Half year Report January - June 2021

18/08/2021 - April – June 2021
- Net Sales MSEK 125.8 (93.5)
- Order intake MSEK 46.9 (282.6)
- Operating profit (EBIT) MSEK 4.6 (-0.9)
- Operating profit (EBITDA) MSEK 13.5 (12.3)
- Total Comprehensive income MSEK -1.0 (-17.1)
- Earnings per share, before and after dilution (SEK) 0.00 (0.00)
- Cash flow from operating activities MSEK 39.2 (1.8)

January – June 2021
- Net Sales MSEK 203.9 (189.1)
- Order intake MSEK 108.7 (344.2)
- Operating profit (EBIT) MSEK -9.6 (-14.6)
- Operating profit (EBITDA) MSEK 8.0 (13.3)
- Total Comprehensive income MSEK -2.0 (-12.4)
- Earnings per share, before and after dilution (SEK) -0.01 (-0.01)
- Cash flow from operating activities MSEK -0.9 (11.4)

Comments from the CEO

Existing customers support our order intake 
The order intake arrived this quarter at SEK 47 million, compared to a record breaking SEK 283 million in Q2 last year. This difference is mainly due to two large contracts in Australia and Costa Rica that were part of the high Q2 2020 order intake. This quarter, the order intake mainly consists of repeat orders from our existing customer base. It portrays the importance of a large global installed base that requires system updates, parts, and maintenance to secure the high uptime performance of more than 99% our solutions are renowned for. During almost the whole COVID period, our local Sales Teams worked hard on an active engagement with existing and new customers, all around the world. This has created a healthy sales pipeline for us that will quite likely drive our order intake forward in the near future.

Total Sales up 35% with US TRaaS Sales up 45%
Net Sales for the quarter reached SEK 126 million, 35% higher than Q2 last year. As expected our recurring Managed Services or TRaaS business has picked up again this quarter, with schools in the USA opening after COVID related closings in Q1. Compared to Q2 last year our US TRaaS business went up by 5%. Compared to the previous quarter our US TRaaS business showed an increase of 45%, from SEK 22 million in Q1 to SEK 33 million in Q2. With higher vaccination rates and more controlled COVID conditions to keep schools open, we expect the Managed Services Sales to normalize going forward.

Pushing the Costa Rica contract execution
The Costa Rican National Traffic Enforcement contract that we won in Q2 of last year has not yet started. COVID related budgetary constraints currently hamper the timing of the execution of this program. With our local presence we are in continuous communication with all stakeholders in the program to secure the budget to start the execution. During these meetings both our strong legal position in the contract and the willingness of our customer to execute the contract are confirmed. With this, we believe the program will be rolled-out as projected, but on a different timeline. We expect the budget to be allocated in December and first deliveries to start in 2022. 

Saudi Arabia contract in steady delivery mode
In August 2020 we signed a second contract with our Customer in Saudi Arabia for our unique in-vehicle speed enforcement solution worth SEK 275 million. This was the second contract for this solution after the first SEK 66 million contract we signed in September 2018. The final payment we received this August marks the successful completion of this first order. Together with our Customer Tahakom we can now focus on the execution of the much larger second contract. Year to date July, we have delivered 35% of this 275 million total contract value and the deliveries are progressing steadily. The execution and rollout of projects characterized by this size and solution type in combination with complex customer and end customer networks in a dynamic market is challenging. Although this complexity can sometimes slow down deliveries, it is more important that the progress happens steadily and correctly, in order to ensure customer satisfaction. We foresee the remainder of the deliveries under the contract, corresponding to approx. SEK 180 million, to be executed throughout 2021 and the beginning of 2022.

Establishment of Sensys Gatso LATAM
In the quarter the new Regional entity Sensys Gatso LATAM S.L. was established with the objective to centrally manage and consolidate our business activities in the important and growing Latin American Region. On July 1st we hired Jose Lozano, a business veteran with 22 years of experience, who started in the new role of Regional Director Latin America. With this we are executing on our strategy to operate closer to our end customers in new and growing regions, just like we did with the Middle East region.

Investigation in The Netherlands legally dismissed
In January of this year we informed the market about an investigation by the Fiscal Information and Investigation Service FIOD related to allegations of misconduct in 2014-2015 in Gatsometer B.V., before the acquisition by Sensys Traffic.  Naturally we have fully cooperated with the investigative authorities and conducted an in depth internal inquiry into the allegations, the result of which we shared with the FIOD. In the beginning of August we heard the formal outcome of the investigation. FIOD dismissed the allegations and will not proceed with any prosecution. I am very happy with this positive, fast and rare outcome in investigations of this kind. Our company revolves around Integrity - It defines who we are as people, as a partner to our customers and how we design our solutions. Integrity guided us in our communication with the authorities, and with the market.

Outlook
Our order backlog remains strong and our costs are in control. With our US TRaaS business picking up again and a healthy sales pipeline in all Regions, we feel confident about our future. We retain our long-term plan to grow our net sales to more than SEK 1 billion, of which TRaaS revenues will be more than SEK 600 million, in 2025. We also retain our ambition to increase our EBITDA margin to more than 15 percent in 2025.

Ivo Mönnink
CEO, Sensys Gatso Group

Financial information

Invitation to a presentation
On 18 August at 10 am CET Sensys Gatso Group invites press, analysts, shareholders, and stakeholders to participate in a presentation/audiocast. The company’s CEO Ivo Mönnink and CFO Simon Mulder will present the financial results in English. The presentation in connection with this report will be published on the website.

The presentation/audiocast can be joined online or via telephone and will be available on the company’s webpage https://www.sensysgatso.com

Link to the presentation/audiocast: https://tv.streamfabriken.com/sensys-gatso-group-q2-2021

Dial-in number 
Sweden: +46 8 505 583 50
NL: +31 107 129 162
UK: +44 333 300 92 61
US: +1 6 319 131 422 US-PIN: 10921420#

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, at 08.30 on 18 August, 2021.

 The 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, Costa Rica, Germany, the Netherlands, Sweden and the USA, and a branch office in the United Arab Emirates and has 252 employees. The Sensys Gatso Group’s shares are listed on Nasdaq Stockholm.

Published: 18/08/2021