Bredband2

Heliospectra

Arise

BrightBid

Starbreeze

TagMaster

* Five-fold growth in a decade may be challenging to achieve without accelerated M&A activity.
* Fragmented market with numerous competitors, potentially limiting market dominance and pricing power.
* Current economic downturn has impacted profitability, with ROIC falling below 10%.
* Some exposure to commodity price fluctuations, affecting component costs and potentially impacting margins.
* Vulnerability to macroeconomic cycles, as evidenced by recent performance challenges in 2024.

* Strong recurring revenue base with long-term contracts and product lifecycles, enhancing business stability and predictability.
* Asset-light business model allowing for efficient scaling without costly reinvestment, with working capital/sales below 20%.
* Successful geographic expansion through both organic growth and M&A, demonstrating adaptability and growth potential.
* Benefiting from secular tailwinds in smart city and environmental solutions, positioning the company for long-term growth.
* Diversified revenue base across various market segments and a wide product range, reducing dependency on single sources.

* Limited insider ownership: Apart from the largest shareholder, management and board members have relatively low stakes in the company, potentially reducing alignment with shareholder interests.
* Inconsistent returns on capital: Recent macroeconomic headwinds have led to fluctuating returns on invested capital, with current returns below 10%.
* Lack of comprehensive incentive structure: Executive compensation plans do not include important non-financial metrics such as customer satisfaction or sustainability-related performance.
* Absence of founder involvement: As a spin-off from Philips/SAAB Combitech, TagMaster lacks the potential benefits of founder influence on corporate culture and long-term focus.
* Unclear dividend policy: The company's focus on business investment and M&A activity means dividend payouts are not in the foreseeable future, potentially limiting income for shareholders.

* Strong leadership with a clear vision: CEO Jonas Svensson demonstrates deep industry knowledge, commitment to innovation, and a well-defined strategic plan for smart city concept growth and M&A.
* Lean, decentralized organization: TagMaster promotes self-direction and accountability, with a long-tenured management team and consistent delivery on promises.
* Transparent and balanced communication: Management provides direct, timely business updates, focuses on long-term value, and maintains consistency in storytelling and key metrics over time.
* Commitment to sustainability: The company shows high commitment to sustainability reporting, aligning with its business model of improving city environments.
* Strong board leadership: Directors have a deep understanding of the value creation process, with experience aligning with business strategy and female representation in leadership roles.