Net sales increased 1.6 percent to SEK 130.4 (128.3) million (-4 percent in local currencies).
EBIT amounted to SEK -17.1 (3.8) million.
The EBIT margin was -13.1 (3.0) percent.
Profit after tax amounted to SEK -15.3 (5.7) million.
Earnings per share amounted to SEK -0.83 (0.31).
Cash flow from operating activities amounted to SEK -6.2 (-11.1) million.
Cash and cash equivalents and short-term investments amounted to SEK 52.5 (80.4) million at the end of the period.
Net sales increased 1.7 percent to SEK 64.1 (63.0) million (-4 percent in local currencies).
EBIT amounted to SEK -11.4 (0.1) million.
The EBIT margin was -17.8 (0.2) percent.
Profit after tax amounted to SEK -10.8 (1.3) million.
Earnings per share amounted to SEK -0.58 (0.07).
Cash flow from operating activities amounted to SEK 0.7 (-11.4) million.

Sales amounted to SEK 130.4 (128.3) million for the first six months of the year. EBIT came in at SEK -17.1 (3.8) million, the decline in profit resulting from a decrease in new sales, combined with continued investments within product development and marketing with the aim of generating future growth. For the second quarter, sales reached SEK 64.1 (63.0) million.

Growth for the first half of 2019 is not to my satisfaction. The market for mobile forensics carries significantly greater potential than what is visible in our numbers. Income from license renewals continues to grow, which demonstrates that our existing customers are satisfied with the systems they have invested in. My dissatisfaction lies primarily with new sales.

Our greatest growth potential lies in the decentralised solutions which we call Frontline. Decentralised solutions mean that police, who currently seize suspects' mobile phones and send them elsewhere for analysis, can instead easily extract data themselves from the phones. In this way, they can quickly take advantage of important information, thereby solving and preventing crime more effectively. One of the reasons that new sales of these systems is lagging is that they entail a whole new way of working for the police. Changing ways of working takes time in large organisations. Nevertheless, the vast majority of customers realise the enormous benefits of decentralisation, but it takes time to decide where the responsibility for these solutions should lie.

I can also report that those customers that have invested in and have experience with our Frontline solutions are very satisfied. In my assessment, MSAB is the company that has delivered the greatest number of decentralised solutions world-wide. We have however seen a trend towards more aggressive price-setting from competitors to win these deals.

We have customers who have been using our systems for many years, and some customers extract data from up to 700 phones per day with XRY. This means that XRY handles extremely large amounts of information every day, and this makes an enormous difference in creating a safer and more secure society.

We continuously develop our product portfolio. Most recently, we released a new version of XRY, that extracts more data in a shorter time and with a significantly improved user experience. Besides offering a strong concept for extracting information from mobile phones, we even have tools for efficient analysis of data from mobile phones through our XAMN products. Thanks to our unique way of sorting data immediately as the mobile phone is being read, in combination with smart AI functions, our products can also analyse vast quantities of data in a short time. With high precision, we can present data relevant to the criminal investigation that the investigator is working on in the moment.

During the third quarter, the company will also carry out some process- and organizational changes in order to strengthen our product offering and intensify our marketing activities. The purpose of these changes is to increase growth and profitability of the company.

MSAB is a company on a market with all the prerequisites for growth and healthy profitability.

Stockholm, July 2019

Joel Bollö Chief Executive Director

EMEA & Latin America – the region experienced marginal growth during the first half of the year. Several interesting business dialogues are ongoing. However, the majority of countries in the region have a budget year that coincides with the calendar year, whereby business deals tend to take longer and are often not finalised until the last quarter of the year.

North America – the region grew somewhat compared with last year. The comparison is affected by a single, larger order for Field version from the American military, whose purchasing occurs irregularly. The federal financial year ends 30 September. Historically, this has been a catalyst for closing business deals.

Asia and CIS (Commonwealth of Independent States) – growth in this region is good in Southeast Asia but clearly weaker in China. The reason behind the decline in the region as a whole lies mainly with Australia, where the previously strong growth in new sales has thus far this year been absent.

New versions of XRY, XAMN and XEC Director were released with a new interface and powerful new functions that make the extraction process faster, simpler and more automated than ever. XRY 8.0 adds support for an additional 409 mobile devices and apps, which brings the number of supported devices and app profiles up to 27,441. XAMN 4.3 now has improved filtering capacity to help investigators find critical content in extracted data, such as passwords, deleted data and important chat messages.

Sales increased somewhat compared with the previous year. Sales of training correlates to a relatively high degree with other sales. Sales for training operations for the period comprised 10 (9) percent of total sales.

Consolidated net sales increased during the second quarter by 1.7 percent to SEK 64.1 (63.0) million, and for the period sales increased 1.6 percent to SEK 130.4 (128.3) million. In local currencies, net sales decreased 4 percent for both the quarter and the period.

Expenses for goods for resales for the quarter amounted to SEK 4.0 (4.7) and SEK 9.9 (15.2) million for the period. Direct expenses are dependent on the product mix sold, where sales for the previous year consisted of more hardware than the current year. Other external expenses for the quarter amounted to SEK 19.9 (18.3) million and to SEK 38.1 (33.4) for the period. Depreciation as a single item amounted to SEK 5.4 million more this year as a result of implementation of IFRS 16 (see also "Accounting principles" in this report). Personnel expenses amounted to SEK 48.7 (39.7) million for the quarter and SEK 93.7 (75.5) for the period. The increase in expenses correlates directly with the rise in the number of employees, which was essentially within development and sales with the aim of promoting further growth and to consolidate and strengthen our position in a technically advanced and ever-changing market.

EBIT for the quarter amounted to SEK -11.4 (0.1) million, corresponding to an EBIT margin of -17.8 (0.2) percent. EBIT for the period amounted to SEK -17.1 (3.8) million, corresponding to an EBIT margin of -13.1 (3.0) percent. Net financial income/expense amounted to SEK 1.1 (1.5) million for the quarter and to SEK 2.6 (3.6) million for the period. Net financial income/expenses consisted primarily of revaluation of cash and cash equivalents in foreign currencies. Profit after tax for the quarter was SEK -10.8 (1.3) million and SEK 15.3 (5.7) million for the period.

The equity/assets ratio at the end of the period was 33.7 (53.4) percent. Cash flow from operating activities amounted to SEK 0.7 (-11.4) million for the quarter and SEK -6.2 (-11.1) million for the period. Dividends totalling SEK 40.6 (40.4) million were paid out during the quarter. Cash and cash equivalents at the end of the period amounted to SEK 52.5 (80.4) million.

Both consolidated sales and profit tend to fluctuate between quarters, primarily due to our customers' purchasing patterns and single, larger orders. This is illustrated in the diagram below, where the substantial variation between individual quarters is clearly visible for both sales and profit. When viewed over a one-year period, growth in sales, profit and profitability are demonstrably more even and stable. However, even when viewed over a one-year period, growth has occurred in waves where, for example, growth in 2015 was strong but more modest in 2016, and then grew significantly again in 2017.

The number of employees in the Group at the end of the period was 185 (158). The average number of employees was 182 (148).

MSAB is not dependent on the seasons in the sense that is normally meant by the term seasonal effects. However, the majority of the Company's customers have a purchasing pattern that follows their budget period. Budget periods differ between countries, but most common in MSAB's largest markets is that they follow the calendar year or end on 30 September. Historically, this has been reflected in sales in such a way that the second half of the year is stronger than the first.

Through its operations, the Group is exposed to risks and uncertainty factors. Information on risks and uncertainties other than currency exposure due to foreign subsidiaries and the fact that most invoicing in Sweden is denominated in foreign currencies can be found in more detail in the 2018 Annual Report. The Annual Report is available on the Company's website.

This report has been prepared for the Group in accordance with the Swedish Annual Accounts Act and IAS 34 Interim Financial Reporting, and for the Parent Company in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities. Information as per IAS 34 is provided in notes as well as in other places throughout this interim report. The accounting principles adopted for the Group and the Parent Company are consistent, unless stated below, with the accounting principles used to prepare the most recent annual report. IFRS 16 Leases shall apply from 1 January, 2019. The Company has inventoried all contracts falling within the scope of the new standard, including operational leases already in effect. The analysis showed that in all material respects it is the Group's leases for office premises that are affected by the new standard. The Company has selected the transitional method called the modified retrospective approach. This means that the Company reports an asset relating to future rights of use amounting to SEK 34.8 million as of 30 June, 2019. The value is determined by discounting the future contractual payments with interest from the Company's marginal loans. The corresponding liability for future payments for rights of use amounts to SEK 33.1 million. The transition to IFRS 16 has no material impact on the Company's EBIT or net profit/loss. However, the new standard means that previously reported rental expense is recognised as depreciation and partly as interest expense, compared with previous years when rental expense as a whole was reported under other external expenses. The Company reports the key figure equity/assets ratio, which is affected by the new standard.

The Parent Company's net sales for the period amounted to SEK 82.3 (91.4) million. EBIT for the period amounted to SEK -21.3 (1.0) million. Investments during the period amounted to SEK 1.0 (1.0) million and were essentially IT-related. The number of employees in the Parent Company was 138 (115) at the end of the period.

There were no related party transactions during the quarter.

23 October	Interim report January-September
29 January, 2020	Year-end report 2019

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 19 July, 2019 at 08:00 CEST through the offices of the contact person listed below.

This report and earlier financial reports and press releases are available on the Company's website: www.msab.com.

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

The under-signed certify that this interim report provides, in accordance with current regulations, a fair and true overview of the Parent Company's and Group's operations, financial position and earnings, as well as describing the significant risks and uncertainty factors to which the Parent Company and the subsidiaries that comprise the Group are exposed.

Stockholm, 19 July, 2019

Corporate ID number 556244-3050

Henrik Tjernberg Joel Bollö Ann Hellenius Chairman of the Board Chief Executive Officer Board member

Jan-Olof Backman Carl Bildt Linda Nyberg Board member Board member Board member

This report has not been reviewed by the Company's auditors.

MSAB

Consolidated income statement in summary

	Apr-June		Jan-June		12 months
MSEK	2019	2018	2019	2018	July-June	2018
Net sales	64.1	63.0	1 30.4	1 28.3	306.0	303.9
Cost of goods sold	-4.0	-4.7	-9.9	-15.2	-32.4	-37.7
Other external costs	-19.9	-18.3	-38.1	-33.4	-76.4	-71.7
Personnel costs	-48.7	-39.7	-93.7	-75.5	-179.1	-160.9
Depreciation of fixed assets	-2.9	-0.2	-5.8	-0.4	-6.3	-0.9
Total operating cost	-75.5	-62.9	-147.5	-124.5	-294.2	-271-7
Operating profit – EBIT	-11.4	0.1	-17.1	3.8	11.8	32.7
Financial income	1.7	2.4	3.8	6.2	6.6	9.0
Financial expenses	-0.6	-0.9	- .2	-2.6	-5.1	-6.5
Profit/loss before tax	-10.3	1.6	-14.5	7.4	13.3	35.2
Tax	-0.5	-0.3	-0.8	-1.7	-6.5	-7.4
Net profit/loss after tax	-10.8	1.3	-15.3	5.7	6.8	27.8

Statement of comprehensive income

	Apr-June		Jan-June		12 months
MSEK	2019	2018	2019	2018	July-June	2018
Net profit/loss after tax	-10.8	1.3	-15.3	5.7	6.8	27.8
Currency translation differences	0.1	2.1	1.0	3.4	-0.5	1.9
Tax on currency translation differences		-0.5	-0.1	-0.7	0.9	0.3
Total comprehensive income	-10.7	2.9	-14.4	8.4	7.2	30.0
Comprehensive income for the period attributable to the shareholders of the parent company	-10.7	2.9	-14.4	8.4	7.2	30.0

Key figures

	Apr-June		Jan-June		12 months
	2019	2018	2019	2018	July-June	2018
Revenue growth, %	1.7	5.9	1.6	11.7	-3.0	0.70
EBIT-margin, %	-17.8	0.2	-13.1	3.0	3.9	10.8
Cash flow from operating activities per share, SEK	0.04	-0.62	-0.34	-0.61	0.55	0.28
Return on equity, %	-15.4	1.8	-22.0	7.3	9.6	24.7
Return on capital employed, %	-14.0	3.3	-19.1	12.8	26.3	37.0
Equity per share, SEK	2.98	4.59	2.98	4.59	2.98	5.96
Earnings per share, basic, SEK	-0.58	0.07	-0.83	0.31	0.36	1 .5 1
Earnings per share, diluted, SEK	-0.58	0.07	-0.83	0.31	0.36	1.50
Average number of shares, basic, million	18.5	18.4	18.5	18.4	18.5	18.5
Average number of shares, diluted, million	18.5	18.4	18.5	18.4	18.5	18.5

	30-jun		31-dec
MSEK	2019	2018	2018
ASSETS
Intangible assets	0.1	0.2	0.2
Tangible assets	2.8	2.2	2.3
Assets with right to use	34.8	-	-
Deferred tax asset	0.0	0.1	0.1
Other long term asset	-	4.3	-
Total non-current assets	37.7	6.8	2.6

Inventories	6.8	6.3	5.7
Accounts receivable - trade	43.0	41.7	67.6
Current tax asset	6.2	5.5	5.7
Other current assets	16.9	17.6	12.1
Cash and cash equivalents	52.5	80.4	98.8
Total current assets	125.4	151.5	189.9
TOTAL ASSETS	163.1	158.3	192.5

EQUITY AND LIABILITIES
Equity	55.1	84.5	110.1

Accounts payable - trade	3.1	5,0	3.7
Current tax liability	1.3	2.4	0.5
Leasing liabilities related to assets with right to use	33.1	-	-
Other current liabilities	70.5	66.4	78.2
Total current liabilities	108.0	73.8	82.4
TOTAL EQUITY AND LIABILITIES	163.1	158.3	192.5

	31-mar
MSEK	2019	2018	2018
Opening balance	110.1	114.6	114.6
Profit/loss for the period	-14.4	8.4	30.0
Conversion of share option rights	-	1.9	5.9
Dividend	-40.6	-40.4	-40.4
Equity at the end of the period	55.1	84.5	110.1

	Apr-June		Jan-June		12 months
MSEK	2019	2018	2019	2018	July-June	2018
Cash flow before working capital changes	-5.0	-1.2	-6.1	2.7	19.8	28.6
Working capital changes	5.7	-10.2	-0.1	-13.8	-9.7	-23.4
Cash flow from operating activities	0.7	-11.4	-6.2	-11.1	10.1	5.2
Investments in fixed assets	-0.4	-0.7	-0.9	-0.8	-1.6	-1.5
Cash flow from investing activities	-0.4	-0.7	-0.9	-0.8	-1.6	-1.5
Dividend paid to shareholders	-40.6	-40.4	-40.6	-40.4	-40.6	-40.4
Conversion/issue of share option rights	-	1.9	-	1.9	-	5.9
Cash flow from financing activities	-40.6	-38.5	-40.6	-38.5	-36.6	-34.5
Cash flow for the period	-40.3	-50.6	-47.7	-50.4	-28.1	-30.8
Cash at the beginning of the period	93.1	128.9	98.8	127.4	80.4	127.4
Exchange rate difference in cash	-0.3	2.1	1.4	3.4	0.2	2.2
Cash at the end of the period	52.5	80.4	52.5	80.4	52.5	98.8

		EMEA & Latin
MSEK Jan-Jun 2019	Asia & CIS	America	North America	Total
Product sales	20.4	51.6	44.4	116.4
Training & other services	3.0	7.2	3.8	13.9
Total	23.4	58.8	48.2	130.4

Recognized at a certain point in	19.6	49.6	37.6	106.8
time Recognized over time	3.8	9.2	10.6	23.6
Total	23.4	58.8	48.2	130.4

MSEK Jan-Jun 2018		EMEA & Latin
	Asia & CIS	America	North America	Total
Product sales	22.7	49.1	44.2	116.0
Training & other services	2.3	7.4	2.7	12.4
Total	25.0	56.4	46.9	128.3

Recognized at a certain point in	21.3	47.9	38.2	107.4
time Recognized over time	3.8	8.6	8.6	20.9
Total	25.0	56.4	46.9	128.3

	2019			2017					2016
	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Net sales, MSEK	64.1	66.3	86.2	89.4	63.0	65.3	84.8	102.0	59.5	55.4	71.9	71.6	60.0	46.8
EBIT, MSEK	-11.5	-5.7	8.7	20.1	0.1	3.7	16.9	40.0	6.1	5.8	21.3	23.3	8.5	5.3
EBIT-margin, %	-17.9	-8.6	10.1	22.5	0.2	5.6	19.9	39.2	10.2	10.6	29.6	32.5	16.3	11.3
Earnings per share, SEK	-0.58	-0.2	0.4	0.8	0.1	0.2	0.8	1.7	0.2	0.2	0.9	1.0	0.4	0.2
Return on equity, %	-15.4	-4.0	6.6	14.4	1.8	3.8	12.8	32.5	6.4	3.9	17.5	22.5	9.9	3.7
Return on capital employed, %	-14.0	-3.2	9.5	20.7	3.3	6.5	18.2	43.7	8.9	5.3	22.9	30.0	14.6	7,0
Equity ratio, %	33.7	49.2	57.2	55.2	53.4	59.8	57.2	52.2	52.0	60.6	58.2	55.7	53.3	62.6
Cash flow from operations/per share, SEK	0.04	-0.4	1.6	-0.7	-0.6	0.0	2.8	-0.1	-0.2	0.1	0.9	1.5	0.2	0.3
Equity per share, SEK	2.98	5.8	6.0	5.6	4.6	6.5	6.2	5.5	3.9	5.9	5.7	4.7	3.7	5.5

EBIT

The Company presents certain financial metrics in the interim report that are not defined under IFRS. The Company believes that these metrics provide useful supplemental information to investors and the Company's management as they allow for the evaluation

of the Company's performance .The key ratios are further described in the 2018 annual report.

Earnings before interest and taxes. EBIT margin EBIT in relation to net sales. Earnings per share * Profit/loss after tax in relation to average number of outstanding shares after dilution. Return on equity Profit/loss after tax in relation to average adjusted equity. Return on capital employed EBIT plus financial items in relation to average capital employed. Equity ratio Equity in relation to total assets. Cash flow from operations/per share Cash flow from operations in relation to average number of outstanding shares after dilution. Equity per share Equity in relation to outstanding shares at the end of the period. Average adjusted equity Average of equity during 12 months-period. Opening plus closing shareholders' equity divided by two. Capital employed /average capital employed Capital employed is calculated as total assets less non- interest-bearing liabilities. Revenue growth, % Average capital employed is calculated as capital employed over a 12 months period. Capital employed at beginning of period plus capital employed at end of period divided by two.

Sales current period in relation to same period prior year

Net financial items Net of financial income and expenses

* Defined in line with IFRS

Reconciliations of measurements that are not defined under IFRS.

	2019		2018				2017				2016			2015
	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Total assets, MSEK	163.2	217.4	192.5	186.9	158.3	200.9	200.2	192.5	136.5	179.0	179.3	156.0	127.1	161.6
Accounts payables, MSEK	-3.1	-3.9	-3.7	-4.5	-4.7	-10.9	-5,0	-11.3	-4.1	-4.5	-4.6	-3.1	-2.2	-3.4
Tax liabilities, MSEK	-1.3	-0.9	-0.5	-6.9	-2.5	-2.1	-3.6	-11.4	-3.1	-4.7	-6.2	-9.4	-4.2	-3.8
Leasing liabilities related to assets with right to use	-33.1	-32.8	-	-	-	-	-	-	-	-	-	-	-	-
Other liabilities, MSEK	-70.5	-72.8	-78.2	-72.4	-35.2	-67.9	-77,0	-69.4	-58.3	-61.4	-64.1	-56.7	-52.9	-53.3
Capital employed, MSEK	55.2	107.0	110.1	103.1	115.9	120.0	114.6	100.4	71.0	108.4	104.4	86.8	67.8	101.1
Average capital employed, MSEK	85.5	113.5	112.4	101.8	93.5	114.2	109.5	93.6	69.4	104.8	97.7	81.1	65.8	88.7

	Jan-June
MSEK	2019	2018
Net sales	82.3	91.4
Cost of goods sold	-9.9	-15.2
Other external costs	-23.6	-23.0
Personnell costs	-64.8	-51.8
Depreciation of fixed assets	-5.3	-0.4
Total operating cost	-103.6	-90.4
Operating profit - EBIT	-21.3	1.0
Net financial items	6.5	3.4
Profit/loss before tax	-14.8	4.4
Tax	-	-1.0
Net profit/loss after tax	-14.8	3.4

	Jan-June
MSEK	2019	2018
Net profit/loss after tax	-14.8	3.4
Total comprehensive income	-14.8	3.4

	30-jun
MSEK	2019	2018
ASSETS
Intangible assets	0.1	0.2
Tangible assets	2.7	2.2
Assets with right to use	32.4	-
Shares in group companies	0.4	0.4
Other long term asset	-	4.3
Total fixed assets	35.6	7.1

Inventories	6.8	6.3
Accounts receivable - trade	17.0	12.4
Other current assets	31.4	47.4
Cash and cash equivalents	24.1	30.6
Total current assets	79.3	96.7
TOTAL ASSETS	114.9	103.8

EQUITY AND LIABILITIES
Share capital	3.8	3.8
Share premium	20.3	20.3
Restricted equity	24.1	24.1
Statutory reserve	7.8	7.8
Profit brought forward	-4.9	29.5
Non-restricted equity	2.9	37.3
Total equity	27.0	61.4

Accounts payable - trade	2.6	4.7
Current tax liability	-	2.5
Leasing liabilities related to assets with right to use	30.6	-
Other current liabilities	54.7	35.2
Total current liabilities	87.9	42.4
TOTAL EQUITY AND LIABILITIES	114.9	103.8