Half year Report January - June 2022

Comments from the CEO
Order Intake up 411%
The order intake in Q2 arrived at SEK 240 million, up more than 400% compared to last year. I am especially pleased to see that our US managed services business model will now also be implemented in Tasmania, Australia. During the quarter we received an order of SEK 74 million to provide an Automated Traffic Offense Enforcement (ATOE) Program to the State of Tasmania for a contract period of 3 years. This confirms our vision that in the future more developed countries are looking to outsource the operational part of their automated traffic enforcement activities to commercial parties, whilst keeping legal control over the process. What is especially noteworthy is that this quarter 100% of the order intake was TRaaS. Next to the new Tasmania contract, we renewed contracts with two cities in the USA for a total value of SEK 144 million and a TRaaS contract extension in the Netherlands of SEK 10 million. On a 12-months rolling base our order intake now amounts to SEK 583 million. It is important to note that Dutch procurement award amount of SEK 245 million in Q1 has not yet been included in these numbers and will be added once the orders are formally allotted.

TRaas Sales up 19%
We had a solid second quarter with total sales of SEK 125 million, at par with last year. Our strategic recurring TRaaS sales arrived at SEK 74 million, up by 19%. The increase in TRaaS sales is mainly attributable to higher volumes on our USA TRaaS programs that have started enforcement last year, now contributing in full this quarter. Our TRaaS sales arrived at 59% of total sales in the quarter, on target with our 2025 ambition. Looking at our 12-months rolling sales we see an increase of 15% from SEK 470 million to SEK 541 million. Using the same 12-months rolling base for our TRaaS sales, we see an increase of 28% from SEK 220 million to SEK 281 million.

TRaaS drives Gross Margin up 4 percentage points
Due to the large share of the TRaaS business in our topline, with typically higher margins, the overall gross margin arrived at 41% this quarter. Compared to 37% in Q2 2021, this is an increase of 4 percentage points. Looking at our gross margin on a 12-months rolling basis, we see an 8 percentage points margin improvement,supporting our strategic choice to focus on the recurring TRaaS business.

EBITDA up by 31%
Our EBITDA arrived at 18 million for the quarter, up SEK 4 million or 31% compared to last year. The EBITDA growth can mainly be attributed to the strong performance of our TRaaS Managed Services business, with higher margins, in the USA. We further managed to keep our costs in control. In the quarter the expenses arrived at SEK 44 million or 35% of sales. This compares to SEK 42 million or 43% of sales in Q2 2021. Year to date our costs are stable at approximately 38% of sales. On a 12-months rolling basis, our EBITDA arrived at SEK 109 million, 100% higher than in the same period last year, and 20% of sales on the same basis.

Our operating profit EBIT improved by SEK 2.5 million or 54% from SEK 4.6 million to SEK 7.1 million. I am proud to state that 12 months rolling, this is the eighth consecutive quarter we managed to arrive at a positive EBIT.

75% of Saudi Arabia contract delivered
To date in Q2 we have delivered 75% of this SEK 275 million contract for our unique Vehicle-in- Motion solution. We keep a steady pace in our deliveries to meet the requirements of our customer. Meanwhile we progress in discussions and testing to develop and possibly provide additional solutions for this key customer in the Middle East region.

Free available cash up 39%
Taking into account the total amount of available credit facilities, the free available cash at the end of Q2 amounted to SEK 172 million, 39% higher than last year. The increase is mainly driven by the cash conversion from earlier investments in inventory and work in progress related to customer contracts. With our strong available cash position and our low level of debt, the company has a healthy financial position.

Supply chain costs stable throughout 2022
At Sensys Gatso we have long lead times for our sales, delivery and operations processes. Critical components are therefore sourced way in advance and have already been secured for 2022. Assembly of our systems takes place in our European factories, where most of the added value for our System Sales is realized. Our System Sales and Managed Services business models are hardly affected by increases in energy cost. We also have no business to date in Russia or Ukraine, no employees working from these countries and no supplies coming from the region. Today we expect no delivery issues in our supply chain and our supply chain costs to remain relatively stable throughout 2022.

Outlook
Our order book is strong and growing, our costs are in control, our profitable TRaaS business continues to grow and our financial position is strong. On top, we see in the short term limited impact from supply chain cost increases and the war in Ukraine. 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 18 August 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: https://www.sensysgatso.com

Link to the presentation/audiocast: https://tv.streamfabriken.com/sensys-gatso-group-q2-2022

Dial-in number:
Sweden: +46 8 505 163 86, Pin code: 8264579#
UK: +44 20 3198 4884, Pin code: 8264579#
US: +1 412 317 6300, Pin code: 8264579#

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 18 August, 2022.

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 263 employees. The Sensys Gatso Group’s shares are listed on Nasdaq Stockholm.

For further information, visit www.sensysgatso.com