Climate Change Data

Environmental Metrics

Social Achievements

• Increased number of R&D employees from eight to 25 from the start of 2015 to the end of 2016.

Climate Goals & Targets

Environmental Challenges

• Turnaround of CitySync took longer than planned, requiring an additional cost-reduction program.
• Balogh Group was under reconstruction since May 2015, requiring a continuation plan approval before acquisition.

Mitigation Strategies

• Launched cost-reduction program at CitySync including downsizing and reorganization.
• Prepared and implemented a continuation plan for Balogh, approved by the Paris Commercial Court.
• Restructuring work at Balogh began after acquisition to cut costs.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Sustainability
• Smart Cities
• Environmental impact reduction
• Traffic efficiency
• Safety

Environmental Achievements

• Reduced traffic congestion and emissions through smart solutions
• Improved traffic flows leading to lower fuel consumption and fewer delays

Social Achievements

• Acquired Hikob, adding employees and expertise in magnetic sensors
• Continued efforts to streamline organization and integrate acquired companies

Governance Achievements

• No specific governance achievements explicitly mentioned in the report.

Climate Goals & Targets

Environmental Challenges

• Volatile sales in Rail Solutions due to large, infrequent projects
• Competition from companies of all sizes in RFID and ANPR fields
• Rapid technological development
• Currency risk due to international sales
• Credit risk due to varying payment cultures in different countries

Mitigation Strategies

• Consolidation of previous acquisitions to reduce costs
• Increased commercial focus, customer-driven product development, and operational improvements
• Price clauses in sales agreements to reduce currency risk
• Procedures to check and follow up on customer financial situations and customer credit insurance
• Strengthened R&D operations to maintain competitiveness

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• New ANPR cameras
• All-new RFID scanner for parking, tolling, and rail applications

Environmental Metrics

ESG Focus Areas

• Climate change
• Sustainability
• Safety

Environmental Achievements

• Reduced emissions through improved traffic flow and the use of more efficient sensor systems (implied, not quantified)
• Reduced congestion and air pollution in urban environments through the use of electronic tolling systems (implied, not quantified)

Social Achievements

• Acquisition of Sensys Networks, adding approximately 40 employees
• Continued focus on integrating acquired companies and maintaining a strong corporate culture

Governance Achievements

• Streamlined Group's organizational structure
• Consolidated operations in the UK, France, and Sweden

Climate Goals & Targets

Environmental Challenges

• Loss of significant partners
• Dependence on a small number of suppliers
• Dependence on key personnel
• Product liability claims
• Infringement and plagiarism of products
• Market economy situation
• Technology competition
• Currency risk
• Interest rate risk
• Price risk
• Credit risk
• Liquidity and financing risk
• Potential impact of Covid-19

Mitigation Strategies

• Opportunities to compensate for partner losses through new partners
• Keeping components and finished products in stock
• Attracting and retaining qualified staff
• Clear information to customers, product testing, insurance
• Patents and registered trademarks
• Diversified customer base across geographic areas and market segments
• Strengthened R&D activities
• Price clauses in sales agreements, balanced selling and buying currencies
• Hedging LIBOR rate with an interest rate swap
• Long-term supplier relationships
• Procedures to check customer financial situations, customer credit insurance, payment in advance
• Overdraft facilities, meeting financial covenants
• Program of reductions in operations to mitigate Covid-19 impact (short-term lay-offs, shortened working week, changes in purchasing practices, cost cutbacks)

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Wireless sensor systems
• Electronic tolling systems
• GiveMeGreen! app

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Increased cycling leading to savings of £567 million annually from air quality alone and preventing 8,300 premature deaths each year

Social Achievements

• Increased cycling and walking, improving health and wellbeing, addressing inequalities, and tackling congestion.
• Creation of more school streets, reducing the number of people driving children to school by up to a third and reducing the risk of casualties.

Governance Achievements

• Establishment of Active Travel England to enforce standards and time limits, and raise performance generally.

Climate Goals & Targets

Environmental Challenges

• Low levels of cycling and walking compared to other countries.
• Inadequate cycling infrastructure.
• Rat-running in residential areas.
• High number of car journeys under 5 miles.
• Bike theft.
• Disparities in road space allocation.
• Inadequate maintenance of the National Cycle Network.

Mitigation Strategies

• £2 billion of new funding for cycling and walking.
• Creation of thousands of miles of protected bike lanes.
• Establishment of low-traffic neighbourhoods.
• Creation of cycle, bus and walking corridors.
• Improved National Cycle Network.
• New cycling design guidance.
• Active Travel England to enforce standards.
• Cycle training for everyone.
• Increased cycle parking.
• Improved planning policies to promote cycling and walking.
• National e-bike support programme.
• Legal changes to protect vulnerable road users.
• Higher safety standards on lorries.

Supply Chain Management

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 11: Sustainable Cities and Communities
• Goal 13: Climate Action

Environmental Metrics

ESG Focus Areas

• Climate change
• Sustainability
• Safety

Environmental Achievements

• Reduced carbon footprint by consolidating production in fewer European and US partners; relocated production from China and the UK to Europe in 2020-2021.
• Most of the systems and solutions sold by TagMaster can be powered by solar panels to minimize climate impact and for increased reliability.
• A study by Siemens demonstrated that using Sensys Networks FlexMag sensors in adaptive traffic control (ATC) reduced CO2 emissions by 282 kg per car per year. National US adoption could cut emissions by nearly 500,000 tonnes annually.

Social Achievements

• Acquisition of Citilog added 15 experienced software engineers, strengthening technical capabilities.
• Continued focus on integrating acquired companies, maintaining strong values and a shared corporate culture.
• Initiatives to broaden the offering of advanced sensor technologies.

Governance Achievements

• Continued application of the Swedish Code of Corporate Governance (with one noted deviation regarding the CEO's role as deputy director, which will not be repeated).
• Annual evaluation of the Board and CEO's performance.
• Clear acquisition strategy and integration process.

Climate Goals & Targets

Environmental Challenges

• Global component shortage affecting deliveries (estimated loss of ~3.5% of sales).
• Increased transport costs.
• Supply chain disruptions (partially addressed by relocating production).

Mitigation Strategies

• Proactive measures to maintain a robust supply chain (daily contact with key suppliers, global sourcing, higher inventory levels).
• Price increases to offset higher costs.
• Redesigning sensor products to adapt to the component situation.
• Consolidation of production at fewer partners.

Supply Chain Management

Responsible Procurement

• Outsourcing production for flexibility and cost efficiency.
• Maintaining inventory levels to mitigate supply chain risks.

Climate-Related Risks & Opportunities

Opportunities

• Growth in the market for sustainable transport solutions.

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: Mazars AB

UN Sustainable Development Goals

• Goal 3
• Goal 8
• Goal 9
• Goal 11

TagMaster's solutions contribute to these goals by reducing traffic congestion and pollution, optimizing transport infrastructure, improving traveler information, and enabling advanced ITS solutions for cities to meet their environmental and safety objectives.

Sustainable Products & Innovation

• Wireless sensor systems (replacing inductive loops).
• Solar-powered solutions.
• AI-based video analytics for incident management.

Environmental Metrics

ESG Focus Areas

• Climate change
• Sustainable transport
• Safety

Environmental Achievements

• Relocated production of traffic detection equipment from Mexico to the USA, meeting Buy America requirements and qualifying for federal funding.
• Consolidated production in Europe to Sweden, reducing carbon footprint and increasing efficiency.
• Reduced carbon dioxide emissions by 282 kg per car per year in a Seattle study using Sensys Networks FlexMag sensors.

Social Achievements

• Turned around Citilog (France) to profitability in the fourth quarter following a restructuring program.
• Implemented ONE TagMaster initiative to develop sales performance and digitalize sales processes.
• Maintained a high level of delivery capacity to customers despite component shortages.

Governance Achievements

• Board evaluation performed via a web-based survey.
• Nomination Committee met on five occasions to assess Board member performance and propose Board members and remuneration levels for the 2023 AGM.

Climate Goals & Targets

Environmental Challenges

• Continued component shortages and capacity shortages at the main supplier.
• Cost increases for electronic components and inputs.
• Supply chain disruptions and slightly lower activity in the UK and France.

Mitigation Strategies

• Redesigned sensor products to adapt to component situation.
• Actively sourced components via the spot market and other channels.
• Implemented new internal processes to reactively manage and proactively prevent shortage situations.
• Raised prices to customers to offset higher costs.
• Consolidated production at fewer partners.

Supply Chain Management

Responsible Procurement

• Focus on cost control and cash flow
• Dedicated team to plan and optimize purchases
• Collaboration with subcontractors to assure component supply

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Growth in green investments in sustainable transport systems

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 11 (Sustainable Cities and Communities)

TagMaster's solutions contribute to these goals by improving traffic flow, reducing emissions, increasing safety, and promoting sustainable urban development.

Sustainable Products & Innovation

• Sensor systems and solutions for traffic management, parking, and rail applications.