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Pricer

Quarterly Report Apr 23, 2021

3098_10-q_2021-04-23_0f0e8a10-d690-443b-b578-76fc917ff416.pdf

Quarterly Report

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SEK 392.9 M

Net sales in the quarter (+74%)

4.4%

Operating margin in the quarter

SEK 17.7 M

Net profit for the quarter (+20%)

Q1 • INTERIM REPORT • January – March 2021

High order intake and net sales growth of 74 percent

Q1 2021

  • Net sales amounted to SEK 392.9 M (225.9), an increase of 74 percent compared to the same period last year.
  • Operating profit amounted to SEK 17.3 M (7.3), which corresponds to an operating margin of 4.4 percent (3.3).
  • Order intake was SEK 443 M (371), an increase of 19 percent compared to the same period last year.
  • Order backlog amounted to SEK 550 M (933), of which the majority is expected to be delivered in Q2 and Q3 2021.
  • Profit for the period was SEK 17.7 M (14.8).
  • Earnings per share (basic) were SEK 0.16 (0.13). Earnings per share (diluted) were SEK 0.16 (0.13)
  • Cash flow from operating activities was SEK -62.6 M (2.2).
Amounts in SEK M unless otherwise Q1 Q1 Rolling Full year
stated 2021 2020 4 Q 2020
Order intake 443 371 1 660 1 588
Net sales 392,9 225,9 1 926,5 1 759,5
Gross margin, % 23,9% 31,4% 23,2% 24,0%
Operating profit 17,3 7,3 165,2 155,2
Operating margin, % 4,4% 3,3% 8,6% 8,8%
Cash flow 1) -62,6 2,2 200,1 264,9
Net profit for the period 17,7 14,8 130,3 127,5
Earnings per share, SEK 2) 0,16 0,13 1,18 1,16
1) Cash flow
from operating activities

2) Basic earnings per share

Continued high demand with growth in many markets

Acquisitions and partnerships can broaden the product portfolio

Comments from CEO Helena Holmgren

The first quarter of the year offered continued high activity in terms of both receipts of new orders and deliveries of backlogged orders. Historically, the first quarter has traditionally been calmer, but this year deliveries set records in both volume and value. Net sales amounted to SEK 393 M (226), which corresponds to a growth of 74 percent compared to the corresponding period last year. The previously communicated large ongoing customer projects in the USA, Canada, Norway, and the Netherlands have continued to progress according to plan during the quarter.

Order intake amounted to SEK 443 M (371), which is the highest of any previous first quarter and on par with Q3 and Q4 2020. We are pleased to note that order intake is spread across a large number of customers and has a broad geographic distribution, which indicates underlying market growth in small and mid-size customer projects. These projects represent a more stable and even revenue flow than large customer projects, which are more irregular and the development of which should be viewed over a longer period of time. Order backlog increased during the quarter due to longer lead times than normal and amounted at the end of March to SEK 550 M.

The gross margin of 23.9 percent (31.4) and the operating profit of SEK 17.3 M (7.3) were under pressure from high component and logistics costs. Otherwise, the gross margin is a result of the product and contract mix that was invoiced in the quarter. We are continuing to invest in an increased market presence that forms the basis for a closer dialogue with our customers and a broader service offer, which combined with a continued high pace of innovation in product development increases the fixed operating expenses. The cash flow is primarily a result of timing effects between incoming and outgoing payments, and, as previously communicated, the cash flow should be analyzed over time.

It is becoming more difficult for paper labels to maintain their grip on the retail trade, and we are seeing strong demand for ESL (Electronic Shelf Label) systems around the world. The digital label's ability to improve both the efficiency of labor-intensive processes and the consumer shopping experience makes the investment of particular strategic importance. The ambition of "doing more with less" has gained a whole new meaning the past year, and retail chains are increasingly dependent on modern system support to maintain their competitiveness.

Alongside providing an ESL system, Pricer's ambition is to offer data-driven insights to our customers and to ensure efficient execution of prioritized tasks in the store. Our battery-driven camera plays a key role in expanding the data collection capability to support real-time insight, but we also intend to include other data points to improve the analysis and its potential for value creation. For each stage of the development, we will evaluate whether we will develop ourselves, acquire a company with a relevant solution, or enter a partnership with a third-party solution. As we increase the value creation of our turnkey solution, we also see good possibilities for increased recurring revenues in the form of software subscriptions and greater sales of services.

A challenge facing many software-based analytic tools aiming to support retailers make better decisions faster is that they do not have links to the store to facilitate the implementation of the analyses that are conducted. Here, the ESL system plays a key role since it enables fast and efficient communication to both store staff and consumers. The strength of providing the market's fastest, most reliable and most scalable ESL system increases as more processes become dependent on the system. We are excited about the trend of store operations becoming increasingly data driven and algorithm steered since Pricer has everything to gain from this development.

Helena Holmgren President and CEO

306 111 26 Order intake per region in Q1 2021, SEK M

Europe, Middle East & Africa Americas Asia & the Pacific

Market development

We are noting high activity in all important markets. Existing framework agreements in Norway and Canada have contributed to the high order intake, but good growth has also been noted in several geographic markets. The cooperation with Carrefour is progressing according to plan, and several pilot installations are currently underway around the world, in addition to running installations in France and Belgium. In general, the flow of small and mid-size customer projects increased during the quarter.

Pricer's new camera solution was introduced in several stores during the quarter. There is great interest in shelf vision solutions, both among retailers and investors. Empty shelves are one of the biggest and most costly challenges for Pricer's customers, especially within grocery retail. Pricer's battery-powered camera introduces eyes in the store and thus enables an automated and increased frequency of checks regarding the actual status of the shelf. Unlike competing solutions from, for example, Trax and Focal systems, Pricer can use the connection to the digital label for increased value creation for the customer.

The pandemic continues to hold large parts of the world in its grip, and in the first quarter several of Pricer's largest markets imposed heavy restrictions that had a major impact on the retail trade. Despite this, the installation projects progressed according to plan, and the largest impact was noted instead in the supply and logistics chain.

We have previously described the tough situation in terms of logistics, where the reduced air traffic resulted in a sharp increase in freight costs for both air and sea transports. In addition, there is a global shortage of a number of standard components such as displays, semiconductors and crystals. Pricer works with long forecast periods to suppliers, which has enabled the maintaining of a good rate of production. However, the fact that the component shortage is coinciding with a sharp increase in demand on the ESL market is resulting in higher costs and longer lead times.

Order intake in Q1 2021

Order intake for the first quarter amounted to SEK 443 M (371), an increase of 19 percent compared to the same quarter last year. Adjusted for exchange rate fluctuations, order intake increased by 31 percent. Order intake is spread across a large number of customers on several geographic markets, with France, Norway and Canada the largest individual contributors. Order intake for the quarter includes a significant portion of the estimated order value of SEK 110 M related to Pricer's Norwegian retailer StrongPoint AS's new agreement with Norway's largest retail chain, NorgesGruppen, where orders will be placed and delivered until the end of 2023.

Order backlog as per March 31, 2021, amounted to SEK 550 M (933), of which the majority is expected to be delivered in Q2 and Q3 2021.

Net sales and profit/loss in Q1 2021

NET SALES BY GEOGRAPHICAL REGION

Q1 Q1 Full year
Amounts in SEK M 2021 2020 2020
Europe, Middle East & Africa 242,0 195,6 839,5
Americas 129,8 29,1 883,0
Asia & the Pacific 21,1 1,2 37,0
Total net sales 392,9 225,9 1 759,5

NET SALES AND PROFIT

Q1 Q1 Full year
Amounts in SEK M 2021 2020 2020
Net sales 392,9 225,9 1 759,5
Cost of goods sold -298,9 -155,1 -1 336,4
Gross profit 94,0 70,9 423,1
Gross margin, % 23,9% 31,4% 24,0%
Operating expenses -74,3 -65,5 -282,1
Other income and expenses -2,4 2,0 14,2
Operating profit 17,3 7,3 155,2
Operating margin, % 4,4% 3,3% 8,8%

ADJUSTED FOR F/X

Reported
current Reported Adjusted
Amount in SEK M unless otherwise stated period change for F/X
First quarter compared with the same period last year
Net sales 392,9 74% 91%
Cost of goods sold -298,9 93% 118%
Gross profit 94,0 33% 31%
Operating expenses -74,3 13% 16%
Other income and expenses -2,4 - -
Operating profit 17,3 136% 99%

Net sales amounted to SEK 392.9 M (225.9) in the quarter, an increase of 74 percent compared to the same quarter last year. Adjusted for exchange rate fluctuations, net sales increased by 91 percent. The majority of the sales occurred in France, Canada and the USA. Net sales in Q1 2021 were spread across a large number of customers.

Gross profit amounted to SEK 94.0 M (70.9), and the gross margin amounted to 23.9 percent (31.4) for the quarter. The change in the gross margin continued to be primarily an effect of the product and contract mix, where the majority of the net sales came from large customer projects. Access to freight solutions continued to be restricted in the first quarter, both for air and sea, which resulted in significant price increases and pressure on the gross margin compared to the same quarter last year. Access to standard components that are shared by several different industries is restricted, which is having an impact on both lead times and prices. 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 had a slight positive impact on gross profit compared to last year.

Operating expenses increased to SEK -74.3 M (-65.5) in the quarter, an increase of 13 percent compared to the same quarter last year. The increase was primarily a result of increased costs for staff and consultants related to investments in product development, an enhanced market presence to enable a broader customer service offer, and IT infrastructure. Operating expenses are primarily in SEK, but they are also in EUR and USD.

Other income and expenses amounted to SEK -2.4 M (2.0) and consisted of the net effect of realized and unrealized currency revaluations of trade receivables and trade payables.

Operating profit amounted to SEK 17.3 M (7.3), which corresponded to an operating margin of 4.4 percent (3.3). An increase in the gross profit led to an increase in both the 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 positive impact on the quarter and amounted to SEK 4.7 M (8.2), which was largely due to positive translation effects on currency accounts in USD.

Tax for the quarter amounted to SEK -4.3 M (-0.7), of which SEK -3.2 M (0.1) refers to deferred tax and SEK -1.1 M (-0.8) to current tax. The current tax rate amounted to -5 percent (-5), and the reported total tax rate amounted to -20 percent (-5). 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 will be higher than in previous years. Deferred tax assets related to capitalized losses carried forward amounted in the balance sheet on March 31, 2021, to SEK 62.8 M (70.4).

Profit for the period was SEK 17.7 M (14.8). The increase compared to the last year can be attributable to an increase in operating profit.

Translation differences in other comprehensive income of SEK 9.6 M (21.1) consisted of currency revaluation of net assets in foreign operations.

Cash flow, investments and financial position

First quarter

Cash flow from operating activities amounted to SEK -62.6 M (2.2) in the first quarter. The change in working capital during the quarter had a negative impact on cash flow from operating activities of SEK -89.5 M (-19.0). Trade receivables increased at the same rate as inventories decreased. The order backlog continues to be high, which meant that receivables from suppliers (for component purchases that are re-invoiced) increased, but the challenges in the production chain due to the shortage of certain standard components have meant that inventory has not built up as order intake increased. Trade payables were paid during the quarter for large deliveries that occurred in Q4 2020 and customer payments were made before the end of the year. 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 -13.2 M (-21.2) in the first quarter and consisted primarily of capitalized development expenditure of SEK -11.7 M (-14.6) for continued investments in product development and investments in property, plant and equipment of SEK -1.5 M (-6.6) attributable primarily to production equipment.

Cash outflow from financing activities amounted to SEK -3.0 M (-2.9) during the first quarter and referred to amortization of lease liabilities.

Exchange rate differences in cash and cash equivalents amounted to SEK 6.2 M (7.8), which was due to positive translation effects on currency accounts in USD and EUR.

Cash and cash equivalents amounted to SEK 189.9 M (180.1) on March 31, 2021. In addition to cash and cash equivalents, the company has an unutilized overdraft facility of SEK 50 M (50).

Equity

ISSUED AND OUTSTANDING SHARES

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 - -877 -877
Outstanding shares at end of period 226 109 869 110 095

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

Pricer's holdings of treasury shares amounted on March 31, 2021, to 877,136 (705,131) 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.

Maximum in Transferred free of
Performance thousands of charge to the
share plan (LTI) shares Vesting period participants
LTI 2018 325 Jun 2018 - May 2021 Jun 2021
LTI 2019 240 Jun 2019 - May 2022 Jun 2022
LTI 2020 330 Jun-2020 - May 2023 Jun 2023

The value of the promise is expensed during the vesting period. For more information about the performance share plans from 2018, 2019 and 2020, please refer to Note 4 of the 2020 Annual Report.

Employees

The average number of employees during the first quarter was 162 (138), and the number of employees at the end of the period was 163 (141). The average number including hired staff and consultants was 190 (162) in the first quarter and 196 (168) at the end of the period. The organization was strengthened in several areas, such as customer project development, support, product development, and sales. In order to further meet the challenges within the digitalization of physical stores that the retail trade is facing, and to broaden the system's area of use, the company continued to expand its R&D organization. We also strengthened our presence in a number of geographic markets with the aim of managing both the increased demand and the growing installed customer base.

In March 2021, Pricer recruited Susanna Zethelius to be the new CFO and member of Group management. Susanna will take on her new role no later than September 1, 2021.

Parent Company

The Parent Company's net sales amounted to SEK 360.2 M (210.4), and the profit for the period amounted to SEK 16.3 M (13.3). The Parent Company's cash and cash equivalents amounted to SEK 147.0 M (125.1) at the end of the period.

Q1 Q2 Q3 Q4 Q1 20 20 20 21

10 0 110

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. These risks apply primarily to the development of the market for not only digital shelf edge 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.

Effects from the coronavirus

Pricer, like other global companies, is affected by pandemics, and during the years 2020–2021 the company was affected by COVID-19. 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 due to the ongoing pandemic.

Uncertainty about the course of the 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.

Events after the end of the reporting period

No significant events occurred after the end of the reporting period.

2021 Annual General Meeting

Due to the spread of COVID-19, the Board of Directors has decided that the AGM will be held without the physical presence of shareholders, proxies and external parties. Shareholders will instead only be able to exercise their voting right by way of postal voting. Information about the resolutions of the meeting will be published Thursday, April 29, 2021, as soon as the outcome of the postal voting is finally compiled.

The Board has proposed to the AGM a dividend of 1.00 (0.80) per share. This corresponds to SEK 110.1 M (88.3), which will be paid in two equal payments in May and November 2021. Proposed record dates are May 3 and November 3, 2021. If the AGM resolves in accordance with the proposal, the dividend is expected to be distributed through Euroclear Sweden AB on May 6 and November 8, 2021. The Board's reasoning is presented on page 61 of the 2020 Annual Report.

Next interim report will be published on July 20, 2021

Financial Calendar

April 29, 2021 Annual General Meeting July 20, 2021 Interim Report January–June 2021 October 22, 2021 Interim Report January–September 2021 February 11, 2022 Year-End Report 2021

The Board of Directors and 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, April 23, 2021

Pricer AB (publ)

Helena Holmgren President and CEO

This report has not been subject to an audit.

Every care has been taken in the translation of this document. In the event of discrepancies, the Swedish original will supersede the English translation.

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 person mentioned below for publication on April 23, 2021, at 8:30 AM CET.

For more information, please contact: Helena Holmgren, President and CEO Tel: +46 (0)702 870 068 Email: [email protected]

Financial Reporting

CONSOLIDATED INCOME STATEMENT IN SUMMARY

Amounts in SEK M Q1
2021
Q1
2020
Full year
2020
Net sales 392,9 225,9 1 759,5
Cost of goods sold -298,9 -155,1 -1 336,4
Gross profit 94,0 70,9 423,1
Selling expenses -36,2 -38,7 -148,7
Administrative expenses -23,4 -17,1 -78,0
Research and development costs -14,7 -9,7 -55,4
Other income and expenses -2,4 2,0 14,2
Operating profit 17,3 7,3 155,2
Net financial items 4,7 8,2 -21,5
Net profit before tax 22,0 15,6 133,6
Income tax -4,3 -0,7 -6,2
Net profit for the period 17,7 14,8 127,5
Net profit for the period attributable to:
Owners of the Parent Company 17,7 14,8 127,5
EARNINGS PER SHARE
Q1 Q1 Full year
2021 2020 2020
Basic earnings per share, SEK 0,16 0,13 1,16
Diluted earnings per share, SEK 0,16 0,13 1,15
Number of shares before dilution, millions 110,3 110,3 110,3
Diluted number of shares, millions 111,2 111,2 111,2
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Q1 Q1 Full year
Amounts in SEK M 2021 2020 2020
Net profit for the period 17,7 14,8 127,5
Items that are or may be reclassified to profit or loss for the period
Translation differences 9,6 21,1 -19,1
Other comprehensive income for the period 9,6 21,1 -19,1
Net comprehensive income for the period 27,3 35,9 108,4
Net comprehensive income for the period attributable to:

CONSOLIDATED BALANCE SHEET IN SUMMARY

Amounts in SEK M Mar 31
2021
Dec 31
2020
Sep 30
2020
Jun 30
2020
Mar 31
2020
ASSETS
Intangible assets 346,6 338,0 352,3 346,5 352,3
Property, plant and equipment 30,5 30,3 30,0 28,7 29,0
Right-of-use assets 43,3 43,7 46,3 48,5 53,0
Deferred tax assets 71,8 75,0 77,4 76,7 76,5
Total non-current assets 492,2 487,0 506,0 500,4 510,7
Inventories 274,2 301,5 464,3 413,9 188,4
Trade receivables 263,2 235,6 312,6 155,2 193,2
Prepaid expenses and accrued income 13,3 9,5 13,4 17,2 13,1
Other current receivables 133,8 98,5 200,9 335,0 142,5
Cash and cash equivalents 189,9 262,4 150,5 132,9 180,1
Total current assets 874,4 907,5 1 141,8 1 054,2 717,4
TOTAL ASSETS 1 366,6 1 394,5 1 647,7 1 554,6 1 228,1
EQUITY AND LIABILITIES
EQUITY
Share capital 111,0 111,0 111,0 111,0 111,0
Other capital contributions 394,9 393,2 408,3 405,5 404,8
Reserves 25,4 15,8 36,7 36,2 56,0
Accumulated profits including profit for the year 316,8 299,1 249,0 179,7 274,8
Shareholder's equity attributable to the Parent Company's
shareholders 848,1 819,0 805,0 732,4 846,6
LIABILITIES
Non-current provisions 25,6 24,0 18,7 17,0 16,3
Non-current lease liabilities 32,9 33,5 36,0 38,1 42,2
Total non-current liabilities 58,5 57,6 54,7 55,1 58,5
Advances from customer 12,6 6,4 9,8 7,5 9,1
Trade payables 309,7 384,4 609,8 603,9 199,6
Current lease liabilities 12,2 11,8 11,8 11,7 11,9
Other current liabilites 14,6 19,5 57,2 55,4 11,9
Accrued expense and deferred income 86,7 73,0 79,8 70,5 73,6
Current provisions 24,3 22,8 19,7 18,0 16,8
Total current liabilities 460,1 517,9 788,1 767,1 322,9
Total liabilities 518,6 575,5 842,8 822,2 381,5
TOTAL EQUITY AND LIABILITIES 1 366,6 1 394,5 1 647,7 1 554,6 1 228,1
Basic shareholders' equity per share, SEK 7,70 7,44 7,29 6,63 7,68
Diluted shareholders' equity per share, SEK 7,63 7,37 7,21 6,58 7,61

CHANGES IN CONSOLIDATED EQUITY IN SUMMARY

3 mths Full year 9 mths 6 mths 3 mths
Amounts in SEK M 2021 2020 2020 2020 2020
Equity at the beginning of the period 819,0 810,2 810,2 810,2 810,2
Net profit for the period 17,7 127,5 77,3 8,0 14,8
Other comprehensive income for the period 9,6 -19,1 1,8 1,3 21,1
Net comprehensive income for the period 27,3 108,4 79,1 9,3 35,9
Repurchase of own shares - -16,0 - - -
Decreased number of treasury shares - 2,1 2,1 2,1 -
Dividend - -88,3 -88,2 -88,2 -
Share based payments, equity settled 1,7 2,6 1,7 -1,1 0,4
Total transactions with owners of the Group 1,7 -99,6 -84,3 -87,1 0,4
Equity at the end of the period 848,1 819,0 805,0 732,4 846,6
Attributable to:
- Owners of the parent company 848,1 819,0 805,0 732,4 846,6

CONSOLIDATED CASH FLOW STATEMENTS IN SUMMARY

Q1 Q1 Full year
Amounts in SEK M 2021 2020 2020
OPERATING ACTIVITIES
Operating profit 17,3 7,3 155,2
Adjustment for non-cash items 11,0 15,2 54,1
- of which depreciations and amortizations 14,0 9,8 45,5
- whereof other non-cash items -3,0 5,4 8,6
Interest received - - 0,2
Interest paid -0,3 -0,4 -1,3
Paid income tax -1,1 -0,9 -4,6
Cash flow from operating activities before changes in working
capital 26,9 21,2 203,6
Cash flow from changes in working capital
Increase(-)/decrease(+) inventories 32,2 33,9 -87,3
Increase(-)/decrease(+) trade receivables -32,4 -45,1 -77,0
Increase(-)/decrease(+) other current receivables -39,2 -74,4 -28,7
Increase(+)/decrease(-) trade payables -56,6 47,6 217,6
Increase(+)/decrease(-) other current liabilites 6,5 19,0 36,6
Cash flow from changes in working capital -89,5 -19,0 61,2
Cash flow from operating activities -62,6 2,2 264,9
INVESTING ACTIVITIES
Acquisition of intangible assets -11,7 -14,6 -45,6
Acquisition of tangible assets -1,5 -6,6 -16,3
Cash flow from investing activities -13,2 -21,2 -61,9
FINANCING ACTIVITIES
Amortization of lease liabilities -3,0 -2,9 -11,0
Dividend paid - - -88,3
Decreased number of treasury shares - - 2,1
Repurchase of treasury shares - - -16,0
Net cash used in financing activities -3,0 -2,9 -113,2
Net cash flow for the period -78,8 -21,9 89,7
Cash and cash equivalents at beginning of period 262,4 194,2 194,2
Exchange rate losses/gains in cash and cash equivalents 6,2 7,8 -21,5
Cash and cash equivalents at end of period 189,9 180,1 262,4
Unutilized bank overdraft facility 50,0 50,0 50,0
Available funds at end of period 239,9 230,1 312,4

PARENT COMPANY INCOME STATEMENT IN SUMMARY

3 mths 3 mths Full year
Amounts in SEK M 2021 2020 2020
Net sales 360,2 210,4 1 672,1
Cost of goods sold -296,5 -169,1 -1 392,2
Gross profit 63,8 41,3 279,8
Selling expenses -15,8 -18,2 -65,1
Administrative expenses -15,9 -10,9 -54,3
Research and development costs -14,7 -9,7 -55,4
Other income and expenses -2,4 2,0 14,3
Operating profit 15,0 4,5 119,3
Result from financial items:
Result from participations in group companies - - -
Interest income and similar profit/loss items 5,1 8,6 0,2
Interest expenses and similar profit/loss items 0,0 0,0 -20,6
Profit/loss before tax 20,0 13,1 99,0
Income tax -3,7 0,2 -1,5
Net profit for the period 16,3 13,3 97,4

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME

3 mths 3 mths Full year
Amounts in SEK M 2021 2020 2020
Net profit for the period 16,3 13,3 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 16,3 13,3 97,4

PARENT COMPANY BALANCE SHEET IN SUMMARY

Mar 31 Dec 31 Sep 30 Jun 30 Mar 31
Amounts in SEK M 2021 2020 2020 2020 2020
ASSETS
Non-current assets
Intangible assets 88,2 84,7 86,2 82,0 72,5
Property, plant and equipment 28,7 28,5 27,6 26,0 26,2
Financial assets
Participations in group companies 191,2 190,9 186,7 186,2 187,1
Recevables from group companies 9,3 11,7 10,6 9,6 6,6
Deferred tax assets 70,1 73,8 76,4 75,8 75,4
Total financial assets 270,6 276,4 273,7 271,6 269,1
Total non-current assets 387,5 389,6 387,5 379,6 367,8
Current assets
Inventories, etc. 138,2 184,8 184,9 227,1 114,3
Current receivables
Trade receivables 106,7 79,9 158,2 63,5 98,5
Receivables from current group companies 166,8 153,2 299,0 179,2 98,6
Other current receivables 129,5 91,7 194,9 322,8 137,5
Prepaid expenses and accrued income 8,8 7,0 8,8 10,3 7,6
Total current receivables 411,8 331,9 660,9 575,7 342,1
Cash and cash equivalents 147,0 225,1 134,6 108,9 125,1
Total current assets 697,0 741,7 980,4 911,8 581,4
TOTAL ASSETS 1 084,5 1 131,3 1 367,9 1 291,4 949,2

PARENT COMPANY BALANCE SHEET IN SUMMARY

Mar 31 Dec 31 Sep 30 Jun 30 Mar 31
Amounts in SEK M 2021 2020 2020 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 86,9 83,7 84,4 79,8 69,9
Total restricted equtiy 302,7 299,5 300,2 295,6 285,7
Non-restricted equity
Share premium reserve 197,9 196,2 211,3 208,5 207,9
Retained earnings 164,6 70,4 69,8 74,3 172,4
Net profit for the year 16,3 97,4 61,9 -2,3 13,3
Total non-restricted equity 378,8 364,0 343,0 280,5 393,6
Total equity 681,5 663,5 643,2 576,1 679,4
PROVISIONS
Provisions 35,7 33,5 28,9 26,3 24,4
Total provisions 35,7 33,5 28,9 26,3 24,4
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
Advances from customer 5,0 0,5 - - -
Trade payables 305,2 378,2 605,3 601,1 195,6
Liabilities to group companies 12,0 18,1 9,2 8,1 10,2
Other current liabilities 2,8 3,1 45,7 48,5 2,5
Accrued expenses and deferred income 42,1 34,4 35,6 31,1 37,0
Total current liabilities 367,2 434,3 695,8 688,8 245,3
TOTAL EQUITY AND LIABILITIES 1 084,5 1 131,3 1 367,9 1 291,4 949,2

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY IN SUMMARY

Amounts in SEK M 3 mths
2020
Full year
2020
9 mths
2020
6 mths
2020
3 mths
2020
Equity at the beginning of the period 663,5 665,6 665,6 665,6 665,6
Net comprehensive income for the period 16,3 97,4 61,9 -2,3 13,3
Repurchase of own shares - -16,0 - - -
Decreased number of treasury shares - 2,1 2,1 2,1 -
Dividend - -88,3 -88,2 -88,2 -
Share based payments, equity settled 1,7 2,6 1,7 -1,1 0,4
Equity at the end of the period 681,5 663,5 643,2 576,1 679,4

KEY FIGURES

Q1 Q4 Q3 Q2 Q1
Amounts in SEK M 2021 2020 2020 2020 2020
Order intake 443 454 440 324 371
Order intake - rolling 4 quarters 1 660 1 588 1 978 1 761 1 667
Net sales 392,9 680,3 565,7 287,6 225,9
Net sales - rolling 4 quarters 1 926,5 1 759,5 1 317,0 983,9 967,0
Operating profit 17,3 69,3 75,1 3,5 7,3
Operating profit - rolling 4 quarters 165,2 155,2 109,9 59,7 90,2
Net profit for the period 17,7 50,2 69,3 -6,9 14,8
Cash flow from operating activities -62,6 203,1 38,2 21,3 2,2
Cash flow from operating activities - rolling 4 quarters 200,1 264,9 187,6 144,5 95,2
Number of employees, end of period 163 150 147 147 141
Equity/assets ratio 62% 59% 49% 47% 69%

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

Q1 Q1 Full year
Amounts in SEK M 2021 2020 2020
Revenue from goods 367,8 209,6 1 670,4
Revenue from services 19,0 13,1 72,5
Revenue from licenses 6,1 3,2 16,6
Total 392,9 225,9 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

Q1 Q1 Full year
2021 2020 2020
Direct customers 61% 48% 72%
Resellers 39% 52% 28%
Total 100% 100% 100%

Note 3 — Leases

RIGHT-OF-USE ASSET

Mar 31 Mar 31 Dec 31
Amounts in SEK M 2021 2020 2020
Premises 38,3 49,7 40,4
Cars 5,0 3,3 3,3
Total 43,3 53,0 43,7

LEASE LIABILITY

Mar 31 Mar 31 Dec 31
Amounts in SEK M 2021 2020 2020
Within one year 12,2 11,9 11,8
Between one and five years 31,4 38,2 31,4
More than five years 1,5 4,1 2,1
Total 45,0 54,1 45,3

Note 3 — Leases (cont'd)

COST AND CASH FLOW INFORMATION

Q1 Q1 Full year
Amounts in SEK M 2021 2020 2020
Depreciation of right-of use assets 3,1 3,1 11,8
(of which premises) 2,7 2,8 10,4
(of which cars) 0,4 0,3 1,3
Interest expense for lease liabilities 0,3 0,3 1,1
Amortization of lease liabilities 3,0 2,9 11,0

Note 4 — Financial instruments

For financial instruments measured at amortized cost — trade receivables, other current receivables and cash and cash equivalents, 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.

FINANCIAL INSTRUMENTS

Mar 31 Mar 31 Dec 31
Amounts in SEK M 2021 2020 2020
Loan and trade receivables 582,2 510,7 589,6
Total financial assets 582,2 510,7 589,6
Lease liabilities 45,1 54,1 45,3
Other financial liabilities 310,1 199,6 400,9
Total financial liabilities 355,2 253,8 446,2

Note 5 — 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 6 — 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.

PLEDGED ASSETS AND CONTINGENT LIABILITIES

Parent company Group
Mar 31 Mar 31 Dec 31 Mar 31 Mar 31 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 - - - - 1,0 -
Total 59,6 59,6 59,6 59,6 60,6 59,6
Contingent liabilities
Bank guarantee - - - - 1,0 -
Customs authorities 0,1 0,1 0,1 5,4 6,2 5,1
Landlords 1,7 1,7 1,7 1,7 1,7 1,7
Total 1,8 1,8 1,8 7,1 8,9 6,8

CONSOLIDATED INCOME STATEMENT IN SUMMARY

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

CONSOLIDATED CASH FLOW STATEMENTS IN SUMMARY

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

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.

Mar 31 Mar 31 Dec 31
Amounts in SEK M unless otherwise stated
PERFORMANCE MEASURE
2021 2020 2020
Operating expenses
Selling expenses -36,2 -38,7 -148,7
Administrative expenses -23,4 -17,1 -78,0
Research and development costs -14,7 -9,7 -55,4
Operating expenses -74,3 -65,5 -282,1
MARGIN RATIOS
Net Sales 392,9 225,9 1 759,5
Gross Profit 94,0 70,9 423,1
Gross profit margin, % 23,9% 31,4% 24,0%
Operating profit 17,3 7,3 155,2
Operating margin, % 4,4% 3,3% 8,8%
CAPITAL AND FINANCIAL RATIOS
Equity/assets ratio
Total assets 1 366,6 1 228,1 1 394,5
Equity 848,1 846,6 819,0
Equity/assets ratio, % 62% 69% 59%
RETURN RATIOS
Equtiy per share basic/diluted
Number of outstanding shares, million 110,3 110,3 110,2
Dilution, million 0,9 1,0 0,9
Equity 848,1 846,6 819,0
Equity per share basic, SEK 7,69 7,68 7,43
Equity per share diluted, SEK 7,63 7,61 7,37
Earnings per share, before and after dilution
Avarage number of outstanding shares, million 110,3 110,3 110,3
Dilution, million 0,9 1,0 0,9
Net profit 17,7 14,8 127,5
Earnings per share, before dilution, SEK 0,16 0,13 1,16
Earnings per share, after dilution, SEK 0,16 0,13 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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