2016-02-11 08:30:01 CET
2016-02-11 08:30:01 CET
REGULATED INFORMATION
QPR Software - Financial Statement Release
QPR Software: Financial Statements Bulletin 2015
QPR SOFTWARE PLC STOCK EXCHANGE RELEASE FEBRUARY 11, 2016 AT 09:30 AM
FINANCIAL STATEMENTS BULLETIN 2015
NET SALES ON PREVIOUS YEAR´S LEVEL, OPERATING PROFIT WEAKENED DUE TO
INVESTMENTS IN SALES CHANNEL AND PRODUCT RENEWALS
Summary full year 2015
-- Net sales EUR 9,436 thousand (2014: 9,541).
-- Net sales decreased 1% due to a decrease in international software channel
sales. Net sales growth in Finland, new international channel sales
partnerships made in 2015 and increased international process mining
software sales had a positive impact on net sales, but it did not fully
compensate sales decline in QPR`s traditional reseller sales channel.
-- Operating profit EUR 368 thousand (1,095), operating margin 3.9% of net
sales (11.5). Operating profit decreased mainly due to increased expenses
related to renewals in the Company´s sales channels and product portfolio.
These expenses were personnel, subcontracting and marketing costs.
-- Profit before taxes EUR 347 thousand (1,065).
-- Profit for the year EUR 338 thousand (890).
-- Earnings per share 0.028 euroa (0.074).
-- The Board of Directors proposes to the Annual General Meeting that a
dividend of EUR 0.02 be paid to shareholders for the financial year 2015
(2014: 0.05) and furthermore the Board of Directors be authorized to
decide, subject to its discretion, on payment of a special dividend of EUR
0.01 during 2016.
Summary fourth quarter 2015
-- Net sales EUR 2,520 thousand (2,
685
).
-- Net sales decreased 6% due to a decrease in international software channel
sales. Net sales growth in Finland, new international channel sales
partnerships made in 2015 and increased international process mining
software sales had a positive impact on net sales, but it did not fully
compensate sales decline in QPR`s traditional reseller sales channel.
-- Operating profit EUR 78 thousand (417), operating margin 3.1% of net sales
(15.5). Operating profit decreased mainly due to lower net sales, increased
personnel costs, as well as marketing and product launch expenses related
to sales channel renewal.
-- Profit before taxes 48 thousand (409).
-- Profit for October-December EUR 55 thousand (341).
-- Earnings per share EUR 0.005 (0.028).
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. The Company´s product portfolio has been
strongly renewed in recent years. The new software products offer customers
innovative and efficient tools to model various dimensions in organizations, to
automatically discover any processes based on actual event data and to analyze
causes for potential performance problems.
OUTLOOK
Operating environment and market outlook
QPR estimates that process mining software market demand grows in its home
market Finland, as well as in broader European market. This software product
category is relatively new and, for the time being, its market size is still
small. The market maturity varies strongly in different countries, but already
last year market growth was strong in several European countries. This growth
is expected to continue this year, and the Company believes its QPR
ProcessAnalyzer product has a strong position in the market.
In developed markets, competition in process and enterprise architecture and
modeling and performance management software is expected to continue to
increase. In developing markets, especially in the Middle East and Africa,
there is still growth potential for these software products.
Outlook for 2016
In process mining software and process analysis services, QPR continues its
outlays in direct sales in Finland and international channel sales, and
estimates that this business will continue to grow this year.
In process and enterprise architecture modeling and performance management
software, the tightened competition is expected to continue to have a negative
impact on sales in part of QPR´s reseller channel, especially in developed
markets. To offset this impact, QPR seeks growth from new reseller partnerships
initiated in 2015, especially from Middle East and Africa.
The Company believes that it will in its home market Finland maintain its
leading position in process modeling and analysis software aimed at operational
development in organizations, as well as its in recent years strengthened
position in operational development consulting.
The Company estimates that its operating profit excluding special items will
grow in 2016 compared to 2015.
KEY FIGURES
--------------------------------------------------------------------------------
EUR in thousands, unless Oct-Dec Oct-Dec Change Jan-Dec Jan-Dec Change
otherwise indicated 2015 2014 , 2015 2014 ,
% %
--------------------------------------------------------------------------------
Net sales 2,520 2,685 -6.1 9,436 9,541 -1.1
EBITDA 284 615 -53.8 1,190 1,857 -35.9
% of net sales 11.3 22.9 12.6 19.5
Operating profit 78 417 -81.2 368 1,095 -66.4
% of net sales 3.1 15.5 3.9 11.5
Profit before tax 48 409 -88.2 347 1,065 -67.4
Profit for the period 55 341 -83.8 338 890 -62.0
% of net sales 2.2 12.7 3.6 9.3
Earnings per share, EUR 0.005 0.028 -83.8 0.028 0.074 -61.9
Equity per share, EUR 0.234 0.257 -8.7 0.234 0.257 -8.7
Cash flow from operating -379 445 -185.1 406 1,617 -74.9
activities
Cash and cash equivalents 585 1,426 -59.0 585 1,426 -59.0
Free cash flow -600 129 -742 702
Net borrowings -85 -1,426 -94.0 -85 -1,426 -94.0
Gearing, % -2.9 -44.6 -2.9 -44.6
Equity ratio, % 42.7 44.0 42.7 44.0
Return on equity, % 7.7 44.8 11.1 29.3
Return on investment, % 10.9 54.8 12.0 35.4
--------------------------------------------------------------------------------
REPORTING
This report complies with requirements of IAS 34 Interim Financial Reporting.
Starting from the beginning of 2015, the Group has applied certain new or
revised IFRS standards and IFRIC interpretations as described in the
Consolidated Financial Statements 2014. 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
2014 financial statements. This report is unaudited.
QPR Software innovates, develops, sells and delivers to international markets
software and services aimed at operational development in organizations. 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 license sales, 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. Typically rental and maintenance charges are
invoiced annually in advance.
As geographic information QPR Software reports geographical areas Finland, rest
of Europe including Russia and Turkey, and rest of the world. Net sales are
reported by the customer´s location.
REVIEW BY THE CEO
The development of QPR Software´s business operations was twofold during 2015.
The first quarter of the year was successful: net sales increased 13% and
operating margin was over 10% of net sales. Subsequently, the tightened
competition in process and enterprise architecture modeling and performance
management software had a negative impact on sales in part of QPR´s reseller
channel. This impact cannibalized sales growth from new products, services and
resellers entirely, and group net sales remained at previous year´s level
(-1%).
According to our strategy, we seek to grow especially our process mining,
analytics and monitoring software sales in the international markets. In line
with these targets, we continued the development of our software products and
services, as well as the renewal of our international sales.
We increased investments in international distribution of our innovative
software products. Reseller recruitment was successful, and the Company
recruited 16 new resellers in 13 countries. In addition to these new
partnerships, many partners in our traditional reseller network expanded their
partnership and included QPR ProcessAnalyzer in their portfolio. We expanded
distribution of this process mining software especially into developed European
markets, such as Germany, Sweden, Belgium and the Netherlands. For performance
management and process modeling software, we recruited many new resellers from
Middle East, Africa and South America. As a result of these channel expansions,
the amount and value of made offers grew significantly in the latter half of
the year, and continues to be on a high level.
We invested in training of the new reseller partners, as well as in marketing
and product launches in new markets. We believe these outlays will have a
positive impact on net sales this year, but at the same time we estimate that
the tightened competition will continue to have a negative impact on sales in
part of QPR´s reseller channel. According to our published earnings outlook, we
estimate that operating profit excluding special items will grow in 2016
compared to 2015.
The development of our software and service offering continued as planned in
2015. During the year, we released new versions of all our software products.
Furthermore, we continued to invest in developing and productizing our
operational development services aimed at organizations. This year one of the
focus areas in product development is further improving user experience of our
software in various terminal devices.
Jari Jaakkola
Chief Executive Officer
NET SALES
NET SALES BY PRODUCT GROUP
--------------------------------------------------------------------------------
EUR in thousands Oct-Dec Oct-Dec Change, Jan-Dec Jan-Dec Change,
2015 2014 % 2015 2014 %
--------------------------------------------------------------------------------
Software licenses 440 512 -14 1,427 1,470 -3
Software maintenance 735 772 -5 2,873 3,093 -7
services
Software rentals 446 494 -10 1,774 1,901 -7
Consulting 899 907 -1 3,362 3,077 9
--------------------------------------------------------------------------------
Total 2,520 2,685 -6 9,436 9,541 -1
--------------------------------------------------------------------------------
NET SALES BY GEOGRAPHIC AREA
--------------------------------------------------------------------------------
EUR in thousands Oct-Dec Oct-Dec Change, Jan-Dec Jan-Dec Change,
2015 2014 % 2015 2014 %
--------------------------------------------------------------------------------
Finland 1,813 1,734 5 6,499 6,193 5
Europe incl. Russia 463 621 -25 1,740 2,035 -15
and Turkey
Rest of the world 243 330 -26 1,197 1,313 -9
--------------------------------------------------------------------------------
Total 2,520 2,685 -6 9,436 9,541 -1
--------------------------------------------------------------------------------
January-December 2015
Net sales 2015 was EUR 9,436 thousand (9,541) and decreased 1 %. Net sales
growth in Finland, new international channel sales partnerships initiated in
2015 and increased international process mining software sales had a positive
impact on net sales, but it did not fully compensate sales decline in QPR`s
traditional international sales channel.
Software license net sales decreased 3% compared to previous year. Vast
majority of license net sales was derived from international markets.
Software maintenance services net sales and software rental net sales decreased
7%. This was due to expiration of a few significant contracts, which was not
fully compensated by new maintenance services and rental sales. Customer churn
remained low, measured by the number of expired contracts, but among them there
were more economically significant ones than usually. The share of recurring
revenue was 49% (52) of total net sales.
Consulting net sales grew 9%, mainly due to very strong first quarter of the
year. Net sales in operational development consulting and process analysis
consulting increased, but decreased in technical SAP consulting.
Out of the Group net sales 69% (65) were derived from Finland, 18% (21) from
the rest of Europe (including Russia and Turkey) and 13% (14) from the rest of
the world.
October-December 2015
Net sales was EUR 2,520 thousand (2,685). Net sales decreased 6% compared to
equivalent period in the previous year due to lower sales in QPR´s traditional
international sales channel. Net sales in Finland and international process
mining software net sales increased.
Software license net sales decreased 14% compared to October-December in the
previous year. License sales in traditional international reseller channel
decreased, but license sales and international process mining software license
sales increased. In October-December there were no large software deals. The
timing of large software deals can have a significant impact on net sales of an
individual quarter.
Software maintenance services net sales (-5%) and software rental net sales
(-10%) decreased. This was due to expiration of a few significant contracts,
which was not fully compensated by new sales. Customer churn remained low,
measured by the number of expired contracts, but among them there were more
economically significant ones than usually. The share of recurring revenue was
47% (47) of total net sales.
Consulting net sales were on the same level as in October-December in the
previous year. Net sales in operational development consulting and process
analysis consulting increased, but decreased in technical SAP consulting.
Out of the Group net sales 72% (65) were derived from Finland, 18% (23) from
rest of the Europe (including Russia and Turkey) and 10% (12) from the rest of
the world.
FINANCIAL PERFORMANCE
January-December 2015
The Group operating profit in 2015 was EUR 368 thousand (1,095), or 3.9% of net
sales (11.5). Operating profit decreased from the previous year primarily due
to increased costs. Higher costs are mainly due to increases in international
sales channel and product development costs. The majority of these outlays were
increased personnel, sub-contracting and marketing costs.
The Group´s fixed costs were EUR 8,510 thousand (8,134) in the reporting
period, and grew 4.6% compared to previous year. Personnel costs represented
76.1% (74.9) of fixed costs and were EUR 6,477 thousand (6,092). Credit losses,
inclusive in fixed costs, totaled EUR 49 thousand (96).
Profit before taxes in the quarter was EUR 347 thousand (1,065) and profit for
the period was EUR 338 thousand (890). Taxes recorded for the period were EUR 9
thousand (176). The low tax rate is primarily due to lower financial results
and recorded taxes at source in QPR´s Swedish subsidiary concerning earlier
years. Earnings per share (fully diluted) were EUR 0.028 (0.074).
October-December 2015
The Group operating profit was EUR 78 thousand (417), or 3.1% of net sales
(15.5). Operating profit decreased from the previous year due to lower net
sales, increased personnel costs and higher marketing and product launch costs
related to reseller channel renewal.
The Group´s fixed costs were EUR 2,286 thousand (2,174) in the reporting
period, and grew 5.1% compared to previous year. Personnel costs represented
75.9% (75.4%) of fixed costs and were EUR 1,734 thousand (1,640). Credit
losses, inclusive in fixed costs, totaled EUR 28 thousand (27).
Profit before taxes in the quarter was EUR 48 thousand (409) and profit for the
period was EUR 55 thousand (338). Earnings per share (fully diluted) were EUR
0.005 (0.028).
FINANCE AND INVESTMENTS
Cash flow from operating activities was EUR 406 thousand (1,617). Cash flow
decreased due to lower profits, a change in invoicing rhythm and taxes paid.
Cash flow from operating actitivities in the fourth quarter was EUR -379
thousand (445). Of the negative difference, approximately EUR 350 thousand was
due to value added taxes paid already in 2015 for invoices that became due in
2016. A significant share of recurring revenue (recurring revenue in 2015: EUR
4,647 thousand) is invoiced at the end of accounting year, and become due early
in the following year. This leads to strong cash flow from operating activities
in January-March. Cash and cash equivalents at the end of the quarter were EUR
585 thousand (1,426).
Investments in January - December year totaled EUR 1,148 thousand (915) and
consisted mainly of product development and ICT system investments and
extension of the office facilities.
Net financial expenses were EUR 21 thousand (30). Financial items included
foreign exchange currency losses of EUR 20 thousand (29). In October-December
net financial expenses were EUR 30 thousand (8), and included EUR 29 thousand
(7) foreign exchange currency losses (net).
At the end of the quarter, the Company had EUR 500 thousand of interest-bearing
liabilities. The gearing ratio was -3% (-45). Current liabilities include
deferred revenue in total of EUR 1,209 thousand (1,261). Annualized return on
investment was 12% (35) in the reporting period and 11% (55) in
October-December.
At the end of the quarter, equity ratio was 43% (44) and the consolidated
shareholders’ equity was EUR 2,914 thousand (3,196). Annualized return on
equity was 11% (29) in January – December and 8% (45) in October – December.
The Annual General Meeting on March 12, 2015 authorized the Board of Directors
to decide on issuing a maximum of 4,000,000 new shares, to decide on 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
QPR develops software and consulting service products to be used by its
customers. Software product development costs in the reporting period January -
September were approximately 91% of all product development costs. The Company
published new versions of all of its software products in the reporting period.
By developing its consulting service products, the Company aims to grow its
local business in Finland, and to accelerate its international software sales
by offering complementary service concepts and solutions to its software
reseller partners.
In the reporting period, product development expenses were EUR 1,821 thousand
(1,847), and represented 19% of net sales (19). Product development expenses do
not include amortization of capitalized product development expenses. Product
development expenses were capitalized for a total amount of EUR 782 thousand
(683). The amortization of capitalized product development expenses in the
quarter was EUR 462 thousand (396).
In October-December, product development expenses were EUR 466 thousand (464),
and represented 18% of net sales (17). Product development expenses do not
include amortization of capitalized product development expenses. Product
development expenses were capitalized for a total amount of EUR 174 thousand
(208). The amortization of capitalized product development expenses in the
reporting period was EUR 116 thousand (114).
PERSONNEL
At the end of the reporting period, the Group employed a total of 83 persons
(78). Average number of personnel in 2015 was 86 (81) and personnel costs were
EUR 6,477 thousand (6,092), representing 69% of net sales (64).
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 mainly on net sales development. In
2015, the maximum annual bonus of executive management team, including the CEO,
is 30% of the annual base salary. A bonus totaling EUR 8 thousand is paid to
the executive management team for 2015. More information on incentive plans can
be found in the Annual Report 2014
(http://www.qpr.com/sites/default/files/QPRSoftwareAnnualReport2014.pdf).
QPR SOFTWARE´S STRATEGY 2016 – 2018
The Board of Directors has approved an updated strategy for QPR Software.
QPR Software innovates, develops and sells in international markets software
aimed at analyzing, monitoring and modeling operations in organizations.
Furthermore, the Company strengthens its consulting practice in its home market
Finland and offers customers a variety of services for operational development
planning and execution.
The Company´s strategy is to differentiate from its competitors by developing
its software products to meet with the increasing challenges organizations face
in leading and developing their operations in digitalizing world. Special focus
areas for development are process analytics and operational performance
monitoring. The Company believes that the relevant market for these focus areas
grows significantly in the future, as companies collect more and more
transaction and other event data from their operations. In software
development, special focus is placed on processing and analyzing large amounts
of data, as well as good user experience.
In the next three years, QPR seeks to grow especially its process mining
software sales in the international markets. In order to reach this target, the
Company has this year increased its investments in expanding and renewing its
international software reseller channel. The Company maintains its middle term
target at 15% annual net sales growth.
SHARES AND SHAREHOLDERS
--------------------------------------------------------------------------------
Trading of shares Jan-Dec Jan-Dec Change, %
2015 2014
--------------------------------------------------------------------------------
Shares traded, pcs 4,558,065 2,828,001 61
Volume, EUR 6,350,859 2,751,903 131
% of shares 38.0 23.6 0.0
Average trading price, EUR 1.39 0.97 43
Treasury shares acquired during the year, 0 37,400 -100
pcs
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shares and market capitalization Dec 31, Dec 31, Change, %
2015 2014
--------------------------------------------------------------------------------
Total number of shares, pcs 12,444,863 12,444,863 -
Treasury shares, pcs 457,009 457,009 -
Book counter value, EUR 0.11 0.11 -
Outstanding shares, pcs 11,987,854 11,987,854 -
Number of shareholders 1,212 820 48
Closing price, EUR 1.20 1.01 19
Market capitalization, EUR 14,385,425 12,107,733 19
Book counter value of all treasury shares, 50,271 50,271 0
EUR
Total purchase value of all treasury 439,307 439,307 0
shares, EUR
Treasury shares, % of all shares 3.7 3.7 -
--------------------------------------------------------------------------------
The Annual General Meeting held on March 12, 2015 approved the Board's proposal
that a per-share dividend of EUR 0.05 (0.04), a total of EUR 599 thousand
(480), be paid for the financial year 2014. The dividend was paid to
shareholders entered in the Company's shareholder register, maintained by
Euroclear Finland Oy, on the record date of March 16, 2015. The dividend
payment date was April 8, 2015.
OTHER EVENTS DURING THE REPORTING PERIOD
In the beginning of 2015, QPR Software´s sales and deliveries were organized
into four units: Operational Development Software, Operational Development
Consulting, Process Intelligence and Channel Business.
Miika Nurminen was appointed Senior Vice President, Operational Development
Consulting, and member of the Executive Management Team as of 1 January, 2015.
Nurminen has previously held several leadership positions in QPR Software.
Sari Törmälä was appointed Senior Vice President, Operational Development
Software, and member of the Executive Management Team as of February 23, 2015.
Before QPR Törmälä worked in Kunnan Taitoa Oy, a service provider for the local
government sector in Finland providing financial and personnel management
services, where she as a member of the Executive Management Team was
responsible for sales and customers. Sari Törmälä´s employment at QPR ended in
June 2015. The business units Operational Development Consulting and
Operational Development Software were combined as of July 1, and Miika Nurminen
was appointed to lead the unit.
In February, QPR announced that it expands co-operation with a European public
sector health care organization and delivers a project for the organization’s
operational development purposes. The total value of the software and
consulting services, delivered by QPR and thus recognizable during the first
half of 2015, was around EUR 140 thousand. Target of the agreed project is to
improve the customer’s operations, development and performance as well as
project management. In addition, the project aims for better alignment between
business and IT by linking the business area service layer with IT services.
In March, QPR announced that QPR Software is recognized in international
research company Gartner Inc.´s Market Guide for Enterprise Business Process
Analysis (EBPA) report. The Gartner EBPA Market Guide evaluated the Enterprise
business process analysis marketplace and depicts Gartner's analysis of how
certain vendors measure against criteria for that marketplace. Gartner
evaluated the EBPA vendors on the focus and importance of different use cases,
as well as about the focus and importance of the different EBPA capabilities.
In April, QPR announced that The U.S. Patent and Trademark Office has granted a
patent to a technology for analyzing and improving business processes with
event instance date, developed by QPR Software. The patented technology
utilizes event instance data obtained from information management systems, and
helps organizations to analyze and develop their business processes. The patent
supports the sale of QPR ProcessAnalyzer software and QPR process intelligence
consulting as well as opens up new opportunities for OEM business.
In April, the Company also announced that the City of Helsinki, the capital of
Finland, had decided to approve QPR Software´s offer for delivering process and
enterprise architecture tool as a service. The value of the entire four year
agreement period is EUR 1.5 million, out of which the share of revenue booked
as software rentals is over 75%. QPR´s competitor appealed to the technical
board of the City of Helsinki and to the Market Court and delivered a claim for
correction against this purchase decision. The City decided to return the case
for further preparation into its sourcing unit and made a new decision to
approve QPR´s offer in July 2015. The terms and conditions of the new decision
are the same to QPR as in the first decision in April.
QPR´s competitor again appealed both to the technical board of the City of
Helsinki and to the Market Court, and provided a claim for correction also
against this new purchase decision. The technical board of the City of Helsinki
rejected the claim in September, but decision regarding the claim in the Market
Court is still pending.
QPR Software´s Chief Financial Officer Päivi Martti´s employment ended at QPR
in June 2015. Jaana Mattila, who worked in the Company as Business Controller
since March 2015, was selected as the new Chief Financial Officer. Mattila has
previously worked, among others, as Finance Director in Fazer Amica and as CFO
in Biohit Oyj.
In November, QPR and Swedish IT Company Advania signed a partnership where
Advania will sell and promote QPR ProcessAnalyzer software product. Advania is
a leading Nordic IT company which offers diverse services and solutions,
hosting and data center services.
In December, QPR announced that it had agreed to deliver QPR ProcessAnalyzer
process mining software and process analysis consultancy to a leading European
industrial corporation. The Customer will develop both its purchase to pay and
order to cash processes with QPR process mining software and consulting. The
value of at this stage agreed delivery is approximately MEUR 0.1. The customer
operates globally and has operations in 40 countries.
The Group structure was altered by merging subsidiary Nobultec Oy with the
parent company on December 31, 2015.
OTHER EVENTS AFTER THE REPORTING PERIOD
QPR and Swedish business and IT services company iStone announced in January
2016 that they had signed a reseller agreement for QPR ProcessAnalyzer software
sales and delivery. The partnership creates new opportunities for mapping
processes, identifying bottlenecks and optimizing process flows especially to
customers using Infor M3 ERP.
GOVERNANCE
The Annual General Meeting on March 12, 2015 resolved that the Board of
Directors consists of four (4) ordinary members. The AGM re-elected the
following members to the Board of Directors: Kirsi Eräkangas, Vesa-Pekka
Leskinen and Topi Piela. The AGM selected Juho Malmberg, as a new member, to
join the Board of Directors. Juho Malmberg has previously held leadership
positions, among others, in Accenture, KONE and Zenrobotics. In its meeting
following the Annual General Meeting, the Board of Directors elected Vesa-Pekka
Leskinen as Chairman of the Board.
The AGM elected KPMG Oy Ab, Authorized Public Accountants, to continue as QPR
Software Plc's auditors, with Kirsi Jantunen, Authorized Public Accountant,
acting as principal auditor.
The AGM authorized the Board to decide on issuing new shares, conveying own
shares held by the Company, and repurchasing the Company’s own shares.
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 12, 2015 and available on the investors section of the
Company's web site,
http://www.qpr.com/investors/annual-general-meeting/annual-general-meeting-2015.
SHORT-TERM RISKS AND UNCERTAINTIES
Internal control and risk management in 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 four groups of risks related to its
operations: risks related to business operations (country, customer, service
delivery, personnel, legal and financial risks as well as risks related to the
Company’s resellers), risks related to information and products (QPR products,
IPR, data security), risks related to financing (foreign currency, bad debt),
and risks related to new businesses (growth of new business, product
development investments in new business). 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. In 2015, EUR 49 thousand (96) of credit losses
were recorded. The amount of trade receivables over 60 days past due was 6% (6)
of total trade receivables at the end of the quarter.
Approximately 82 % of Group’s trade receivables were in euro at the end of the
quarter (81). At the end of the quarter, the Company had not hedged its
non-euro trade receivables.
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 2014, pages
12-14.
(http://www.qpr.com/sites/default/files/QPRSoftwareAnnualReport2014.pdf).
THE BOARD OF DIRECTORS’ PROPOSAL ON DIVIDEND
The distributable funds of the parent company were EUR 704 thousand at December
31, 2015. The Board of Directors proposes to the Annual General Meeting on
March 22, 2015 that a dividend of EUR 0.02 per share be paid to shareholders
for the financial year 2015, totaling EUR 240 thousand. The dividend shall be
paid to a shareholder that has been entered into the Company’s shareholder
register on the record date of the dividend payment on March 24, 2015. The
Board of Directors proposes to the AGM that the dividend be paid on April 5
2015.
Furthermore, the Board of Directors proposes to the AGM that Board of Directors
be authorized to decide, subject to its discretion, on payment of a special
dividend of EUR 0.01 during 2016. In its assessment on potential special
dividend payment, the Board of Directors intends to evaluate especially the
development of the Company´s operative environment, implementation of the
Company´s strategy and economic situation.
No material changes have taken place in the Company’s financial position after
the end of the financial year.
FINANCIAL INFORMATION
In 2016, QPR Software Plc will publish its financial information in Finnish and
English as follows:
-- Annual Report 2015: Monday, February 29, 2016.
-- Interim Report 1 – 3/2015: Thursday, April 28, 2016.
-- Interim Report 1 – 6/2015: Tuesday, August 2, 2016.
-- Interim Report 1 – 9/2015: Thursday, October 27, 2016.
The Annual General Meeting will be held on Thursday, March 22, 2015.
COMPLIANCE WITH CORPORATE GOVERNANCE CODE 2015
QPR Software Plc complies with the Corporate Governance Code 2015, issued by
the Finnish Securities Market Association, from the beginning of the financial
year starting on January 1, 2016.
For the financial year 2015 the Company complies with the Corporate Governance
Code 2010, which is the one preceding the new 2015 Code.
QPR SOFTWARE PLC
BOARD OF DIRECTORS
Further information:
Jari Jaakkola, CEO
Tel. +358 (0) 40 5026 397
DISTRIBUTION:
Nasdaq Helsinki
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CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
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EUR in thousands, unless Oct-Dec Oct-Dec Change Jan-Dec Jan-Dec Change
otherwise indicated 2015 2014 , % 2015 2014 , %
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Net sales 2,520 2,685 -6 9,436 9,541 -1
Other operating income - - 1 26
Materials and services 156 94 66 558 337 66
Employee benefit expenses 1,734 1,640 6 6,477 6,092 6
Other operating expenses 346 336 3 1,211 1,281 -5
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EBITDA 284 615 -54 1,190 1,857 -36
Depreciation and 206 198 4 822 761 8
amortization
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Operating profit 78 417 -81 368 1,095 -66
Financial income and -30 -8 -21 -30
expenses
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Profit before tax 48 409 -88 347 1,065 -67
Income taxes 7 -68 -110 -9 -175 -95
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Profit for the period 55 341 -84 338 890 -62
Earnings per share, EUR
(basic and diluted) 0.005 0.028 -84 0.028 0.074 -62
Consolidated statement of
comprehensive income:
Profit for the period 55 341 338 890
Other items in comprehensive
income that may be
reclassified
subsequently to profit or
loss:
Exchange differences on 5 -29 -21 -40
translating foreign
operations
Income tax relating to - - - -
components
of other comprehensive
income
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Total comprehensive income 61 312 317 850
CONSOLIDATED BALANCE SHEET
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EUR in thousands December December Change
31, 31, ,
2015 2014 %
--------------------------------------------------------------------------------
Assets
Non-current assets:
Intangible assets 2,041 1,815 12
Goodwill 513 513 0
Tangible assets 274 174 58
Other non-current assets 27 27 1
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Total non-current assets 2,855 2,529 13
Current assets:
Trade and other receivables 4,592 4,572 0
Cash and cash equivalents 585 1,426 -59
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Total current assets 5,177 5,998 -14
Total assets 8,033 8,527 -6
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Equity and liabilities
Equity:
Share capital 1,359 1,359 0
Other funds 21 21 0
Treasury shares -439 -439 0
Translation differences -242 -221 10
Invested non-restricted equity fund 5 5 0
Retained earnings 2,210 2,471 -11
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Equity attributable to shareholders of the 2,914 3,196 -9
parent company
Non-current liabilities:
Non-interest-bearing liabilities 9 25 -62
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Total non-current liabilities 9 25 -62
Current liabilities:
Interest-bearing liabilities 500 -
Advances received 1,209 1,261 -4
Accrued expenses and prepaid income 2,932 3,223 -9
Trade and other payables 468 822 -43
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Total current liabilities 5,109 5,305 -4
Total liabilities 5,119 5,331 -4
Total equity and liabilities 8,033 8,527 -6
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CONSOLIDATED CASH FLOW STATEMENT
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EUR in thousands Oct-Dec Oct-Dec Change Jan-Dec Jan-Dec Change
2015 2014 , % 2015 2014 , %
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Cash flow from operating
activities:
Profit for the period 55 338 -84 338 887 -62
Adjustments to the profit 198 173 14 850 725 17
Working capital changes -679 -57 1,090 -645 25 -2,681
Interest and other financial -7 -2 270 -38 -13 190
expenses paid
Interest and other financial 3 1 12 3 294
income received
Income taxes paid 51 -8 -743 -111 -10 1,009
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Net cash from operating -379 445 -185 406 1,617 -75
activities
Cash flow from investing
activities:
Purchases of tangible and -221 -316 -29 -1,148 -915 25
intangible assets
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Net cash used in investing -221 -316 -29 -1,148 -915 25
activities
Cash flow from financing
activities:
Proceeds from short term 500 - 500 0
borrowings
Repayments of long-term - - - -113
borrowings
Repurchase of shares - - - -44
Dividends paid - - -599 -480 25
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Net cash used in financing 500 0 -99.205 -637 -84
activities
Net change in cash and cash -100 129 -177 -841 65 -1,394
equivalents
Cash and cash equivalents at 683 1,303 -48 1,426 1,365 4
the beginning of the period
Effects of exchange rate 1 -6 -123 1 -4 -117
changes on cash and cash
equivalents
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Cash and cash equivalents at 585 1,426 -59 585 1,426 -59
the end of the period
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
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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 -181 -395 5 2,061 2,871
Jan 1,
2014
Dividends -480 -480
paid
Repurchas -44 -44
e of
shares
Comprehen -40 890 850
sive
income
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Equity 1,359 21 -221 -439 5 2,471 3,196
Dec 31,
2014
Dividends -599 -599
paid
Repurchas
e of
shares
Comprehen -21 338 317
sive
income
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Equity 1,359 21 -242 -439 5 2,210 2,914
Dec 31,
2015
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NOTES TO INTERIM FINANCIAL STATEMENTS
ACCOUNTING PRICIPLES
This report complies with requirements of IAS 34 ”Interim Financial Reporting”.
Starting from the beginning of 2015, the Group has applied certain new or
revised IFRS standards and IFRIC interpretations as described in the
Consolidated Financial Statements 2014. 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
2014 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
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EUR in thousands Jan-Dec 2015 Jan-Dec 2014
-----------------------------------------------------------------------
Increase in intangible assets:
Acquisition cost Jan 1 6,953 6,112
Increase 906 841
Increase in tangible assets:
Acquisition cost Jan 1 1,425 1,351
Increase 242 74
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CHANGE IN INTEREST-BEARING LIABILITIES
-----------------------------------------------------------------------
EUR in thousands Jan-Dec 2015 Jan-Dec 2014
-----------------------------------------------------------------------
Interest-bearing liabilities Jan 1 - 113
Proceeds from short term borrowings 500 -
Repayments - -113
-----------------------------------------------------------------------
Interest-bearing liabilities Sept 30/Dec 31 500 -
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PLEDGES AND COMMITMENTS
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EUR in thousands Dec 31, 2015 Dec 31, 2014 Change, %
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Business mortgages (held by the Company) 1,392 1,391 0
Minimum lease payments based on lease
agreements
Maturing in less than one year 357 304 18
Maturing in 1-5 years 89 436 -80
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Total 446 740 -40
Total pledges and commitments 1,838 2,131 -14
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CONSOLIDATED INCOME STATEMENT BY QUARTER
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EUR in thousands Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
2015 2015 2015 2015 2014 2014 2014 2014
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Net sales 2,520 1,989 2,402 2,524 2,685 2,167 2,465 2,225
Other operating - - 1 - - 1 10 15
income
Materials and 156 148 149 105 94 66 92 85
services
Employee benefit 1,734 1,398 1,723 1,622 1,640 1,370 1,557 1,525
expenses
Other operating 346 239 287 338 336 316 304 325
expenses
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EBITDA 284 204 243 459 615 416 522 305
Depreciation and 206 206 211 200 198 189 178 197
amortization
--------------------------------------------------------------------------------
Operating profit 78 -1 32 259 417 227 344 107
Financial income -30 11 -16 14 -8 -5 -12 -4
and expenses
--------------------------------------------------------------------------------
Profit before 48 10 16 272 409 222 332 103
tax
Income taxes 7 13 18 -47 -68 -54 -43 -10
--------------------------------------------------------------------------------
Profit for the 55 23 35 225 341 167 288 93
period
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GROUP KEY FIGURES
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EUR in thousands, unless otherwise Jan-Dec or Dec 31, Jan-Dec or Dec 31,
indicated 2015 2014
--------------------------------------------------------------------------------
Net sales 9,436 9,541
Net sales growth, % -1.1 9.8
EBITDA 1,190 1,857
% of net sales 12.6 19.5
Operating profit 368 1,095
% of net sales 3.9 11.5
Profit before tax 347 1,065
% of net sales 3.7 11.2
Profit for the period 338 890
% of net sales 3.6 9.3
Return on equity (per annum), % 11.1 29.3
Return on investment (per annum), % 12.0 35.4
Borrowings 500 -
Cash and cash equivalents 585 1,426
Free cash flow -742 702
Net borrowings -85 -1,426
Equity 2,914 3,196
Gearing, % -2.9 -44.6
Equity ratio, % 42.7 44.0
Total balance sheet 8,033 8,527
Investments in non-current assets 1148 915
% of net sales 12.2 9.6
Product development expenses 1,821 1,847
% of net sales 19.3 19.4
Average number of personnel 86 81
Personnel at the beginning of period 78 79
Personnel at the end of period 83 78
Earnings per share, EUR 0.028 0.074
Equity per share, EUR 0.234 0.257
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