Strong growth in order intake and net sales. Lower operating margin.
- The Board of Directors proposes a dividend of SEK 0.50 per share
Fourth quarter 2017
- Net sales of SEK 253.0 M (188.0), an increase of 35 percent compared to the same period of last year
- Operating profit of SEK 16.9 M (16.6), corresponding to an operating margin of 6.7 percent (8.8)
- Order intake of SEK 231 M (180), an increase 29 percent compared to the same period of last year
- The backlog is approximately SEK 133 M (95), most of which is expected to be invoiced in the first half of 2018
- Profit for the period amounted to SEK 10.8 M (18.0)
- Earnings per share amounted to SEK 0.10 (0.16)
- Cash flow from operating activities was SEK 24.5 M (63.3)
Full year 2017
- Net sales of SEK 827.8 M (757.6), an increase of 9 percent compared to last year
- Operating profit of SEK 55.7 M (64.1), corresponding to an operating margin of 6.7 percent (8.5)
- Order intake of SEK 872 M (783), an increase of 11 percent compared to the same period of last year
- Profit for the period amounted to SEK 38.7 M (57.3)
- Earnings per share amounted to SEK 0.35 (0.52)
- Cash flow from operating activities was SEK -8.3 M (174.0)
- The Board of Directors proposes to the Annual General Meeting a dividend of SEK 0.50 (0.50) per share for 2017
Comments from acting CEO Helena Holmgren
2017 came to a strong close with an increase in order intake of 29% in the fourth quarter compared to the same period of last year, resulting in growth of 11% for the full year 2017 compared to 2016. Order intake in the fourth quarter came from a high level of activity across multiple geographic markets, where Italy, Norway and Belgium all showed robust performance. It is worth mentioning our recent success in the Italian market, where several new customers such as Brendolan and a number of freestanding COOP regions each placed orders for multiple stores in the fourth quarter. Starting in 2017 and continuing in the first and second quarters of 2018, these stores will be equipped with Pricer’s electronic shelf-edge solution with graphic (e-paper) labels combined with advanced digital services.
Net sales rose by 35% in the fourth quarter compared to the same period of last year. Net sales growth in the quarter was driven mainly by the deployment of sixty Best Buy stores in the USA during the autumn. For the full year 2017, net sales were up by 9% compared to 2016. Growth in a number of markets, such as the USA, Italy, Norway and Belgium, has been strong and the high order backlog (order intake not yet invoiced) of SEK 133 M is spread across several geographic markets and a large number of customers.
Gross margin fell in the fourth quarter as a result of continued price pressure. As previously mentioned, major new roll-outs of graphic labels are exposed to aggressive competition, a situation that is expected to persist. In addition, sales through resellers have been high and service sales (such as installation services) were low in the quarter as a share of total sales, which has had a negative impact on gross margin.
Operating profit for the fourth quarter was SEK 16.9 M (16.6), equal to an operating margin of 6.7 percent (8.8), which is a consequence of the lower gross margin for the period combined with negative foreign exchange effects. Operating profit for the full year 2017 amounted to SEK 55.7 M (64.1), equal to an operating margin of 6.7 percent (8.5). The decrease is mainly due to the lower gross margin but was also affected by foreign exchange losses and, to a lesser degree, higher costs related to reinforcement of the organization.
The intense activity in the final quarter of the year, combined with the high order backlog at the end of 2017, resulted in a temporary peak in capital tied-up at the year-end. Both inventory levels and trade receivables were higher at December 31, 2017, than on the corresponding date of the previous year and this had a negative impact on cash flow from operating activities. Cash and cash equivalents at the end of the year amounted to SEK 167 M (261).
For further information, please contact:
Helena Holmgren, acting CEO, Pricer AB +46 8 505 582 00
This information is information that Pricer 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 by the contact person set out above, on February 14, 2018 at 8:30 CET.