Interim Report for January-September 2015

Comments from the CEO
During the third quarter we finalised the acquisition of Gatso Beheer BV and formed Sensys Gatso Group effective as of August 1^st, 2015. The acquisition positions us as the leading traffic safety provider globally and gives us a more diversified product portfolio resulting in a more stable and predictable business model. The market for traffic safety systems continued to gradually strengthen in all our main regions. In the third quarter, the net sales amounted to SEK 100.3 million (43.0). This corresponds to an increase in relation to the average quarterly net sales based on the Proforma accounts for 2014 of SEK 436 million. Sensys Traffic AB had a net sales of SEK 160.6 million 2014 and Gatso Beheer BV had a proforma net sales of 275.5 million for the financial year ending 30th of September 2014. Considering that the third quarter 2015 consists of one month of Sensys Traffic AB and only two months of Sensys Gatso Group, it is therefore difficult to establish comparable proforma numbers. We should also bear in mind that the recent order intake has not yet fully influenced the financials for the third quarter.

The gross margin amounted to 40.6 per cent (48.5), mainly affected by the in-house delivery model used in the Dutch operations. The in-house delivery model in combination with the strong order intake during the third quarter has also driven an increase of the net working capital. The operating margin was however negative, due to costs relating to the acquisition of Gatso Beheer of 15.3 million, consisting of a one off transaction cost of SEK 7.9 million and a “Purchase Price Allocation” cost of SEK 7.4 million. Operating profit excluding the costs related to the acquisition amounts to SEK 7.9 million.

We have received orders in the quarter of SEK 39.7 million consisted primarily of orders for Japan, the UK, the Netherlands, France and the Middle East. In addition to this, just before the merger became effective, Gatso received orders, in July, worth SEK 187 million of which SEK 165 million was a major order from a new customer. This order is covering delivery of in-vehicle systems to a new customer and the final delivery is due in the first half of 2016, somewhat later than previously communicated.

For the period January–September our net sales amounted to SEK 219.1 million (101.8) and the operating profit totalled SEK 27.3 million (14.1) with an operating margin of 12.4 per cent (13.9).

The integration of the two companies is progressing at a high pace and we are now moving into a more operational phase focusing on product portfolio alignment, engineering and supply chain management. We have already noticed good benefits in better market coverage.

From January 1, 2016 we will start reporting in two business segment, Systems Sales and Managed Services. This segmentation will provide us with a better and more transparent operational model. In Systems Sales the ownership of the equipment is transferred to the customer, while in Managed Services the ownership remains with us. Hence, our shareholders and investors will be able to properly analyse and understand the performance of two significantly different business models.

I am very pleased to see the teams executing our strategies and plans with enthusiasm and energy, while at same time continuing with our day-to-day business, winning orders, developing products and executing deliveries. Sensys Gatso Group is clearly changing the face of the traffic safety and enforcement industry.

Invitation to presentation for press and analysts
On 26 November at 09:30, CEO Torbjörn Sandberg and CFO Niki Gatsonides will present the report and answer questions in an audio cast. The presentation can be followed on the Internet via the link on Sensys Gatsos’ website: www.sensysgatso.com. It is also possible to listen to the presentation and ask questions by phone, via the following numbers:

Sweden: +46 (0)8 5052 0110
USA: +1 334 323 6201
UK: +44 (0)207 1620 077

Password: 955722 or Sensys.

Please call ten minutes before the time specified.

This is information that Sensys Gatso Group AB (publ) must publish pursuant to the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act.

The information was submitted for publication on 26 November 2015 at 08:30.

For more information:
Torbjörn Sandberg, CEO
Mobile: 076-843 43 76
E-mail: t.sandberg@sensysgatso.com

Sensys Gatso Group is the leading supplier of system solutions for traffic safety in the field of traffic enforcement systems. Sensys Gatso 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 at NASDAQ OMX Stockholm. The Group has 200 employees and is the result of a merger of Sensys Traffic AB and Gatso Beheer B.V. following Sensys Traffic’s acquisition of Gatso Beheer. Sensys Traffic had net sales of SEK 160.6 million during 2014 and Gatso Beheer had a pro forma net sales of SEK 275.5 million during the financial year ending on 30 September 2014.