Year-End Report January–December 2014 CybAero AB (publ)


  · Net sales: SEK 46.8 million (SEK 24.4 million)
  · EBITDA: SEK -22.3 million (SEK -15 million)
  · Operating loss: SEK -33.7 million (SEK -24.3 million)
  · Loss after tax: SEK 34.2 million (SEK 25.4 million)
  · Earnings per share: SEK -1.62 (SEK -2.94)

Events during the year

  · In January, CybAero receives its largest order to date with a value of EUR
5.5 million. The order is for the delivery of three systems to be operated from
ships. China Customs is the end user.
  · In February, the final delivery of orders on hand to the company's U.S.
partner AeroVironment is completed.
  · In March, AeroVironment converts one of its two convertible loans to
CybAero, each worth SEK 10 million, giving them 1,062,699 shares, which is equal
to ownership in the company of just over 8.5 percent.
  · In April, CybAero receives an order for a demo system from its agent in
China.
  · In April, CybAero conducts a private placement to four international
institutional investors. In total 1.8 million shares are issued, which is equal
to approximately 12.6 percent of CybAero's total share capital. The private
placement brings in approximately SEK 50 million for CybAero before issuing
costs.
  · On July 2, the company announces a framework agreement with one of the
world's largest companies and aircraft manufacturers, Chinese AVIC. The
agreement spans eight years and has a minimum commitment from AVIC for orders of
at least 70 systems worth approximately SEK 700–800 million.
  · In August, AeroVironment converts its second convertible loan, which gives
them 1,062,699 shares, corresponding to company ownership of over 6.9 percent.
  · In August, CybAero receives a supplementary order from Airbus Defence &
Space for avionics and subsystems for the continuing development of their TANAN
300 demonstrator.
  · In November, CybAero conducts another private placement. In total, 1.6
million shares are issued, corresponding to approximately 9.3 percent of
CybAero's total share capital. The private placement brings in approximately SEK
45 million for CybAero before issuing costs.

Key events after the period

In January, the redemption period ends for the TO 8 warrants issued in
connection with the preferred issue in December 2013. A total of 1,334,111
warrants are exercised, corresponding to 98.4 percent of the warrants. The
company thus receives an injection of approximately SEK 16 million before issue
expenses. After registration, there will be 18,497,213 shares, and CybAero's
share capital will be SEK 27,745,819.50.

In February, the company commences factory testing on systems to be delivered to
China Customs.
The deliveries are estimated to begin in March 2015, which is three months later
than originally estimated.

Initial training of AVIC staff is held in February. The purpose of this training
is to give them knowledge on how to manage the company's systems in order to
boost their sales activities in China.

Message from the CEO

The year 2014 was even more intense than 2013 and served as the springboard for
CybAero's expansion. In January, we received our largest order ever to deliver
three ship-based systems with China Customs as the end user. This is a key
breakthrough order that demonstrates our competitiveness in these highly
advanced systems. Delivery of the systems was originally estimated to begin
before the end of last year, but the deliveries were postponed due to extensive
development work. The deliveries are set to begin in March 2015.

We continued to work hard on our marketing during the year, especially to the
Chinese market, which led to a major framework agreement with Chinese AVIC at
mid-year. AVIC is a group of companies whose activities include development and
production of aircraft and is one of the largest companies in the world with
over half a million employees. The framework agreement stipulates that AVIC
commit to ordering at least 70 systems over the next eight years. The order
value is estimated to be at least approximately SEK 700–800 million. This is the
largest contract ever in our segment and reinforces our position as the world
leader in our product and market segment.

We have seen a substantial increase in interest in CybAero from the financial
market as well. This was demonstrated by the two successful private placements
we conducted during the year, which several renowned international investors
participated in, and by the fact that the number of shareholders in the company
has increased substantially. At the end of the year, our shareholders numbered
nearly five thousand (4,794), which is an increase of around two thousand
shareholders in one year.

We are very pleased that we can see clear evidence on a daily basis that the
market for our systems is now really taking off. This is manifested in the
significant increase in the number of inquiries we are receiving, particularly
in regard to the civilian and commercial applications of our products. The order
in January and the agreement with AVIC are also clear signs of this. We are
continuing to pursue our objective of being a global leader.

Development and production

In late fall, 2013, we commenced major, large-scale work on upgrading the
performance and reliability of our main product, APID 60. This work continued in
2014 and is estimated to be completed in March 2015. We have revised our
production strategy, and as a result, we now perform the final assembly of
aircraft and systems in-house and use subcontractors and partners for the
assembly of subsystems. The company is simultaneously expanding its production
capacity, which includes expanding its production facilities and increasing the
production workforce. In this context, we have also decided to build our own
test center, which is estimated to be put into service in April 2015.

Market presence and collaboration agreements

In January, as previously mentioned, we received very clear proof of the success
of our marketing efforts when we received an order worth EUR 5.5 million for
delivery to China Customs. Our agent in China placed an order in April for a
demo system which will enable more intense marketing on the Asian market. In
July, we were able to announce an agreement with Chinese AVIC, which
definitively solidifies CybAero's role as a global leader in supplying computer
-controlled, helicopter-based systems under 200 kg.

We conducted demonstration flights for potential clients in China over a three
-week period in July and August. Many people representing various government
authorities and companies were present, including state-owned energy companies,
public sector agencies working on environmental initiatives, as well as several
private/commercial representatives. The demonstrations were very successful and
also made a major breakthrough by exposure on Chinese television and other media
outlets.

CybAero finished its work with its partner Indra on their Pelican project where
the APID 60 serves as the foundation of the system by delivering the final
subsystems during the year. As for us, we plan to  focus more on our own work
for end users as we move forward.

Linköping, February 27

Mikael Hult

CEO
For more information, please contact:
Mikael Hult, CEO CybAero AB, tel: +46 (0)70-564 25 45, email:
mikael.hult@cybaero.se
Anna-Lena Rahm, CFO CybAero AB, tel: +46 (0)70-635 15 60, email: anna
-lena.rahm@cybaero.se

Web: www.cybaero.se
Videos: www.youtube.com/cybaero
About CybAero
CybAero develops and manufactures Remotely Piloted Aircraft Systems (RPAS) and
associated sensor systems for safer and more cost-effective operations in
hazardous environments.The company has made a great international impact with
its  APID 60 helicopter, which can be adapted for for exemple coastal and border
surveillance, search and rescue missions, and mapping.
CybAero has its head office in the Mjärdevi Science Park in Linköping, Sweden.
The company has more than 40 employees and has been listed on NASDAQ OMX First
North since 2007. Remium Nordic AB is the company’s certified adviser.

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