Delft, January 31, 2023

Results Q4 2022*

The turnover for the fourth quarter of 2022 is ZEPCAM amounted to Euro 1,01M. This is a decrease of 14% compared to the fourth quarter of 2021. For the entire year, turnover amounted to Euro 2,27M, a decrease of 19% compared to 2022.

The decline in turnover compared to 2021 is related to a number of factors. In addition to a general influence of the uncertain political and economic situation that plays a role in government procurement in particular, these are:

  • There were no major national tenders in 2022. These are planned in 11 European countries.
  • The delivery of the complete ZEPCAM T3 system (including adding functionalities) was delayed in 2022, which meant that marketing and sales could only start later.
  • Various local governments have postponed the purchase of body cameras due to increased energy costs.

The spearhead of ZEPCAM's business model is the creation of recurring revenue through the sale of software licenses. And we were successful in that in 2022. The software license turnover increased by 2022% to Euro 19M in 0,83 (36% of turnover). In 2023, based on contracts already concluded, this will certainly amount to Euro 1,0M and is expected to continue to grow.

Despite the lower turnover for the whole of 2022, the company has been able to take a number of good steps in the past year:

  • Delivery and sale of the T3 (live) system with its back end, with a significant list of first reference customers, including the Berlin State Police and the Danish Railways who have placed first orders.
  • Deepening market leadership in the Netherlands. 150 municipalities have now equipped their BOAs with the ZEPCAM bodycam. In addition, in 2022, three new public transport companies will switch to using our body cameras for their inspectors. Inspections such as the Telecom Agency and nature conservation with Staatsbosbeheer could also be added to the customer list.
  • Expansion of the number of German state polices to four: in addition to Hesse/Frankfurt, Lower Saxony/Hannover, these are the city-states of Hamburg and (as mentioned) Berlin.
  • By improving and translating the website and with targeted online campaigns, we generated more than 500 leads, half of which came from Southern Europe where body cameras have only recently been or have been allowed.
  • With new reseller partners, a well-stocked pipeline has been built up to dozens of local police forces and enforcement officers in Belgium, France, Germany, Italy and Switzerland. The company currently has a total of Euro 13M worth of proposals/quotes outstanding.

Simplification of organization

In view of the lower turnover in 2022 and uncertainty about the pace at which the market in Europe will grow in 2023, and in view of the increasing focus on the European market, the Board has decided to simplify and rationalize the organization. This is achieved by saying goodbye to a number of people (permanent and temporary employees), reducing the costs for the various support services and adjustments in the field of housing.

The management board will also be reduced in size. The current CEO will step down from his position on February 1. However, he will remain involved this year as an advisor on strategic (customer) projects. Co-founder Bart van der AA, who is currently Chief Product Officer, will take on the position of CEO.

The company is expected to save approximately Euro 0,9M on an annual basis with these adjustments. The one-off costs associated with this are estimated at Euro 0,2M.

With these measures, ZEPCAM is prepared for a possibly still slow market in 2023, but at the same time the company is able to scale up relatively quickly if the market or customer orders so require. Thanks to the aforementioned adjustments, ZEPCAM expects to be virtually cash flow break even for the entire year of 2023.

This will be explained in more detail at the publication of the annual figures and the subsequent general meeting of shareholders.

*No audit has been applied to the stated turnover figures.