Cyber Security 1

Mangold updates Cyber Security 1 (“CYBER1”). Revenues increased to EUR 28.7 (25.1) million in the first half of 2024, corresponding to a growth rate of around 15 percent. The revenue was in line with our estimate, which we believe shows that the company is on the right path. The gross margin was 21.0 (22.5) percent, which was slightly lower than estimate. However, personnel costs and other costs were lower than we expected, which means that we will lower the operational costs moving forward. We continue to estimate that CYBER1 will achieve full-year profitability in 2024. Mangold welcomes the fact that revenues from Europe are the highest ever, as more deals from the area are expected to contribute to continued high growth.

The cash balance amounted to only EUR 220 thousand at the end of the first half of 2024. The company carried out a directed issue of EUR 0.9 million at a price of EUR 0.015 per share, which resulted in a dilution of 5.3 percent. Through the issue, we see that CYBER1 will be able to reach profitability and that the capital requirement is covered given expected profitability. We estimate that the second half of the year will be stronger, which is supported by the fact that the end of the year is generally stronger, given seasonal variation in sales.

Mangold raises the price target to EUR 0.045 (0.040) per share. In order for the price target to be reached, CYBER1 needs to improve margins and achieve profitability on a full-year basis in 2024.