Quarterly Report • Oct 25, 2017
Quarterly Report
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-8%
Net sales change
10.6% Operating margin
SEK 16.1 M
Profit for the period
| Amounts in SEK M unless otherwise | ||||||
|---|---|---|---|---|---|---|
| stated | ||||||
| Order intake | 234 | 145 | 641 | 603 | 783 | 820 |
| Net sales | 193,8 | 210,0 | 574,8 | 569,6 | 757,6 | 762,8 |
| Gross margin | 27,9% | 29,7% | 27,6% | 27,8% | 28,1% | 28,0% |
| Operating profit | 20,5 | 29,0 | 38,8 | 47,5 | 64,1 | 55,4 |
| Operating margin | 10,6% | 13,8% | 6,7% | 8,3% | 8,5% | 7,3% |
| Cash flow* | 10,0 | 68,8 | -32,8 | 110,7 | 174,0 | 30,5 |
| Profit for the period | 16,1 | 23,6 | 27,9 | 39,3 | 57,3 | 45,8 |
| Earnings per share (SEK) | 0,15 | 0,21 | 0,25 | 0,36 | 0,52 | 0,42 |
* Cash flow from operating activities
We are delighted to note the high order intake of SEK 234 M for the quarter, which is an increase of 62% compared to the same period of last year. In previous years, order intake was driven partly by large individual customer projects that have created volatility in figures between quarters. In the current year we have seen a more steady growth trend where order intake is attributable to a large number of customers across multiple geographic markets.
Order intake includes approximately SEK 70 M for the rollout of Pricer's system with graphic labels for a new American customer, as announced at the beginning of July. Deliveries to this customer started according to plan in the third quarter, but due to the stipulations in the contract, no sales related to this order were recognized in the quarter. Deliveries will continue in Q4 and our assessment is that sales will be realized in this quarter. The contract, which was won in fierce competition, demonstrates Pricer's ability to meet the industrial expectations on solutions for store digitalization in the American market.
Activity in the market remains high and we have numerous pilot projects underway around the world. It is resource-intensive to drive these activities, which is exerting pressure on profitability. The sales cycle to win a new major customer typically extends over more than a year, where a considerable share of the time is devoted to the pilot testing phase.
This year, a larger share of sales has been generated via our extensive global network of partners and distributors. This development is part of our strategy to continue establishing Pricer's system in more markets, both geographic regions and customer segments, than the core markets where we are represented with our own staff.
Net sales of SEK 194 M fell short of the previous year's level. The drop in sales is explained by the fact that a few of our key customers have not made any significant investments during the year. We judge this to be temporarily, however, short-term we were not able to offset this shift in sales with sales to other customers. However, it is satisfying that several of our largest customers expand features and capabilities of existing systems with automated product positioning, as one example. It testifies that our solutions are responding well to customers' needs to further automate their store processes and improve the in-store shopping experience.
The fact that we achieved sales of SEK 194 M in the quarter, despite the lack of large individual deliveries, is evidence of growth in the underlying business that is creating better conditions for stability and predictability in our operations. Having said that, however, we can't rule out the occurrence of sizeable future fluctuations in the growth curve on a quarterly or annual basis as a result of large individual contracts.
Cash flow from operating activities of SEK 10 M has been affected by the ongoing American customer project. Large deliveries demand high capital tied-up in the early stages of the projects. Cash flow should therefore be seen over time and not on the basis of individual quarters.
Helena Holmgren
The competitive situation in several of our core markets remains aggressive. A number of competitors are fighting to maintain or establish a position in the market, leading to major disruptions in the general price scenario. This is also spreading to system functionality and giving rise to noise and insinuations in the market place that are difficult for the customers to evaluate. In relation with large-scale and comprehensive pilot projects the differentiation becomes clear, even if it is an expensive and time-consuming approach for both parties. However, Pricer has a lot to gain from this type of testing where performance, functionality and scalability are pushed to the limit.
Pricer's largest market, France, is showing continued strength, as are Belgium, Norway and Italy, albeit at lower levels. Northern and Eastern Europe are also contributing to a geographic expansion of the market. Thus far, the German market has not gained momentum but we are noting activity in several segments that lie outside the traditional grocery retail segment. The UK and Japan remain major potential ESL markets, but where the level of investment is for various reasons still low. The North American market is showing rising activity. In Latin America, the economic climate is under strain and it is currently difficult to find investment budgets for ESL systems. Likewise, in Asia, particularly China, we are seeing a tough market climate where several players are competing to gain ground in a so far limited ESL market.
| Net sales | 193,8 | 210,0 | 574,8 | 569,6 | 757,6 |
|---|---|---|---|---|---|
| Cost of goods sold | -139,8 | -147,7 | -416,1 | -411,5 | -544,4 |
| Gross profit | 54,0 | 62,3 | 158,6 | 158,1 | 213,2 |
| Gross margin | 27,9% | 29,7% | 27,6% | 27,8% | 28,1% |
| Operating expenses | -31,8 | -34,0 | -118,2 | -112,1 | -149,6 |
| Other income and costs | -1,7 | 0,7 | -1,7 | 1,5 | 0,5 |
| Operating profit | 20,5 | 29,0 | 38,8 | 47,5 | 64,1 |
| Operating margin | 10,6% | 13,8% | 6,7% | 8,3% | 8,5% |
| % change in Order intake | 62% | 22% | 6% | -12% | -1% |
|---|---|---|---|---|---|
| whereof currency translation difference | -2% | 1% | 2% | 0% | 1% |
| % change in Order intake adjusted for currency translation difference |
63% | 21% | 4% | -12% | -2% |
| % change in Net sales | -8% | -31% | 1% | -17% | -12% |
| whereof currency translation difference | 0% | 0% | 3% | 0% | 1% |
| % change in Net sales adjusted for currency translation difference |
-8% | -31% | -2% | -17% | -13% |
Order intake in the third quarter was SEK 234 M (145), an increase of 62 percent compared to the same period of last year. Adjusted for changes in exchange rates, order intake increased by 63 percent. The increase was driven by high activity from numerous customers, of which the largest order is from a leading US retailer.
Net sales amounted to SEK 193.8 M (210.0) in the quarter. The decrease was 8 percent compared to the same quarter of last year. Adjusted for changes in exchange rates, net sales decreased by 8 percent. Net sales in the quarter continued to be distributed over a large number of customers, mainly in France.
Gross profit amounted to SEK 54.0 M (62.3) and gross margin decreased to 27.9 percent (29.7) in the quarter. The contract mix and degree of value creation from digital services and an increased price pressure in the market have affected the gross margin.
Operating expenses decreased to SEK 31.8 M (34.0) in the quarter. The decrease is primarily due to increased capitalization of project related development costs.
Other income and expenses, consisting of the net effect of foreign exchange revaluations of trade receivables and trade payables to the closing rate, unrealized foreign exchange gains and losses on hedge contracts, as well as realized foreign exchange gains and losses, contributed SEK -1.7 M (0.7) in the quarter.
Operating profit amounted to SEK 20.5 M (29.0), which corresponded to an operating margin of 10.6 percent (13.8) in the quarter. The decrease in gross margin in combination with negative currency effects reduced the operating margin in the period.
Net financial items, primarily attributable to currency revaluation of cash and cash equivalents, impacted the quarter negatively and amounted to SEK -0.6 M (2.3).
Profit for the period was SEK 16.1 M (23.6).
Translation differences in other comprehensive income of SEK -3.9 M (6.8) consisted of foreign currency translation of net assets in foreign subsidiaries.
Cash flow hedges in other comprehensive income relate to the net effect of the market revaluations of the forward contracts in USD and EUR and amounted to SEK 0.8 M (-) in the quarter. As of 1 January 2017, in accordance with the hedge policy adopted by the board, Pricer has resumed hedge accounting for cash flow hedges.
Order intake for the first nine months of the year was SEK 641 M (603), an increase of 6 percent compared to the same period of last year. Adjusted for changes in exchange rates, order intake increased by 4 percent. The increase is primarily explained by the large order received from the leading US retailer.
Net sales amounted to SEK 574.8 M (569.6) in the period. The increase was 1 percent compared to the same period of last year. Adjusted for changes in exchange rates, net sales decreased by 2 percent. Net sales in the period continued to be distributed over a large number of customers, mainly in France, Belgium and Norway.
Gross profit amounted to SEK 158.6 M (158.1) and gross margin decreased slightly to 27.6 percent (27.8) in the period. The contract mix and degree of value creation from digital services impacted the gross margin in the period.
Operating expenses increased to SEK 118.2 M (112.1) in the period. Operating expenses in the period include restructuring of SEK 3.8 M (6.5). The cost increase is primarily due to reinforcement of the organization in product development, production, marketing and sales.
Other income and expenses, consisting of the net effect of foreign exchange revaluations of trade receivables and trade payables to the closing rate, unrealized foreign exchange gains and losses on hedge contracts, as well as realized foreign exchange gains and losses, contributed SEK -1.7 M (1.5) in the period.
Operating profit amounted to SEK 38.8 M (47.5), which corresponded to an operating margin of 6.7 percent (8.3) in the period.
Net financial items, primarily attributable to currency revaluation of cash and cash equivalents, impacted the period negatively and amounted to SEK -3.2 M (5.3).
Profit for the period was SEK 27.9 M (39.3).
Translation differences in other comprehensive income of SEK -1.6 M (15.4) consisted of foreign currency translation of net assets in foreign subsidiaries. Cash flow hedges in other comprehensive income relate to the net effect of the market revaluations of the forward contracts in USD and EUR and amounted to SEK -2.6 M (-) in the period. Tax attributable to items in other comprehensive income amounted to SEK 0.6 M (-).
Cash flow from operating activities for the third quarter amounted to SEK 10.0 M (68.8). The decrease in cash flow from operating activities, compared to the same period of last year, is primarily explained by increased inventory levels from customer projects where the product mix and delivery dates are the most important parameters. In addition, cashflow from operating activities had in 2016 a one-time effect coming from improved conditions in supply chain. This onetime effect has not recurred during 2017.
Cash flow from operating activities for the first nine months of the year amounted to SEK -32.8 M (110.7). The negative cash flow from operating activities is primarily attributable to more capital being tied up in inventories and receivables.
Cash flow from financing activities includes a dividend payment of SEK 55.0 M (27.5) in accordance with the decision of the Annual General Meeting on April 27, 2017.
Cash and cash equivalents amounted to SEK 151.5 M (208.0) on September 30, 2017. In addition to cash and cash equivalents, Pricer has an unutilized overdraft facility amounting to SEK 50 M and further SEK 50 M in a credit facility.
Investments in non-current assets amounted to SEK 7.5 M (5.1) in the third quarter consisted of capitalized development costs of SEK 3.2 M (2.9) and investments in production.
Investments in non-current assets amounted to SEK 21.5 M (12.8) in the first nine months of the year and consisted mainly of capitalized development costs of SEK 12.3 M (9.0).
Pricer holds 705 thousand treasury shares in order to fulfill the promise of matching and performance shares in the two outstanding two share saving programs. The value of the promise is reported in accordance with IFRS and is expensed over the vesting period.
On September 30, 2017, a total of 1,235 thousand warrants were outstanding in the programs decided upon in 2015 and 2016. In the event that the pre-defined performance targets are fully met, a maximum of 228 thousand shares will be transferred free of charge to the participants in June, 2020.
| Stated in thousands of shares | Series A | Series B | Total |
|---|---|---|---|
| Issued at the beginning of the year, 2017-01-01 | 226 | 110 746 | 110 972 |
| Issued and converted shares in the year | - | - | |
| Issued at the end of the period, 2017-09-30 | 226 | 110 746 | 110 972 |
| Treasury shares | - | -705 | -705 |
| Outstanding shares at end of period | 226 | 110 041 | 110 267 |
Class A share carries five votes and class B share carries one vote
The average number of employees during the third quarter was 102 (89) and the number of employees at the end of the quarter was 104 (92). Additional strengthening of the organization has taken place in product development, production and marketing/sales.
The Parent Company's net sales amounted to SEK 528.2 M (477.1) for the first nine months of the year and profit for the period was SEK 26.1 M (33.1). The Parent Company's cash and cash equivalents amounted to SEK 115.8 M (187.6) at the end of the period.
Pricer's results 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 are primarily associated with development of the market for Electronic Shelf Labels and large currency fluctuations. In view of the client structure and the extensive scale of the agreements, a delay in the installations or major fluctuations in exchange rates can have a significant impact in an individual quarter. For other risks, please see the 2016 annual report, pages 14 and 43.
Income tax expenses relating to the third quarter amounted to SEK 3.8 M (7.7) of which SEK 2.2 M (6.2) relates to deferred tax expenses arising from accumulated tax loss carryforwards in the Parent Company. The effective tax rate amounts to 8 percent (5) for the third quarter and the actual tax rate to 19 percent (25). Deferred tax relating to accumulated tax loss carryforwards in the balance sheet at September 30, 2017, amounted to SEK 71.1 M (81.5).
No forecast is issued for 2017.
No significant events have taken place after the end of the reporting period.
Pricer's 2018 nomination committee at the Annual General Meeting comprise of Göran Bronner, Göran Sundholm, Ulf Palm and Gunnar Ek, also the Chairman of the nomination committee, and Bernt Ingman, Chairman of the Board. As of September 30, 2017, these shareholder representatives together represent about 27 percent of the votes in Pricer AB.
Shareholders who wish to submit a proposal to Pricer's Nomination Committee may, before December 31, 2017, contact the Nomination Committee by e-mail: [email protected] or at address; Pricer AB, Attention: Nomination Committee, Box 215, 101 24 Stockholm
The Annual General Meeting will take place in Stockholm at 4pm on April 26, 2018 at Lundqvist & Lindqvist Konferens Klara Strand, Klarabergsviadukten 90, Stockholm. Invitation will be made in due course.
The interim report for January - December 2017 will be published on February 14, 2018.
This interim report for Pricer AB (publ) has been submitted following approval by the Board of Directors.
Stockholm, October 25, 2017
Pricer AB (publ)
Helena Holmgren
Acting CEO
This information is information that Pricer AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency by the contact person set out below, at 8:30 CET on October 25, 2017.
Helena Holmgren, acting CEO, Pricer AB +46 8 505 582 00
Review report
Pricer AB (publ), corporate identity number 556427-7993
Västra Järnvägsgatan 7
111 64 Stockholm
We have reviewed the condensed interim report for Pricer AB (publ) as at September 30, 2017 and for the nine months period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements 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 is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance with the Swedish Annual Accounts Act regarding the Parent Company.
Stockholm, October 25, 2017
Ernst & Young AB
Rickard Andersson Authorized Public Accountant
| Amounts in SEK M | |||||
|---|---|---|---|---|---|
| Net sales | 193,8 | 210,0 | 574,8 | 569,6 | 757,6 |
| Cost of goods sold | -139,8 | -147,7 | -416,1 | -411,5 | -544,4 |
| Selling and administrative expenses | -28,7 | -28,9 | -105,0 | -97,7 | -129,3 |
| Research and development costs | -3,1 | -5,1 | -13,2 | -14,4 | -20,4 |
| Other income and expenses | -1,7 | 0,7 | -1,7 | 1,5 | 0,5 |
| Net financial items | -0,6 | 2,3 | -3,2 | 5,3 | 12,6 |
| Income tax | -3,8 | -7,7 | -7,7 | -13,5 | -19,4 |
| Items that are or may be reclassified to profit or loss for the period | |||||
| Translation differences | -3,9 | 6,8 | -1,6 | 15,4 | 14,2 |
| Cash flow hedges | 0,8 | - | -2,6 | - | - |
| Tax attributable to items in other comprehensive income | -0,1 | - | 0,6 | - | - |
| Owners of the Parent Company | 16,1 | 23,6 | 27,9 | 39,3 | 57,3 |
| Owners of the Parent Company | 12,9 | 30,4 | 24,2 | 54,7 | 71,5 |
| Basic earnings per share, SEK | 0,15 | 0,21 | 0,25 | 0,36 | 0,52 |
|---|---|---|---|---|---|
| Diluted earnings per share, SEK | 0,15 | 0,21 | 0,25 | 0,36 | 0,52 |
| Number of shares before dilution, millions | 110,2 | 110,0 | 110,1 | 110,0 | 110,0 |
| Diluted number of shares, millions | 110,5 | 110,2 | 110,3 | 110,2 | 110,2 |
| Amounts in SEK M | |||
|---|---|---|---|
| Intangible assets | 276,1 | 266,1 | 268,4 |
| Tangible fixed assets | 14,3 | 9,1 | 11,2 |
| Financial fixed assets | 77,7 | 85,6 | 81,2 |
| Inventories | 174,3 | 94,3 | 104,5 |
| Current receivables | 262,0 | 238,8 | 204,7 |
| Cash and cash equivalents | 151,5 | 208,0 | 261,3 |
| Equity attributable to holders of the Parent Company | 698,9 | 713,0 | 729,4 |
| Provisions, long term | 9,0 | 6,8 | 8,2 |
| Provisions, short term | 17,1 | 13,3 | 18,0 |
| Current liabilities | 230,8 | 168,8 | 175,7 |
| Basic shareholders' equity per share, SEK | 6,35 | 6,48 | 6,63 |
| Diluted shareholders' equity per share, SEK | 6,33 | 6,47 | 6,62 |
| STATEMENT OF CHANGES IN CONSOLIDATED EQUITY IN SUMMARY | |||||||
|---|---|---|---|---|---|---|---|
| Amounts in SEK M | |||||||
| Profit for the period | 27,9 | 39,3 | 57,3 | ||||
| Other comprehensive income for the period | -3,6 | 15,4 | 14,2 | ||||
| Net comprehensive income for the period Dividend |
24,2 -55,0 |
54,7 -27,5 |
71,5 -27,5 |
||||
| Share based payments, equity settled | 0,3 | 1,1 | 0,7 | ||||
| Total transactions with owners of the Group | -54,7 | -26,4 | -26,8 | ||||
| Attributable to: - Owners of the Parent Company |
698,9 | 713,0 | 729,4 |
| Amounts in SEK M | |||||
|---|---|---|---|---|---|
| Profit before tax | 19,9 | 31,3 | 35,6 | 52,8 | 76,7 |
| Adjustment for non-cash items | 8,3 | 4,1 | 15,2 | 6,1 | 14,7 |
| Of which depreciations and amortizations | 3,8 | 3,1 | 10,9 | 9,7 | 12,6 |
| Paid income tax | -1,6 | -1,3 | -5,3 | -4,7 | -6,2 |
| Change in working capital | -16,7 | 34,7 | -78,2 | 56,5 | 88,8 |
| Cash and cash equivalents at beginning of period | 148,5 | 144,4 | 261,3 | 135,6 | 135,6 |
| Exchange rate difference in cash and cash equivalents | 0,9 | -0,1 | -0,3 | 2,0 | 0,8 |
| Unutilized bank overdraft facilities | 50,0 | 50,0 | 50,0 | 50,0 | 50,0 |
| Amounts in SEK M | |||||
|---|---|---|---|---|---|
| Order intake | 234 | 218 | 189 | 180 | 145 |
| Order intake - rolling 4 quarters | 820 | 731 | 667 | 783 | 711 |
| Net sales | 193,8 | 206,7 | 174,2 | 188,0 | 210,0 |
| Net sales - rolling 4 quarters | 762,8 | 779,0 | 776,4 | 757,6 | 747,8 |
| Operating profit | 20,5 | 11,0 | 7,2 | 16,6 | 29,0 |
| Operating profit - rolling 4 quarters | 55,4 | 63,9 | 69,1 | 64,1 | 54,9 |
| Profit for the period | 16,1 | 7,7 | 4,0 | 18,0 | 23,6 |
| Cash flow from operating activities | 10,0 | -38,2 | -4,5 | 63,3 | 68,8 |
| Cash flow from operating activities - rolling 4 quarters | 30,5 | 89,4 | 148,7 | 174,0 | 203,4 |
| Number of employees, end of period | 104 | 104 | 98 | 93 | 92 |
| Equity ratio | 73% | 75% | 77% | 78% | 79% |
| Amounts in SEK M | |||||
|---|---|---|---|---|---|
| Europe, Middle East & Africa | 181,7 | 186,7 | 518,9 | 516,8 | 687,0 |
| America | 8,3 | 19,3 | 36,0 | 40,0 | 52,0 |
| Asia & the Pacific | 3,8 | 4,0 | 19,9 | 12,8 | 18,6 |
| Amounts in SEK M | |||
|---|---|---|---|
| Net sales | 528,2 | 477,1 | 629,0 |
| Cost of goods sold | -435,4 | -383,7 | -504,8 |
| Selling and administrative expenses | -43,0 | -43,5 | -55,9 |
| Research and development costs | -13,2 | -14,4 | -20,4 |
| Other income and expenses | -1,6 | 1,6 | 0,6 |
| Net financial items | -3,8 | 5,2 | 12,5 |
| Income tax | -5,3 | -9,2 | -13,5 |
| STATEMENT OF COMPREHENSIVE INCOME OF PARENT COMPANY | ||||||||
|---|---|---|---|---|---|---|---|---|
| Amounts in SEK M | ||||||||
| Profit for the period | 26,1 | 33,1 | 47,5 | |||||
| Comprehensive income for the period | ||||||||
| Items that are or may be reclassified to profit or loss for the period | ||||||||
| Cash flow hedges | -2,6 | - | - | |||||
| Tax attributable to items in other comprehensive income | 0,6 | - | - | |||||
| Amounts in SEK M | |||
|---|---|---|---|
| Intangible assets | 34,3 | 22,0 | 26,0 |
| Tangible fixed assets | 11,8 | 8,3 | 9,4 |
| Financial fixed assets | 269,8 | 369,6 | 273,6 |
| Inventories | 98,8 | 69,6 | 76,4 |
| Current receivables | 257,9 | 186,0 | 197,5 |
| Cash and cash equivalents | 115,8 | 187,6 | 238,2 |
| Shareholders' equity | 566,0 | 582,6 | 596,6 |
| Provisions | 19,5 | 18,0 | 21,0 |
| Non-current liabilities | 0,5 | 0,1 | 2,2 |
| Current liabilities | 202,4 | 242,4 | 201,2 |
| Amounts in SEK M | |||
|---|---|---|---|
| Net comprehensive income for the period | 24,0 | 33,1 | 47,5 |
| Dividend | -55,0 | -27,5 | -27,5 |
| Share based payments, equity settled | 0,3 | 1,0 | 0,7 |
This interim report for the Group was prepared in accordance with IAS 34 Interim Financial Reporting and the applicable provisions in the Swedish Annual Account Act (Årsredovisningslagen). The interim report for the Parent Company was prepared in accordance with the Swedish Annual Account Act (Årsredovisningslagen), Chapter 9, and RFR 2, Reporting by a legal entity issued by the Swedish Financial Reporting Board. For both the Group and the Parent Company, the same accounting policies and methods of computation were applied as in the latest annual report.
IFRS 9 – Financial Instruments with effective date January 1, 2018, will replace IAS 39 Financial Instruments; recognition and measurement of financial assets and financial liabilities and addresses the classification and measurement of financial instruments. Pricer's analysis indicates that the new standard will have a limited impact on the company's result.
IFRS 15 - Revenue from Contracts with Customers - is a new revenue standard with associated disclosure requirements that will replace IAS 18, IAS 11 and IFRIC 13. This new standard will come into force on January 1, 2018. Pricer's analysis of the standard and its impact on the future accounting is that it will not have a material impact. The company's revenue is distributed into revenue on goods, service and licensees. The revenue is generated through direct sales to customers or sales through partners. The revenue recognition is following the customer agreements and is done when the risk and rewards is passed ownership. Revenue from maintenance is recognized over the life-time of the agreement. Licensee fees is done in connection with the recognition of the revenue from goods since it licensee give the customer the "Right to use" which according to IFRS15 is "Point in time recognition". However, since IFRS 15 contains additional disclosure requirements, its application will probably result in increased note disclosures regarding revenue.
Related party transactions are described in Note 24 in the Group's accounting statement in the Annual Report for 2016. No significant transactions have taken place with related parties that have significantly affected the financial position or results of the Group or the Parent Company compared to the description in the Annual Report for 2016.
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 or loss and development in a consistent manner. A list of the definitions to the alternative performance measures used in this report are found in the 2016 Annual Report, page 15.
Financial instruments are assets and liabilities that can immediately be converted into cash. Pricer reports financial instruments according to the classification derivatives, cash and cash equivalents, other financial assets and other financial liabilities. The derivatives have been valued at fair value according to level 2 in the fair value hierarchy (see definition below). All other financial instruments are valued at acquisition cost.
Level 1 – quoted prices in active markets for identical financial instruments
Level 2 – inputs other than quoted market prices included in level 1 that are observable for the financial asset either directly or indirectly
Level 3 – inputs for financial instruments that are not based on input from observable market data (unobservable input)
Financial instruments valued at acquisition cost
| Amounts in SEK M | |||
|---|---|---|---|
| Derivatives | 1,0 | - | - |
| Other financial assets | 243,3 | 225,1 | 194,3 |
| Cash and cash equivalents | 151,5 | 208,0 | 261,3 |
| Derivatives | - | - | - |
| Other financial liabilities | 202,2 | 125,4 | 143,1 |
Floating charges (chattel mortgages) are a type of general collateral in the form of an undertaking to the bank. The Parent Company have issued guarantees to tax and customs authorities and landlords. Blocked funds in the companies' bank accounts are available for the guarantees.
| Amounts in SEK M | |||||||
|---|---|---|---|---|---|---|---|
| Floating charges | 59,6 | 59,6 | 59,6 | 59,6 | 59,6 | 59,6 | |
| Bank deposits | - | - | - | 0,8 | 0,8 | 0,8 | |
| Bank guarantee | - | - | - | 0,8 | 0,8 | 0,8 | |
| Customs authorities | 0,2 | - | 0,2 | 0,2 | - | 0,2 | |
| Landlords | 1,7 | - | 1,7 | 1,7 | - | 1,7 | |
Pricer offers solutions for more efficient and reliable price information through electronic display and information systems for the retail industry. Pricer's system significantly improves consumer benefit and store productivity. The platform is based on a two-way communication protocol to ensure complete traceability and effective management of resources. The Pricer system leads to higher productivity in the store and enhances the customer experience.
Pricer, founded in 1991 in Uppsala, Sweden, is the leading global provider of electronic display and information systems. With the most complete ESL solution, Pricer has installations in over 50 countries and commands the largest share of the global ESL market. Customers include many of the world's top retailers and some of the foremost retail chains in Europe, Japan and the USA. Pricer, in cooperation with qualified partners, offers a totally integrated solution together with supplementary products, applications and services.
Pricer's shares are listed on the Nasdaq Stockholm Small Cap. For more information, please visit www.pricer.com.
Pricer AB Website: www.pricer.com Box 215 Telephone no. +46 8 505 582 00 SE-101 24 Stockholm Corporate registration number: 556427-7993
Office address: Västra Järnvägsgatan 7 SE-111 64 Stockholm
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