Interim Report January - June 2026

• Net sales decreased by 8,4 % during the quarter to 116,4 MSEK (127.2). Organic growth, adjusted for currency effects, amounted to -5,8 %.
• Adjusted EBITDA decreased by 12,9 % during the quarter to 19,0 MSEK (21,8), corresponding to an adjusted EBITDA margin of 16,3 % (17,1).
• Operating profit amounted to 12,3 MSEK (9,6), corresponding to an operating margin of 10,6 % (7,5).
• Profit for the period amounted to 8,4 MSEK (7,0).
• Earnings per share amounted to SEK 0,57 (0,48).
• Cash flow from operating activities amounted to 13,8 MSEK (-2,7).

January-June 2026

• Net sales were essentially unchanged and amounted to 227,1 MSEK (227,2). Organic growth, adjusted for currency effects, amounted to 4,6 %.
• Adjusted EBITDA increased by 77,4 % during the first half of the year to 34,9 MSEK (19,7), corresponding to an adjusted EBITDA margin of 15,4 % (8,7).
• Operating profit amounted to 20,9 MSEK (-1,6), corresponding to an operating margin of 9,2 % (-0,7).
• Profit/loss for the period amounted to 12,7 MSEK (-0,6).
• Earnings per share amounted to SEK 0,87 (-0,04).
• Cash flow from operating activities amounted to 49,5 MSEK (11,5).

Comments by the CEO

We delivered another quarter of solid profitability, with an adjusted EBITDA margin of 16.3 percent and strong cash flow. This was achieved despite parts of our business being affected by a cautious market driven by uncertainty surrounding tariffs and geopolitical developments. Particularly encouraging is the improvement in our gross margin to above 70 percent. Overall, the quarter demonstrates the strength of our business model, enabling us to maintain solid profitability even in a more challenging market environment.

The quarter was strong given the market backdrop, which remained volatile as demand for our solutions depends on long-term investment decisions. The markets in which we operate continue to be affected by the unpredictable global economic environment and ongoing supply chain disruptions. We reported revenue of SEK 116.4 million, representing a decrease of 8.4 percent in absolute terms compared with the second quarter of 2025, and 5.8 percent adjusted for currency effects and acquisitions.

The slightly lower revenue was offset by an improved gross margin, which reached 70.1 percent (67.8) at the Group level. Adjusted EBITDA amounted to SEK 19.0 million, corresponding to an adjusted EBITDA margin of 16.3 percent. Cash flow from operating activities amounted to SEK 13.8 million, and the Group's solvency ratio stood at 62.6 percent at the end of the period.

A key factor behind our ability to deliver solid profitability despite challenging external conditions is the significant strengthening of our parking and access digitalization offering. This has also increased the share of our sales to corporate customers (B2B). It complements our core business, which is primarily focused on the public sector (B2G), making us somewhat less exposed to the uncertainty and slower decision-making processes that can affect public sector procurement.

The Group's total operating expenses during the quarter decreased by just over SEK 3 million compared with the corresponding period last year, and our efforts to reduce working capital remain a key priority. On a sequential basis, inventories for comparable units decreased by approximately 3 percent, while compared with the corresponding quarter last year they were reduced by just over 14 percent.

Revenue in the Traffic Solutions business amounted to SEK 93.2 million in the second quarter, representing a decrease of approximately 10 percent compared with the corresponding quarter of 2025. During the quarter, Traffic Solutions accounted for 80 percent of Group revenue, while Rail Solutions accounted for the remaining 20 percent.

We also continue to see rising input costs, particularly for semiconductors, partly driven by increased demand related to AI investments and reduced oil supply due to the tensions in the Strait of Hormuz. Our ambition is to mitigate these effects through close collaboration with customers and suppliers, product substitution, and further efficiency measures.

During the quarter, we continued to invest in product development to further strengthen the competitiveness of our offering, with a particular focus on software, AI and data-driven solutions. Our AI First strategy is fully integrated across the organization and underpins our product development, internal processes and marketing activities. Backed by a strong development team and leading expertise in AI, image analysis and sensor technologies, we are well positioned to develop new applications and capitalize on the growing demand for multi-sensor solutions.

With a total of 50 development engineers, around 30 of whom are dedicated to advancing AI-based video solutions, and with virtually the entire development team leveraging AI-powered coding tools and AI agents, we are developing solutions at the forefront of the industry. During the quarter, investment in product development amounted to approximately 15 percent of the Group's revenue.

Looking ahead, I can conclude that TagMaster is well positioned to help address some of the key challenges facing transport systems around the world, including traffic congestion in densely populated areas, improved road safety, and the reduction of transport-related emissions. These long-term trends continue to drive demand for our solutions, and we remain firmly committed to strengthening TagMaster's market position despite the cautious market environment created by uncertainty surrounding tariffs, geopolitics and regulatory developments.

Jonas Svensson, CEO

Auditor’s review

This report has not been reviewed by the company auditor.

Financial calendar

October 28, 2026: Interim report third quarter 2026
February 4, 2027: Earnings release 2026

This report and previous reports and press releases are found at the company home page www.tagmaster.com.