2016-10-27 07:30:02 CEST
2016-10-27 07:30:02 CEST
REGULATED INFORMATION
QPR Software - Interim report (Q1 and Q3)
QPR SOFTWARE INTERIM REPORT JANUARY – SEPTEMBER 2016
QPR SOFTWARE PLC STOCK EXCHANGE RELEASE OCTOBER 27, 2016 AT 8.30 AM
THIRD QUARTER NET SALES AND PROFIT INCREASED YEAR-ON-YEAR
Summary July – September 2016
-- Net sales EUR 2,104 thousand (2015: 1,989).
-- Operating profit EUR 385 thousand (-1).
-- Operating margin 18.3% (-0.1).
-- Comparable operating profit EUR 385 thousand (-1).
-- Cash flow from operating activities EUR -201 thousand (-282).
-- Profit before taxes EUR 374 thousand (10).
-- Profit for the quarter EUR 281 thousand (23).
-- Earnings per share EUR 0.023 (0.002).
Summary January – September 2016
-- Net sales EUR 6,319 thousand (2015: 6,916).
-- Operating profit EUR 509 thousand (290).
-- Operating margin 8.1% (4.2).
-- Comparable operating profit EUR 549 thousand (290).
-- Cash flow from operating activities EUR 1,221 thousand (785).
-- Profit before taxes EUR 469 thousand (299).
-- Profit for the period EUR 352 thousand (283).
-- Earnings per share EUR 0.029 (0.024).
Business operations
QPR Software focuses on providing organizations software and professional
services for operational development. Our software and services are used in
over 50 countries. The Company offers its customers insight to their business
operations through modeling, analysis and performance monitoring. This insight
enables customers to streamline and improve operations and to execute their
strategies swiftly and effectively.
OUTLOOK
Operating environment and market outlook (updated)
QPR expects the demand for process mining software to grow in its home market
in Finland, as well as in the broader international market. The software market
for process mining is relatively new and, for the time being, its market size
is still small. Market maturity varies greatly from one country to another, but
already last year we experienced strong market growth in several European
countries. This growth is expected to continue this year, and the Company
believes that its QPR ProcessAnalyzer product has a strong position in the
market.
In developed markets, competition in process and enterprise architecture
modeling and performance management software is expected to continue to
increase. In emerging markets there is still strong growth potential for these
software products.
Outlook for 2016 (updated)
QPR will continue to invest in the sales activities of its in-house developed
process mining software and the related process analysis services. QPR
estimates that this business will continue to grow significantly this year.
The tightened competition in the software business for process and enterprise
architecture modeling and performance management is expected to continue having
a negative impact on sales in parts of QPR’s reseller channel, especially in
developed markets. To offset this negative impact, QPR seeks growth from new
reseller partnerships in emerging countries.
In its home market in Finland, QPR believes it will maintain its position as a
leading software provider for process modeling and operational development; as
well as to preserve its position in operational development consulting. This
position has strengthened over the past few years.
QPR has updated its future outlook and estimates its operating profit to grow
in 2016 as compared to 2015 (EUR 368 thousand). Earlier this year QPR estimated
its comparable operating profit to grow in 2016 as compared to 2015.
KEY FIGURES
--------------------------------------------------------------------------------
EUR in thousands, Jul-Sep Jul-Se Change Jan-Sep Jan-Sep Change Jan-Dec
unless otherwise , 2016 p 2015 , , 2016 , 2015 , , 2015
indicated % %
--------------------------------------------------------------------------------
Net sales 2,104 1,989 6 6,319 6,916 -9 9,436
EBITDA 607 204 197 1,149 906 27 1,190
% of net sales 28.8 10.3 18.2 13.1 12.6
Operating profit 385 -1 509 290 76 368
% of net sales 18.3 -0.1 8.1 4.2 3.9
Profit before tax 374 10 3,622 469 299 57 347
Profit for the 281 23 1,126 352 283 24 338
period
% of net sales 13.4 1.2 5.6 4.1 3.6
Earnings per share, 0.023 0.002 1,135 0.029 0.024 24 0.028
EUR
Equity per share, 0.243 0.229 6 0.243 0.229 6 0.234
EUR
Cash flow from -201 -282 28 1,221 785 56 406
operating
activities
Cash and cash 567 683 -17 567 683 -17 585
equivalents
Net borrowings -567 -683 -17 -567 -683 -17 -85
Gearing, % -18.8 -23.9 -18.8 -23.9 -2.9
Equity ratio, % 71.5 59.0 71.5 59.0 42.7
Return on equity, % 39.0 3.2 15.8 12.5 11.1
Return on 50.3 -0.2 22.9 12.8 12.0
investment, %
--------------------------------------------------------------------------------
REPORTING
QPR Software innovates, develops, sells and delivers software and services
aimed at operational development in international markets. QPR Software reports
one operating segment: Operational development of organizations. In addition to
this, the Company reports revenue from products and services as follows:
Software licenses, Software maintenance services, Software rentals, and
Consulting. Software rentals and Software maintenance services together form
the recurring revenue reported by the Company. Recurring revenue is based on
long-term contracts continuing for the time being or for a fixed period of
several years. Rental and maintenance charges are typically invoiced annually
in advance.
The geographical areas reported are Finland, the rest of Europe (including
Russia and Turkey), and the rest of the world. Net sales are reported according
to the customer´s location.
In the January – June 2016 half year financial report the Company renamed a
term in order to comply with the European Securities and Markets Authority´s
(ESMA) recommendations for alternative key figures, which stepped into force on
July 3, 2016. The previously used term “operating profit excluding
non-recurring items” is now known as “comparable operating profit”. Items
having an impact on comparable operating profit are, for example, non-recurring
items related to streamlining or restructuring business. Comparable operating
profit is calculated by eliminating these items from operating profit.
Interest-bearing net debt is calculated by deducting cash and cash equivalents
from interest-bearing liabilities.
REVIEW BY THE CEO
The positive development in the growth of our third quarter profit was very
satisfactory. As a result of increased net sales and our streamlined
operations, operating profit increased to over 18% of net sales.
The business environment remained challenging and economic growth was weak in
most markets, especially in the Company’s largest market area, Europe
(including Finland). On the other hand, the demand for process mining, being at
the beginning of its life-cycle, kept on growing. We acquired and extended
several significant client engagements with big international corporations.
Consequently, our third quarter net sales for this product area more than
doubled year-on-year. Net sales for this product area grew by over 60%
year-to-date.
Thanks to our patented technology, early market entry, and innovative
functionalities, our process mining software QPR ProcessAnalyzer is in
excellent position to continue its strong market growth.
We also achieved a significant market opening in Saudi Arabia by striking a
deal with a leading furniture retailer for our comprehensive, easy-to-use
software solution for strategy execution and quality management. The delivery
will be done in cooperation with QPR’s local reseller partner Leaders
Solutions.
We believe that the investments made in 2015 to grow our reseller partner
network will have a positive impact on net sales this year; but at the same
time, we estimate that tightened competition will continue to have a negative
impact on sales in parts of QPR´s reseller channel. We estimate that our
operating profit will grow in 2016, as compared to 2015.
Jari Jaakkola
CEO
NET SALES DEVELOPMENT
July – September 2016
Net sales in the third quarter were EUR 2,104 thousand (1,989) and grew 6% from
the corresponding period of the previous year. Software net sales grew
significantly (+19%) and net sales from process mining software and related
process analysis services more than doubled year-on-year. Net sales from
process modeling and performance management software in the international sales
channel also increased. Growth in net sales was slowed down by a clear downturn
in the net sales from consulting services (-23%).
Software license net sales grew by 121% compared to last year. Net sales were
positively affected by a sizeable deal made with a leading, international IT
and business process outsourcing service provider. Also the net sales of our
performance management software QPR Metrics showed positive development.
Net sales from software rentals decreased by 6%, because new software sales
were driven by license sales. Software maintenance services grew 3% and
customer churn remained on the same low level as in the past years. Recurring
revenues (software maintenance services and rentals) represented 53% (57) of
total net sales.
Net sales from consulting services decreased clearly (-23%), which was caused
by unfavorable conditions in the operational development and technical SAP
consulting businesses. On the contrary, net sales from process analysis
services grew.
Of the Group net sales, 56% (69) derived from Finland, 22% (19) from the rest
of Europe (including Russia and Turkey), and 22% (13) from the rest of the
world.
NET SALES BY PRODUCT GROUP
--------------------------------------------------------------------------------
EUR in Jul-Sep, Jul-Sep Change Jan-Sep, Jan-Sep, Change Jan-Dec,
thousands 2016 2015 , 2016 2015 , 2015
% %
--------------------------------------------------------------------------------
Software 494 223 121 946 987 -4 1,427
licenses
Software 708 687 3 2,064 2,194 -6 2,873
maintenance
services
Software 415 443 -6 1,244 1,328 -6 1,774
rentals
Consulting 487 636 -23 2,065 2,407 -14 3,362
--------------------------------------------------------------------------------
Total 2,104 1,989 6 6,319 6,916 -9 9,436
--------------------------------------------------------------------------------
NET SALES BY GEOGRAPHIC AREA
--------------------------------------------------------------------------------
EUR in thousands Jul-Sep, Jul-Sep Change Jan-Sep, Jan-Sep Change Jan-Dec
2016 2015 , 2016 , 2015 , , 2015
% %
--------------------------------------------------------------------------------
Finland 1,185 1,365 -13 4,152 4,686 -11 6,499
Europe incl. 461 371 24 1,257 1,276 -2 1,740
Russia and
Turkey
Rest of the 459 253 81 910 953 -5 1,197
world
--------------------------------------------------------------------------------
Total 2,104 1,989 6 6,319 6,916 -9 9,436
--------------------------------------------------------------------------------
January – September 2016
Net sales for the January – September reporting period were EUR 6,319 thousand
(6,916). The decrease in net sales was mainly caused by the dip in consulting
service net sales when compared to last year. Software net sales in the
beginning of the year were lower than last year, but sales took a clear upturn
in the third quarter with significant software license deals made.
Net sales deriving from software maintenance services and software rentals
decreased (-6% both). Recurring revenues (software maintenance services and
rentals) represented 52% (51) of total net sales.
Net sales from consulting services decreased -14%, which was caused by
unfavorable conditions in the operational development and technical SAP
consulting businesses. On the contrary, net sales from process analysis
services grew.
Of the Group net sales, 66% (68) derived from Finland, 20% (18) from the rest
of Europe (including Russia and Turkey), and 14% (14) from the rest of the
world.
FINANCIAL PERFORMANCE
July – September 2016
In the third quarter, the Group’s operating profit improved significantly being
EUR 385 thousand (-1), representing 18.3% of net sales (-0.1). Net sales
increased and costs dropped significantly. Especially personnel costs were
lower than the year before. Further investments were made in the Company’s new
software products.
The Group’s fixed costs in the quarter amounted to EUR 1,651 thousand (1,843)
and they decreased 10.4% year-on-year. Personnel costs represented 67.1% (75.9)
of fixed costs, equaling to EUR 1,108 thousand (1,398).
Profit before taxes was EUR 374 thousand (10) and profit for the period was EUR
281 thousand (23). Earnings per share (fully diluted) were EUR 0.023 (0.002).
January – September 2016
The Group’s operating profit for the January – September reporting period was
EUR 509 thousand (290), representing 8.1% of net sales (4.2). Operating profit
improved significantly due to cost reductions.
Comparable operating profit was EUR 549 thousand (290). The items having an
impact on comparable operating profit are related to the streamlining of
operations implemented in early 2016, and mainly include personnel expenses.
The Group’s fixed costs for the reporting period were EUR 5,507 thousand
(6,225) and they diminished year-on-year by 11.5%. Personnel costs represent
73.1% of fixed costs and they amounted to EUR 4,025 thousand (4,743). Credit
losses, included in fixed costs, totaled EUR 49 thousand (21).
Profit before taxes was EUR 469 thousand (299) and the operating profit was EUR
352 thousand (283). Earnings per share (fully diluted) were EUR 0.029 (0.024).
FINANCE AND INVESTMENTS
Cash flow from operating activities in the January – September reporting period
amounted to EUR 1,221 thousand (785). The growth in cash flow resulted from
more efficient management of working capital and lower investment expenditure.
The Group’s cash and cash equivalents at the end of the third quarter were EUR
567 thousand (683).
Investments year-to-date amounted to EUR 496 thousand (927). Investments
consisted mainly of product development.
Net financial items for the January – September reporting period were EUR -41
thousand (+9). Net financial items include net foreign exchange losses of EUR
-31 thousand (+10). In the July – September reporting period, net financial
items were EUR -11 thousand (+11) including net foreign exchange losses of EUR
-9 thousand (+12).
The Company did not have interest-bearing liabilities at the end of the third
quarter. The gearing ratio was -19% (-24). Current liabilities include a total
of EUR 1,758 thousand (1,549) in deferred revenue. The annualized return on
investment was 23% (13) year-to-date, and 50% (0) for the third quarter alone.
At the end of the reporting period, the equity ratio was 71% (59) and the
consolidated shareholders’ equity was EUR 3,025 thousand (2,854). The
annualized return on equity was 16% (13) year-to-date, and 39% (3) for the
third quarter alone.
The Annual General Meeting held on March 22, 2016 authorized the Board of
Directors to decide on issuing a maximum of 4,000,000 new shares, to decide on
the conveyance of a maximum of 700,000 own shares held by the Company, and to
decide on acquiring a maximum of 250,000 own shares. The authorizations are in
force until the next Annual General Meeting.
PRODUCT DEVELOPMENT
In the July – September reporting period, product development expenses amounted
to EUR 344 thousand (407), representing 16% of net sales (20). Product
development expenses worth EUR 121 thousand were capitalized (168). Capitalized
product development expenses worth EUR 157 thousand were amortized (117).
In the reporting period January – September, product development expenses
amounted to EUR 1,250 thousand (1,355), representing 20% of net sales (20).
Product development expenses do not include the amortization of capitalized
product development expenses. Product development expenses worth EUR 461
thousand were capitalized (609). Capitalized product development expenses worth
EUR 412 thousand were amortized (346).
PERSONNEL
At the end of the reporting period, the Group had a total of 68 employees (87).
The average number of employees in the third quarter was 68 (88), and 73 in the
January – September reporting period (87).
For incentive purposes, the Company has a bonus program that covers all
employees. Remuneration of the top management consists of salary, fringe
benefits and a possible annual bonus based on net sales performance. In 2016,
the maximum annual bonus of the executive management team, including the CEO,
is 30% of the annual base salary. More information on the bonus program can be
found in the Annual Report 2015
(http://cdn.qpr.com/sites/default/files/QPR_Software_Annual_Report_2015_1.pdf).
SHARES AND SHAREHOLDERS
--------------------------------------------------------------------------------
Trading of shares Jan-Sep, Jan-Sep, Change, Jan-Dec,
2016 2015 % 2015
--------------------------------------------------------------------------------
Shares traded, pcs 640,416 4,186,256 -85 4,558,065
Volume, EUR 671,386 5,900,822 -89 6,350,859
% of shares 5.3 34.9 38.0
Average trading price, EUR 1.05 1.41 -26 1.39
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shares and market capitalization Sep 30, Sep 30, Change, Dec 31,
2016 2015 % 2015
--------------------------------------------------------------------------------
Total number of shares, pcs 12,444,863 12,444,863 - 12,444,863
Treasury shares, pcs 457,009 457,009 - 457,009
Book counter value, EUR 0.11 0.11 - 0.11
Outstanding shares, pcs 11,987,854 11,987,854 - 11,987,854
Number of shareholders 1,197 1,221 -2 1,212
Closing price, EUR 1.04 1.30 -20 1.20
Market capitalization, EUR 12,467,368 15,584,210 -20 14,385,425
Book counter value of all treasury 50,271 50,271 - 50,271
shares, EUR
Total purchase value of all 439,307 439,307 - 439,307
treasury shares, EUR
Treasury shares, % of all shares 3.7 3.7 - 3.7
--------------------------------------------------------------------------------
The Annual General Meeting held on March 22, 2016 approved the Board's proposal
to pay a per-share dividend of EUR 0.02 (0.05), a total of EUR 240 thousand
(599) for the financial year 2015. Dividends were paid to all shareholders
registered in the Company's shareholder register, maintained by Euroclear
Finland Oy, on the record date of March 24, 2016. Dividends were paid on April
5, 2016.
The Annual General Meeting approved the Board´s proposal to authorize the Board
of Directors, subject to its discretion, on payment of an extra dividend of EUR
0.01 during 2016. The authorization is valid until 31 December, 2016.
OTHER EVENTS DURING THE QUARTER
In January, QPR and the Swedish business and IT services company iStone
announced that they have signed a reseller agreement for QPR ProcessAnalyzer -
the software that enables automated process analysis based on existing data
from Enterprise Resource Planning (ERP) systems. The partnership creates new
opportunities in automated process mapping and process flow optimization,
especially for those organizations using the ERP system Infor M3.
QPR Software and PricewaterhouseCoopers (PwC) Portugal announced in February
that they have signed a consulting agreement on using QPR ProcessAnalyzer in
PwC’s process and operational development consulting in Portugal. QPR
ProcessAnalyzer enables automated process analysis based on existing data from
enterprise IT systems, utilizing technology patented in the United States by
QPR.
In March, QPR completed co-determination negotiations with its personnel. As a
result of the negotiations, the Company reduced its annual expenses by
approximately EUR 0.7 million. Of the total, EUR 0.1 million will be realized
by reducing external purchases and EUR 0.6 million through personnel
reductions.
QPR signed an agreement in March on delivering software for business process
management purposes to one of the world’s largest lighting manufacturing
companies. The signed agreement is valid for three years, and the value of the
entire three-year agreement is approximately EUR 0.2 million before reseller
commissions.
In March, QPR announced the launch of QPR MobileDashboard, an application that
makes it even easier to access and browse actionable performance information on
the go.
QPR Software was listed in April as a representative vendor in the Gartner
Market Guide for Enterprise Business Process Analysis (EBPA). Globally the
Gartner Market Guide lists 22 representative vendors offering solutions in this
market.
In May, QPR received additional intellectual property protection for its
process mining technology. This was already the second patent that the United
States Patent and Trademark Office has awarded for the technology in question.
The patented technology is utilized in QPR ProcessAnalyzer, an application
developed by QPR. QPR’s previous patent from 2015 related to the utilization of
event instance data obtained from information management systems to help
organizations analyze and improve their business processes. The latest patent
now safeguards the technology behind predicting the probability of future
events based on process analysis.
In June, the Company announced the release of the new QPR Suite 2016, the
complete portfolio of business management tools for planning, executing and
monitoring strategy-driven operations. The newest developments in QPR
technology bring enhancements to user experience and enable easy integration
between QPR products and third party software. New features of the Suite
further strengthen QPR’s offering as a value-adding solution provider for
strategy execution, business-IT alignment, performance and process management
and process mining.
In June, QPR made a deal to deliver QPR ProcessDesigner and QPR Metrics, as
well as professional consulting services to a leading European engineering
group. The duration of the contract made is three years, and it is worth well
over EUR 0.2 million.
In August, QPR struck a deal with a leading furniture retailer in Saudi Arabia
to deliver a comprehensive, easy-to-use software solution for strategy
execution and quality management. The deal is a significant market opening in
Saudi Arabia, where the demand for software solutions on strategy execution and
quality management is experiencing strong growth in both private and public
sectors.
In September, QPR delivered process mining and process performance management
software to a leading IT and business process outsourcing service provider. The
customer is a member of Fortune 500, offering services to customers globally
from over 50 locations worldwide. The customer uses QPR ProcessAnalyzer for
continuously analyzing and monitoring the business process services provided to
its customers. This helps the customer to improve the efficiency and quality of
their services, and to proactively ensure that service-level agreements are
met. QPR ProcessAnalyzer automatically generates a variety of visual analyses
for discovering process flow charts, variations, bottlenecks and KPIs based on
the customer’s operational data. The three-year contract is worth approximately
EUR 250 thousand.
EVENTS AFTER THE REPORTING PERIOD
There were no significant events after the reporting period.
GOVERNANCE
The Annual General Meeting on March 22, 2016 resolved that the number of Board
Members is four (4).
The Annual General Meeting re-elected Kirsi Eräkangas, Vesa-Pekka Leskinen,
Juho Malmberg and Topi Piela as members of the Company´s Board of Directors.
The term of office of the members of the Board of Directors expires at the end
of the next Annual General Meeting. At its organizing meeting, the Board of
Directors elected Vesa-Pekka Leskinen as its Chairman.
The Annual General Meeting re-elected Authorized Public Accountants KPMG Oy Ab
as QPR Software´s auditor with Kirsi Jantunen, Authorized Public Accountant,
acting as principal auditor. The term of office of the auditor expires at the
end of the next Annual General Meeting.
The Annual General Meeting decided to authorize the Board of Directors to
decide on an issue of new shares and conveyance of the own shares held by the
Company (share issue) either in one or in several occasions. The share issue
can be carried out as a share issue against payment or without consideration on
terms to be determined by the Board of Directors.
All authorizations of the Board and other decisions made by the Annual General
Meeting are available in their entirety on the stock exchange release published
by the Company on March 22, 2016 and available on the investors section of the
Company's web site, http://www.qpr.com/investors/stock-exchange-releases.htm.
SHORT-TERM RISKS AND UNCERTAINTIES
Internal control and risk management at QPR Software aims to ensure that the
Company operates efficiently and effectively, distributes reliable information,
complies with regulations and operational principles, reaches its strategic
goals, reacts to changes in the market and operational environment; and ensures
the continuity of its business.
QPR has identified the following three groups of risks related to its
operations: risks related to business operations (country, customer, personnel,
legal), risks related to information and products (QPR products, IPR, data
security) and risks related to financing (foreign currency, short-term cash
flow). The Company has an insurance policy for property, operational and
liability risks.
Financial risks include reasonable credit risk concerning individual business
partners, which is characteristic to any international business. QPR seeks to
limit this credit risk by continuous monitoring of standard payment terms,
receivables and credit limits. The amount of trade receivables over 60 days
past due was 10% (5) of total trade receivables at the end of the reporting
period.
Approximately 71% of the Group’s trade receivables were in Euro at the end of
the reporting period (67). At the end of the reporting period, the Company had
not hedged its non-euro trade receivables.
QPR has initiated an arbitration process due to a customer´s decision to
dissolve a contract, as QPR regards this dissolution unjustified. The value of
the contract is less than EUR 100 thousand and less than EUR 50 thousand has
been recognized as revenue. The customer has made a counterclaim with demands
worth under EUR 100 thousand. QPR believes that the counterclaim made by the
customer is unfounded.
No significant changes have taken place in the Company’s short-term risks and
uncertainties during the quarter. Risks and risk management related to the
Company’s business are further described in the Annual Report 2015, pages 14-15
(http://cdn.qpr.com/sites/default/files/QPR_Software_Annual_Report_2015_1.pdf).
QPR SOFTWARE PLC
BOARD OF DIRECTORS
Further information:
Jari Jaakkola, CEO
Tel. +358 (0) 40 5026 397
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Main Media
Neither this press release nor any copy of it may be taken, transmitted or
distributed, directly or indirectly, in or into the United States of America or
its territories or possessions.
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
--------------------------------------------------------------------------------
EUR in thousands, unless Jul-Se Jul-Se Change Jan-Se Jan-Se Change Jan-De
otherwise indicated p, p 2015 , % p, p, , % c,
2016 2016 2015 2015
--------------------------------------------------------------------------------
Net sales 2,104 1,989 6 6,319 6,916 -9 9,436
Other operating income - - 18 1 1,705 1
Materials and services 68 148 -54 321 402 -20 558
Employee benefit 1,108 1,398 -21 4,025 4,743 -15 6,477
expenses
Other operating expenses 321 239 34 842 865 -3 1,211
--------------------------------------------------------------------------------
EBITDA 607 204 197 1,149 906 27 1,190
Depreciation and 222 206 8 639 617 4 822
amortization
--------------------------------------------------------------------------------
Operating profit 385 -1 509 290 76 368
Financial income and -11 11 -197 -41 9 -554 -21
expenses
--------------------------------------------------------------------------------
Profit before tax 374 10 3,622 469 299 57 347
Income taxes -93 13 -812 -117 -16 631 -9
--------------------------------------------------------------------------------
Profit for the period 281 23 1,126 352 283 24 338
Earnings per share, EUR 0.023 0.002 1,135 0.029 0.024 24 0.028
(basic and diluted)
Consolidated statement
of
comprehensive income:
Profit for the period 281 23 352 283 338
Other items in
comprehensive income
that may be
reclassified
subsequently to profit
or loss:
Exchange differences on -2 -23 -1 -26 -21
translating foreign
operations
--------------------------------------------------------------------------------
Total comprehensive 280 0 350 257 317
income
CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
EUR in thousands Sep Sep Change Dec
30, 30, , 31,
2016 2015 % 2015
--------------------------------------------------------------------------------
Assets
Non-current assets:
Intangible assets 1,966 2,002 -2 2,041
Goodwill 513 513 0 513
Tangible assets 206 298 -31 274
Other non-current assets 27 67 -59 27
--------------------------------------------------------------------------------
Total non-current assets 2,712 2,880 -6 2,855
Current assets:
Trade and other receivables 2,710 2,825 -4 4,592
Cash and cash equivalents 567 683 -17 585
--------------------------------------------------------------------------------
Total current assets 3,277 3,508 -7 5,177
Total assets 5,990 6,388 -6 8,033
================================================================================
Equity and liabilities
Equity:
Share capital 1,359 1,359 0 1,359
Other funds 21 21 1 21
Treasury shares -439 -439 0 -439
Translation differences -243 -247 -2 -242
Invested non-restricted equity fund 5 5 7 5
Retained earnings 2,322 2,155 8 2,210
--------------------------------------------------------------------------------
Equity attributable to shareholders of the 3,025 2,854 6 2,914
parent company
Non-current liabilities:
Non-interest-bearing liabilities - 13 -100 9
--------------------------------------------------------------------------------
Total non-current liabilities - 13 -100 9
Current liabilities:
Interest-bearing liabilities - - 500
Advances received 1,758 1,549 13 1,209
Accrued expenses and prepaid income 938 1,560 -40 2,932
Trade and other payables 269 412 -35 468
--------------------------------------------------------------------------------
Total current liabilities 2,965 3,521 -16 5,109
Total liabilities 2,965 3,534 -16 5,119
Total equity and liabilities 5,990 6,388 -6 8,033
================================================================================
CONSOLIDATED CASH FLOW STATEMENT
--------------------------------------------------------------------------------
EUR in thousands Jul-Se Jul-Se Change Jan-Se Jan-Se Change Jan-De
p, p 2015 , p, p, , c,
2016 % 2016 2015 % 2015
--------------------------------------------------------------------------------
Cash flow from operating
activities:
Profit for the period 281 23 1,126 352 283 24 338
Adjustments to the 324 204 59 798 652 22 850
profit
Working capital changes -774 -466 -66 174 33 421 -645
Interest and other -11 -12 11 -41 -30 35 -38
financial
expenses paid
Interest and other 0 3 -92 3 9 -65 12
financial
income received
Income taxes paid -22 -33 33 -65 -162 -60 -111
--------------------------------------------------------------------------------
Net cash from operating -201 -282 28 1,221 785 56 406
activities
Cash flow from investing
activities:
Purchases of tangible -130 -173 25 -496 -927 -46 -1,148
and
intangible assets
--------------------------------------------------------------------------------
Net cash used in -130 -173 25 -496 -927 -46 -1,148
investing activities
Cash flow from financing
activities:
Proceeds from short term - - - - 500
borrowings
Repayments of short term - - -500 - -
borrowings
Dividends paid - - -240 -599 -60 -599
--------------------------------------------------------------------------------
Net cash used in - - -740 -599 23 -99
financing activities
Net change in cash and -332 -454 27 -15 -742 -98 -841
cash
equivalents
Cash and cash 900 1,134 -21 585 1,426 -59 1,426
equivalents at the
beginning of the period
Effects of exchange rate -1 4 -2 -1 253 1
changes on cash and
cash equivalents
--------------------------------------------------------------------------------
Cash and cash 567 683 -17 567 683 -17 585
equivalents at the end
of the period
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
--------------------------------------------------------------------------------
EUR in Share Other Translatio Treasur Invested Retained Total
thousand capita funds n y non-restricted earnings
s l difference shares equity fund
s
--------------------------------------------------------------------------------
Equity 1,359 21 -221 -439 5 2,471 3,196
Jan 1,
2015
Dividends -599 -599
paid
Repurchas
e of
shares
Comprehen -26 283 257
sive
income
--------------------------------------------------------------------------------
Equity 1,359 21 -247 -439 5 2,155 2,854
Sep 30,
2015
Dividends
paid
Repurchas
e of
shares
Comprehen 5 55 60
sive
income
--------------------------------------------------------------------------------
Equity 1,359 21 -242 -439 5 2,210 2,914
Dec 31,
2015
Dividends -240 -240
paid
Repurchas
e of
shares
Comprehen -1 352 350
sive
income
--------------------------------------------------------------------------------
Equity 1,359 21 -243 -439 5 2,322 3,025
Sep 30,
2016
--------------------------------------------------------------------------------
NOTES TO INTERIM FINANCIAL STATEMENTS
ACCOUNTING PRINCIPLES
This report complies with requirements of IAS 34 ”Interim Financial Reporting”.
Starting from the beginning of 2016, the Group has applied certain new or
revised IFRS standards and IFRIC interpretations as described in the
Consolidated Financial Statements 2015. The implementation of these new and
revised requirements have not impacted the reported figures. For all other
parts, the accounting principles and methods are the same as they were in the
2015 financial statements.
When preparing the consolidated financial statements, management is required to
make estimates and assumptions regarding the future and to consider the
appropriate application of accounting principles, which means that actual
results may differ from those estimated.
All amounts presented in this report are consolidated figures, unless otherwise
noted. The amounts presented in the report are rounded, so the sum of
individual figures may differ from the sum reported. This report is unaudited.
During the reporting period, the Group did not have any financial instruments
measured at fair value.
INTANGIBLE AND TANGIBLE ASSETS
--------------------------------------------------------------------------------
EUR in thousands Jan-Sep, Jan-Sep, Jan-Dec,
2016 2015 2015
--------------------------------------------------------------------------------
Increase in intangible assets:
Acquisition cost Jan 1 7,862 6,956 6,956
Increase 471 700 906
Increase in tangible assets:
Acquisition cost Jan 1 1,707 1,465 1,465
Increase 25 228 242
--------------------------------------------------------------------------------
CHANGE IN INTEREST-BEARING LIABILITIES
--------------------------------------------------------------------------------
EUR in thousands Jan-Sep, Jan-Sep, Jan-Dec,
2016 2015 2015
--------------------------------------------------------------------------------
Interest-bearing liabilities Jan 1 500 - -
Proceeds from short term borrowings - - 500
Repayments 500 - -
--------------------------------------------------------------------------------
Interest-bearing liabilities Jun - - 500
30/Dec 31
--------------------------------------------------------------------------------
PLEDGES AND COMMITMENTS
--------------------------------------------------------------------------------
EUR in thousands Sep 30, Sep 30, Dec 31, Change,
2016 2015 2015 %
--------------------------------------------------------------------------------
Business mortgages (held by the 1,389 1,390 1,392 0
Company)
Minimum lease payments based on
lease agreements:
Maturing in less than one year 236 365 357 -34
Maturing in 1-5 years 344 172 89 287
--------------------------------------------------------------------------------
Total 581 537 446 30
Total pledges and commitments 1,970 1,928 1,838 7
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT BY QUARTER
--------------------------------------------------------------------------------
EUR in thousands Q3 2016 Q2 2016 Q1 2016 Q4 Q3 2015 Q2 2015
2015
--------------------------------------------------------------------------------
Net sales 2,104 2,173 2,042 2,520 1,989 2,402
Other operating income - 12 6 - - 1
Materials and services 68 112 141 156 148 149
Employee benefit expenses 1,108 1,361 1,557 1,734 1,398 1,723
Other operating expenses 321 257 264 346 239 287
--------------------------------------------------------------------------------
EBITDA 607 456 86 284 204 243
Depreciation and 222 226 191 206 206 211
amortization
--------------------------------------------------------------------------------
Operating profit 385 230 -105 78 -1 32
Financial income and -11 -12 -18 -30 11 -16
expenses
--------------------------------------------------------------------------------
Profit before tax 374 217 -123 48 10 16
Income taxes -93 -42 18 7 13 18
--------------------------------------------------------------------------------
Profit for the period 281 175 -105 55 23 35
--------------------------------------------------------------------------------
GROUP KEY FIGURES
--------------------------------------------------------------------------------
EUR in thousands, unless Jan-Sep or Sep Jan-Sep or Sep Jan-Dec or Dec
otherwise indicated 30, 2016 30, 2015 31, 2015
--------------------------------------------------------------------------------
Net sales 6,319 6,916 9,436
Net sales growth, % -8.6 0.9 -1.1
EBITDA 1,149 906 1,190
% of net sales 18.2 13.1 12.6
Operating profit 509 290 368
% of net sales 8.1 4.2 3.9
Profit before tax 469 299 347
% of net sales 7.4 4.3 3.7
Profit for the period 352 283 338
% of net sales 5.6 4.1 3.6
Return on equity (per 15.8 12.5 11.1
annum), %
Return on investment (per 22.9 12.8 12.0
annum), %
Borrowings - - 500
Cash and cash equivalents 567 683 585
Net borrowings -567 -683 -85
Equity 3,025 2,854 2,914
Gearing, % -18.8 -23.9 -2.9
Equity ratio, % 71.5 59.0 42.7
Total balance sheet 5,990 6,388 8,033
Investments in non-current 496 927 1,148
assets
% of net sales 7.9 13.4 12.2
Product development 1,250 1,355 1,821
expenses
% of net sales 19.8 19.6 19.3
Average number of personnel 73 87 86
Personnel at the beginning 83 78 78
of period
Personnel at the end of 68 87 83
period
Earnings per share, EUR 0.029 0.024 0.028
Equity per share, EUR 0.243 0.229 0.234
--------------------------------------------------------------------------------
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