CYBER1 - Strong end of 2023 - Mangold Insight Analysis

Mangold updates Cyber Security 1 ("CYBER1") after the fourth quarter of 2023. Revenue increased to EUR 18.8 (16.2) million in the fourth quarter, corresponding to growth of around 16 percent. At the same time, the gross margin improved to 25 (20) percent during the quarter. The EBITDA amounted to approximately EUR 1.4 (-0.5) million, which is a significant improvement on the same period last year. The EBITDA margin amounted to 7.3 percent, which was a strong close in 2023. For the full year, the EBITDA was in line with our estimate and the EBITDA margin was 1.2 percent. However, the result was significantly lower than expected as the company was burdened by a one-off item related to closed subsidiaries.

CYBER1's cash amounted to EUR 728 thousand, corresponding to approximately SEK 8.2 million at the end of the fourth quarter. In addition, CYBER1 completed a directed issue at a price of EUR 0.150 per share at the end of February. This resulted from a lender's decision to convert the EUR 750 000 loan given in January into shares at a premium of 7.3 percent. In addition, previous loans were refinanced, which led to the maturity being extended to 15 August 2025. Given the refinancing, and with a positive EBIT for 2023, we see that CYBER1 is on track to improve its margins in the coming years.

Mangold reduces the benchmark price to EUR 0,040 (0,045) per share. The decrease is due to the increase in the number of shares since the previous analysis. In order to reach the target price, CYBER1 needs to continue improving margins and reach profitability on a full-year basis in 2024.