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MSAB: Interim report January – September 2016

report January – September 2016

Stockholm, Sweden, 2016-10-21 08:00 CEST (GLOBE NEWSWIRE) --

Record turnover in the third quarter

Third quarter

· Net sales increased 20.2 percent to SEK 71.6 (59.6) million (21.9
percent in local currencies)

· EBIT increased to SEK 23.3 (15.3) million

· The EBIT margin reached 32.5 (25.7) percent (33.2 percent in local

· Profit after tax was SEK 18.3 (12.0) million

· Earnings per share were SEK 0.99 (0.66)

· Cash flow from operational activities was SEK 27.5 (14.4) million

January - September

· Net sales increased 5.4 percent to SEK 170.4 (161.7) million (7.5
percent in local currencies)

· EBIT reached SEK 37.1 (38.2) million

· The EBIT margin reached 21.8 (23.6) percent (22.7 percent in local

· Profit after tax was SEK 28.2 (29.2) million

· Earnings per share were SEK 1.53 (1.60)

· Cash flow from operational activities was SEK 36.0 (37.1) million

· Cash and cash equivalents and short-term investments amounted to SEK
107.1 (84.9) million at the end of the period

Comments from the CEO

MSAB gave its best third quarter performance ever with a record turnover and a
good profit margin. Business deals with long lead times have now become
concrete agreements.

Sales during the third quarter grew 20.2 percent and amounted to SEK 71.6
(59.6) million. EBIT increased to SEK 23.3 (15.3) million, corresponding to an
EBIT margin of 32.5 (25.7) percent. Sales grew 5.4 percent during the first
nine months of the year reaching SEK 170.4 (161.7) million. EBIT decreased to
SEK 37.1 (38.2) million, corresponding to an EBIT margin of 21.8 (23.6)
percent. The lower EBIT level for the year’s first nine months is attributable
to continuing initiatives for growth and thus increased personnel costs.
Adjusted for currency effects, sales growth was 7.5 (23.3) percent for the
period. This third quarter has demonstrated the strength of our business model.
A higher turnover led to increased profits with a stronger EBIT margin.

The third quarter is the most important for our operations in the USA as all
federal authorities, i.e. our customers, close their annual accounts on the
last day of September. North America became our largest region during the
quarter and our operations in North America continue to expand as demand is
strong and customer confidence in our product offering is growing.

With a subsidiary in Singapore in place, we now have companies in a total of
seven countries outside of Sweden, and our own personnel in an additional four
countries. We have chosen to establish offices locally as many of our customers
prefer to do business locally. Our success is based largely on having personnel
who know the local market and who have the capacity to quickly build trust with
our customers. We will continue to expand internationally as potential

Smart phones are becoming increasingly advanced and complex. This means that
the judicial system is being challenged in ways that it never has been
previously. We have successively expanded our product offering from extraction
to analysis of large quantities of data. Our system solutions currently handle
the information flow from a significant number of digital units. Through MSAB
Ecosystem, we now address the very core of today’s and tomorrow’s criminal
investigations. MSAB Ecosystem, which was launched at the end of last year, has
received a very positive response from our customers. It is a product offering
that caters to the entire police organisation and streamlines police work
processes relating to digital evidence and investigative material. The more
complete product offering also serves to take us higher in our customers’ value
chain thereby generating increased revenue per customer.

The Swedish police and its organisation have been criticised in the media
lately. One issue that is often raised is that the police do not have the tools
they need, and that they have problems getting mobile phones and computers
analysed in time. We are convinced that our products could help the police in
their daily work, increasing their efficiency and helping them solve more

MSAB’s third quarter demonstrated strong growth. However, it is important to
remember that the Company’s rate of growth from quarter to quarter will
continue to vary due to changes in our customers’ purchasing patterns. Going
forward, we feel confident about the future, as the long-term growth trend is
strong. The need to extract and analyse the content of seized mobile phones
continues to grow. We see how an increasing number of authorities around the
world are starting to review their entire digital strategy, and that is exactly
what MSAB has been working and planning for.

Stockholm, October 2016

Joel Bollö

Chief Executive Officer

Författare SSE

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