09.03.2023
Management report
AS Bercman Technologies (hereinafter “Bercman”) announces its unaudited consolidated results for the second half and 12 months of 2022. Bercman’s sales revenue of the 2022 was 1 755 741 euros. For the comparable period in 2021, turnover was EUR 76 096. From 2022, the results of Bercman’s subsidiary Krakul OÜ (hereinafter “Krakul“) are reflected in the consolidated results of the Bercman Group.
New markets and expansion in existing markets
In the second half of 2022, new generation smart pedestrian crosswalks were delivered to export markets in Greece and the UK. Several smart safety systems were installed in Narva-Jõesuu, Elva and Haapsalu.
In Greece and the United Kingdom, framework agreements for the resale of in-house developed products were signed with local companies. In Greece, a five-year contract was signed with Eur.Elec Ltd, a local transport infrastructure maintenance and installation company. In the United Kingdom, a two-year resale contract was signed with Clearview Intelligence Ltd, an ITS technology company. Cooperation was launched with 1oT, a data service provider for the Internet of Things market, for the use of 1oT eSIM cards in smart transport infrastructure devices.
In a joint bid with Krakul, the Põlva Smart Road re-tender has been won, which will see the construction of a 2.5 km stretch of road in the city of Põlva with 14 smart crosswalks and average speed measurement capability. At the time of reporting, the contract for the works has not yet been signed.
Krakul continued to work with long-term customers and customer projects and companies from both Estonia and foreign markets were added to the client portfolio. IoT and autonomous systems solutions were exported to the UK, Germany, Switzerland, Finland, Latvia, Singapore and the USA.
To increase its network of contacts and export opportunities, the company’s team attended the Smart City Expo World Congress in Barcelona in November, together with representatives from Krakul. Smart City Expo is one of the world’s leading events on smart city developments and opportunities.
Research and development
In autumn 2022, the development project “SmartWalk”, funded by the German Ministry of Transport and Infrastructure, was completed with the participation of Bercman. The project was carried out in cooperation with the University of Hamburg and technology companies NATIX GmbH, HITeC e.V. and Artificial Intelligence Center Hamburg (ARIC). During the project, a smart crosswalk with cameras and radars was installed on Lammi Road in Tartu, testing innovative artificial intelligence technologies to improve traffic safety.
During 2022, several further developments were carried out within the framework of the Estonian-Norwegian cooperation programme “Green ICT”, which aims to develop an environmentally friendly demand-driven mobility platform (VEDAS). The platform is integrated into a network of smart bus stops.
Tertiary public offering of company shares
During the period from 4 to 14 October, the company carried out a tertiary public offering of shares. A total of 97 684 shares were subscribed during the offer period by 392 investors for a total value of EUR 293 052.
Economic results
The reporting period ended with a loss of 746 323 euros (12 months of 2021 a loss was EUR 593 252). Loss is due to expenses made for the growth and development of the company, the further development of its own product, and non-recurring expenses related to public offerings and admission to trading of shares.
As of 31.12.2022, the company’s balance sheet total was 2 008 262 euros (31.12.2021: EUR 2 144 947). Current assets amounted to 557 671 euros (31.12.2021: EUR 659 578). Fixed assets amounted to 1 450 591 euros (31.12.2021: EUR 1 485 369). The company’s equity as of 31.12.2022 was 1 468 769 euros (31.12.2021: EUR 1 644 819). As of 31.12.2022, the company had 73 658 euros in loan liabilities (31.12.2021: EUR 28 472).
As of 31.12.2022, there is one member of the Management Board, three of the Supervisory Board in Bercman, and one of the Management Board in Krakul. A total of 20 specialists works in the Bercman Group. The Group’s labour costs with labour taxes amounted to EUR 1 336 499 in 2022 (12 months 2021: EUR 384 855).
In macroeconomic terms, in 2022, the company’s operations were impacted by the Russian-Ukrainian war, which created uncertainty and caused delays in customer decisions and project progress. Projects already in progress were not cancelled by customers due to the instability caused by the war but some of them were postponed until 2023. The second half of the year was further impacted by accelerating inflation and rising input prices in the energy market, which were accompanied by some increases in component input prices.
The financial results for the reporting period are presented here.
Estimation revision
Company’s Management Board has decided to lower the consolidated turnover forecast presented on 04.10.2022 for 2023 from EUR 3,1 million to EUR 2,1 million and the turnover forecast for 2024 from EUR 6,53 million to EUR 2,5 million. The company is revising its forecasts published in 2022 based on a pessimistic overall economic outlook, a slowdown in economic growth and uncertainty caused by the Russian-Ukrainian war.
Due to the tight economic situation, there is currently less receptivity to the introduction of new solutions, and local authorities have put the brakes on investments. As a result, the company does not expect a big increase in turnover from the sale of transport infrastructure solutions this year, but it does expect the realisation of the projects prepared last year as planned. In development services, sales are expected to grow steadily through the addition of new customer projects.
Mart Suurkask, CEO of Bercman: “Although 2022 was a challenging year, we finished on track with the turnover forecast we set last year. We have decided not to raise any additional money from the stock exchange this year and plan to manage the year within our resources. To optimise operating costs, we changed the company’s structure and are focusing on sales of proprietary products and development services. In the current economic situation, it is necessary to revise the forecasts for 2023 and 2024, as last year’s recession and analysts’ rather pessimistic outlook for the current year do not give reason to expect a big increase in sales of own products. However, we see some turnover growth compared to 2022 through the addition of new development service customers, and we will continue to work towards steady growth. There is a lot of uncertainty in the economy today, but we are resilient and continue to focus on growth opportunities, and as the economic environment stabilises, we are ready to set new, more ambitious targets for our business.”
Additional information:
Mart Suurkask
AS Bercman Technologies
Member of the Board
Telephone: +37253402902
E-mail: mart.suurkask@bercman.com