Year-End Report October - December 2023

Comments from the CEO

Delivering on our financial guidance
On the back of our record breaking order intake in 2022, we targeted full year 2023 revenues in the range of SEK 550-650 million and an EBITDA margin of 10-15%. With completion of the deliveries to Saudi Arabia, the rollout of the new TRaaS programs in the USA, as well as several other smaller deliveries, I am proud that we delivered on the high end of our guidance. Revenues arrived at MSEK 623 and our EBITDA margin landed at 14%.

With SEK 1,2 Bn of two large contracts in our home markets still in our backlog and strong sales performance in the USA we are on track to meet our 2025 ambition.

Backlog in homemarkets MSEK 1,200
Order intake and procurement awards during the fourth quarter came in at MSEK 212 compared to MSEK 1,080 in Q4 2022. The latter was an extraordinary quarter since it included the largest order in the industry from our Swedish customer, worth MSEK 850. In this quarter we have also been awarded an additional MSEK 150 from our Dutch customer, raising the contract value to MSEK 400. The combined value of these two large contracts in our home markets Sweden and The Netherlands is MSEK 1,250. We have just started our first system deliveries against these contracts. The remaining backlog is MSEK 1,200. Overall, our order intake in previous quarters including new TRaaS contracts provides for solid revenue generation in the coming years.

TRaaS revenue up 12%
Our TRaaS revenue for the quarter of SEK 104 (93) million was up by 12%. This recurring business equates to 47% of total sales in the quarter. The growth is mainly related to our US TRaaS Managed Services business and revenue from our Tasmania Police project in Australia, which we started earlier this year. For the full year 2023, the total TRaaS sales amounted to SEK 363 (312) million, an increase of 16% and representing 58% of total sales. Our Tasmania Police project has contributed SEK 34 (9) million, or 10% to our TRaaS sales.

USA is driving recurring revenue growth
The main contributor to our recurring business is our TRaaS Managed Services business in the US market. This quarter it grew by 27% to SEK 71 (56) million. For the full year 2023 we realised a growth of 22% to SEK 226 (185) million. And we continue on our growth path in this strategic market for us. In the first two months of 2024 we have seen a high level of commercial activity in the USA. Our sales team signed no less than six new contracts of which four contract renewals, including expansions and two new cities in the state of Iowa. The combined value of these contracts is SEK 150 million. With this high commercial activity level we are steadily creating recurring revenue growth and we are gaining market share in the USA.

Deliveries to Saudi customer completed
As anticipated, we have delivered this quarter the remaining 25% of the SEK 275 million contract for our unique Vehicle-in-Motion solution to our Saudi customer. Building on the excellent customer relationship and satisfaction with our technical capabilities, we are in discussions with our customer to potentially introduce new enforcement solutions and a service level agreement to maintain the installed base.

Balanced global revenue distribution
Sensys Gatso is a European company with a global reach and a balanced sales mix. In 2023 Americas represented 33% of revenue, Europe 25% and APAC/MEA 42%. Our business is built on trust and relationships with Road Safety governmental customers in more than 70 countries. We have a close relationship with our customers and together we customize solutions to meet local legal requirements. Through this we develop long term relationships, often resulting in add-on sales over time.

Ghana project progressing
In December 2022, we signed, through a 40% joint venture share in Nationwide Traffic Management & Enforcement Ltd (NTMEL), an eleven year contract with the Government of Ghana. Our assignment is to Design, Build, Finance, Operate and Maintain a nationwide road safety program. The total revenue for the JV is expected to be around MSEK 800 over the eleven year contract period. We are making good progress with the roll-out of the project and we expect first test citations to be sent out in the first half of 2024. In our financial reporting we show results from the project as results from JV’s.

European development and supply chain
Our software development is at the core of Sensys Gatso’s business model and our teams are predominantly in Europe. The hardware design, development and production of our systems is in part provided by third party suppliers in Sweden, and partly at our own production facility in Haarlem, the Netherlands. This means that we are not dependent on deliveries from Asia. Given our European centric development model, Sensys Gatso is required to meet EU environmental legislations and regulations.

EBITDA increase of 35%
Compared to Q4 last year, we see this quarter a SEK 221 million sales level which is 37% higher than last year. At this sales level, our EBITDA arrived this quarter at SEK 45 million (34), an improvement of 35% compared to Q4 of 2022. At 21%, our EBITDA margin in this quarter is ahead of our 2025 ambition of more than 15%. For the full year 2023 we realised an EBITDA margin of 14%, slightly below our 2025 ambition.

Outlook
Our order book is strong with a revenue backlog of SEK 1.2 Bn from two large contracts in our home markets Sweden and Netherlands. Our profitable TRaaS business continues to grow and our strengthened team in the USA proves to be able to push our topline in this strategic market. On top, we see our new ground breaking roadside platform FLUX coming to fruition in the market.

We therefore retain our long-term plan and ambition 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 22 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: https://www.sensysgatso.com

If you wish to participate via webcast please use the link below.
https://ir.financialhearings.com/sensys-gatso-group-q4-2023

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.
https://conference.financialhearings.com/teleconference/?id=5008477

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 22 February, 2024.

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, Saudi Arabia, Sweden and the USA, and a branch office in the United Arab Emirates and has 302 employees. The Sensys Gatso Group’s shares are listed on Nasdaq Stockholm.

For further information, visit www.sensysgatso.com