MSAB: Interim Report January - March 2016
Good earning capacity and launch of Ecosystem
· Net sales decreased by 7.3 percent to MSEK 46.8 (50.5)
· EBIT decreased to MSEK 5.3 (12.8)
· The EBIT margin was 11.3 (25.4) percent
· Profit after tax was MSEK 3.3 (11.1)
· Basic earnings per share were SEK 0.18 (0.61)
· Cash flow from operational activities amounted to MSEK 5.2 (16.7)
· The equity ratio was 62.6 (55.6) percent
· Cash and cash equivalents and short-term investments amounted to MSEK 115.1 (83.1)
Comments by the CEO
MSAB’s sales decreased 7.3 percent during the first quarter compared with the same period in 2015 and amounted to MSEK 46.8 (50.5). EBIT amounted to MSEK 5.3 (12.8), which corresponds to an EBIT margin of 11.3 (25.4) percent. Sales for the first quarter adjusted to reflect local currencies decreased by 6.2 percent.
Sales in Q1 were somewhat lower than last year. Despite the decline for this quarter, it is the second best Q1 ever. The decline is mainly attributable to normal fluctuations between quarters. Because our assessment is that market potential remains good, we are not satisfied with this result. It is our ambition to regain positive growth.
There has been intense debate during the quarter over whether the FBI will be able to compel Apple to unlock heavily encrypted mobile phones. What the authorities have the right to request and what is technically possible are current issues. This subject demonstrates how the importance of evidence recovered from mobile devices has gone from being significant to being the single most important investigative basis in every instance of criminal suspicion. At the same time, serious consideration must be given to privacy as well as internet security and openness.
In order to find a reasonable balance between legitimate regulatory requirements and protection of personal information, MSAB proposes a solution which is a combination of technology and organisational structure. We call our patent pending method FACT − Forensic Access Control Technology. It is based on extensive experience in this field and creates long-term guidelines for authorities, mobile manufacturers and for the mobile forensics industry.
Requirements for investigative authorities are currently undergoing rapid change. As technology evolves, investigative methods and evidence analysis must be adapted. The volume of mobile devices and data is increasing, and our customers’ organisations are being challenged in entirely new ways. This trend has been ongoing for some time, but with the dominance of smart phones it has reached a critical stage. Police practices and attitudes must change and adapt. This has become a strategic issue of critical importance for the efficiency and legal security of criminal investigative authorities. How should police in the field act when seizing a phone, when should data be recovered, by whom, and how can relevant information be found and analysed?
For quite some time, MSAB has been developing a new platform that can revolutionise how police handle evidence from mobile phones. We call it the MSAB Ecosystem and it consists of a series of products and packages which can be combined in several different ways. This flexible system allows police organisations to streamline their processes and meet each user’s unique requirements. The platform unites different users’ work areas for an optimal end result, and the time required to secure relevant evidence is substantially reduced. In this way, we rise in the value chain and can partake of a greater share of the added value we create for society. Thus we also drive market growth.
MSAB is taking the next step and offering our customers a strategic toolkit and support to meet future requirements.
MSAB is active within an industry characterised by rapid development and change. This environment continuously presents us with new challenges. The launch of our new Ecosystem is a continuation of the way we handle the industry’s rapid evolution − by continuously providing our customers with new and more sophisticated tools.
Stockholm, April 2016
Chief Executive Officer
The information contained in this press release is of the type that MSAB, 556244-3050, is required to disclose under the Swedish Securities Markets Act. The information in this press release was submitted for publication 22 April, 2016 at 08:00 C(S)ET.
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 mobile phones. The company has its own sales offices and sales representatives in Europe, North America, South America, China, Australia and Russia, and together with a number of distributors covers most of the world. The company's proprietary products have become a de facto standard in the field and are used for securing evidence in over 100 countries. The products are complemented by a wide range of training courses, with the opportunity to become certified in a forensically sound method of extracting data from mobile devices. Customers are primarily authorities involved in performing criminal investigations, and include police, military and customs. MSAB is listed on NASDAQ Stockholm under the ticker symbol: MSAB B.