Message from CEO

Purely in terms of figures, 2024 was a good year, albeit one with slightly lower profitability than in our record year of 2023, when a generally poor international economic situation temporarily weakened demand. We are affected because our business is in large part centred on the government sector, with long-term investment decisions affected by the state of public finances. In 2024, the outcome to us was slightly less buoyancy in the market, as orders were affected by weakness in the general economy in several geographical markets – in Tagmaster’s case above all the UK, institutions, hospitals, housing associations and offices worldwide. Quercus has established itself as a technology leader in the parking industry.

All this means that we are now better positioned in the market, with our offering meeting some of the very biggest challenges that face the transportation systems of the world, challenges that have to be addressed. Our solutions actively help in improving traffic congestion in densely populated areas, in lowering the That we still managed to do so well in a relatively weak market is testament to our strength. This strength was particularly evident in the final quarter of the year, when we were able to post organic growth and thus deliver record figures in terms of both sales and profitability. I am therefore proud to affirm that we continue to stand strong as we maintain our market shares and report a healthy, positive cash flow.

But the real bright spot towards year-end came with our announcement of the acquisition of Quercus Technologies, Spain. The acquisition rounds out and balances the Group’s business, which until now has been predominantly focused on the government sector.

Increased cross-selling
Quercus develops and manufactures advanced ANPR video system solutions for parking access and parking information systems that optimise efficiency in parking facilities and improve the parking experience. With installations in more than 60 airports and 80 shopping centres, as well as in hotels, universities, public Obviously, this strengthens our position in parking solutions, but it also provides major opportunities for organic growth through increased cross-selling. Quercus is strong in Germany, Spain and Australia, while our main strengths already exist in the USA, the UK and France . Together, we gain opportunities to sell each of our solutions in new markets and to offer a wider range of products and AI-powered solutions to global customers.

Strategic innovation
The acquisition also adds to our strengths in our ambitious innovation and development work on new solutions, sensor products and software-based platforms based on advanced AI technology. With Quercus now part of the Group, we have gained access to in-depth knowledge in visual data analysis and advanced AI technology, reinforcing our position as a leading player in intelligent sensor systems for both transportation and parking applications.

Following the acquisition, the Group has a total of 57 development engineers, 30 of them dedicated to advancing the development of solutions based on AI and visual data analysis.

Clearly marking that development and innovation are a strategic part of our business, we are restrictive when it comes to capitalising development costs; they are recognised directly in profit or loss. In 2024, we spent around 15 percent of our sales on research and development, or about SEK 70 million, engaging around 40 percent of the Group’s employees in this area.

“With installations in more than 60 airports and 80 shopping centres, as well as in hotels, universities, public institutions, hospitals, housing associations and offices worldwide, Quercus has established itself as a technology leader in the parking industry.”

Cost control and good margins
During the year, we were also able to benefit from our successful work on diversifying component sourcing and design modifications to our products and production equipment that were made necessary by the shortage of components in previous years . Cost control, simplification and streamlining are a highly important part of our work, providing good gross margins.

The gross margin in 2024 was 68 .3 percent, slightly lower than the 68 .5 percent in 2023. We are maintaining our focus on cost control in order to compensate for the slightly lower gross margin that we see lie ahead in parts of our business.

Going forward, the average gross margin is more likely to be 65–68 per cent instead of the 68–70 percent we have reported earlier . Lower costs offer continued good profitability and greater opportunities to be even more competitive in pricing.

Continued strategic growth
Over the past nine years, we have made a total of nine acquisitions and have integrated the companies concerned into the Group . The integration of Quercus has made great progress in just a few months and we are already working well together across the Group. Over the years, we have developed a highly successful acquisition and integration model and part of our continued growth will be through acquisitions.

We continue to actively seek potential candidates in the markets where we operate. First and foremost, we look at complementary acquisitions in the markets where we are already established, or at players with complementary technological solutions. With more strength, a broader and even more innovative offering, combined with geographical expansion, we can gain greater market share in a growing market.

However, it is not solely through acquisitions that we intend to grow. Constant innovation and development, above all, will deliver a stronger position and thus organic growth. In addition, we can still get much better at leveraging the strength of the Group as a whole, in terms of cross-selling and joint development and innovation and have therefore redoubled our investment during the year in the Group-wide sales organisation and further integration of our businesses.

Viewed against the above background, our future prospects are good. We operate in a fragmented and growing market with major investments both in the current budget cycles and for many years to come. We are still small, but we are getting stronger and more competitive every year and we look to the future with great hopes.