2014-07-31 08:30:00 CEST
2014-07-31 08:30:03 CEST
REGULATED INFORMATION
QPR Software - Interim report (Q1 and Q3)
NET SALES INCREASED, PROFITABILITY IMPROVED SIGNIFICANTLY FROM PREVIOUS YEAR
QPR SOFTWARE PLC STOCK EXCHANGE RELEASE JULY 31, 2014 AT 9.30 AM
INTERIM REPORT JANUARY - JUNE 2014
NET SALES INCREASED, PROFITABILITY IMPROVED SIGNIFICANTLY FROM PREVIOUS YEAR
Summary second quarter 2014
-- Net sales EUR 2,465 thousand (second quarter 2013: 2,335).
-- Net sales increased 6% mainly due to an increase in software net sales.
Software net sales grew 9%.
-- Recurring revenues (software rentals and maintenance services) increased 9%
and were 51% of total net sales (50). Net sales from software rentals
increased 18%. The growth in recurring revenues was slowed down by exchange
rate changes in maintenance service revenues.
-- Operating profit EUR 344 thousand (222), growth 55%.
-- Cash flow from operating activities EUR 311 thousand (-71).
-- Profit before taxes EUR 332 thousand (222), growth 50%.
-- Profit for the quarter EUR 288 thousand (189), growth 52%.
-- Earnings per share EUR 0.024 (0.016), growth 50%.
Summary January-June 2014
-- Net sales EUR 4,689 thousand (January-June 2013: 4,416).
-- Net sales increased 6% mainly due to an increase in software net sales.
Software net sales grew 10%.
-- Recurring revenues (software rentals and maintenance services) increased 6%
and were 53% of total net sales (53). Net sales from software rentals
increased 16%. The growth in recurring revenues was slowed down by exchange
rate changes in maintenance service revenues.
-- Operating profit EUR 451 thousand (191), growth 136%.
-- Cash flow from operating activities EUR 828 thousand (1,198).
-- Profit before taxes EUR 435 thousand (180), growth 142%.
-- Profit for January-June EUR 382 thousand (153), growth 150%.
-- Earnings per share EUR 0.032 (0.013), growth 146%.
OUTLOOK
Operating environment and market outlook
QPR Software 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 Software 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 Software 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 channel
and puts effort in recruiting new resellers.
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, Apr-Jun Apr-Jun Change Jan-Jun Jan-Ju Change Jan-Dec
unless otherwise 2014 2013 , % 2014 n 2013 , % 2013
indicated
--------------------------------------------------------------------------------
Net sales 2 465 2 335 5.6 4 689 4 416 6.2 8 688
EBITDA 522 396 31.8 826 538 53.5 1 285
% of net sales 21.2 17.0 17.6 12.2 14.8
Operating profit 344 222 55.0 451 191 136.1 578
% of net sales 14.0 9.5 9.6 4.3 6.7
Profit before tax 332 222 49.5 435 180 141.7 554
Profit for the 288 189 52.4 382 153 149.7 521
period
% of net sales 11.7 8.1 8.1 3.5 6.0
Earnings per share, 0.024 0.016 50.0 0.032 0.013 146.2 0.043
EUR
Equity per share, 0.220 0.209 5.3 0.220 0.209 5.3 0.231
EUR
Cash flow from 311 -71 828 1 198 -30.9 1 661
operating
activities
Cash and cash 1 127 1 534 -26.5 1 127 1 534 -26.5 1 365
equivalents
Free cash flow 110 -277 391 777 -49.7 815
Net borrowings -1 127 -1 308 -13.8 -1 127 -1 308 -13.8 -1 252
Gearing, % -41.2 -50.3 -41.2 -50.3 -43.6
Equity ratio, % 54.8 47.6 54.8 47.6 42.5
Return on equity, % 40.8 27.3 27.2 11.0 17.8
Return on 56.6 29.9 31.6 13.0 18.3
investment, %
--------------------------------------------------------------------------------
REPORTING
This report complies with requirements of IAS 34 ”Interim Financial Reporting.”
Starting from the beginning of 2014, the Group has applied certain new or
revised IFRS standards and IFRIC interpretations as described in the
Consolidated Financial Statements 2013. 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
2013 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.
Starting from the beginning of 2014, the Company also reports fixed-price
extended software maintenance services as part of software maintenance.
Earlier, these services were reported as part of consulting revenues.
Comparative figures for 2013 have not been restated. In January-June 2014, the
change increased net sales from software maintenance by EUR 63 thousand and,
accordingly, decreased net sales from consulting services with the same amount.
The Company 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
In the first half of 2014, the Company's software net sales grew approximately
10 percent, despite the continued challenging market situation and the negative
impact from exchange rate changes to net sales. Net sales from both software
licenses (+26%) and software rentals (+16%) grew significantly from the
previous year. This shows that the Company's software for operational
development is in great demand even at economically challenging times. In
tightening competitive environment, there is an increasing demand for tools to
drive profitability and operational improvement initiatives.
The Company's consulting net sales were at the previous year's level, and a
twofold development trend was visible. Operational development consulting based
on enterprise architecture continued to grow rapidly, while net sales from
technical consulting declined in a tight market situation. In consulting
business, the order backlog strengthened significantly in the second quarter.
Due to this development, we expect consulting net sales to grow in the second
half of 2014 compared to previous year.
Our most important target is to further speed up net sales growth. Thanks to
our new software products, we are in excellent position to reach this target.
The biggest opportunities for software sales growth lie outside the borders of
our home market Finland, and thus we are strengthening our outlays for growth
in international sales channel. Our specific focus is to expand the
distribution for our process analysis, enterprise architecture and process
modeling software.
Profitability was strong in the second quarter; operating margin rose to 14% of
net sales (Q2 2013: 9.5%). Due to fairly fixed cost structure, net sales growth
has a strong impact on the Company´s profitability.
Jari Jaakkola
CEO
NET SALES
Net sales in the second quarter were EUR 2,465 thousand (2,335) and increased
6% from the corresponding period of the previous year. In January-June, net
sales were EUR 4,689 thousand (4,416) and increased 6% from the corresponding
period of the previous year. Both for the second quarter and for January-June,
the increase was especially due to growth in net sales from software licenses
and software rentals, as compared to the corresponding periods in the previous
year.
Net sales by product group
--------------------------------------------------------------------------------
EUR in thousands Apr-Jun Apr-Jun Change Jan-Jun Jan-Jun Change Jan-Dec
2014 2013 , % 2014 2013 , % 2013
--------------------------------------------------------------------------------
Software 379 341 11 680 539 26 1 034
licenses
Software 791 760 4 1 554 1 531 2 3 021
maintenance
services
Software rentals 477 405 18 920 795 16 1 656
Consulting 818 829 -1 1 535 1 551 -1 2 977
--------------------------------------------------------------------------------
Total 2 466 2 335 6 4 689 4 416 6 8 688
--------------------------------------------------------------------------------
Demand for software licenses in the developing markets was on a higher level
than in the previous year, both in the second quarter and in January-June. In
the developed markets, however, more and more customers favor software rentals
instead of purchasing software licenses, which has 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. Strengthening of the euro
against main export currencies had a negative impact on maintenance service net
sales in the second quarter and in January-June. Approximately 60% of
maintenance service net sales come from international and 40% from Finnish
customers.
Rental net sales of the Company's software have grown strongly already for
several years. This development continued in the current year. 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. Net sales from software
rentals grew 18% in the second quarter and 16% in January-June.
Total recurring revenues (net sales from software maintenance services and
software rentals) grew 9% in the second quarter and 6% in January-June. The
growth in recurring revenues was slowed down by exchange rate changes in
maintenance service revenues. The share of recurring revenues in the second
quarter was 51% (50) of total net sales.
Consulting net sales were at the previous year's level both in the second
quarter and in January-June. Especially the consulting for enterprise
architecture based operational development grew strongly, while net sales from
technical consulting declined due to continued difficult market situation.
Net sales by segment
--------------------------------------------------------------------------------
EUR in Apr-Jun Apr-Jun Change Jan-Jun Jan-Jun Change Jan-Dec
thousands 2014 2013 , % 2014 2013 , % 2013
--------------------------------------------------------------------------------
Direct and OEM 1 554 1 468 6 3 006 2 818 7 5 574
business
Resellers 911 866 5 1 683 1 599 5 3 114
--------------------------------------------------------------------------------
Total 2 465 2 335 6 4 689 4 416 6 8 688
--------------------------------------------------------------------------------
Net sales in the Direct and OEM business grew 6% in the second quarter and 7%
in January-June. The growth was especially strong in net sales from software
and consulting for enterprise architecture based operational development. Net
sales from technical consulting decreased.
Net sales in the Resellers business increased 5% from the previous year both in
the second quarter and in January-June, mainly due to growth in software
license net sales. The growth was slowed down by negative exchange rate changes
in maintenance service revenues, and by unfavorable business development in
Russia.
FINANCIAL PERFORMANCE
Operating profit
In the second quarter, the Group's operating profit increased 55% and was EUR
344 thousand (222), or 14.0% of net sales (9.5). In January-June, operating
profit increased 136% and was EUR 451 thousand (191), or 9.6% of net sales
(4.3). The Group's operating expenses were at the previous year's level both in
the second quarter and in January-June.
Operating profit by segment
--------------------------------------------------------------------------------
EUR in Apr-Jun Apr-Jun Change Jan-Jun Jan-Jun Change Jan-Dec
thousands 2014 2013 , % 2014 2013 , % 2013
--------------------------------------------------------------------------------
Direct and OEM 258 170 52 350 188 86 536
business
Resellers 186 143 30 291 183 59 385
Unallocated -100 -91 10 -190 -180 6 -343
--------------------------------------------------------------------------------
Total 344 222 55 451 191 136 578
--------------------------------------------------------------------------------
Operating profit in the Direct and OEM business increased from the previous
year, due to growth in net sales, both in the second quarter and in
January-June.
Operating profit in the Resellers business increased from the previous year,
mainly due to higher net sales from software licenses, both in the second
quarter and in January-June. Operating profit for the Resellers business
includes credit losses of EUR 16 thousand (0) in the second quarter and EUR 19
thousand (21) in January-June.
Other items in the comprehensive income statement
Net financial expenses were EUR 12 thousand (0) in the second quarter and EUR
16 thousand (11) in January-June. In the second quarter, net financial expenses
included foreign exchange losses of EUR 12 thousand (net gains of 3). In
January-June, net financial expenses included foreign exchange losses of EUR 16
thousand (5).
Profit before taxes was EUR 332 thousand (222) in the second quarter and EUR
435 thousand (180) in January-June.
QPR Software puts significant efforts in developing its software and service
products, and expects to be able to utilize an additional tax deduction on
research and development activities, valid for years 2013-2014 in Finland.
Therefore, similar to 2013, the effective tax rate for the review period was
significantly lower than the Finnish corporate tax rate of 20% (24.5). The
effective tax rate was 13% (15) in the second quarter and 12% (15) in
January-June.
Profit for the second quarter increased 52% and was EUR 288 thousand (189).
Earnings per share for the second quarter were EUR 0.024 (0.016). Profit for
January-June increased 150% and was EUR 382 thousand (153). Earnings per share
for January-June were EUR 0.032 (0.013).
FINANCE AND INVESTMENTS
Cash flow from operating activities in the second quarter improved from the
previous year and was EUR 311 thousand (-71). In January-June, cash flow from
operating activities was EUR 828 thousand (1,198) and declined from the
previous year mainly due to an exceptional timing of invoicing in 2013.
Investments totaled EUR 201 thousand (206) in the second quarter and EUR 437
thousand (424) in January-June. More than half of the investments were made in
the development of software and consulting service products.
At the beginning of the second quarter, dividends of EUR 480 thousand (486)
were paid. Net change in cash and cash equivalents was EUR -370 thousand (-909)
in the second quarter and EUR -237 thousand (131) in January-June. Cash and
cash equivalents at the end of the quarter were EUR 1,127 thousand (1,534).
At the end of the quarter, the Company had no interest-bearing liabilities. At
the end of comparative second quarter of 2013, interest-bearing liabilities
were EUR 226 thousand. The gearing ratio was -41% (-50). Current liabilities
include received advance payments in total of EUR 1,886 thousand (1,688).
Return on investment (per annum) was 57% (30) in the second quarter and 32%
(13) in January-June.
At the end of the quarter, equity ratio was 55% (48) and the consolidated
shareholders' equity was EUR 2,736 thousand (2,601). Return on equity (per
annum) was 41% (27) in the second quarter and 27% (11) in January-June.
PRODUCT DEVELOPMENT
Product development expenses in the second quarter were EUR 470 thousand (457),
equal to 19% (20) of net sales, and in January-June EUR 936 thousand (918),
equal to 20% (21) of net sales. Product development expenses do not include
amortization of capitalized product development expenses.
Product development expenses were capitalized for a total amount of EUR 173
thousand (140) in the second quarter and EUR 320 thousand (250) in
January-June. The amortization period for capitalized product development
expenses is four years. The amortization of capitalized product development
expenses was EUR 92 thousand (68) in the second quarter and EUR 176 thousand
(137) in January-June.
Product development employed 29 persons (27) at the end of the quarter, equal
to 37% (32) of the total personnel.
The Company develops the following software products: QPR EnterpriseArchitect,
QPR Metrics, QPR ProcessDesigner, and QPR ProcessAnalyzer.
In January, QPR Software released QPR Suite 2014, which includes the software
tools for architecture based business development, as well as the related
supporting methodology. QPR Suite 2014 is available in over 20 languages.
In January, QPR Software also 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 notifications and process flow animation raise the control and
visualization of the process performance to a totally new level.
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 quarter, the Group employed a total of 79 persons (84).
Average number of personnel in January-June was 81 (84) and personnel expenses
totaled EUR 3,082 thousand (3,013), equal to 66% (68) of net sales.
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 and operating profit
performance. In 2014, the maximum annual bonus of executive management team,
including the CEO, is 60% of the annual base salary. More information on
incentive plans can be found in the Annual Report 2013
(www.qpr.com/investors/key-figures-and-reports.htm).
SHARES AND SHAREHOLDERS
--------------------------------------------------------------------------------
Trading of shares Jan-Jun Jan-Jun Change, Jan-Dec
2014 2013 % 2013
--------------------------------------------------------------------------------
Shares traded, pcs 1 213 420 282 186 330 624 427
Volume, EUR 1 140 398 267 802 326 586 842
% of shares 9.8 2.3 5.0
Average trading price, EUR 0.94 0.95 -1 0.94
Treasury shares acquired during the 37 400 47 052 -21 133 722
year, pcs
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shares and market capitalization Jun 30, Jun 30, Change, Dec 31,
2014 2013 % 2013
--------------------------------------------------------------------------------
Total number of shares, pcs 12 444 863 12 444 863 - 12 444 863
Treasury shares, pcs 457 009 332 939 37 419 609
Book counter value, EUR 0.11 0.11 - 0.11
Outstanding shares, pcs 11 987 854 12 111 924 -1 12 025 254
Number of shareholders 708 609 16 627
Closing price, EUR 0.94 0.92 2 0.93
Market capitalization, EUR 11 268 583 11 142 970 1 11 183 486
Book counter value of all treasury 50 271 36 623 37 46 157
shares, EUR
Total purchase value of all 430 307 304 990 41 395 134
treasury shares, EUR
Treasury shares, % of all shares 3.7 2.7 3.4
--------------------------------------------------------------------------------
Trading of the QPR Software share more than quadrupled in January-June, as
compared to the corresponding period of the previous year. The number of
shareholders increased 16% and was 708 (609) at the end of the second quarter.
The Annual General Meeting held on March 13, 2014 approved the Board's proposal
that a per-share dividend of EUR 0.04 (0.04), a total of EUR 480 thousand
(486), be paid for the financial year 2013. The dividend was paid to
shareholders entered in the Company's shareholder register, maintained by
Euroclear Finland Oy, on the record date of March 18, 2014. The dividend
payment date was April 3, 2014.
The Annual General Meeting on March 13, 2014 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. For the time being, the Company has not
used these authorizations.
OTHER EVENTS DURING THE REVIEW PERIOD
In February, QPR Software announced that Gartner Inc., an international ICT
research and consulting company, has ranked QPR Software in the best tier used
in its report “MarketScope for Enterprise Business Process Analysis”, with the
rating “Positive”. According to Gartner, the potential customers should
consider vendors in this category as a viable choice for their strategic or
tactical investments. Gartner evaluated the vendors on the following criteria:
product/service, overall viability, market understanding, offering (product)
strategy, business model, innovation, and customer experience, with the latter
two having a higher weighting.
In March, QPR Software and Tieto, the largest Nordic IT services company,
signed a cooperation agreement with the aim to offer customers business driven
enterprise architecture services for gaining substantial business benefits. QPR
Software provides Tieto with QPR EnterpriseArchitect software together with the
methodology for business driven enterprise architecture. The agreement enables
QPR Software, together with Tieto, to offer customers more comprehensive
services, increasing the business benefits that can be gained from enterprise
architecture work.
In March, QPR Software and Affecto Finland Oy signed a cooperation agreement,
through which Affecto can offer its customers data driven approach for analysis
and improvement of processes. QPR Software provides Affecto with the automated
business process discovery (ABPD) software, QPR ProcessAnalyzer. The agreement
enables QPR Software, together with Affecto, to offer customers a way to bring
transparency to processes and see the process changes, and thereby be able to
have a direct impact on their business performance.
In April, QPR Software's corporate performance management tool QPR Metrics was
rated as “Facilitators” in Nucleus Research Corporate Performance Management
Technology Value Matrix. Nucleus Research defines Facilitators as companies
offering an application which is intuitive and easy to use, driving rapid
adoption with limited training requirements.
In June, QPR Software announced at the IRMUK Business Process Management
Conference in London the release of its new enhanced 2014.1 template supporting
QPR Software's enterprise architecture based operational development
methodology. The template contains a very pragmatic and business oriented
framework linking strategy to business capabilities and their practical
realization by organization, processes, and ICT.
GOVERNANCE
The Annual General Meeting on March 13, 2014 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, Jyrki Kontio,
Vesa-Pekka Leskinen and Topi Piela. 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 13, 2014 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 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 Software 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 Software
seeks to limit this credit risk by continuous monitoring of standard payment
terms, receivables and credit limits. In January-June, EUR 19 thousand (21) of
credit losses were recorded. The amount of trade receivables over 60 days past
due was 14% (7) of total trade receivables at the end of the quarter.
Approximately 70% of Group's trade receivables were in euro at the end of the
quarter. 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 2013, pages 13-15
(http://www.qpr.com/investors/key-figures-and-reports.htm).
FINANCIAL INFORMATION
Interim Report for January-September 2014 will be published on Wednesday,
October 29, 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
www.qpr.com
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, Apr-Jun Apr-Jun Change Jan-Jun Jan-Ju Change Jan-Dec
unless otherwise 2014 2013 , % 2014 n 2013 , % 2013
indicated
--------------------------------------------------------------------------------
Net sales 2 465 2 335 6 4 689 4 416 6 8 688
Other operating 10 - 25 32 -22 32
income
Materials and 92 73 26 177 134 32 292
services
Employee benefit 1 557 1 484 5 3 082 3 013 2 5 703
expenses
Other operating 304 382 -20 629 763 -18 1 439
expenses
--------------------------------------------------------------------------------
EBITDA 522 396 32 826 538 54 1 285
Depreciation and 178 174 2 375 347 8 707
amortization
--------------------------------------------------------------------------------
Operating profit 344 222 55 451 191 136 578
Financial income and -12 0 -16 -11 45 -25
expenses
--------------------------------------------------------------------------------
Profit before tax 332 222 50 435 180 142 554
Income taxes -43 -33 30 -53 -27 96 -33
--------------------------------------------------------------------------------
Profit for the 288 189 52 382 153 150 521
period
Earnings per share, 0.024 0.016 50 0.032 0.013 146 0.043
EUR (basic and
diluted)
Consolidated
statement of
comprehensive
income:
Profit for the 288 189 382 153 521
period
Other items in
comprehensive
income that
may be reclassified
subsequently to
profit or loss:
Exchange differences
on
translating foreign
operations
7 -5 -1 -3 -12
Income tax relating
to components
of other - - - - -
comprehensive
income
--------------------------------------------------------------------------------
Total comprehensive 295 184 381 150 509
income
CONSOLIDATED BALANCE SHEET
-------------------------------------------------------------------------
EUR in thousands Jun 30, 2014 Jun 30, Dec 31, Change,
2013 2013 %
-------------------------------------------------------------------------
Assets
Non-current assets:
Intangible assets 1 704 1 571 1 628 5
Goodwill 513 513 513 0
Tangible assets 193 198 207 -7
Other non-current 89 133 82 9
assets
-------------------------------------------------------------------------
Total non-current 2 499 2 415 2 431 3
assets
Current assets:
Trade and other 3 256 3 207 4 365 -25
receivables
Cash and cash 1 127 1 534 1 365 -17
equivalents
-------------------------------------------------------------------------
Total current assets 4 383 4 741 5 730 -24
Total assets 6 882 7 156 8 161 -16
=========================================================================
Equity and
liabilities
Equity:
Share capital 1 359 1 359 1 359 0
Other funds 21 21 21 0
Treasury shares -430 -305 -395 9
Translation -182 -172 -181 1
differences
Invested 5 5 5 0
non-restricted
equity fund
Retained earnings 1 963 1 693 2 061 -5
-------------------------------------------------------------------------
Equity attributable 2 736 2 601 2 871 -5
to shareholders of
the parent company
Non-current
liabilities:
Non-interest-bearing 33 64 42 -21
liabilities
-------------------------------------------------------------------------
Total non-current 33 64 42 -21
liabilities
Current liabilities:
Borrowings - 226 113 -100
Advances received 1 886 1 688 1 406 34
Accrued expenses and 1 828 2 073 2 976 -39
prepaid income
Trade and other 399 504 753 -47
payables
-------------------------------------------------------------------------
Total current 4 112 4 491 5 248 -22
liabilities
Total liabilities 4 146 4 555 5 290 -22
Total equity and 6 882 7 156 8 161 -16
liabilities
=========================================================================
CONSOLIDATED CASH FLOW STATEMENT
--------------------------------------------------------------------------------
EUR in thousands Apr-Ju Apr-Jun Chang Jan-Ju Jan-Jun Change Jan-De
n 2014 2013 e, n 2014 2013 , c 2013
% %
--------------------------------------------------------------------------------
Cash flow from
operating activities:
Profit for the period 288 189 52 382 153 150 521
Adjustments to the 184 162 14 374 329 14 700
profit
Working capital changes -117 -364 -68 162 824 -80 573
Interest and other -3 -8 -63 -7 -13 -46 -30
financial expenses
paid
Interest and other 0 2 -100 1 4 -75 8
financial income
received
Income taxes paid -42 -52 -19 -84 -99 -15 -111
--------------------------------------------------------------------------------
Net cash from operating 311 -71 828 1 198 -31 1 661
activities
Cash flow from
investing activities:
Acquired subsidiaries - - - -3 -3
Purchases of tangible -201 -206 -2 -437 -421 4 -846
and intangible assets
--------------------------------------------------------------------------------
Net cash used in -201 -206 -2 -437 -424 3 -849
investing activities
Cash flow from
financing activities:
Repayments of long-term - -113 -100 -113 -113 0 -226
borrowings
Repurchase of shares - -32 -100 -35 -44 -20 -134
Dividends paid -480 -486 -1 -480 -486 -1 -486
--------------------------------------------------------------------------------
Net cash used in -480 -631 -24 -628 -643 -2 -847
financing activities
Net change in cash and -370 -909 -59 -237 131 -281 -35
cash equivalents
Cash and cash 1 496 2 443 -39 1 365 1 404 -3 1 404
equivalents at the
beginning of the
period
Effects of exchange 1 0 0 -1 -100 -4
rate changes on cash
and cash equivalents
--------------------------------------------------------------------------------
Cash and cash 1 127 1 534 -27 1 127 1 534 -27 1 365
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 -169 -261 5 2 026 2 981
Jan 1,
2013
Dividends -486 -486
paid
Repurchas -44 -44
e of
shares
Comprehen -3 153 150
sive
income
--------------------------------------------------------------------------------
Equity 1 359 21 -172 -305 5 1 693 2 601
Jun 30,
2013
Repurchas -90 -90
e of
shares
Comprehen -9 368 359
sive
income
--------------------------------------------------------------------------------
Equity 1 359 21 -181 -395 5 2 061 2 871
Dec 31,
2013
Dividends -480 -480
paid
Repurchas -35 -35
e of
shares
Comprehen -1 382 381
sive
income
--------------------------------------------------------------------------------
Equity 1 359 21 -182 -430 5 1 963 2 736
Jun 30,
2014
--------------------------------------------------------------------------------
NOTES TO INTERIM FINANCIAL STATEMENTS
ACCOUNTING PRICIPLES
This report complies with requirements of IAS 34 ”Interim Financial Reporting.”
Starting from the beginning of 2014, the Group has applied certain new or
revised IFRS standards and IFRIC interpretations as described in the
Consolidated Financial Statements 2013. 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
2013 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 review period, the Group did not have any financial instruments
measured at fair value.
INTANGIBLE AND TANGIBLE ASSETS
----------------------------------------------------------------------------
EUR in thousands Jan-Jun 2014 Jan-Jun 2013 Jan-Dec 2013
----------------------------------------------------------------------------
Increase in intangible assets:
Acquisition cost Jan 1 6 112 5 428 5 428
Increase 400 318 687
Increase in tangible assets:
Acquisition cost Jan 1 1 351 1 234 1 234
Increase 37 101 159
----------------------------------------------------------------------------
CHANGE IN INTEREST-BEARING LIABILITIES
----------------------------------------------------------------------------
EUR in thousands Jan-Jun 2014 Jan-Jun 2013 Jan-Dec 2013
----------------------------------------------------------------------------
Interest-bearing liabilities Jan 1 113 339 339
Repayments -113 -113 -226
----------------------------------------------------------------------------
Interest-bearing liabilities - 226 113
Jun 30/Dec 31
----------------------------------------------------------------------------
PLEDGES AND COMMITMENTS
--------------------------------------------------------------------------------
EUR in thousands Jun 30, Jun 30, Dec 31, Change,
2014 2013 2013 %
--------------------------------------------------------------------------------
Business mortgages (held by the 1 392 1 394 1 394 0
Company)
Minimum lease payments based on
lease
agreements
Maturing in less than one year 159 353 163 -2
Maturing in 1-5 years 46 26 38 20
--------------------------------------------------------------------------------
Total 205 379 201 2
Total pledges and commitments 1 596 1 773 1 595 0
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT BY QUARTER
--------------------------------------------------------------------------------
EUR in thousands Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 Q1 2013
2013
--------------------------------------------------------------------------------
Net sales 2 465 2 225 2 310 1 961 2 335 2 082
Other operating income 10 15 - - - 32
Materials and services 92 85 86 72 73 61
Employee benefit expenses 1 557 1 525 1 482 1 209 1 484 1 528
Other operating expenses 304 325 348 327 382 383
--------------------------------------------------------------------------------
EBITDA 522 305 395 353 396 142
Depreciation and 178 197 178 183 174 173
amortization
--------------------------------------------------------------------------------
Operating profit 344 107 217 171 222 -31
Financial income and
expenses -12 -4 -11 -3 0 -11
--------------------------------------------------------------------------------
Profit before tax 332 103 206 167 222 -42
Income taxes -43 -10 19 -25 -33 6
--------------------------------------------------------------------------------
Profit for the period 288 93 225 142 189 -36
--------------------------------------------------------------------------------
SEGMENT INFORMATION
--------------------------------------------------------------------------------
EUR in thousands Apr-Jun Apr-Jun Change Jan-Ju Jan-Jun Change Jan-Dec
2014 2013 , % n 2013 , % 2013
2014
--------------------------------------------------------------------------------
Net sales
Direct and OEM 1 554 1 468 6 3 006 2 818 7 5 574
business
Resellers 911 866 5 1 683 1 599 5 3 114
------------------------------------------------------------------------------
Total 2 465 2 335 6 4 689 4 416 6 8 688
EBITDA
Direct and OEM 350 257 36 558 375 49 921
business
Resellers 272 230 18 458 343 34 708
Unallocated -100 -91 10 -190 -180 6 -343
------------------------------------------------------------------------------
Total 522 396 32 826 538 54 1 285
Operating profit
Direct and OEM 258 170 52 350 188 86 536
business
Resellers 186 143 30 291 183 59 385
Unallocated -100 -91 10 -190 -180 6 -343
------------------------------------------------------------------------------
Total 344 222 55 451 191 136 578
Financial income -12 0 -16 -11 45 -25
and expenses
Income taxes -43 -33 30 -53 -27 96 -33
--------------------------------------------------------------------------------
Profit for the 288 189 52 382 153 150 521
period
Other
information:
Depreciation and
amortization
Direct and OEM 92 87 6 208 187 11 384
business
Resellers 86 87 -1 167 160 4 323
--------------------------------------------------------------------------------
Total 178 174 2 375 347 8 707
--------------------------------------------------------------------------------
GROUP KEY FIGURES
--------------------------------------------------------------------------------
EUR in thousands, unless otherwise Jan-Jun or Jan-Jun or Jan-Dec or Dec 31,
indicated Jun 30, Jun 30, 2013
2014 2013
--------------------------------------------------------------------------------
Net sales 4 689 4 416 8 688
Net sales growth, % 6.2 -4.3 -6.8
EBITDA 826 538 1 285
% of net sales 17.6 12.2 14.8
Operating profit 451 191 578
% of net sales 9.6 4.3 6.7
Profit before tax 435 180 554
% of net sales 9.3 4.1 6.4
Profit for the period 382 153 521
% of net sales 8.1 3.5 6.0
Return on equity (per annum), % 27.2 11.0 17.8
Return on investment (per annum), % 31.6 13.0 18.3
Borrowings - 226 113
Cash and cash equivalents 1 127 1 534 1 365
Free cash flow 391 777 815
Net borrowings -1 127 -1 308 -1 252
Equity 2 736 2 601 2 871
Gearing, % -41.2 -50.3 -43.6
Equity ratio, % 54.8 47.6 42.5
Total balance sheet 6 882 7 156 8 161
Investments in non-current assets 437 420 846
% of net sales 9.3 9.5 9.7
Product development expenses 936 918 1 683
% of net sales 20,0 20.8 19.4
Average number of personnel 81 84 82
Personnel at the beginning of 79 81 81
period
Personnel at the end of period 79 84 79
Earnings per share, EUR 0.032 0.013 0.043
Equity per share, EUR 0.220 0.209 0.231
--------------------------------------------------------------------------------
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