Interim Report Pricer AB January – June 2016

Regulatory News:

Pricer AB (STO:PRICB)

Improved operating margin and profit, weaker order intake

Second quarter 2016

· Net sales of SEK 204.2 M (239.4), a decrease of 15 percent compared to the same period last year

· Operating profit of SEK 16.3 M (8.2) and profit for the period of SEK 14.6 M (7.0)

· Operating profit includes costs affecting comparability related to restructuring of SEK 6.5 M (0)

· Cash flow from operating activities improved to SEK 21.1 M (-57.9)

· Order intake of SEK 154 M (296), a decrease of 48 percent compared to the same period last year

· The backlog is approximately SEK 163 M (303), whereof the majority is expected to be invoiced in the third and fourth quarter of 2016

· The Board appointed Charles Jackson as acting CEO of Pricer AB as per 16 May 2016 after Jonas Vestin resigned as President and CEO of Pricer AB

* See Note 1 in the complete version of the interim report.

Comments from acting CEO, Charles Jackson

The second quarter showed sustained high demand from the existing customer base but, due to the postponement of a few major project procurements, order intake was lower than in the previous year and did not meet the company’s own expectations. We can however be pleased of a significant strengthening of the gross margin which, combined with good cost control, raised operating profit compared to last year despite lower sales.

We do not consider that the order intake level during the second quarter reflects a market slowdown but see it rather as due to the investment horizon of individual customers combined with delayed call-offs under previously reported framework agreements. The international grocery business is a structurally and financially sensitive market in which investment decisions sometimes take longer than we would like. As previously reported, major projects in individual quarters affect the consistency of our figures.

Existing framework agreements are recognized as order intake only in the quarter in which call-offs take place. The deliveries to our Norwegian partner Strongpoint, relating to the Bunnpris grocery chain, were pushed back in relation to the previously estimated timetable with only a small portion being included in recognized order intake for the first half. The total order value is still estimated at approximately SEK 100 M which means that we expect additional order intake related to Bunnpris during the current year while deliveries and installation will partly be pushed into to 2017. Furthermore, the French grocery chain Système U did not start call-offs under its framework agreement until the end of the second quarter, which was slightly later than expected. Order intake under this framework agreement is now expected to continue according to plan during the second half of 2016 and in 2017.

Net sales decreased by 15 percent compared to the same quarter in 2015, from SEK 239 M to SEK 204 M. Pricer delivered several major orders in the second quarter of last year which was not the case this quarter. However, supported by improved product costs and an advantageous product mix, we raised the operating margin in the second quarter of 2016 considerably compared with the previous year, from 3.4 percent to over 11 percent if we exclude the non-recurring costs in the quarter attributable to the change of CEO and other staff changes. Cash flow from operating activities also improved by a full SEK 78.8 M compared with last year as a result of less capital being tied in supply chain and inventory combined with better control of our working capital in relation to the fluctuations we are seeing in net sales and order backlog.

To counter these fluctuations, which to some extent are hard to predict, we work continuously to improve our operational processes in order to achieve greater scalability while retaining control of costs. During the past six months we have also achieved a marked improvement of the cost structure which has both strengthened our competitiveness and reduced the need to tie up capital in the production chain. In parallel, we are also investing in more intensive marketing in a number of selected geographies where we want to be in a position to land the major projects. A market that is expected to take off in the coming years is the USA. The USA is the world’s single largest grocery market and trends such as increased automation, active price strategies and increased interactivity with customers can be clearly seen here which strengthens interest in Pricer’s solutions. Several American retail chains within both the grocery trade and the DIY sector have ongoing test installations, a significant step in the sales cycle.

Our strategy to expand our offer into digital services that increase store profitability and enhance the shopper experience remains unchanged. Pricer’s aim is to be a key partner as the world’s major retail chains develop their omni-channel concepts. This is expected to include both global platform solutions and local customizations. A local presence and proximity to customers are pre-requisites to be successful. As part of this work we currently have several test installations with strategic customers in France and Sweden, among other countries. Here, Pricer’s platform guides consumers via an interactive digital map of the store which will, we believe, result in enhanced shopper experience and increased sales. This solution for product positioning is in demand in all our geographical markets and here we intend to accelerate development in order to meet demand from several of the major retail chains in strategically important markets such as France and the USA.

This information is information that Pricer AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency by the contact persons set out above, at 8:30 CET on August 19, 2016.

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