Pricer AB – Year-end report 2015

Strong result and cash flow concludes 2015, the Board proposes to resume
dividend

Fourth quarter 2015

  · Net sales of SEK  178.5 (173.2) M, an increase of 3 percent compared to last
year
  · Operating profit of SEK 7.4 (7.2[2]) M and profit for the period of SEK 7.9
(-5.1) M
  · Cash flow from operating activities increased to SEK 92.7 (56.8) M
  · Order intake of SEK 108 (115) M, a decrease of 6 percent compared to last
year
  · The backlog* is approximately SEK 63 M, whereof the majority is expected to
be invoiced in the first quarter of 2016
  · Framework agreement signed between Strongpoint and Bunnpris in Norway,
estimated future order value is approximately SEK 100 M

Full year 2015

  · Net sales of SEK  870.6 (583.0) M, an increase of 49 percent compared to
last year
  · Operating profit of SEK 47.8 (15.9[2]) M and profit for the period of SEK
37.0 (-55.5) M
  · Cash flow from operating activities increased to SEK 101.4 (13.6) M
  · Order intake of SEK 792 (541) M, an increase of 46 percent compared to last
year
  · The Board proposes to the Annual General Meeting to resume dividend for 2015
with 0.25 (0) SEK per share

Subsequent events

  · Orders from Carrefour of more than 100 MSEK with deliveries scheduled to
begin during first quarter of 2016
  · Launch of real time in-store automated product positioning

+---------------------------------------+-------+-------+-------+-------+
|Amounts in MSEK unless otherwise stated|Q4 2015|Q4 2014|FY 2015|FY 2014|
+---------------------------------------+-------+-------+-------+-------+
|Order intake                           |    108|    115|    792|    541|
+---------------------------------------+-------+-------+-------+-------+
|Net sales                              |  178.5|  173.2|  870.6|  583.0|
+---------------------------------------+-------+-------+-------+-------+
|Gross margin[1, 3]                     |  24.6%|  24.6%|  21.9%|  24.0%|
+---------------------------------------+-------+-------+-------+-------+
|Operating profit[2]                    |    7.4|    7.2|   47.8|   15.9|
+---------------------------------------+-------+-------+-------+-------+
|Operating margin[2]                    |   4.1%|   4.2%|   5.5%|   2.7%|
+---------------------------------------+-------+-------+-------+-------+
|Cash flow from operating activities    |   92.7|   56.8|  101.4|   13.6|
+---------------------------------------+-------+-------+-------+-------+
|Profit for the period                  |    7.9|   -5.1|   37.0|  -55.5|
+---------------------------------------+-------+-------+-------+-------+
|Earnings per share (SEK)               |   0.07|  -0.05|   0.34|  -0.51|
+---------------------------------------+-------+-------+-------+-------+

[1] Excluding non-recurring costs of 0 for Q4 2014 and SEK 37.5 M for the full
year 2014.
[2] Excluding non-recurring costs of SEK 12.1 M for Q4 2014 and SEK 69.0 M for
the full year 2014.
[3] Depreciations of capitalized development costs were during 2014 reclassified
from the research and development cost function to cost of goods sold. The
effect of this is SEK 2.8 M for Q4 2014 and SEK 11.2 M for the full year 2014.

Comments from the CEO, Jonas Vestin

Pricer succeeded in turning last year’s losses into profit and a very strong
cash flow for 2015. I am delighted to report that net sales rose by 49% to SEK
871 M, making this Pricer’s best year ever. We have prioritized profitable
growth, order intake increased by 46% to SEK 792 M and operating profit nearly
tripled to SEK 48 M, at the same time that we reduced our tied-up capital. This
should also be seen against the background of the extensive restructuring that
the organization underwent during the period, parallel to the launch of a new
digital strategy.

In the fourth quarter, both net sales and profit were up over the same quarter
last year. And if we had included the framework order between our Norwegian
reseller and Bunnpris that was announced in the fourth quarter as order intake,
we would also have shown growth in order intake and backlog. But since the exact
size and timetable had not yet been finalized at year-end we have chosen to wait
before including them in our order intake and backlog, in accordance with our
principles.

At the same time, the lower order intake in the second half of the year does
indicate a certain headwind. The fourth quarter of 2015 saw the completion of
two major global auction type ESL procurements, with tightly controlled
requirements for participation and price as the decisive factor, in which Pricer
chose to prioritize margins over volumes. These procurements referred to
business where the label density in the stores is low and price updates are
relatively few, resulting in strong price pressure in combination with
disproportionate risks involved. Pricer’s competitive advantage is stronger when
the number of ESL labels per store are high, preferably also combined with an
active pricing strategy, resulting in system stability and functionality in
addition to price updates being considered important evaluation criteria.

To ensure our ability to be competitive even in major procurements of this kind,
we will intensify the already started rationalization initiatives, particularly
with regard to graphic ePaper labels. These projects are underway and succeeded
in largely compensating for the high US dollar rate in the past year, but will
also successively improve our competitiveness in different segments going
forward.

Pricer’s digital solutions are leading the way in the industry, but the
competitors have wasted no time in revamping both their position and market
messages. For Pricer, this means a continued focus on the differentiation
strategy that was launched in 2014 and will begin to make a positive
contribution to earnings in 2016 through initial deliveries of digital solutions
to our customers’ stores. In time, the digital strategy will improve our gross
margin and earnings. However, a more powerful breakthrough is not expected until
2017 which is in line with our earlier projections.

All in all, Pricer is now on stable financial ground and delivered robust growth
and a strong cash flow in 2015. We are well poised for the year ahead, but
despite continued long-term growth in the market, we are dealing with a
relatively tough market scenario and will issue no forecast for 2016.

For further information, please contact:
Jonas Vestin, CEO, or Helena Holmgren, CFO, Pricer AB: +46 8 505 582 00, or
visit www.pricer.com.

In its capacity as issuer, Pricer AB publishes the information in this interim
report in accordance with the Securities Markets Act (2007:528). The information
was issued to the media for publication on Friday, 12 February 2016 at 8:30 am
CEST.

* The order backlog consists of binding orders and call-offs under frame
agreements. Expected future value of frame agreements is not included. Framework
agreement between Strongpoint and Bunnpris not part of backlog.