Quartely report for TagMaster AB January-March 2016

Press release, Sweden, Stockholm, April 28 2016

A robust quarter with extensive development work

First quarter

  · Net sales increased during the first quarter by 28,1% to 24,6 MSEK (19,2)
  · Result before depreciation (EBITDA) was 2,0 MSEK (2,6), corresponding to a
margin of  8,2% (13,74)
  · Net result after tax was 0,9 MSEK (2,0)
  · Result per share was 0,01 (0,02)
  · Cash flow from the business for the period was -0,2 MSEK (3,4)
  · CitySync Ltd makes a small operating profit for the quarter

After end of period

  · TagMaster announced April 27 that its intention to acquire the French
company Balogh, one of the pioneers within the RFID technology working within
rail solutions and access/security solutions.

Comments by the CEO

Our sales during first quarter has been stable with much focus on product
development, both general product development and customer specific product
development.

We have come a long way in the integration and transformation work with CtySync,
which after many years with losses is going through a major change with a total
change in its strategy and with a substantially more efficient organization. As
a consequence of the strategy change, turnover in CitySync will drop some during
the year before going into a new growth phase. It is a result of that we
consciously have left a number of larger non profitable projects and instead are
focusing on building a scalable business model supported by several product
launches during 2016. We have also chosen to focus our marketing resources on
fewer markets coinciding with the markets of TagMaster.

Our Rail business has been characterized by intensive NRE (Nonrecurring
Engineering) work connected to the big rail project announced during the end of
last year. We work on a new rail reader where prototypes should be available
already early second quarter, which is record time for a project this
complexity.

We also work on a new rail tag with 20 year lifetime to be used in the same
project, but also in other future projects. We still judge there will be further
new projects of medium size coming in during 2016 and with serial deliveries the
following years.

Our Traffic business has continued to develop well in several of our markets
with increasing margins.

The US market has continued to develop well while the markets in EMEA and the
Nordics have been unchanged. We continue to increase the market efforts during
2016 supported by our recently launched UHF products which we judge will have a
positive impact on sales and margins during years to come. We continue the work
to develop more products in our UHF family and we will launch more products by
the end of 2016.

In CitySync we work on making new products in high speed to enable us to address
a bigger application market. We have during the quarter started sales of
CitySync 30, an IP based ANPR camera for the parking and the access markets, and
which should be seen as an entry product. We launched during the quarter
CitySync 50, an ANPR camera with all functions integrated in the camera, and
which could work all standalone which makes it suitable for “free-flow” parking
and for “buslane enforcement”. CitySync 50 is expected to start sellng during
the second quarter and we will also launch CitySync 100, an ANPR camera for
traffic solutions and toll roads during the present quarter. In parallel to all
these hardware launches we refine our software and we offer a totally new web
based user interface with the purpose to shorten installation time.

Our quarterly result of 2,0 MSEK (2,6) depends on somewhat higher costs in
TagMaster as well as in CitySync due to the product development described above,
explaining the lower comparable result.

Jonas Svensson

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   identification systems and solutions based on radio & vision
technology (RFID & ANPR) for demanding environments. Business areas include
Traffic Solutions and Rail Solutions providing innovative mobility solutions,
sold under the brands TagMaster & CitySync, in order to increase efficiency,
security, convenience and to decrease environmental impact within Smart Cities.
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. TagMasters certified
advisor is Remium AB. For more information about TagMaster, please visit
www.tagmaster.com