Interim Report January

Pricer takes significant non-recurring costs

– New sales and market strategy is announced

  · Leroy Merlin has chosen Pricer’s solution for all its stores – potential
sales value SEK 130 million
  · Provision for non-recurring costs of SEK 53 million
  · A new strategy is announced that will simplify price optimisation between
physical and online stores as well as mobile applications for the consumer
  · The strategy is expected to strengthen growth and profitability in 2015
  · No forecasts for 2014 is given

Second quarter
Orders                    SEK 127 M (154)
Net sales                 147.9 M (127.9)
Gross margin 1)           24.3 percent (31.4)
Operating profit 2)       SEK 2.7 M (9.1)
Operating margin 2)       1.8 percent (7.1)
Cash flow                 -37.7 M (-25.4)
Basic earnings per share  SEK -0.46 (0.07)


January - June
Orders                    SEK 260 M (296)
Net sales                 SEK 251.5 M (221.1)
Gross margin 1)           23.9 percent (28.9)
Operating profit 2)       SEK -6.5 M (5.3)
Operating margin 2)       -2.6 percent (2.4)
Cash flow                 -8.4 M (21.4)
Basic earnings per share  SEK -0.55 (0.03)

1) Excluding non-recurring costs of SEK 37.5 M for 2014
2) Excluding non-recurring costs of SEK 52.8 M for 2014

Comments from the (acting) CEO, Harald Bauer

Sales increased in the second quarter while orders and the profit were lower
than the previous year.

In the second quarter the profit continued to be burdened by costs for replacing
components in on-site customer installations. The company’s warranty reserve is
being increased to meet additional costs.

The costs refer to component problems in deliveries from some of Pricer’s
suppliers which, while they are assessed as resolved, have required significant
efforts to replace the labels for a number of customers. A comprehensive quality
enhancement programme has been launched, which also includes sub-contractors.

In the second quarter, non-recurring costs of SEK 52.8 million are reported. In
addition to the increased warranty reserve for replacement components, the costs
include write-downs of stock and development projects. Excluding non-recurring
costs, the operating profit was SEK 2.7 million.

We assess that the component problems will not have an impact on Pricer’s sales
in 2014 as the problems have been identified and are assessed as being resolved.
The replacement work is being conducted on a continuous basis with the affected
customers. No sales or profit forecast is given for the full-year.

To enable Pricer to resume its growth and return to good profitability, the
company’s sales and market strategy is currently reviewed and revised as
described below.
Interim Report January - June 2014

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