Interim-Report April - June 2021: Increased profit for the first six months but lower sales
January - June
- Net sales decreased with -23.0 procent to SEK 64.6 (83.9) million (-18 percent in local currencies).
- EBIT amounted to SEK -1.9 (12.1) million.
- EBIT margin was -2.9 (14.4) percent.
- Profit after tax amounted to SEK -2.9 (10.4) million.
- Earnings per share before/after dilution amounted to SEK -0.16 (0.56).
- Cash flow from operating activities amounted to SEK 1.1 (-1.6) million.
- Cash and cash equivalents at the end of the period amounted to SEK 70.8 (64.8) million.
Comments from the CEO
Increased profit for the first half of the year but sales decreased slightly. The result of a couple of unfortunate, coinciding factors.
The decline in sales is foremost attributable to North America. The major reorganisation that we implemented in the USA in the end of last year is starting to yield results and we have high hopes for the important US market going forward. We are doing the right things and winning the confidence of additional customers, although this is not yet reflected in our reported figures.
We are continuing to increase new sales in several important countries, and we have a very high degree of license renewals.
MSAB is a global company that helps improve the efficiency of law enforcement agencies. Simultaneously, conditions world-wide are in a constant state of flux. Our products are extremely powerful, which means we must be selective about who we sell to.
We follow an ethical policy which means that we continually evaluate which countries and organisations we can deliver our solutions to. As a result, we are delivering to fewer regions than previously. This carries a negative impact on our sales in the short-term.
At the same time, we are entirely convinced that this is the correct decision and that it will benefit the Company long-term since this is something we know that the absolute majority of our customer base, law enforcement agencies globally, is putting an increased emphasis on. As we have always done.
The pandemic continues to affect MSAB.
Our experience of working under pandemic conditions has been both good and bad. One positive effect has been that the pandemic has taught us and our customers to work more efficiently in the digital environment, and we have become quite accomplished at working via webinars, and on-line conferences and meetings using Teams and other tools.
Our experience from the pandemic has been less positive when it comes to major system solutions. Our customers experience no problems buying or renewing licenses, complementing with new systems, etc. However, decisions for major integration solutions take time. We still have several customers who cannot execute their plans because of the pandemic. This is especially true for rollout of kiosk solutions.
Two years ago, we decided to improve our success in Japan. We hired a sales representative to start working the market.
Japan is probably the most detail-oriented culture we have worked in thus far. The Japanese have a reputation for not making hasty decisions and their review has been thorough. The police have gone through everything down to the tiniest detail. It is therefore especially gratifying that they have now placed a larger, initial order, one which gives the police throughout Japan access to XRY.
With XRY, they will be able to work smarter and more effectively, and above all they gain access to our unique features.
Japan exemplifies well that what we are doing on this market is right and unique. We know that customers that use our solutions become more efficient. We also know that it can take time for our customers to make decisions and cross the start line, but once the decision is made, it is highly likely that they will be customers for a long time. We have many customers today who made their original investments in XRY more than 15 years ago, and who remain loyal and steadfast customers.
A powerful motivating factor for the whole Company is the fantastic feedback we receive from customers who see us as a partner they can trust. Over time, we deliver pivotal value to our customers, and we are world leaders at much of what we do.
I am convinced that MSAB will continue to grow, and that our solutions will be a critical component in ensuring our customers’ success in their work, and for making our societies safer around the world.
We will continue to work hard, and focus on the future, and we know we are on the right path – not because we think so ourselves – but because our customers tell us we’re good at what we do, that we are easy to work with, and that our products relative to our competitors are constantly improving. Our customers are, like us, looking forward to the pandemic ending soon so that together we can accelerate the pace on several new and exciting, major projects.
I am incredibly proud of the outstanding work MSAB does to contribute to a safer and more secure world, and our ambition will always be to continue to be world leaders at what we do.
Stockholm, July 2021
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 22 July, 2021 at 08:00 CEST.
Questions should be addressed to:
Chief Executive Officer Joel Bollö
Tel. +46 8 739 0270
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, Australia, Singapore, Japan, India 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.