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2016-10-27

TagMaster AB: Quarterly report for TagMaster AB January-September 2016

Press release, Stockholm, Sweden 27 October, 2016

Strong quarter for TagMaster

Third quarter

· Net sales increased during the third quarter by 56,8% to 28,6 MSEK
(18,2)

· Result before depreciation (EBITDA) was 1,7 MSEK (-3,6),
corresponding to a margin of 6,0% (-19,6)

· Net result after tax was -0,1 MSEK (-4,5)
· Result per share was -0,00 (-0,03)
· The mother company made its best quarter ever with result before
depreciation (EBITDA) of 3,8 MSEK (1,5)

· Cash flow from the business for the period was 1,0 MSEK (0,1)
· The Balogh Group was acquired from August 30, 2016. The
acquisition means that TagMaster is taking over a business of just
below 35 MSEK yearly.

January - September

· Net sales increased during the period by 31,5% to 73,8 Mkr (56,1)
· Result before depreciation (EBITDA) was -1,2 Mkr (1,5),
corresponding to a margin of -1,6% (2,7)

· Net result after tax was -4,4 Mkr (-0,6)
· Result per share was -0,03 (0,00)
· Cash flow from the business for the period was -1,2 Mkr (7,3)
Comments by the CEO

Our sales during the third quarter has been good for the TagMaster
part, but still weak in the CitySync part. We do, however, see that
the restructuring program, which we informed about in the second
quarter has good effect and that the interest for CitySync's new
products is big. We have during the quarter also finalized our
acquisition of Balogh, which is now included with one month and wit a
small positive contribution in the consolidated result.

As we have described earlier we focus in CitySync on building a
scalable business model supported by several product launches this
year and during 2017. During Q3 we have restructured the business
including personnel reductions and changes in the product management,
in development and in sales and administration, Several functions
have been centralized to TagMaster and the cost reductions are
estimated to 3,5 MSEK on a yearly basis.

Our rail business has been good during the quarter and product
deliveries have started for the big rail project we announced at the
end of last year. Deliveries will continue during the rest of 2016
and during part of 2017. We also work on a new rail tag with 20 year
lifetime to be used in the same project, but also in future projects.
We already see indications of that our acquisition of Balogh will
increase our total offering to the rail market and that our
complimentary product assortments are received positively by our
common customers. We now start the work to integrate our sales and
development resources within Rail and we expect that our joint
offering should contribute positively already during 2017.

Our Traffic business has stayed unchanged during the quarter, while
margins are developing positively for important product groups. The
US market has developed according to plan while the markets in the ME
region and in the Nordics have been disappointing. We will continue
to increase our market activities among others through participation
in several fairs during 2017. During the fourth quarter we will start
the launch of our UHF products in the French market through the
market channels of Balogh and in the beginning of 2017 we plan to let
our different sales forces sell all our product assortment, i.e. both
RFID and ANPR products. We also continue the work to develop more
products during the first half of 2017.

Our quarterly result of 1,7 MSEK (-3,6) is a clear improvement
compared to the last quarter, but we still have work to do. We will
during the coming quarter initiate cost reductions in Balogh,
including personnel reductions as well as other cost reductions like
rental costs.

Jonas Svensson

CEO

For further information, please contact:

Jonas Svensson, CEO, +46 8-6321950, jonas.svensson@tagmaster.com

This information is information that TagMaster 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 of the contact person set out above, at 8.30 a.m. CET on
October 27, 2016.

About TagMaster

TagMaster is an application driven technology company that designs and markets advanced identification systems and solutions based on radio & vision technology (RFID & ANPR) for demanding environments. Business areas include Traffic Solutions and Rail Solutions sold under the brands TagMaster, CitySync and Balogh with innovative mobility solutions in order to increase efficiency, security, convenience and to decrease environmental impact within Smart Cities. TagMaster has dedicated agencies in the US and in China and exports mainly to Europe, The Middle East, Asia and North America via a global network of partners, systems integrators and distributors. TagMaster was founded in 1994 and has its headquarters in Stockholm. TagMaster is a public company and its shares are traded on First North stock exchange in Stockholm, Sweden. TagMasters certified advisor is Remium AB.

www.tagmaster.com

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http://news.cision.com/tagmaster-ab/r/quarterly-report-for-tagmaster-ab-...
http://mb.cision.com/Main/1590/2109628/580982.pdf

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