CYBER1 - Continued potential within cyber security - Mangold Insight Analysis

Mangold is updating the cyber security company Cyber Security 1 (”CYBER1”) following the second quarter. CYBER1's revenue increased by 19.7 percent in the second quarter of 2022, compared to the same period last year. Revenue was accordingly 7.3 percent lower than estimated for the quarter. The gross margin was lower than expected, driven by costs related to customer acquisition and price wars with competitors within the largest subsidiary Drs. 

CYBER1's subscription warrants of series TO1 had a exercise rate of approximately 86 percent, meaning the company received approximately MEUR 3.1, before issue costs. Further financing has also been obtained through a loan of MEUR 3.5. The financing will contribute to continued growth, and opens the way to acquiring the remaining 25 percent of CSSA and 50 percent of CSAD. The companies had a combined turnover of approximately MEUR 2.8 during the quarter, and CSSA was EBITDA profitable. CYBER1 has an exclusive option to acquire the remaining shares of the companies until the end of September. Mangold takes a positive view of any further acquisitions, as they are expected to increase profitability and contribute to further growth moving forward.  

Mangold lowers the price target from EUR 0.045 to 0.040 per share, given lower growth and margins than expected. This corresponds to an upside of over 200 percent. Mangold assessment remains that CYBER1 will be EBIT profitable in 2023, and will grow at a high rate going forward, driven by the underlying market demand and the expansion of the Managed Services business area.

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