Sensys Gatso

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Year-End Report October - December 2022


October–December 2022
- Net Sales MSEK 161 (173)
- Order intake MSEK 1,080 (195)
- Operating profit (EBITDA) MSEK 34 (38)
- Operating profit (EBIT) MSEK 22 (27)
- Total Comprehensive income MSEK 9.6 (21.3)
- Earnings per share, before and after dilution (SEK) 0.01 (0.02)
- Cash flow from operating activities MSEK 6.7 (11.3)

January–December 2022
- Net Sales MSEK 495 (507)
- Order intake MSEK 1,456 (368)
- Operating profit (EBITDA) MSEK 73 (84)
- Operating profit (EBIT) MSEK 31 (46)
- Total Comprehensive income MSEK 61.0 (45.5)
- Earnings per share, before and after dilution (SEK) 0.02 (0.04)
- Cash flow from operating activities MSEK 125.6 (9.1)

Comments from the CEO

Historic order intake exceeding SEK 1 billion in the quarter
2022 has been a year in which our customers have clearly shown their appreciation of our traffic enforcement solutions by placing large orders in Europe, Australia and the USA. The order intake in Q4 arrived at a historic SEK 1,080 million, up more than 450% compared to last year.

One large, long term contract is the main driver of the large order intake this quarter, the Swedish Trafikverket procurement award of SEK 850 million. This has been added in full to the order intake in Q4. Of this twelve year contract, 50 percent is recurring TRaaS business. Next to this large order we booked two TRaaS orders from Australia for a total value of SEK 47 million. Additionally, two TRaaS orders were booked from the USA, for a total value of SEK 128 million. Altogether the total TRaaS part of the order intake this quarter is SEK 600 million or 56 percent of the total order intake.

For the full year 2022, the order intake arrived at SEK 1.5 billion. This is three times higher than in 2021 and by far the highest order intake in the 65 year history of Sensys Gatso. More importantly, 58% percent of the order intake in 2022 is recurring TRaaS revenue, clearly showing we are executing on our strategy to grow our TRaaS business.

TRaaS Sales up 28% in the quarter
Our net sales in the quarter amounted to SEK 161 million, which is 6% lower than last year's sales of SEK 173 million. While total sales for 2022 came in 2% lower than previous year at SEK 495 million (compared to SEK 507 million), our strategic focus on Traffic Enforcement as a Service (TRaaS) resulted in a significant increase in recurring revenue streams.

In fact, our TRaaS sales arrived at SEK 93 million for the quarter, up by 28% from previous year. For the full year, our TRaaS sales were SEK 312 million, which is 26% higher than in 2021. As a result of this focus, our share of TRaaS sales is now 63% of total sales, compared to 49% in 2021. This clearly demonstrates that our strategy to focus on TRaaS recurring revenue streams is paying off.

US TRaaS sales up 21% in the quarter
We grew our US TRaaS Managed Services business by 21% from SEK 39 million to SEK 47 million in the quarter. For the full year 2022, the growth was 36%, from SEK 129 million to SEK 176 million. This recurring revenue level provides our US organization with a solid baseline to further build on. With new US leadership and a new strategic plan in execution, our future looks promising in this large and strategic market for Sensys Gatso.

First revenues from our Tasmania TRaaS project in Australia
In May 2022 Sensys Gatso received a 3 year SEK 74 million contract order from the Tasmania Police, for an automated traffic enforcement program. Our solution provides for Sensys Gatso sensor technology, deployed in vehicles and trailers operated by our highly trained staff. Next to this we provide a hosted adjudication system based on our Puls and Xilium software, tailored to the needs of our customer. The enforcement by our customer, using our solutions has successfully been implemented and contributed in Q4 to the TRaaS managed services revenue to the amount of SEK 9 million, in line with our expectations. This successful implementation is a promising development of our TRaaS business model outside of the USA.

Investing to support growth
As part of our new strategic plan for the US market, we are investing in front-end sales people and activities to support the growth we foresee in this important market. Also the implementation of a new ERP system this year has contributed to a temporary increase of our expenses this quarter. We foresee the implementation to be completed for the most part by the end of Q1 2023.

New projects in LATAM
The momentum we have in the LATAM region continues. In this region our strong Sensys Gatso brand name and global delivery experience carry significant value for our customers.

In Uruguay we have secured a part of the National Tender through our local partner. Due to our ability to deliver a fast solution, we could deliver the full order in the fourth quarter.

Since 2021 we have been engaging with a strong local partner in Ecuador, resulting in 3 new projects that have been delivered in the fourth quarter of this year.

Costa Rica continues to be in an uncertain situation due to the government budget. Meanwhile we continue to work together with municipalities, to start our business in Costa Rica with local projects.

Saving lives in Ghana
The other large deal this quarter came from Ghana, where our 40% joint venture closed a SEK 800 million contract after several years of discussions and negotiations with our customer, the Ghana government.

Sensys Gatso’s purpose is to save lives by changing the behavior of drivers in traffic, all around the world. From our 65 years of global experience in traffic enforcement, we know that the single most important contributor to fatalities and injuries in traffic is speed. Speed kills, as we know.

Especially in countries where many different traffic participants use the same roads, the numbers can be astronomical. A clear example of such a situation is Ghana, where in 2021 nearly 3,000 people lost their lives in traffic. And unfortunately, this number is increasing. Next to the fatalities, nearly 16,000 people were injured in the same period. This not only poses incredible social and emotional distress, it also causes significant costs to the Ghanees society of 1.6% of GDP annually. Not surprisingly the Ghana government has made traffic safety a spearpoint of their political program for the coming years.

We are very proud that Sensys Gatso, through its 40% share in our joint venture NTMEL, can contribute to this by introducing a full TRaas program in Ghana. In this program we will design, build, finance, operate and maintain a national road safety program during the upcoming 11 years. The value of the contract is SEK 800 million, of which Sensys Gatso has a 40 percent profit share. We expect the program to contribute to our revenue in the second half of 2024, predominantly with sales of equipment and license fees for the use of Sensys Gatso’s software platform.

Gross Margin up 7 percentage points in the quarter
The gross margin for the quarter was strong at 48.5 percent. This is 7 percentage points higher than last year at 41.6 percent. The increase in gross margin is caused by more TRaaS revenue with a typically higher margin and improved System sales margins this quarter. For the full year 2022, the margin improved with 5 percentage points, from 40.6 percent to 45.5 percent. On a rolling 12-month basis, the gross margin improved by 2 percentage points from 43 percent in Q3 to 45 percent in Q4.

Free available cash up SEK 70 million
The cash-flow from operating activities in the fourth quarter amounted to SEK 13.2 million up from SEK 11.3 million last year. For the full year 2022, Sensys Gatso generated a positive cash flow from operating activities of SEK 126 million. This is an increase of SEK 117 million compared to SEK 9 million previous year. After Investment and Financing activities, the group added 70 million to its available cash position. The positive movement mainly relates to payment of trade receivables and use of inventories. With our strong available cash position and our low level of debt, the company has a healthy financial position to support future growth.

With SEK 1.5 billion of order intake in 2022, this year has been the most successful year in the 65 year history of Sensys Gatso. Long-term contracts with governmental customers in our home markets Sweden, The Netherlands and Australia secure our revenue for many years to come. I am especially proud to see our strategic focus on the recurring TRaaS business paying off. Our full TRaaS business in the USA has grown this year by more than 40 percent and we added new TRaaS revenue in Australia during the year. Together with our TRaaS business growth, our gross margin is growing, contributing to our already strong financial position. We therefore retain our long-term plan to, by 2025, grow our net sales to more than SEK 1 billion, of which TRaaS revenues is more than SEK 600 million. We also retain our ambition to increase our EBITDA margin to more than 15% in 2025.

Ivo Mönnink
CEO, Sensys Gatso Group

Invitation to a presentation
On 23 February at 10 am CET Sensys Gatso Group invites press, analysts, shareholders, and stakeholders to participate in an 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:

If you wish to participate via webcast please use the link below.

If you wish to participate via teleconference please register on the link below. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference.

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 23 February, 2023.

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, Costa Rica, Germany, the Netherlands, Sweden and the USA, and a branch office in the United Arab Emirates and has 263 employees. The Sensys Gatso Group’s shares are listed on Nasdaq Stockholm.

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