3 3,5 75,1 69,3 17,3 22,6 40,1
Adjustment for non-cash items 15,2 10,4 10,3 18,3 11,0 11,7 15,5
- of which depreciations and amortizations 9,8 9,7 12,9 13,1 14,0 14,1 14,0
- whereof other non-cash items 5,4 0,7 -2,6 5,2 -3,0 -2,4 1,5
Interest received - - - 0,1 - 0,0 -
Interest paid -0,4 -0,3 -0,3 -0,2 -0,3 -0,3 -0,5
Paid income tax -0,9 -1,0 -1,8 -0,9 -1,1 -0,9 -1,0
Cash flow from operating activities before changes in
working capital 21,2 12,7 83,2 86,5 26,9 33,1 54,1
Cash flow from changes in working capital
Increase(-)/decrease(+) inventories 33,9 -229,1 -51,7 159,6 32,2 -173,6 -98,7
Increase(-)/decrease(+) trade receivables -45,1 36,7 -161,0 92,5 -32,4 -33,1 5,3
Increase(-)/decrease(+) other current receivables -74,4 -197,2 138,2 104,7 -39,2 -140,1 49,9
Increase(+)/decrease(-) trade payables 47,6 398,2 16,4 -244,6 -56,6 291,7 -77,9
Increase(+)/decrease(-) other current liabilites 19,0 0,0 13,2 4,5 6,5 3,8 -27,2
Cash flow from changes in working capital -19,0 8,6 -45,0 116,6 -89,5 -51,3 -148,6
Cash flow from operating activities 2,2 21,3 38,2 203,1 -62,6 -18,2 -94,5
INVESTING ACTIVITIES
Acquisition of intangible assets -14,6 -14,0 -10,9 -6,1 -11,7 -13,7 -9,5
Acquisition of tangible assets -6,6 -2,0 -4,3 -3,4 -1,5 -12,4 -3,8
Cash flow from investing activities -21,2 -15,9 -15,2 -9,6 -13,2 -26,1 -13,3
FINANCING ACTIVITIES
Amortization of lease liabilities -2,9 -2,8 -2,8 -2,6 -3,0 -3,0 -3,1
Dividend paid - -44,1 - -44,2 - -55,0 -
Decreased number of treasury shares - 2,1 - - - 2,1 -
Increased number of treasury shares - - - -16,0 - - -
Change of overdraft facility - - - - - - 65,3
Cash flow from financing activities -2,9 -44,7 -2,8 -62,8 -3,0 -56,0 62,2
Net cash flow for the period -21,9 -39,4 20,2 130,8 -78,8 -100,3 -45,7
Cash and cash equivalents at beginning of period 194,2 180,1 132,9 150,5 262,4 189,9 86,1
Exchange rate losses/gains in cash and cash equivalents 7,8 -7,9 -2,5 -18,9 6,2 -3,5 0,0
Cash and cash equivalents at end of period 180,1 132,9 150,5 262,4 189,9 86,1 40,4
Unutilized bank overdraft facility 50,0 50,0 150,0 50,0 50,0 50,0 34,7
Available funds at end of period 230,1 182,9 300,5 312,4 239,9 136,1 75,1

Alternative key ratios

In addition to the key financial ratios that are covered by the IFRS framework, this report also includes other key ratios and measures, so-called alternative performance measures, that Pricer considers to be important for monitoring, analyzing and managing its operations. These key ratios and measures also provide Pricer's stakeholders with useful information about the company's financial position, profit and loss and development in a consistent manner. The reconciliation and definitions of the alternative key ratios and measures used in this report and that cannot be inferred directly from the financial statements are presented below.

Amounts in SEK M unless otherwise stated Sep 30
2021
Sep 30
2020
Dec 31
2020
PERFORMANCE MEASURE
Operating expenses
Selling expenses -108,3 -104,1 -148,7
Administrative expenses -58,8 -54,9 -78,0
Research and development costs -45,6 -33,6 -55,4
Operating expenses -212,7 -192,6 -282,1
MARGIN RATIOS
Net Sales 1 277,9 1 079,2 1 759,5
Gross Profit 296,3 270,4 423,1
Gross profit margin, % 23,2% 25,1% 24,0%
Operating profit 80,1 85,9 155,2
Operating margin, % 6,3% 8,0% 8,8%
CAPITAL AND FINANCIAL RATIOS
Equity/assets ratio
Total assets 1 607,3 1 647,7 1 394,5
Equity 782,4 805,0 819,0
Equity/assets ratio, % 49% 49% 59%
RETURN RATIOS
Equtiy per share basic/diluted
Number of outstanding shares, million 110,3 110,5 110,2
Dilution, million 0,8 1,2 0,9
Equity 782,4 805,0 819,0
Equity per share basic, SEK 7,09 7,29 7,43
Equity per share diluted, SEK 7,04 7,21 7,37
Earnings per share, before and after dilution
Avarage number of outstanding shares, million 110,2 110,4 110,3
Dilution, million 0,8 1,2 0,9
Net profit 64,9 77,3 127,5
Earnings per share, before dilution, SEK 0,59 0,70 1,16
Earnings per share, after dilution, SEK 0,58 0,69 1,15
ALTERNATIVE KEY RATIOS DEFINITION REASON FOR USE
PERFORMANCE METRIC
Change adjusted for exchange rate
fluctuations/change in local currency
Relationship between the period's profit/loss and
the comparative period's profit/loss translated
using the period's exchange rates.
This measure is used by management to follow
underlying change in profit/loss in comparable
currencies.
Gross profit Net sales less cost of goods sold Gross profit is an important measure for
management since it is used to analyze the
company's underlying development excluding
factors such as the product mix and price
changes that can give rise to sharp fluctuations
in net sales.
Operating expenses Refers to selling expenses, administrative
expenses and R&D expenses that are included in
operating activities.
Operating expenses provide an overall picture of
expenses that are charged to operating activities
and are an important internal measure that
management can influence to a large extent.
Items affecting comparability Expenses of a non-recurring nature that are not
part of the operating activities, such as personnel
costs related to restructurings.
This measure is used by management to
understand which costs are not part of the
underlying operating activities.
Operating expenses adjusted for items
affecting comparability
Operating expenses minus items affecting
comparability.
This measure is used by management to enable
comparability of operating expenses between
periods and to forecast future cost trends.
Operating profit Profit before financial items and tax. Operating profit provides an overall picture of the
total profit generation in operating activities. This
is a very important metric for internal use that
management can influence to a greater extent
than net profit.
Rolling four quarters Financial KPIs and measurements based on the
four most recent quarters.
Rolling four quarters are used to show financial
development over time adjusted for any
seasonal effects.
MARGIN RATIOS
Gross profit margin Gross profit as a percentage of net sales. The gross margin is used for both internal
evaluation and individual sales/contracts and to
monitor development over time for the company
as a whole.
Operating margin Operating profit as a percentage of net sales. Operating margin is one of management's most
important measures for performance monitoring
since it measures the company's ability to
convert net sales into operating profit.
CAPITAL AND FINANCIAL RATIOS
Equity/asset ratio Equity as a percentage of total assets. A traditional measure that gives an indication of
the company's ability to pay its debts.
RETURN RATIOS
Equity per share, before/after dilution Equity attributable to owners of the Parent
Company divided by the weighted number of
shares before/after dilution on the balance sheet
date. The dilutive effect can arise from the
company's outstanding warrants or performance
based share plans.
This measure is used to show development of
equity per share over time and enable
comparability with other companies.
ALTERNATIVE KEY RATIOS DEFINITION REASON FOR USE
Earnings per share, before/after
dilution
Profit for the period attributable to owners of the
Parent Company divided by the average number
of shares outstanding before/after dilution during
the period. The dilutive effect can arise from the
company's outstanding warrants or performance
based share plans.
This measure is used to show development of
earnings per share over time and to enable
comparability with other companies.
OTHER RATIOS
Order intake The value of binding customer orders, invoiced
service contracts and call-off under framework
agreements. Does not include the anticipated
future value of frameworks agreements.
Order intake is used to measure demand for the
company's products and services during a
specific period. This measure is also an
important indicator of increases/decreases in
demand between periods.
Change in order intake adjusted for
exchange rate fluctuations
Relationship between the period's order intake and
the comparative period's order intake translated
using the period's exchange rates.
This measure is used by management to follow
underlying change in order intake in comparable
currencies.
Order backlog The value of incoming orders that have not yet
been invoiced.
The size of the order backlog gives an indication
of net sales development from a short to mid
term perspective.

About Pricer

Pricer manufactures the world's most reliable system of electronic shelf labels (ESL), which help retailers all over the world resolve important challenges introduced by modernization. Pricer's digital solutions optimize employee-intensive processes, ensure price information, and improve the buying experience for the customer.

With over 200 million labels installed in over 17,000 installations in more than 60 countries, Pricer is the world-leader in digital retail solutions.

For many years, Pricer's ideas, technology and employees have changed how the grocery retail trade functions and transformed an entire industry. Pricer is today the only supplier with optical wireless communication, which creates a scalable and reliable system that is not disrupted by other Wi-Fi systems. In addition, the battery performance of Pricer's labels is the market leader, featuring significantly less energy consumption than other communication systems without sacrificing speed and flexibility.

Pricer's customers today primarily operate in the grocery retail, DIY, electronics, and pharmacy industries. Customer needs and consumer preferences are the drivers for Pricer's innovative and sustainable solutions.

Pricer was founded in 1991 in Sweden, and the company's Class B share is listed on Nasdaq Stockholm Mid Cap.

For more information, please visit www.pricer.com.

Pricer AB Website: www.pricer.com Box 215 Telephone: +46 8 505 582 00 SE-101 24 Stockholm, Sweden CIN: 556427-7993 Street address: Västra Järnvägsgatan 7 SE-111 64 Stockholm

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