Interim report Q1, January - March 2023

CEO Comments
MSAB has had an active, successful first quarter 2023. We have signed several important contracts, participated in several major international branch events, and executed many customer activities
together with distributors and on our own. Our product offering continues to develop robustly, particularly our extraction solution XRY, which now includes advanced software - XRY Pro - for forensic labs.
This has been the best first quarter in MSAB’s history and we set a new record for consolidated net sales of SEK 87.4 million, compared to SEK 75.6 million last year, an increase of 15.6 percent. Profit after tax amounted to SEK 6.7 million, compared to SEK 1.4 million last year. Despite generally high inflation, the mix of products and services delivered and a restrictive approach to expenses contributed to the improved result.
Cash flow from operating activities increased to SEK 24.0 million, compared to SEK 5.5 million for the corresponding period 2022, primarily due to our intensified efforts with accounts receivable.
The mobile forensic industry remains one of the most rapidly evolving and fastest changing branches in the world. As suppliers to law enforcement agencies, the need to manage and develop new techniques which address customers’ needs during process change and digital transformation is great. It requires legally secure processes and continuous development of our product offering and business model. MSAB’s continuing growth also depends on competence development for existing personnel and that we quickly increase our pace of recruitment. Today we are looking for many new employees globally to secure the right competence and capacity.
Demand for our solutions is strong, but the company is still affected by component shortages and late deliveries from suppliers. We expect that this situation will improve during the last half of 2023. 
The increase in European sales has been primarily driven by the British market. We are also seeing former customers rediscovering the strength in MSAB’s product development over the last few years, which generates additional sales. Even countries in Asia are expanding, albeit from lower volumes. The North American market saw a relatively weak quarter, and several initiatives have been taken to grow this important market.
We see increased demand from defence and intelligence agencies. These segments must be able to handle mobile forensics out in the field; hence their interest in MSAB Frontline. Other agencies which use mobile phones to exercise authority, e.g. when identifying people at border controls or in migration/asylum cases, are also demonstrating an increased need.
The security threats we have seen over the last few years affects businesses as well as authorities. Last year, under strictly controlled forms, we completed several smaller deals to support organizations. 
Being an established supplier of mobile forensic solutions in Europe benefits MSAB and creates opportunities. Authorities and companies are keen to work with ethical suppliers that adhere to EU legislation. In this we are the only commerical actor, which resulted in MSAB being chosen as partner in the EU-financed Formobile project. Our participation in the project, where the objective was creating an end-to-end mobile forensic investigation chain for the EU legal system, improving digital security while respecting fundamental human rights, has further strengthened MSAB’s postion.
I am convinced that MSAB:s ethical profile and strong product offering will continue to generate appreciation from authorities and businesses.

Stockholm, April 2023

Mikael Falkovén
Acting CEO, MSAB


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 April 27, 2023 at 08:00 CEST.