Interim Report July - September, Q3
- Net sales amounted to 89.6 million (99.3) -4.0 percent (-1,6 per cent in local currencies)
- EBIT amounted to 24.0 (29.4) million
- EBIT margin was 26.7 (31.5) procent
- Profit after tax amounted to 18.6 (21.4) million
- Earnings per share before/after dilution amounted to SEKk 1.01 (0.56)
- Cash flow from operating activities amounted to SEK -10.8 (-2.8) million
- Cash and cash equivalent amounted to 61.3 (59.0) mkr
Comments from the CEO
Sales for the quarter amounted to SEK 89.6 million with an operating profit of SEK 24.0 million, which corresponds to an operating margin of 27%. The margin shows the strength of our business model where we have a gross margin of approximately 93%. If we increase sales, it has a major positive effect on the company's profit.
When we sell new systems, software and hardware are included. The hardware is a small part of the customer’s cost but is crucial for connecting and managing the tens of thousands of digital devices we support.
The information we are receiving from our sub-contractors has never been so uncertain due to the prevailing, global shortage of components for certain electronics products. If our sub-contractors had been able to deliver according to plan, our third quarter sales would have surpassed our sales for the corresponding period in 2020.
However, we have our own warehouses and alternative suppliers for a large part of the hardware components we use. Which means that we will minimize future delivery delays.
The company's other external costs are slightly higher than in the corresponding period last year, but at the same time significantly lower than before the pandemic. This is due to more markets opening up and enabling physical meetings as well as participation in important trade fairs and other events.
We expect that these costs will continue to rise slightly as restrictions on travel are reduced, which is something we also welcome as it creates more opportunities to show what we can offer customers when it comes to both products and services.
The change we made in North America last year is starting to show results. Sales increased during the third quarter compared to last year, even though we are slightly behind so far this year, we are doing the right things with the right organization, and this will continue to have an effect.
The EMEA region is slightly lower during the third quarter but has grown so far this year and an important quarter for EMEA is the fourth quarter as many of the customers in the region have budget years that coincide with calendar years.
ASIA / CIS is a region that is declining compared to the previous year and this is largely a consequence of our more restrictive attitude in which countries we sell our solutions to. Unfortunately, several countries in the region have developed in a way that has made us actively choose not to deliver our solutions.
More and more countries are easing restrictions, which enable travelling. This means that several projects that were previously hindered or even paused can now be resumed and completed. It is primarily frontline projects that we know will be resumed.
The mobile forensic industry is rapidly changing in a positive direction. More and more authorities in the western world are being required to work according to certain standards in mobile forensics. Standards that enable our customers to decentralize the work of reading digital devices in a controlled and legally secure manner, in order to meet the enormous need for secure evidence in digital devices. Being able to secure the truth from digital devices and the owner's activity is indisputably important for law enforcement agencies. This is what MSAB is a world leader in. For several reasons, ever higher demands are placed on both which and how the information is secured from seized mobile phones.
For the past two years, MSAB has been a leading participant in a European initiative funded by the EU. The project is called "FORMOBILE” whose purpose is to ensure integrity and security through documented and standardized methods for reading mobile phones in Europe.
The project will run until the middle of next year and will result in new standards and higher requirements for European police, which MSAB not only meets but also worked with and developed.
Several important customers request strategic advice and assistance with the implementation and maintenance of our ECO systems.
This is exactly what we anticipated and prepared for early on when we started our professional services.
I view MSAB's future development positively and we will continue to support our customers in their important work to create a safer society through increasing quality and value in our products and services.
Stockholm, October 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 28 October, 2021 at 08:00 CEST.