Half year Report

29/08/2019 - January - June 2019

MSEK April - June
2019
April - June
2018
January - June 2019

January - June
 2018

Net Sales 96.6 88.6 175.3 160.2
Order intake 141.5 182.9 241.4 235.7
Operating profit (EBIT) -8.2 -0.6 -20.4 -15.5
Operating profit (EBITDA) 4.4 8.6 4.3 2.6
Total Comprehensive income -5.1 7.9 -7.1 6.2
Earnings per share, before and after dilution (SEK) -0.01 0.00 -0.02 -0.02
Cash flow from operating activities -2.7 -4.9 -23.3 -1.4

 

Comments from the CEO

Order intake Q2 contains 75% recurring revenue
We had yet another good order intake in the quarter of SEK 141 (183) million, which is 40 percent higher than the order intake of SEK 100 million in Q1 2019. The order intake mainly relates to orders received from the USA and Australia. For the first half of the year, the order intake amounts to SEK 241 million, slightly higher than the SEK 236 million last year. The recurring nature of the total order value for the quarter amounts to 75 percent, year to date the total recurring order value amounts to 60 percent.

TraaS Sales increased by 24 percent
Sales for the quarter rose to SEK 97 million (89), up 9 percent. The Net Sales in the first half of the year has grown by approximately 10% compared to last year, to SEK 175 million (160). The recurring part of this revenue, which we call TraaS, ended for the first half of the year at SEK 84 million (68) or 48 percent (42) of total revenue. This increase of 24 percent of our TraaS revenue is fully in line with our strategy to grow this business.

Extending our solution portfolio
In 2019 we are simultaneously implementing large projects in the Netherlands, Australia and the USA, which for the most part were won in 2018. These projects represent innovative solutions for the Sensys Gatso Group, enhancing our knowledge and solution portfolio and which could potentially be leveraged globally. As a result, the costs of mostly direct flexible employee expenses and related administrative costs have increased in the quarter. Whilst increasing our costs to execute the projects, we kept our year to date gross margin at approximately 38 percent (40).

Inroads in Latin America
After the quarter, and for the first time in our history, we have booked two significant orders in Latin America (Colombia). This is a result of our Sales efforts in the region, which started in 2017. We are proud to grow our installed base in a region with an increasing focus on Traffic Safety.

Oklahoma picking up momentum
A major breakthrough for our Managed Services business (TraaS) in 2018 was the starting up of a car insurance enforcement program in the state of Oklahoma, USA. After going through a learning curve, we now see the program picking up momentum, and starting to contribute to the higher Managed Services Sales (TraaS) in the quarter of SEK 25 million (20). During the first half of the year we have gradually increased the number of systems deployed. We are further enhancing the functionality of the software to be able to handle various situations (like location, mobile and fixed deployment). Improving the software, the algorithm behind it and further building up the knowledge in our organisation will improve our time to operation and revenue going forward.

Supply from Prodrive back to normal
The supply from our component  supplier Prodrive which suffered from a fire in December 2018, is back to normal delivery timelines. Mitigations have been taken by our supplier, to prevent supply chain interruptions from happening again. As foreseen, the disruption will not negatively impact our revenue for the year, nor the relationships with our customers.

Our financial position remains solid
Our available cash has decreased from SEK 153 million at the end of 2018 to SEK 111 million. As mentioned in our first quarter report this is mainly due to prepayments received in 2018 on various projects, which have been delivered in part in the first quarter. Simultaneously we have built up contract assets, work in progress, relating to projects, impacting our working capital negative. Due to adaptation of the new accounting standard IFRS 16 we have seen a decrease in our Equity/Assets ratio from 71.8 at the end of 2018 to 66.1. Our financial position remains solid. After the quarter, the company has repaid the second installment on the Vendor Loan to the amount of EUR 1 million (SEK 10.5 million) as per the agreement.

Outlook
Our new Traffic Enforcement as a Service (TraaS) position is being reinforced with a significant growth of 24% during the first half of the year. This strong TRaaS position is increasing our recurring revenue potential going forward. Considering also the good quality of our order intake and our solid financial position, we feel optimistic about the future.


Ivo Mönnink
CEO, Sensys Gatso Group

 

Financial information

Invitation to a presentation for press and analysts
On 29 August at 10:00 CEO Ivo Mönnink and CFO Simon Mulder will present the Interim Report for the second quarter, 2019 and answer questions in an audiocast. The presentation can be followed online via the link on Sensys’ website: www.sensysgatso.com or by https://tv.streamfabriken.com/sensys-gatso-group-q2-2019


It is also possible to listen to the presentation and ask questions by phone.

Dial-in numbers:
SE: +46 8 50 558 368
UK: +44 33 33 009 272
US: +1 8 335 268 382
 

The presentation in connection with this report will be published on the website.

This information is information that Sensys Gatso Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08.30 on 29 August 2019.

  Release (pdf)

For further information please contact:
Ivo Mönnink, CEO
e-mail: i.monnink@sensysgatso.com
e-mail IR: investors@sensysgatso.com
Telephone: +46 36 34 29 80

Sensys Gatso Group AB is a global leader in traffic management solutions for nations, cities and fleet owners. Sensys Gatso Group has subsidiaries in Australia, Germany, the Netherlands, Sweden and the USA, and a branch office in the United Arab Emirates. The Sensys Gatso Group’s shares are listed on Nasdaq Stockholm and has 195 employees.

Published: 29/08/2019