Q-Free ASA
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Q-Free ASA
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Welcome to Q-Free's Fourth Quarter and Preliminary 2019 Results Presentation. My name is Håkon Volldal. I am the CEO, and with me today, I have actually the Chairman of the Board, Trond Valvik; and also our Interim CFO, Trond Christensen. If we jump right into the main events of the fourth quarter of 2019. We had revenues of NOK 246 million. That's up 2% year-on-year driven by growth in parking and inter-urban. We reported NOK 11 million in EBITDA. Adjusted for nonrecurring items, that was NOK 15 million in the quarter, 6% margin compared to, respectively, NOK 9 million and NOK 22 million last year. Order intake came in at NOK 236 million driven by a NOK 75 million tolling contract in Thailand that we announced. We had strong cash flow in the quarter from operations, NOK 46 million, and hence, reduced our net interest-bearing debt by 11%. A key point in this presentation which I will talk more about in the outlook section is our strategic plan for the coming years. We will slim down our portfolio and divest our parking and infomobility assets. And related to that decision, we have a NOK 32 million impairment of parking assets in the quarter. For the full year 2019, we booked 8% year-on-year growth and NOK 962 million. We were hoping to exceed NOK 1 billion for the first time in 2019, but a few contracts, especially on the urban side, slipped into 2020. That also impacted full year EBITDA numbers, NOK 73 million in reported EBITDA for the year, NOK 71 million in adjusted EBITDA compared to NOK 71 million in reported EBITDA last year and NOK 89 million in adjusted EBITDA for 2018. Order intake for the full year 2019 was NOK 950 million compared to NOK 972 million in 2018. We have not included frame agreements. So if we include the biggest frame agreement that we signed in 2019, the ALPR frame agreement in the U.S., book-to-bill was actually at 1.1. Without the frame agreement, book-to-bill was 1. Order backlog remains high, NOK 1.080 billion in order backlog at the end of the year compared to NOK 1.1 billion at the end of 2018. However, I should say that the quality of the backlog is a bit higher entering 2020 than it was entering 2019. Cash flow from operations in 2019, NOK 25 million. A bit more details. If we look at the gross contribution in the fourth quarter, margins were down, negatively impacted by certain project -- tolling project deliveries and also a lower share of software revenues in the urban segment. We didn't lose any software contracts on the urban side, but the deliveries were postponed compared to a very strong quarter with high software revenues last year. OpEx is down by 5%. Adjusted EBITDA, below last year; adjusted for recurring items, above. So again, in the fourth quarter, good cost control and for the year as a whole, you see the same trend. We have revenue growth. Margin is down due to product mix effects and also lower margins on tolling project deliveries in 2019 as a whole compared to 2018. OpEx is down, but EBITDA is not in line with 2018. If you look at the details behind the revenues. 2019 has been fairly consistent in terms of what we have taken to P&L throughout the year. In the fourth quarter, tolling revenues grew by 2%, and nontolling revenues were up only 1%. And if you see the distribution, it's still Europe that contributes with the highest share of revenues. Europe had decent 2019. APMEA is growing. Where we did not deliver according to expectations was in the Americas. We had weaker development in the Americas in 2019 than we actually expected entering the year. And that's due to postponements of several key contracts not only on the urban side but also on the inter-urban side. So the U.S. has been a bit slow in terms of deployments, not in terms of Q3 losing market momentum or market share but just the timing of the customer deliveries. Tolling is still around half of our revenue base. Parking, infomobility, urban and inter-urban accounting for 49%, which is slightly down from fourth quarter last year. But on a quarterly basis, it's kind of hard to comment on each of the segments. I think it makes more sense to look at the year as a whole. Tolling had a good year in 2019, strong product volumes, continued growth in automated license plates software revenues and also project deliveries. So they came in 11% higher than in 2018. Parking had significant growth, percentage-wise. Nominally, of course, NOK 19 million is less than we grew on the tolling side, but that was driven by the large parking contract we announced in the first quarter of 2019 for several parking garages with Charles Schwab. Infomobility remained flat, so nongrowth. Urban was down. They had a very strong 2018, 2019, as I said, negatively impacted by delayed contract deliveries, whereas urban had growth, both in -- I mean good performance in the U.S. and also growth in Norway related to a big project with the Norwegian Customs. Looking at EBITDA. 2019, negatively impacted by a weak first quarter and also a fourth quarter, that was below what we anticipated, negatively impacted by, again, delayed contract -- timing on contract deliveries and especially the software share in urban. Software contracts in urban have a very high margin, so 1 or 2 contracts slipping from 2019 into 2020 has a huge impact on the total performance of Q3. Margin has -- from a weak first quarter has rebounded slightly; second and third quarter, acceptable; fourth quarter, below what we want to see. Looking at the different segments. Tolling is the most important contributor to Q3's overall EBITDA, slightly down versus 2018, again, driven by lower-than-normal margins on certain project deliveries. We are done with those deliveries now. We have finalized them, and the quality of our backlog in terms of margins on tolling projects is much better than it was entering 2019. Parking was negative in 2019. This number, minus NOK 5 million, is an improvement on minus NOK 13 million. But we haven't been able to make it a profitable business in 2019. Infomobility, slightly down, NOK 5 million in contribution partly driven by, again, high margin -- less high-margin software revenues and more sort of regular hardware product deliveries. Urban is the big negative deviation versus last year. Software, as I've said several times, lower in 2019 than in 2018, and that impacts the performance a lot. So with the 2, 3 more software contracts taken in 2019, we would have been able to match the all-time high level in 2018, but we didn't. Inter-urban, positive development, good contract base and then good profitability on the deliveries and then a slight reduction in group costs. So that's the composition of the NOK 71 million in adjusted EBITDA. The nonrecurring items would be a positive contribution from pension -- reduced pension obligations in Norway, NOK 10 million, less write-down of parking assets and restructuring charges. Order intake. As I said, the key driver in the quarter was a big contract in Thailand, NOK 75 million for the Don Muang Tollway. Book-to-bill then at 1 in the quarter; and for the year as a whole, slightly below 1 but not including frame contracts. So when we include the frame contracts, it's 1.1. The reason we don't think include frame contracts is that unless they have a guaranteed minimum volume, we don't take them in our backlog. But just use one example, 2 years ago, we announced the contract with the Norwegian Customs on ALPR border control systems worth between NOK 40 million and NOK 60 million. And we have started to deliver on that contract. 2019, the inter-urban segment was positively impacted by several systems being delivered to Norwegian Customs. So these frame agreements are not -- even though we've put them in our books at 0 backlog value, they materialize over time. So also the ALPR contracts that we communicated last quarter we think will positively impact revenues going forward. And if we include that, we are at 1.1, which is our target level for 2019. The backlog then remains high. When you do it quarter-by-quarter, you see some small deviations. If you do it -- if you compare it to historical levels, we are almost twice -- double the size of what we have had historically, so it's still a good backlog. But more importantly, the quality of the backlog that the underlying margin structure of the NOK 1.1 billion is higher than the NOK 1.1 billion entering 2019. The estimated margins on especially tolling project deliveries in 2020 are higher than the margins that we were able to realize in 2019. The distribution is roughly NOK 200 million secured for the first quarter in 2020. And then we have NOK 340 million for the remaining 3 quarters and then NOK 540 million for the period 2021 and onwards. Those are typically long-term service and maintenance contracts. Cash flow and available credit/cash. We increased available cash from NOK 78 million to NOK 84 million driven by predominantly a reduction in working capital and good cash management. We've also paid down on our credit facilities, so we have reduced credit lines by NOK 19 million but still increased available cash from NOK 78 million to NOK 84 million in the quarter. On the balance sheet side, not big changes. There were some write-downs that I will get back to you related to parking assets, so that's why we reduce the assets and also the equity and liabilities. And you see the development in net interest-bearing debt from a high level of NOK 250 million in the second quarter down to NOK 200 million this quarter. More importantly, what are we going to do going forward? What is the outlook? And I should start by refreshing or remind -- reviewing the plan that we put in place some years ago. Second half of 2016, we said we would do some restructuring to restore profitability, then we would develop leading positions in target segments. We said back then that we had a broad portfolio. We were in 5 segments, and we didn't exactly know which segments would be the more attractive ones. Based on leading positions in each segment, we could start to integrate our offering, bundle solutions and expand geographically. And then there's also been ongoing discussions along the way in terms of M&A and structural solutions. So how has this gone? Well, we had delivered positive EBITDA for 3 consecutive years for the first time in 10 years since the 2016 restructuring. I have to admit, I hope 2019 would be better than 7.4% margin. But nevertheless, it's the first time in 10 years that we have delivered 3 years in a row with positive EBITDA, and I think that's at least a testament to the initial restructuring that it worked. Another thing to comment on, revenues and backlog have grown despite the fact that we have pulled out of several markets. We exited Brazil and South Africa in 2016. We abandoned Malta, Serbia and Indonesia in 2018, and we pulled out of Malaysia in 2019. Despite this, the average annual revenue in the last 3-year period was 14% -- or 16% higher than in the previous 3-year period. So there is a revenue growth despite the fact that we have reduced our footprint, which means we do more business in the markets that we remain in. Also the ability to replenish the backlog has been good. If you look at order backlog divided by last year revenues, it used to be 60%, and now we are above 100%. So we have more than 1 full year of revenues in our backlog. Revenue growth has been driven by several key contracts that we won. We're quite proud of some of these achievements. The nationwide tolling system in Slovenia, the Great Belt Bridge in Denmark, several software contracts in the U.S., record-high deliveries of tolling tags, both in 2018 and '19. We have won big contracts in Thailand and Australia. We have developed our ALPR business in the U.S. quite favorably. And we've also signed contracts with ferry operators in Norway in excess of NOK 200 million. So we have won a lot during the past years. And actually, if you look at our win rate on contracts with a value above NOK 10 million, we captured 60% of the value, which means we are quite successful in the market when it comes to winning contracts. So out of everything we bid on in 2019, if you take the value of all the available contracts and you look at what we actually won, 60% came Q-Free's way. We have built or maintained top market positions in 3 out of 5 target segments. We are still the #2 player in DSRC tolling globally. We are top 10 player in parking and infomobility. We're top 5 in urban and top 3 in inter-urban in North America. So 3 out of 5 segments have delivered on the ambition to become a top 5 player. So a lot has worked. If we look at the strategic plan, we have succeeded, I think, with the initial restructuring. We have won a lot of contracts and been able to replenish the backlog. And we have developed tolling, urban and inter-urban businesses successfully. But there are also some elements that have not worked. Liquidity and cash generation has been challenging, partly because of events that are related to decisions taken prior to 2016 but also high work-in-progress requirements on some of the projects we are delivering right now. Another thing that has not worked exactly as according to plan is the cross-selling and bundling of our solutions. We believe that is the future of the industry. We believe it makes sense to combine technologies and deliver solutions to customers that don't work isolated from each other. But the way the industry is structured at the moment, especially on the customer side and the way they are organized in silos is hard to sort of break through and get them to work together across departments and internal organization barriers. So we haven't been as successful promoting several products to the same customers as we thought we would be. Also, development of parking and infomobility has been below expectations. So based on this, we feel that we need to update our plan, we need continue to build on the things that work well, but we also need to take actions on the things that have not worked. In the first half of 2020, meaning right now, we want to slim down our portfolio and reduce the business complexity. We need a stronger focus to improve execution and, more importantly, capital and resource allocation in the company. There are so many opportunities out there, but you cannot win them unless you are spread out your resources across 5 businesses and multiple countries and geographies is challenging for a company of Q-Free's size. Once we've done that, we aim to keep building the reputation as the #1 technology provider in the market in tolling and traffic management and standardized solutions. Once we've done that, we can scale up. Scaling is only profitable if you have off-the-shelf solutions and have standardized as much as possible, taking -- entering new markets with solutions that need to be tailored 100% to customer needs will not generate profits. So we need to build on the attractive positions we have in existing markets, fortify our positions in existing markets and then use that to scale profitably outside the markets in which we operate today. A few more details then on this 3-step plan. Starting with focus. We aim to reduce portfolio complexity, as I said, to improve execution and resource allocation. We plan to divest our parking and infomobility assets that will leave us with 3 segments. But based on the trend in urban and inter-urban to buy integrated solutions like we've sold to PennDOT where we integrate signal processing with the traffic management, we think it makes sense to combine urban and inter-urban into one traffic management segment so that we have 2 sizable business segments or divisions going forward. We are divesting parking and infomobility not because those markets are unattractive. That is clear. It's possible to make good money in parking and infomobility. And infomobility has not been a lossmaker since we acquired the company. But you have to, again, look at where can you generate the highest returns and the most shareholder value. And we believe that taking some of the time and resources spent on parking and infomobility and shifting that to the other segments will help Q-Free generate higher shareholder value going forward. We are not the best owner of the parking and infomobility assets. We believe we are good owners of the traffic management and tolling assets. So with this, starting a process to divest parking and infomobility. Q-Free ASA will actually be lean holding company for 2 autonomous businesses. We will have a small corporate staff on ASA level, maybe 8 employees taking care of our duties as a publicly listed company, so reporting in legal and compliance and then group marketing. But most of the business will actually happen in 2 divisions. The tolling division will be headed up by Fredrik Nordh, who today is responsible for most of our tolling activities already. That division will have in excess of 200 employees. And in 2019, they had NOK 550 million roughly in revenues. Traffic management will be headed up by Morten Andersson. They will have roughly 90 FTEs, NOK 275 million in revenues. And of course, our ambition is to grow this beyond the 2019 level. But as you can see, most of the revenues will be kept in Q-Free, but it will be a much simpler setup. What are we going to do then? If you look at the tolling offering, we already have a complete offering, and it's attractive. We have products, we have software and we do system integrations and we do service and maintenance. We will continue to do that on the tolling side. We've done that for many, many years, but there are things we can do to improve profitability and our position in the market. There were certain thing on the product side that we aim to do. We aim to continue cost reductions on all our products to protect margins and stay competitive in the market. We intend to grow our ALPR software, which we consider to be the best software in the world, but it deserves more attention and also more resources so that we can grow that profitable part of the business. We've been quite successful building this in the U.S., but it's possible to build it outside the U.S. also. Back-office software, we have a great platform we have developed for Slovenia that has to be standardized so we can deploy that platform in other markets. We will address the total system cost on our deliveries, looking at both equipment cost but also delivery cost and service and maintenance cost. So a lot of the focus will be on cost tuning and finding smarter ways of delivering our technology to the market so that we stay competitive and keep our -- and/or grow our market share in existing markets. Having a low-cost system integration concept and also looking into the future of road user charging, meaning business-based charging is something we want to do in order to grow presence also into new markets. Slovenia is a good example of our full offering in action. We offer products. There are more than 300,000 Q-Free OBUs in circulation. There are close to 130 charging points, meaning the portal that you see here with readers and cameras and great Q-Free equipment. We have provided mobile enforcement stations for the police. We have an operational back-office software, plus we've integrated with the commercial back office, which enables the customer to bill end users. And we provide service and maintenance on long-term contracts. This is what we do on the tolling side, and here, we are very competitive. So over time, which markets are we going to target? I think, and this is indicative, but in 2020 and 2021, we have lots of opportunities in our existing markets. There are opportunities both in current core markets like Norway, Sweden, Portugal and Slovenia. There are signed projects in countries like Australia and Thailand. And there are opportunities to further grow in markets where we are, like Spain, Chile and Denmark. We can continue the ALPR expansion in the U.S., and we can also prepare for what we think will be a very interesting region in the coming years, which is the Baltic region. They are considering both congestion charging systems in the major cities and nationwide truck tolling systems allow what we've done in Slovenia. Can we do that and also standardize our technology? We will be able to enter selected new markets. I think it's possible to start delivery of the first Baltics project within that period. It's possible to take the ALPR solution outside the U.S. and Nordics. And it's also an ambition for Q-Free to pilot the first distance based or mileage based road user charging scheme in Europe. On the traffic management side, we will have hardware products. That's traffic controllers, the brain of hardware which is basically controlling how the signal is shifted and timed in intersections. We will have software solutions for the same, and we will have software solutions for what we call traffic management or highway traffic management. As you can see, software will be 2/3, and hardware is 1/3 of this. We aim to continue what we do. We have a great starting point. We had good back office or software platforms -- core software platforms both for signal processing and traffic management. And we're working on what we call enhancements. So if you look, for instance, at inter-urban, meaning state-wide systems to control traffic on highways, you have 50 potential customers on state level in the U.S., which is our core market. If you can go one level below on the county level, then you can multiply that by a factor of, I don't know, 10, 20. And if you can go down on a city level, you can multiply that again. That gives you a lot more potential customers. But they don't need the full platform, they might need a subset. Often, you have to wait a long time for these contracts to be awarded and renegotiated. So in the meantime, what we're working on is to take some of the modules in our platform and turn them into products that can work on existing platforms. That gives us more opportunities to sell and harvest what the -- on the investments that we've already made. So we made dedicated products on the inter-urban side for corridor management. We've done it for lane assistance and lane closure. And we're also going to do it for event management. On the urban side, we're doing the same. We're developing brand meter functionality, analytics modules, connected vehicle modules and also adaptive modules that will basically change the algorithms for when lights turn from red to green based on learning from the traffic patterns that you have. It will not be static, it will be dynamic. So software-driven business, with great opportunities to sell the existing platforms but also then push more, let's call it, products in the market. A key reference for us on the urban side is Georgia. We have 10,000 signal light intersections. They're also running all these intersections on the centralized software system called MAXVIEW, provided by Q-Free. We run real time signal adjustments. We have automated monitoring and alerting. And we've also made most of the intersections ready to communicate with connected vehicles. So inside your car, you can receive that signal from the traffic controller. So the car will actually know when the light will change from green to red or vice versa. Pennsylvania is an example of a state-wide system for traffic operators. It's a big system, rules based for incident response, 2,000 devices connected to this system like signals and signs and speed limits and cameras and whatnot. And we've also done signal processing integration. Q-Free is the only company in the U.S. that can integrate what we just spoke about, signal processing into this traffic management system. We did that for PennDOT. That was a nice contract, $2.5 million contract. And there are 4 or 5 other customers considering to do exactly the same. And that puts us in a favorable position to capitalize on the integration of urban and inter-urban, and that's partly the reason why we're combining them because customers want this to become one solution. So over time, if you look at market expansion, we will grow in existing plus new markets in the U.S. We will stay within North America. Might take on a project or 2 outside the U.S. to test the waters, but we need to basically capture and build our position in North America. Based on the great technology base we have, we should climb up the ladder in terms of market position when you look at the revenues generated. We've had good growth in the business, organic growth for many years, and we can continue that. If we succeed in building, let's say, #1, 2 or 3 position in the U.S., it's also possible to take our offering and expand to selected markets outside the U.S. We will then target markets that use the same technical protocols as the U.S. And examples could be in Latin America and in Asia. It's also possible to do some projects in Eastern Europe. We will probably stay away from Western Europe, which is already taken by established players. So where does that leave us? Because we spent a lot of time talking about Q-Safe, Q-Clean and Q-Flow, but our commitment remains the same. These are the fundamental challenges that our customers face. And even if we take out parking and infomobility, if you look at what we can do, it's still to make roads and travel safe. It's still to help address the environmental challenges of traffic. And it's, of course, to optimize how people and goods move. We have solutions within all these fields, and we will continue to deliver on those. If there's a need to combine, let's say, Weigh in Motion, which we now divest with tolling in the future, okay, we will source that, but it doesn't have to be manufactured by Q-Free. We will stick to the things on this chart that we know well and that we do well and that will help customers. And if we can do that in a good way, we will also deliver better returns than we have done historically. And the market for us, the target market is not small even though we plan to divest parking and infomobility. Just looking at the known contracts that will be awarded in 2020 related to tolling and traffic management, we are talking about NOK 1.7 billion in contract value. Not value to be delivered in 2020 alone, some of these are multiyear contracts, but there's enough -- these are the known contracts. There will be other contracts popping up during the year which we are not aware of, but NOK 1.7 billion is a lot. So to summarize our plan. We want now to reduce the business complexity, slim down the portfolio by exiting parking and infomobility; strengthen the governance of the company by running it through 2 autonomous units, tolling and traffic management; and optimize and focus remaining resources and investments. We want in tolling to lead, and we're going to do that by maintaining or leading DSRC technology, cost optimizing what we call the single-gantry solution and become the first mover in road user charging. On the traffic management side, we're going to advance our 2 key platforms, MAXVIEW and OpenTMS. And we're going to continue our work to become independent of selling just big platforms but selling simpler software products, what we call product enhancements. Once we have standardized those solutions, we will scale in tolling, that means target selected greenfield markets with the right characteristics and become first in road user charging in Europe. On the traffic management side, we will become a clear top 3 player in the U.S. short term and expand to markets with the same technical protocols as North America over time. That was it. Might be some questions from the audience here in Oslo or from the audience online.
[indiscernible], private investor. Can you say something about Q1 is -- already you said that many of the contracts were delayed until 2020. Are they coming down in Q1?
2 -- 1 contract has been signed on the urban side, an important $2 million contract. We're waiting for $3 million contracts to be signed. But this is a -- this is the tough part about being in this industry, that you're dealing with the public -- I mean, not private companies but government bodies that make the purchasing decisions. So we have a somewhat limited visibility on exactly when the contracts will be signed. And it's also an industry where all the paperwork has to be perfect so that nobody will -- can pinpoint fingers and say that there was a mistake made. So it takes a little while to get through the paper mill and the bureaucracy of getting these contracts signed. It hasn't been a big thing in the past. It's 2019 which caught us by surprise, where are a lot of contracts had to be reviewed several times to correct mistakes, and the bureaucracy of getting them approved took a lot longer than we anticipated. So the good thing is we haven't lost any other contracts. We've signed one, and we expect more contracts to be assigned -- to be signed in the first quarter. But it's still early. January is not the most intense month of the year on contract signings. First quarter is usually slow. So we expect to sign more. But they'll, of course, also announce the contracts if we do it.
I hope for a catch-up effect for 2020 then. Another question, divesting parts of the company, can you say anything about the valuation? And can you say something about when this is going to take place? You're probably in process already. So can we expect this Q1 or Q2 of 2020?
I don't want to comment on the value because that sort of weakens my position in the contract negotiations with the counterparty. So I don't want to comment on what we aim to get for infomobility and parking. I think, yes, it will help to raise some cash, but more importantly, I think we're doing this in order to get the right focus in the company. We're below NOK 1 billion, but it's a very complex company. Standing here presenting Q-Free going through 5 segments, and some of them are rather small and explaining 20% increases or decreases, it's -- I think we do ourselves a favor when we go to 2 segments and really push that instead of being all over the place handling everything from bicycle counters to big tolling and software systems. So that's why we're doing it. It is not only to raise cash, it's to improve focus. So I don't want to comment on the valuation of the companies. But in terms of timing, of course, when you announce something like this, you want to get it done as soon as possible. So we are working on this as we speak in order to get to the point where we only have 2 divisions left and can put all our energy and efforts into running those 2 divisions in the best possible way.
[indiscernible] Is there any interest-bearing debt related to infomobility and parking?
Please elaborate what...
Yes. Whether those -- I understand that you have more than NOK 200 million interest-bearing debt. But I just wonder if there's any interest-bearing debt related directly to those 2 divisions up for a potential sale, for those the proceeds will be free to use whenever you like.
I think if you raise significant proceeds from the divestments, we will also reduce our net interest-bearing debt. But if you look at the 2 businesses themselves, they are not that capital intensive. It's short order cycles, product deliveries, so that doesn't sort of change the work in progress or net interest-bearing, let's say, cash generation model in Q-Free. But of course, the divestment might raise cash that will improve the liquidity and the financial position of the company. It's not going to be assets that will be given away or closed down.
[indiscernible], an investor. Did I understand you correct that you are in negotiations with buyers of the business areas to divest?
I don't want to comment specifically on that yet. Also, what I would say is, I will repeat what I said that we want to -- we aim at getting this done as soon as possible. When you do something like this, you, of course, know which companies and parties that could potentially be interested in your assets. There are ongoing discussions for, I think, all companies related to structural solutions, so we have a fairly good overview of who are potential buyers and sellers of assets in the industry. So we hope we can expedite this and get it closed. In terms of work, it will take a few months to get it done. And then formally to close the transaction between signing and closing, it will take some time. So I expect first quarter to be quite heavy on this and then second quarter to be more about formalities. And then hopefully by the end of the second quarter, we have this sorted out. We will, however, change our segment reporting for 2020. We will move to 2 segments. We will classify these assets as held for sale. So we will clean up the financial structure. We will try to run these businesses as best as we can while we still own them. It's like when you sell your car, you don't leave it out in the rain, and you take care of it until it's sold. So we will do the same for parking and infomobility. But we're going to look at IT systems and processes and support mechanisms based on what will remain in the company long term. So we have already started the planning, and we'll execute on that.
There's a few questions from the web. What is the level of working capital at the business units that will be sold?
I think we can come back to that when we do the segment reporting for 2020. I don't have the breakdown in my head on traffic management and tolling on working capital.
What's your expectations for your disposals, timing, price? Is the impairment sufficient, or you have good hope to have more?
I think I've commented on valuation expectations. Basically, there is no comment on that yet, process we have talked about. Impairment, we've done an impairment so that we can start 2020 with clean sheets, but you never know until the final price has been negotiated. There might be an upside potential or a downside potential, but I believe that is at a reasonable level. It's not going to be -- we don't want 2020 to be highly negatively impacted by asset disposals. So we'll try to think about what the realistic value is and made adjustments accordingly in 2019.
You have not given guidance for 2020 pro forma. Are you expecting a revenue growth considering the backlog? Similarly, considering your quality of backlog, should we expect margin improvement?
I'm not done revenue guidance for 2020, but I believe with the rebound in traffic management and continued growth in tolling based on the projects we have signed, I would have to say I would be disappointed if we could not do well above NOK 1 billion based on the old base. But then you need to adjust for infomobility and parking. So let's say, in terms of percent, I expect traffic management and tolling to generate 10% growth, and I would be disappointed if we could not deliver around 10% EBITDA margin in 2020.
That's all from the web.
Okay. Thank you.