QUARTERLY REPORT FOR TAGMASTER AB January-June 2015

Press release Sweden Stockholm 16 July 2015

Continued growth with robust cash flow

Second quarter

  · Net sales increased by 14,2% during the second quarter and was 18,7 MSEK
(16,4)
  · Result before depreciation (EBITDA) was 2,5 MSEK (2,2), corresponding to a
margin of 13,3% (13,1)
  · Net result was 1,9 MSEK (1,7)
  · Result per share was 0,02 (0,02)
  · Cash flow from the business for the period April-June was 3,8 MSEK

First half year

  · Net sales increased during the period by 23,5% to 37,9 MSEK (30,7)
  · Result before depreciation (EBITDA) increased to 5,1 MSEK (3,7), which
corresponds to a margin of 13,5% (12,1)
  · Net result was 3,9 MSEK (2,7)
  · Result per share was 0,03 (0,03)
  · Cash flow from the business for the first half year was 7,2 MSEK

Sales and
result
TSEK       Second                  First                  Full
           quarter                 half                   year
                                   year
           2015     2014   Change  2015    2014   Change  2014   2013   Change
Sales      18 713   16     14%     37 947  30     23%     62     50     25%
                    381                    735            505    344
Operating  2 493    2 154  16%     5 124   3 710  38%     7 084  2 776  155%
income
(EBITDA)
Operating  13,3%    13,1%          13,5%   12,1%          11,3%  5,5%
margin
(EBITDA)
Income     2 382    1 902  15%     4 983   3 156  42%     6 740  1 512  183%
before
tax
Operating  3 844    1 213  217%    7 210   -454           7 917  -1
cash flow                                                        209
Earnings   0,02     0,02           0,03    0,03           0,05   0,01   150%
per
share

Comments by the CEO

Our sales during the second quarter have had a continued growth, just somewhat
slower than in the first quarter. Our continuous work on improving our margins
now also start to show up in the result.

Our Rail business has been stable during the period with an even flow of serial
deliveries to our main customers. We know by experience that our rail market is
volatile by its character with major shifts between years. New projects are
discussed and our focus is to work more and tighter with our already established
big partners, with whom we want to expand our business and become a more
important business partner for them. We make the judgment that we will see some
more new projects coming during 2015 and with serial deliveries during coming
years.

Our Traffic business has continued to develop well in the US market, but also
the markets in the Gulf states have developed well. In the EMEA and the Nordic
markets the sales has been according to plan and we continue to increase our
efforts during 2015 supported by our newly launched UHF products, which we judge
will have a positive impact on sales and margin during the following years.

We have during the quarter carried out a rights issue, which was subscribed to
209%, and a directed issue, which together added almost 30 MSEK to the company
as well as a new strategic owner through LMK Ventures AB. The capital should be
used for selective acquisitions in adjacent technology areas like sensors,
detectors and camera technology (LPR) with the purpose to widen our product
offering and be a more attractive supplier of the type of information which is a
prerequisite for building the smart cities of the future.

We have during the quarter worked actively with acquisitions discussions, which
has resulted in the acquisition of CitySync, which was communicated July 10.

The innovation work will continue with increasing speed and we have during the
quarter started the launch of a new member, XT Mini, of our new UHF family.
Sales start is expected at the end of quarter three. In addition to the new XT
Mini we have during the quarter started the launch of a number of software add
-ons to exisiting UHF products, which add unique functions making us further
differentiated positively in the market.

Our quarterly result of 2,5 MSEK (2,2), is an improvement compared to previous
year and it is a good result considering that the compared figures from last
year included a great deal of rail sales. In summary we are happy about both
increase in turnover and in result, but we want more going ahead. Our cash flow
has developed well during the quarter which is also reflected in a significantly
stronger balance sheet.

Jonas Svensson

CEO

This report like all previous economic reports can be found at the company home
page www.tagmaster.com

For further information, please contact:

Jonas Svensson, CEO, +46 8-6321950, jonas.svensson@tagmaster.com

About TagMaster

TagMaster is an application driven technology company that designs and markets
advanced radio frequency identification (RFID) products and systems for
demanding environments. Business areas include Traffic Solutions and Rail
Solutions providing innovative applications in order to increase efficiency,
security, convenience and to decrease environmental impact. TagMaster has
dedicated agencies in the US and in China and exports mainly to Europe, Middle
East, Asia and North America via a global network of partners, systems
integrators and distributors. TagMaster was founded in 1994 and has its
headquarters in Stockholm. TagMaster is a public company and its shares are
traded on First North stock exchange in Stockholm, Sweden. For more information
about TagMaster, please visit www.tagmaster.com