Interim Report July - September 2019

28/11/2019 - July – September 2019 (MSEK)
Net Sales 73.0 (95.7)
Order intake 79.3 (100.7)
Operating profit (EBIT) -17.8 (8.8)
Operating profit (EBITDA) -2.8 (18.2)
Total Comprehensive income -6.6 (1.2)
Earnings per share, before and after dilution (SEK) -0.02 (0.00)
Cash flow from operating activities -23.9 (11.6)

January – September 2019 (MSEK)
Net Sales 248.3 (255.9)
Order intake 320.7 (336.3)
Operating profit (EBIT) -38.3 (-6.7)
Operating profit (EBITDA) 1.5 (20.9)
Total Comprehensive income -13.7 (7.4)
Earnings per share, before and after dilution (SEK) -0.04 (-0.01)
Cash flow from operating activities -47.1 (10.3)

Comments from the CEO

TRaaS Order Intake amounts to 49%
We continue to have a solid order intake this quarter of SEK 79 (101) million, further reinforcing our already strong 2019 orderbook. The order intake mainly relates to orders received from the USA, France, United Arab Emirates and our new market Colombia in Latin America. Year to date the order intake amounts to SEK 320 million, slightly lower (5%) than last year (337). The TRaaS (recurring) nature of the total order value year to date amounts to approximately 49 percent.

TraaS sales development stays on track 
The total net sales year to date amounts to SEK 248 million, slightly lower than last year (256). This is in line with our expectations because the realization of our strong order intake in 2018, to a large extent still has to be converted into revenue. In Q2 and Q3 we have been implementing several large and complex projects simultaneously.  The recurring part of this revenue, which we call TraaS, ended for the first nine months of the year at 51 percent (43). This is 15 percent higher than the same period 2018 and in line with our strategy to grow this business.

Market entry in Latin America 
Our strong international brand name and reputation has helped us to book two significant orders in two separate Departments in Colombia during the quarter. With a 30% TRaaS component, over a 5 year period, we are at the brink of building a longstanding relationship with new customers in the exciting and growing Latin American region. With our investments in sales efforts in the past years, and our recent successes in Colombia, I am confident we can seize further opportunities  in the region.

Oklahoma spin-offs
The introduction of  the new business vertical of Uninsured Car Enforcement in Oklahoma, was the first of its kind in the USA. We have mastered the complexity of this program and the revenue contribution is increasing month after month. Based on the Oklahoma results so far, we are now seeing concrete interest from several other states in the USA to implement a similar program. A prerequisite for implementation is that state legislation needs to be amended to enable automated enforcement. The incentive for the states to change legislation is to decrease the social costs and to increase insurance premium tax income. Because of the scalability of our solution, and lessons learned, we expect shorter implementation timelines when new states would come onboard.  

Innovative growth creates long-term value
In our business, sales cycles and project implementation can take quite a long time. This certainly is the case when we implement large, innovative and therefore complex projects. We are currently doing so with three large projects in the Netherlands, Australia and the USA, which for the most part were won in 2018.  Combined, these projects have a very significant TRaaS component of approximately 45 percent. Revenue and margin generation of these programs can therefore be expected on a yearly base for many years to come. As explained last quarter, the increase in costs of services and goods sold, are mostly variable costs of employees related to the implementation phase of the mentioned projects. The project developments realised within the implementation phase will also benefit our future customers, as the functionality of our software platform grows. The expenses in general have increased due to higher sales activities and administrative costs related to higher costs of employees. Sales activities have increased due to additional sales efforts in the Latin American region. As we are in an expansion phase with implementation of many large projects, the year to date gross margin arrives at approximately 36% (43%). 

Available cash and financial position
Our available cash has decreased from SEK 153 million at the end of 2018 to SEK 66.1 million at the end of the quarter (122.4). In the first nine months of the year we have seen an increase in working capital needs in our System Sales business, due to large projects that are currently being executed, such as the Australian In vehicle solution and the Dutch Rural Roads project. With the expectation of partial deliveries in Q4, we would expect payments to come in during the first and second quarter of 2020. In 2019 the working capital position has increased with SEK 43.9 million to finance our growth. The sales success achieved in our Managed Services (TRaaS) business has lead to expansion of our installed base. These expansion investments in Fixed Assets in Operations are related to Red Light, Speed and Automated Number Plate Recognition (ANPR) solutions for new programs in the USA and Germany to the amount of SEK 19.5 million.  Expanding our Managed Services (TRaaS) business results in an upfront capex with cash starting to come in between two to twelve months after the startup of the program. Payments are typically based on a “paid-citation” base, which means that cash increases when the program is fully implemented. System Sales deals are getting bigger, therefore our work in progress is increasing. For System Sales, cash generation differs project by project, depending on the contract-specifics. 

Over the last six quarters our cash flow from operations has been break-even. The Available cash in the same period has decreased from 117 million to 66 million. The decrease relates to a repayment on the vendor loan to the amount of SEK 10.2 million and investments in Fixed Assets to the amount of SEK 40.6 million. These investments in fixed assets  mainly relate to Fixed Assets in Operations in the US and in the development of our new platform FLUX. 

Our Equity/Assets ratio landed at 61.4 compared to 71.8 at the end of 2018. This ratio is heavily impacted by IFRS16 and the increase in working capital assets that both have an increasing effect on our balance sheet total.

We continue on our path to grow our Traffic Enforcement as a Service business, with successes in various parts of the world. Although implementing complex solutions initially takes time and affects our revenue and margin in the short-term, we are expanding our solution offering and growing our software platform. We are also very proud to have introduced an innovative solution in the US market to address the important social issue of uninsured drivers, a completely new business opportunity for us. Finally, considering our strong order book, our growing recurring revenue base and our entry into Colombia, part of the large Latin American market, we have created a solid base for future growth. 

Ivo Mönnink
CEO, Sensys Gatso Group

Financial information

Invitation to a presentation for press and analysts
On 28 November at 10:00 CEO Ivo Mönnink and CFO Simon Mulder will present the Interim Report for the third quarter, 2019 and answer questions in an audiocast. The presentation can be followed online via the link on Sensys’ website: or by

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

Dial-in numbers:
Sweden: +46 8 505 583 50 
UK: +44 333 300 92 64 
US: +1 8 335 268 384

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, at 08.30 on 28 November 2019.

  Release (pdf)

For further information please contact:
Ivo Mönnink, CEO
e-mail IR:
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: 28/11/2019