Increased sales and profitability in 2020 during a challenging fourth quarter

January - December

• Net sales increased +0.8 percent to SEK 310.1 (307.6) million (+3 percent in local currencies).
• EBIT was SEK 28.6 (6.2) million.
• The EBIT margin was 9.1 (2.0) percent.
• Profit after tax amounted to SEK 16.3 (4.9) million.
• Earnings per share before/after dilution amounted to SEK 0.88 (0.28).
• Cash flow from operating activities amounted to SEK 52.0 (17.7) million.
• Cash and cash equivalents at the end of the period amounted to SEK 101.2 (63.9) million.

Fourth quarter

• Net sales declined -20.6 percent to SEK 66.7 (84.0) million (-14.5 percent in local currencies).
• EBIT was SEK -4.0 (3.7) million.
• The EBIT margin was -6.0 (4.4) percent.
• Profit after tax amounted to SEK -7.0 (1.3) million.
• Earnings per share amounted to SEK -0.38 (0.07).
• Cash flow from operating activities amounted to SEK 47.2 (10.5) million.

Comments from the CEO

Looking at 2020 in the rear-view mirror, I can say that it has without doubt been one of my stormiest years as CEO for MSAB. The pandemic has defined an entirely new and untried playing field for society in general and for our justice system on a more micro level. It has also affected MSAB and our business. But there has been no lock-down when it comes to crime. It continues unabated, beyond the reach of our pandemic laws and the Public Health Agency of Sweden’s recommendations. The need to investigate crime and prosecute criminals was the same or greater. The need to streamline police and investigative activities has become increasingly clear and inevitable.

Our flexibility, sensitivity to customer needs, and our ability to adapt gives us the prerequisites for further development while sharpening our business. During this exceptional year, we continued to grow. For 2020, the Company is reporting its highest annual turnover ever. Profit has also increased significantly since 2019. This proves our ability to adapt and act on prevailing circumstances in a way that few companies our size can handle.

I am impressed by the loyalty of our staff and their devotion to MSAB. To succeed with the changes we implemented required initiative and ability at all levels and from all employees. At the same time, development of our products has continued with undiminished strength, and they represent the absolute cutting edge of what the branch has to offer today. The solutions are now so advanced that we have chosen to package the most unique of these as a separate service, delivered under strict confidentiality agreements with selected customers. Training has been executed and solutions have been delivered. With our international operations including employees in sixteen countries, the process – while not simple – has been completely necessary.

The pandemic has also affected our customers and their prioritisation. Travel restrictions and changes in budgets have meant fewer opportunities to meet our customers eye-to-eye. MSAB is active in a branch where confidentiality and physical meetings are often the determining factor for whether a deal goes through or not. A challenge that the police-force digital transformation journey will solve. There are new business opportunities out there, but longer lead times in the decision process combined with the ongoing pandemic, has affected us negatively.

During 2020, we saw strongly differentiated regional development. Europe exhibited strong growth. In several of the largest European countries, MSAB’s growth was thirty percent or more. This is no coincidence, but rather the result of ambitious marketing and sales efforts that we continued to execute, in combination with the cutting-edge solutions we offer.

Sales in North America declined compared with 2019. There are several reasons for this and to some extent they reinforced each other. North America is vast and requires many trips over long distances to effectively address the market.  This was not possible during 2020.

For several different reasons, we have chosen to redo the organization in North America in order to better utilize the potential that exists there. In addition to new leadership, we are also adapting our way of working in a way that means we will win more business.

Much of what MSAB does is technically complex and our products are powerful, effective and benefit the efficient administration of justice. But these possibilities can – if used in the wrong way – also do damage. Hence, export permits are required for several of our products for certain countries outside of Europe and North America. In a world that is evolving faster than ever, our efforts to do business in some regions are also changing. During 2020, we chose to withdraw from certain regions for humanitarian reasons. Two examples are China and Hong Kong, where we no longer have any form of operations. We make such decisions only after careful consideration.

Micro Systemation plays an important role in strengthening the judicial system, while at the same time taking into account personal integrity when securing digital evidence. 

We are excited going into 2021. Our global organisation possesses an outstanding capacity and our offering is stronger than ever. No matter how long Covid burdens our global community, MSAB is robustly equipped to meet 2021.

I am extraordinarily proud over MSAB’s work in contributing to a safer world.

Stockholm, January 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 27 January, 2021 at 08:00 CEST.

Questions should be addressed to:
Chief Executive Officer Joel Bollö
Tel. +46 8 739 0270
Email: joel.bollo@msab.com

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.

Attachment

• MSAB - Report Q4 2020