2014-02-07 08:30:00 CET
2014-02-07 08:30:03 CET
REGULATED INFORMATION
QPR Software - Financial Statement Release
FINANCIAL STATEMENTS BULLETIN 2013
QPR SOFTWARE PLC STOCK EXCHANGE RELEASE FEBRUARY 7, 2014 AT 9.30 AM
TRANSITION FROM LICENSE SALES TO SOFTWARE RENTAL SALES CONTINUED. NET SALES
DECREASED 7%; NET SALES FROM SOFTWARE RENTALS INCREASED 36%.
Summary full year 2013
-- Net sales EUR 8,688 thousand (2012: 9,321).
-- Net sales decreased 7% mainly due to a decrease in software license net
sales. Transition from software license sales to software rental sales
continued.
-- Recurring revenues (software rentals and maintenance services) increased 5%
and were 54% of total net sales (48). Net sales from software rentals
increased 36%. The growth in recurring revenues was slowed down by exchange
rate changes in maintenance service revenues.
-- Operating profit EUR 578 thousand (874).
-- Cash flow from operating activities EUR 1,661 thousand (1,777).
-- Profit before taxes EUR 554 thousand (833).
-- Profit for the year EUR 521 thousand (662).
-- Earnings per share EUR 0.043 (0.054).
-- The Board of Directors proposes to the Annual General Meeting that the
Company pay a dividend of EUR 0.04 per share for the financial year 2013
(2012: 0.04).
Summary fourth quarter 2013
-- Net sales EUR 2,310 thousand (2012: 2,693).
-- Net sales decreased 14% due to a significant decrease in software license
and technical consulting net sales.
-- Recurring revenues (software rentals and maintenance services) increased 4%
and were 51% of total net sales (42). Net sales from software rentals
increased 21%. The growth in recurring revenues was slowed down by exchange
rate changes in maintenance service revenues.
-- Operating profit EUR 217 thousand (281).
-- Cash flow from operating activities EUR 410 thousand (-85).
-- Profit before taxes EUR 206 thousand (271).
-- Profit for the quarter EUR 225 thousand (237).
-- Earnings per share EUR 0.019 (0.019).
OUTLOOK
Operating environment and market outlook
The Company estimates that demand for enterprise architecture based business
development services and software will increase in its home market Finland, as
well as elsewhere in Europe. Development of operations in an enterprise
architecture context, and not just in business process or in system development
context, is a necessity in current competitive environment for more and more
organizations. QPR provides its customers, through its software and services,
an insight and control to various dimensions of their organizations, such as
business processes, information, applications and technology.
QPR aims to grow in its home market Finland especially in the enterprise
architecture based business development services and in the process analysis
business. In the international markets, the Company's goal is to significantly
increase the sales of its innovative software products. In the international
markets, the Company operates mainly through its reseller partners and puts
effort in recruiting new resellers.
The Company's target is to reach a 15% annual organic and profitable growth in
2014 - 2016, on the average.
Outlook for 2014
The Company estimates its net sales and operating profit in euros to increase
in 2014, compared to 2013.
KEY FIGURES
EUR in thousands, Oct-Dec Oct-Dec Change, Jan-Dec Jan-Dec Change,
unless otherwise 2013 2012 % 2013 2012 %
indicated
--------------------------------------------------------------------------------
Net sales 2,310 2,693 -14.2 8,688 9,321 -6.8
EBITDA 395 451 -12.4 1,285 1,555 -17.4
% of net sales 17.1 16.7 14.8 16.7
Operating profit 217 281 -22.8 578 874 -33.9
% of net sales 9.4 10.4 6.7 9.4
Profit before tax 206 271 -24.0 554 833 -33.5
Profit for the 225 237 -5.1 521 662 -21.3
period
% of net sales 9.7 8.8 6.0 7.1
Earnings per share, 0.019 0.019 0.0 0.043 0.054 -20.4
EUR
Equity per share, 0.231 0.240 -3.7 0.231 0.240 -3.7
EUR
Cash flow from 410 -85 1,661 1,777 -6.5
operating
activities
Cash and cash 1,365 1,404 -2.8 1,365 1,404 -2.8
equivalents
Free cash flow 170 -299 815 1,165 -30.0
Net liabilities -1,252 -1,065 17.6 -1,252 -1,065 17.6
Gearing, % -43.6 -35.7 -43.6 -35.7
Equity ratio, % 42.5 51.3 42.5 51.3
Return on equity, % 32.4 32.5 17.8 22.2
Return on 28.7 34.5 18.3 25.5
investment, %
--------------------------------------------------------------------------------
REPORTING
This report complies with requirements of IAS 34 ”Interim Financial Reporting”.
Starting from the beginning of 2013, the Group has applied certain new or
revised IFRS standards and IFRIC interpretations as described in the
Consolidated Financial Statements 2012. The implementation of these new and
revised requirements have not materially impacted the reported figures. For all
other parts, the accounting principles and methods are the same as they were in
the 2012 financial statements. This report is unaudited.
QPR Software's business operations consist of software and consulting services
sales. The Company reports income for products and services as follows:
software license sales, software maintenance services, software rentals, and
consulting services.
QPR reports the following operating segments: Direct and OEM business (software
license and rental sales, maintenance and consulting services sales to direct
customers and OEM customers) and Resellers (software license and rental sales,
maintenance and consulting services sales through resellers and the Russian
subsidiary).
REVIEW BY THE CEO
After fast and profitable growth in 2012, the development of QPR Software's
business operations has been twofold during 2013. Our new businesses, launched
after 2010, have continued their fast growth - and grew organically over 20% in
2013. The new businesses are software and consulting businesses based on
enterprise architecture, and the process analysis business. These businesses
grew to represent approximately half of our net sales in 2013. This proves that
our outlays to growth in recent years have been successful. As a result of the
outlays, two new software businesses and related service businesses have been
created.
The competitive environment tightened significantly in our traditional
businesses, performance management and process modeling, as supply by the local
and international software companies increased. In addition, the business was
impacted by tight economic situation, which led customers in many markets to
favor software rentals as an alternative to purchasing software licenses. Tight
economic situation in Finland also had a negative impact on demand for
technical SAP consulting and related net sales.
The twofold development led to a 6.8% decline in the Group's net sales.
However, the transition from license net sales to software rentals resulted in
strong rental net sales growth and led to an increase in our recurring revenue
last year. Customer churn remained in a low level and, according to customer
surveys, over 90% of our customers recommend QPR's products and services.
The outlook for current year is brighter than the last year's results. Based on
the rapid growth of our new businesses, we estimate that net sales will return
to a growth path already this year. At the same time, we estimate operating
profit to improve from last year. We target profitable net sales growth also in
the longer term. Our target is to reach a 15% annual organic and profitable
growth in 2014 - 2016, on the average.
Our software and service offering development continued as planned in 2013. The
development in 2013 led to new releases of all our software products in January
2014. In addition, we increased our investments significantly from previous
years to operational development services based on enterprise architecture. The
investments resulted already last year in strong net sales growth of these
services.
In international business, our focus last year was in new sales channel
development for enterprise architecture and process modeling software. This
channel development and packaging of our offering according to channel business
needs will continue this year.
Jari Jaakkola
CEO
NET SALES
Net sales in 2013 were EUR 8,688 thousand (9,321) and decreased 6.8% from the
previous year. Net sales decreased mainly due to a decline in software license
sales, which was not fully compensated by the continued strong growth in
software rental net sales.
Net sales in the fourth quarter were EUR 2,310 thousand (2,693) and decreased
14.2% from the corresponding period of the previous year. Net sales decreased
due to a decline in software license and technical consulting net sales, which
were not fully compensated by the continued strong growth in software rental
net sales.
Net sales by product group
EUR in thousands Oct-Dec Oct-Dec Change, Jan-Dec Jan-Dec Change,
2013 2012 % 2013 2012 %
--------------------------------------------------------------------------------
Software licenses 332 556 -40 1,034 1,797 -42
Software maintenance 742 776 -4 3,021 3,223 -6
services
Software rentals 430 355 21 1,656 1,221 36
Consulting 807 1,006 -20 2,977 3,080 -3
--------------------------------------------------------------------------------
Total 2,310 2,693 -14 8,688 9,321 -7
--------------------------------------------------------------------------------
In 2013, software license net sales decreased significantly when competition
has increased and new product alternatives have entered the market. Competition
increased especially in the market for performance management software. In the
developed markets, more and more customers favor software rentals instead of
purchasing software licenses. This had a negative impact on software license
net sales and, on the other hand, a positive impact on software rental net
sales.
Software maintenance services relate to contract based customer support and
software updates for earlier sold software licenses. The majority of decline in
the maintenance service net sales in 2013 was due to strengthening of the euro
against main export currencies (U.S. dollar, South African rand, Russian ruble,
and Japanese yen). In 2013, 65% of maintenance service net sales came from
international customers and 35% from Finnish customers.
Rental net sales of QPR's software have grown strongly already for several
years, and this development continued also in 2013. Of all new software sales,
the share of rental sales is especially large in the Company's home market
Finland. The vast majority of software rentals is based on continuing
agreements signed with the customers. Strong growth in net sales from software
rentals continued in 2013 (+36%).
Consulting net sales declined 3% in 2013, mainly due to a difficult market
situation for technical consulting. The consulting for enterprise architecture
based operational development, on the other hand, grew strongly in 2013.
Total recurring revenue (net sales from software maintenance services and
software rentals) grew 5% in 2013. The growth in recurring revenues was slowed
down by exchange rate changes in maintenance service revenues. The share of
recurring revenue of total net sales was 54% (48) in 2013.
In the fourth quarter, net sales by product group developed similarly as in the
full year 2013, except for consulting net sales which declined 20% from the
corresponding quarter in 2012. Net sales from consulting decreased due to a
difficult market situation for technical consulting and due to an exceptionally
large technical consulting project in Russia in the corresponding quarter in
the previous year.
Net sales by segment
EUR in thousands Oct-Dec Oct-Dec Change, Jan-Dec Jan-Dec Change,
2013 2012 % 2013 2012 %
--------------------------------------------------------------------------------
Direct and OEM 1,508 1,640 -8 5,574 5,491 2
business
Resellers 803 1,053 -24 3,114 3,830 -19
--------------------------------------------------------------------------------
Total 2,310 2,693 -14 8,688 9,321 -7
--------------------------------------------------------------------------------
In 2013, net sales in the Direct and OEM business grew 2%. The growth was
especially strong in net sales from software and services for enterprise
architecture based operational development. Net sales from software licenses
and technical consulting decreased.
Net sales in the Resellers business decreased 19% in 2013, due to a decline in
software license net sales, exchange rate changes in maintenance service
revenues, and an exceptionally large technical consulting project in Russia in
the previous year.
In the fourth quarter, net sales in both segments declined, in Direct and OEM
business due to a decline in technical consulting net sales, and in the
Resellers business due to lower license sales and lower net sales from
technical consulting in Russia. The comparative figure for the previous year
was boosted by an exceptionally large technical consulting project in Russia in
the fourth quarter.
FINANCIAL PERFORMANCE
In 2013, the Group's operating profit was EUR 578 thousand (874), or 6.7% of
net sales (9.4). Operating profit decreased from the previous year mainly due
to lower net sales.
The Group's expenses in 2013 declined 5%, mainly due to lower credit losses of
EUR 53 thousand (319) and due to lower expenses for external services. The
Group's personnel expenses increased 4% from the previous year.
In the fourth quarter, operating profit was EUR 217 thousand (281), or 9.4% of
net sales (10.4). Expenses for the quarter declined 17%, mainly due to lower
credit losses of EUR 17 thousand (118), lower personnel expenses, and lower
expenses for external services.
Operating profit by segment:
EUR in thousands Oct-Dec Oct-Dec Change, Jan-Dec Jan-Dec Change,
2013 2012 % 2013 2012 %
--------------------------------------------------------------------------------
Direct and OEM 216 292 -26 536 848 -37
business
Resellers 87 77 13 385 402 -4
Unallocated -86 -88 -2 -343 -376 -9
--------------------------------------------------------------------------------
Total 217 281 -23 578 874 -34
--------------------------------------------------------------------------------
Operating profit in the Direct and OEM business declined in 2013 from the
previous year, due to increased outlays in the growth businesses.
Operating profit in the Resellers business declined in 2013 from the previous
year, due to lower net sales. Operating profit for the Resellers business
includes credit losses of EUR 53 thousand (319).
In the fourth quarter, operating profit in the Direct and OEM business declined
from the previous year, due to continued outlays in the growth businesses.
Operating profit in the Resellers business increased in the fourth quarter, as
credit losses of EUR 17 thousand (118) included in the results were lower than
in the previous year.
Other items in the comprehensive income statement
Net financial expenses in 2013 were EUR 25 thousand (41). Net financial
expenses included foreign exchange losses of EUR 15 thousand (29).
Profit before taxes in 2013 was EUR 554 thousand (833). Income taxes of EUR 33
thousand (171) were significantly lower than in the previous year, since the
Company expects to be able to utilize an additional tax deduction on research
and development activities, valid for years 2013 - 2014 in Finland.
Profit for the financial year was EUR 521 thousand (662). Earnings per share in
2013 were EUR 0.043 (0.054).
In the fourth quarter, net financial expenses were EUR 11 thousand (9). Net
financial expenses included foreign exchange losses of EUR 10 thousand (8).
Profit before taxes for the quarter was EUR 206 thousand (271). Profit for the
quarter was EUR 225 thousand (237) and earnings per share were EUR 0.019
(0.019).
FINANCE AND INVESTMENTS
Cash flow from operating activities was EUR 1,661 thousand (1,777) in 2013 and
EUR 410 thousand (-85) in the fourth quarter. Cash and cash equivalents at the
end of the year were EUR 1,365 thousand (1,404).
Investments in 2013 totaled EUR 849 thousand (693). Slightly more than half of
the investments were made in product development.
Interest-bearing liabilities decreased and were EUR 113 thousand (339) at the
end of the year. The gearing ratio was -44% (-36). Current liabilities include
deferred revenue in total of EUR 1,406 thousand (1,044). Return on investment
was 18% (25) in 2013 and 29% (34) in the fourth quarter.
At the end of the year, equity ratio was 42% (51) and the consolidated
shareholders' equity was EUR 2,871 thousand (2,981). Return on equity was 18%
(22) in 2013 and 32% (32) in the fourth quarter.
The Annual General Meeting on March 14, 2013 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 550,000 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. On March 20, 2013, the Company issued a
stock exchange release on a decision to start acquiring own shares through
public trading in NASDAQ OMX Helsinki Ltd.
PRODUCT DEVELOPMENT
Product development expenses in 2013 were EUR 1,683 thousand (1,619), equal to
19% (17) of net sales. Product development expenses do not include amortization
of capitalized product development expenses.
In 2013, product development expenses were capitalized for a total amount of
EUR 464 thousand (380). The amortization period for capitalized product
development expenses is four years. The amortization of capitalized product
development expenses in 2013 was EUR 277 thousand (278).
Product development employed 27 persons at the end of the year, equal to 34% of
the total personnel.
The Company develops the following software products: QPR EnterpriseArchitect,
QPR Metrics, QPR ProcessDesigner, and QPR ProcessAnalyzer.
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 reseller
partners.
PERSONNEL
At the end of the year, the Group employed a total of 79 persons (81). Average
number of personnel in 2013 was 82 (78) and personnel expenses totaled EUR
5,703 thousand (5,491).
For incentive purposes, the Company has a bonus program that covers all
employees. Short-term remuneration of the top management consists of salary,
fringe benefits and a possible annual bonus based on net sales and operating
profit performance. In 2013, the maximum annual bonus of executive management
team, including the CEO, was 40% of the annual base salary. No bonuses were
paid to the executive management team, including the CEO, for the year 2013. In
2011 - 2013, long-term remuneration of the executive management team consisted
of a share-based incentive plan, which did not result in any payments during
the three years. More information on incentive plans can be found in the Annual
Report 2012 (www.qpr.com/investors/key-figures-and-reports.htm).
SHARES AND SHAREHOLDERS
Trading of shares Jan-Dec Jan-Dec Change, % 2013 2012
--------------------------------------------------------------------------------
Shares traded, pcs 624,427 501,186 25
Volume, EUR 586,842 437,890 34
% of shares 5.0 4.0
Average trading price, EUR 0.94 0.87 8
Treasury shares acquired during the year, 133,722 106,482 26
pcs
--------------------------------------------------------------------------------
Shares and market capitalization Dec 31, Dec 31, Change, %
2013 2012
--------------------------------------------------------------------------------
Total number of shares, pcs 12,444,863 12,444,863 -
Treasury shares, pcs 419,609 285,887 47
Book counter value, EUR 0.11 0.11 -
Outstanding shares, pcs 12,025,254 12,158,976 -1
Number of shareholders 627 597 5
Closing price, EUR 0.93 0.95 -2
Market capitalization, EUR 11,183,486 11,551,027 -3
Book counter value of all treasury shares, 46,157 31,448 47
EUR
Total purchase value of all treasury 395,134 260,906 51
shares, EUR
Treasury shares, % of all shares 3.4 2.3
--------------------------------------------------------------------------------
The Annual General Meeting held on March 14, 2013 approved the Board's proposal
that a per-share dividend of EUR 0.04 (0.03), a total of EUR 486 thousand
(367), be paid for the financial year 2012. The dividend was paid to
shareholders entered in the Company's shareholder register, maintained by
Euroclear Finland Oy, on the record date of March 19, 2013. The dividend
payment date was April 3, 2013.
OTHER EVENTS IN 2013
In March, QPR Software and the German software company JobRouter AG announced a
new process analysis service based on QPR ProcessAnalyzer software. The
companies have agreed on cooperation, where JobRouter will use QPR
ProcessAnalyzer software in fact-based visualizing and analysis of their
customers' processes in the JobRouter workflow solution.
In April, QPR Software published an agreement with CGI, the leading IT and
business process services company, for a new process analysis service based on
QPR ProcessAnalyzer software product. With the service, CGI will be able to
show their customers the real state of their processes and help support them in
reaching operational efficiency. For QPR, the partnership gives the opportunity
to bring QPR ProcessAnalyzer to a larger clientele.
In April, after a tender competition, Hansel Oy, the central procurement unit
of the Finnish Government, elected QPR Software as one of the frame agreement
providers of management consulting services for years 2013 - 2017. The frame
agreement enables QPR to offer its professional services in simplified tender
competitions by government entities in their operational development and
enterprise architecture projects.
In October, QPR Software released version 4.5 of its QPR ProcessAnalyzer
software. This version enables continuous process analytics by providing
automated ETL (Extract, Transform, Load) functionalities. This supports the
transition from one-off analyses to real-time monitoring of process performance
that can be used, for example, to optimize order-to-delivery process. Through
continuous automated process analysis, companies have good visibility over
their process efficiency and operations.
In October, QPR Software signed with the Finnish Tax Administration a frame
agreement on management consulting services until the end of 2017.
SUBSEQUENT EVENTS
On January 8, 2014, QPR Software released QPR Suite 2014, which includes the
software tools for architecture based business development, as well as the
related supporting methodology.
On January 23, 2014, QPR Software released a new version of the QPR
ProcessAnalyzer software. Release 2014.1 brings added efficiency to the process
analysis with an integrated data extraction. In addition to the most common IT
systems, data can now also be extracted directly from databases used by the
companies. Automated email notifications and process flow animation raise the
control and visualization of the process performance to a totally new level.
GOVERNANCE
The Annual General Meeting on March 14, 2013 resolved that the Board of
Directors consists of four (4) ordinary members. The AGM elected the following
members to the Board of Directors: Kirsi Eräkangas, Jyrki Kontio, Vesa-Pekka
Leskinen and Topi Piela. In its first 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, 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 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 14, 2013 and available on the investors section of the
Company's web site, www.qpr.com.
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. The Company monitors country,
customer, personnel and finance risks also in the Russian subsidiary OOO QPR
Software.
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 escalated economic crisis in the euro area
has, according to management's estimate, to some extent increased the credit
risk that has earlier remained on a moderate level, and has resulted in
increased credit losses. In 2013, however, the amount of credit losses was
clearly lower than in the previous year. In 2013, EUR 53 thousand (319) of
credit losses were recorded. The amount of trade receivables over 60 days past
due was 5% (3) of total trade receivables at the end of the year.
Approximately 80% of Group's trade receivables were in euro at the end of the
year. At the end of the year, the Company had not hedged its foreign currency
(non-euro) trade receivables.
No significant changes have taken place in the Company's short-term risks and
uncertainties during 2013. Risks and risk management related to the Company's
business are further described in the Annual Report 2012, pages 14-15
(www.qpr.com/investors/key-figures-and-reports.htm).
THE BOARD OF DIRECTORS' PROPOSAL ON DIVIDEND
The Board of Directors proposes to the Annual General Meeting on March 13, 2014
that a dividend of EUR 0.04 per share be paid to shareholders for the financial
year 2013, totaling EUR 481 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 18, 2014. The Board of
Directors proposes to the AGM that the dividend be paid on April 3, 2014.
The dividend proposed by the Board for the financial year 2013 represents 29%
of the Company's consolidated cash flow from operations in 2013.
The distributable funds of the parent company were EUR 1,248 thousand at
December 31, 2013. No material changes have taken place in the Company's
financial position after the end of the financial year.
FINANCIAL INFORMATION
In 2014, QPR Software will publish its Annual Report and three interim reports
in English and Finnish on the following dates:
-- Annual Report 2013: Thursday, February 20, 2014
-- Interim Report Q1/2014: Tuesday, April 29, 2014
-- Interim Report Q2/2014: Thursday, July 31, 2014
-- Interim Report Q3/2014: Wednesday, October 29, 2014
The Annual General Meeting will take place on Thursday, March 13, 2014.
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 Oct-De Oct-De Change, Jan-De Jan-De Change
otherwise indicated c 2013 c 2012 % c 2013 c 2012 , %
--------------------------------------------------------------------------------
Net sales 2,310 2,693 -14 8,688 9,321 -7
Other operating income 0 104 -100 32 158 -80
Materials and services 86 100 -14 292 402 -27
Employee benefit expenses 1,482 1,626 -9 5,703 5,491 4
Other operating expenses 348 620 -44 1,439 2,031 -29
--------------------------------------------------------------------------------
EBITDA 395 451 -12 1,285 1,555 -17
Depreciation and amortization 178 171 4 707 681 4
--------------------------------------------------------------------------------
Operating profit 217 281 -23 578 874 -34
Financial income and expenses -11 -9 22 -25 -41 -39
--------------------------------------------------------------------------------
Profit before tax 206 271 -24 554 833 -33
Income taxes 19 -34 -156 -33 -171 -81
--------------------------------------------------------------------------------
Profit for the period 225 237 -5 521 662 -21
Earnings per share, EUR 0.019 0.019 0 0.043 0.054 -20
(basic and diluted)
Consolidated statement of
comprehensive income:
Profit for the period 225 237 521 662
Other items that may be
reclassified
subsequently to profit or loss:
Exchange rate differences from
translating foreign operations -4 -19 -12 -103
Income tax related to other - - - -
items
--------------------------------------------------------------------------------
Total comprehensive income 221 218 509 559
CONSOLIDATED BALANCE SHEET
EUR in thousands Dec 31, Dec 31, Change,
2013 2012 %
-----------------------------------------------------------------
Assets
Non-current assets:
Intangible assets 1,628 1,557 5
Goodwill 513 513 0
Tangible assets 207 140 48
Other non-current assets 82 120 -32
-----------------------------------------------------------------
Total non-current assets 2,431 2,329 4
Current assets:
Trade and other receivables 4,365 3,111 40
Cash and cash equivalents 1,365 1,404 -3
-----------------------------------------------------------------
Total current assets 5,730 4,515 27
Total assets 8,161 6,845 19
=================================================================
Equity and liabilities
Equity:
Share capital 1,359 1,359 0
Other funds 21 21 0
Treasury shares -395 -261 51
Translation differences -181 -169 7
Invested non-restricted 5 5 0
equity fund
Retained earnings 2,061 2,026 2
-----------------------------------------------------------------
Equity attributable to 2,871 2,981 -4
shareholders of the parent
company
Non-current liabilities:
Interest-bearing - 113 -100
liabilities
Non-interest-bearing 42 71 -41
liabilities
-----------------------------------------------------------------
Total non-current 42 184 -77
liabilities
Current liabilities:
Trade and other payables 5,135 3,453 49
Interest-bearing 113 226 -50
liabilities
-----------------------------------------------------------------
Total current liabilities 5,248 3,679 43
Total liabilities 5,290 3,863 37
Total equity and 8,161 6,845 19
liabilities
=================================================================
CONSOLIDATED CASH FLOW STATEMENT
EUR in thousands Oct-Dec Oct-Dec Change Jan-Dec Jan-Dec Change
2013 2012 , % 2013 2012 , %
--------------------------------------------------------------------------------
Cash flow from operating
activities:
Profit for the period 225 237 -5 521 662 -21
Adjustments to the profit 161 125 29 700 548 28
Working capital changes -23 -393 -94 573 744 -23
Interest and other financial -4 -8 -50 -30 -39 -23
expenses paid
Interest and other financial 1 15 -93 8 21 -62
income received
Income taxes paid 50 -61 -182 -111 -159 -30
--------------------------------------------------------------------------------
Net cash from operating 410 -85 -582 1,661 1,777 -7
activities
Cash flow from investing
activities:
Acquired subsidiaries - -81 -3 -81 -96
Purchases of tangible and -240 -214 12 -846 -612 38
intangible assets
--------------------------------------------------------------------------------
Net cash used in investing -240 -295 -19 -849 -693 23
activities
Cash flow from financing
activities:
Repayments of long-term - - -226 -226 0
borrowings
Repurchase of shares -52 -10 420 -135 -103 31
Dividends paid - - -486 -367 32
--------------------------------------------------------------------------------
Net cash used in financing -52 -10 420 -847 -696 22
activities
Net change in cash and cash 118 -390 -130 -35 388 -109
equivalents
Cash and cash equivalents at 1,248 1,797 -31 1,404 1,020 38
the beginning of the period
Effects of exchange rate -1 -3 -4 -4
changes on cash and cash
equivalents
--------------------------------------------------------------------------------
Cash and cash equivalents at 1,365 1,404 -3 1,365 1,404 -3
the end of the period
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR in thousands Share Other Transl Treasu Invest Retain Non-co Total
capita funds ation ry ed ed ntroll
l differ shares non-re earnin ing
ences strict gs intere
ed sts
equity
fund
--------------------------------------------------------------------------------
Equity Jan 1, 1,359 21 -66 -158 5 1,820 -8 2,973
2012
Dividends paid -367 -367
Acquisition of -89 8 -81
the
non-controlling
interest in QPR
CIS Oy
Repurchase of -103 -103
shares
Comprehensive -103 662 559
income
--------------------------------------------------------------------------------
Equity Dec 31, 1,359 21 -169 -261 5 2,026 - 2,981
2012
--------------------------------------------------------------------------------
Dividends paid -486 -486
Repurchase of -134 -134
shares
Comprehensive -12 521 509
income
--------------------------------------------------------------------------------
Equity Dec 31, 1,359 21 -181 -395 5 2,061 - 2,871
2013
--------------------------------------------------------------------------------
NOTES TO INTERIM FINANCIAL STATEMENTS
ACCOUNTING PRICIPLES
This report complies with requirements of IAS 34 ”Interim Financial Reporting”.
Starting from the beginning of 2013, the Group has applied certain new or
revised IFRS standards and IFRIC interpretations as described in the
Consolidated Financial Statements 2012. The implementation of these new and
revised requirements have not materially impacted the reported figures. For all
other parts, the accounting principles and methods are the same as they were in
the 2012 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-Dec 2013 Jan-Dec 2012
--------------------------------------------------------------------------------
Increase in intangible assets:
Acquisition cost Jan 1 5,428 5,004
Increase 687 427
Increase in tangible assets:
Acquisition cost Jan 1 1,234 1,159
Increase 159 117
--------------------------------------------------------------------------------
Increase in intangible assets in 2013 includes a purchase of certain intangible
assets
used in the Company's business operations from a member of the Company's
Executive
Management Team, for a purchase price of EUR 39 thousand. Management estimates
that the purchase price corresponds to fair value of the acquired assets to the
Company.
CHANGE IN INTEREST-BEARING LIABILITIES
EUR in thousands Jan-Dec 2013 Jan-Dec 2012
---------------------------------------------------------------
Interest-bearing liabilities Jan 1 339 566
Repayments -226 -226
---------------------------------------------------------------
Interest-bearing liabilities Dec 31 113 339
---------------------------------------------------------------
COMMITMENTS AND CONTINGENT LIABILITIES
EUR in thousands Dec 31, 2013 Dec 31, 2012 Change,
%
--------------------------------------------------------------------------------Business mortgage 1,337 1,337 0
Lease liabilities
Liabilities maturing in 163 397 -59
less than one year
Liabilities maturing in 1-5 years 38 91 -58
--------------------------------------------------------------------------------
Lease liabilities total 201 489 -59
Total commitments and contingent 1,538 1,826 -16
liabilities
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT BY QUARTER
EUR in thousands Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
2013 2013 2013 2013 2012 2012 2012 2012
--------------------------------------------------------------------------------
Net sales 2,310 1,961 2,335 2,082 2,693 2,011 2,404 2,212
Other operating - - - 32 104 18 21 15
income
Materials and 86 72 73 61 100 100 115 87
services
Employee benefit 1,482 1,209 1,484 1,528 1,626 1,211 1,360 1,294
expenses
Other operating 348 327 382 383 620 379 552 480
expenses
--------------------------------------------------------------------------------
EBITDA 395 353 396 142 451 339 398 366
Depreciation and 178 183 174 173 171 174 168 167
amortization
--------------------------------------------------------------------------------
Operating profit 217 171 222 -31 281 165 230 199
Financial income
and
expenses -11 -3 0 -11 -9 4 -34 -2
--------------------------------------------------------------------------------
Profit before tax 206 167 222 -42 271 169 196 197
Income taxes 19 -25 -33 6 -34 -17 -72 -48
--------------------------------------------------------------------------------
Profit for the 225 142 189 -36 237 152 124 149
period
--------------------------------------------------------------------------------
SEGMENT INFORMATION
EUR in thousands Oct-Dec Oct-Dec Change, Jan-Dec Jan-Dec Change,
2013 2012 % 2013 2012 %
--------------------------------------------------------------------------------
Net sales
Direct and OEM 1,508 1,640 -8 5,574 5,491 2
business
Resellers 803 1,053 -24 3,114 3,830 -19
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Total 2,310 2,693 -14 8,688 9,321 -7
EBITDA
Direct and OEM 314 393 -20 921 1,251 -26
business
Resellers 166 146 14 708 680 4
Unallocated -86 -88 -2 -343 -376 -9
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Total 395 451 -12 1,285 1,555 -17
Operating profit
Direct and OEM 216 292 -26 536 848 -37
business
Resellers 87 77 13 385 402 -4
Unallocated -86 -88 -2 -343 -376 -9
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Total 217 281 -23 578 874 -34
Financial income -11 -9 22 -25 -41 -39
and expenses
Income taxes 19 -34 -156 -33 -171 -81
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit for the 225 237 -5 521 662 -21
period
Other information:
Depreciation and
amortization
Direct and OEM 98 101 -3 384 403 -5
business
Resellers 80 70 14 323 278 16
------------------------------------------------------------------------------
Total 178 171 4 707 681 4
--------------------------------------------------------------------------------
Names of the segments have been changed in 2013. Earlier, these segments were
called Finland operations and International operations.
GROUP KEY FIGURES
EUR in thousands, Jan-Dec or Dec 31, Jan-Dec or Dec 31,
unless otherwise indicated 2013 2012
--------------------------------------------------------------------------------
Net sales 8,688 9,321
Net sales growth, % -6.8 23.6
EBITDA 1,285 1,555
% of net sales 14.8 16.7
Operating profit 578 874
% of net sales 6.7 9.4
Profit before tax 554 833
% of net sales 6.4 8.9
Profit for the period 521 662
% of net sales 6.0 7.1
Return on equity, % 17.8 22.2
Return on investment ,% 18.3 25.5
Interest-bearing liabilities 113 339
Cash and cash equivalents 1,365 1,404
Free cash flow 815 1,165
Net liabilities -1,252 -1,065
Equity 2,871 2,981
Gearing, % -43.6 -35.7
Equity ratio, % 42.5 51.3
Total balance sheet 8,161 6,845
Investments in non-current assets 846 518
% of net sales 9.7 5.6
Product development expenses 1,683 1,619
% of net sales 19.4 17.4
Average number of personnel 82 78
Personnel at the beginning of 81 73
period
Personnel at the end of period 79 81
Earnings per share, EUR 0.043 0.054
Equity per share, EUR 0.231 0.240
--------------------------------------------------------------------------------
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