MSAB: Growth and continuing investments

First quarter

• Net sales increased 17.9 percent to SEK 65.3 (55.4) million (20.3 percent in local currencies)
• EBIT amounted to SEK 3.7 (5.8) million
• The EBIT margin reached 5.6 (10.6) percent (5.8 percent in local currencies)
• Profit after tax amounted to SEK 4.3 (4.1) million.
• Earnings per share were SEK 0.24 (0.22).
• Cash flow from operating activities amounted to SEK 0.3 (2.7) million.
• Cash and cash equivalents at the end of the period amounted to SEK 128.9 (124.8) million.

Comments from the CEO

During the year’s first quarter, sales increased 17.9 percent to SEK 65.3 (55.4) million, and EBIT amounted to SEK 3.7 (5.8) million, corresponding to a margin of 5.6 (10.6) percent. Adjusted for currency effects, growth for the quarter reached 20.3 percent.

The year began with a record turnover, which is gratifying, and a quarter with unusual high level of activity. The quarter’s somewhat weaker result is a consequence of the investments in both the market and products-in-progress, as well as the product mix we delivered.

Our business is long-term and market growth is good. We always encourage our investors to evaluate the Company from a long-term perspective since revenue and earnings for individual quarters vary more sharply than they do on an annual basis.

The vast majority of our customers are government authorities and their activities are largely determined by their budgets. This means that our sales tend to be stronger in the second half of the year compared with the first six months.

The investments we undertake allow us to further increase the tempo and thus our ability to deliver products with even more functionality, and in this way increase the value for our customers. During the quarter, we added support for an additional 406 new types of  mobile phones. In addition, we added 401 new apps or app versions. In total, we now manage over 24,000 different forensic profiles for different mobile phones and models.

In addition to the very extensive support for mobile phones and apps, we also supply products for analysing extracted data. During the first quarter, we launched new, groundbreaking features in our expert tool XAMN Elements. With XAMN Elements, our users can, with surgical precision, find deleted and hidden data from scanned phones.

We continue to strengthen our presence on continents and in countries where there is strong demand for our solutions, and we are doing this in several places. During the first quarter, we strengthened our presence in many European countries, so that we now have our own personnel in nine European countries and in a total of 16 countries globally. Asia is growing fast and has a large population. Hence we see good potential in the region. We are continuing to grow our workforce and are planning start-ups in more countries. Our experience is that local presence is an important success factor for winning business in an individual country.

Working in a fast-growing and dynamic market entails responding to an ever-changing and constantly increasing set of requirements. The investments we make are necessary to maintain our lead and develop the mobile forensics market.

In addition to our own, highly-competent team at MSAB, we work with several partners, both technically and in particular from a commercial perspective. Many customers demand increasingly integrated solutions that no single actor can deliver. We meet these requirements through our strategic partnerships. This increases the scalability of our business.

The majority of our customers are law enforcement authorities, and so it will remain for the foreseeable future. However, we are seeing a rapid increase in demand from other types of agencies as well. This might be different types of authorities responsible for keeping society safe and secure, but from a different angle than that of the police.

Thanks to our business model, which is both scalable and has a high proportion of recurring revenues, we have managed to invest, grow and earn money at the same time. This applies to both maintaining and supporting our large customer base, even as we develop new innovative solutions and expand the market.

An exciting, growing market, together with our strong offering and a well-established organisation, allows us to look to the future with confidence.  

Stockholm, April 2018

Joel Bollö

Chief Executive Officer

The information in this report is such that MSAB, Corporate ID number 556244-3050, is required to disclose in accordance with the EU’s Market Abuse Regulation. The information in this report was submitted for publication on 27 April, 2018 at 08:00 CEST through the offices of the contact person listed below.

MSAB in brief

MSAB is a world leader in mobile forensics technology with the aim of extracting and analysing data from confiscated mobile devices, mainly from mobile phones. The company has its own sales offices and sales representatives in Europe, North America, South America, China, Australia, Singapore and Russia, and together with a number of distributors, covers most of the world. The proprietary products have become a de facto standard in the field and are used for securing evidence in more than 100 countries. These products are complemented by a wide range of training courses with the possibility of becoming certified in a forensically sound methodology. Customers are primarily law enforcement agencies, such as police, military and customs. MSAB is listed on NASDAQ Stockholm under the ticker symbol: MSAB B.