2017-02-16 14:00:01 CET
2017-02-16 14:00:01 CET
REGULATED INFORMATION
QPR Software - Financial Statement Release
QPR Software's operating profit doubled in 2016
QPR SOFTWARE PLC'S FINANCIAL STATEMENTS BULLETIN 2016, FEBRUARY 16, 2017 AT
3.00 PM
Summary for the full year 2016
-- Net sales EUR 8,634 thousand (2015: 9,436).
-- Net sales decreased by 8%. Process mining business increased significantly,
but it did not fully compensate sales decline in other businesses.
-- Operating profit doubled to EUR 761 thousand (368), operating profit 8.8%
of net sales (3.9). Operating profit increased due to siginificantly
decreased expenses. Especially personnel costs were lower compared to
previous year.
-- Comparable operating profit EUR 801 thousand (368).
-- Profit before taxes EUR 710 thousand (347).
-- Profit for the year EUR 568 thousand (338).
-- Earnings per share EUR 0.047 (0.028).
-- The Board of Directors proposes to the Annual General Meeting that a
dividend of EUR 0.03 be paid to shareholders for the financial year of 2016
(2015: 0.02).
Summary for the fourth quarter 2016
-- Net sales EUR 2,315 thousand (2,520).
-- Net sales decreased by 8%, mainly due to lower sales of consulting and
software licenses in Finland. The international sales increased by
18%.
-- O
perating profit EUR 252 thousand (78), operating profit 10.9% of net sales
(3.1). Operating profit increased due to siginificantly decreased expenses.
-- Comparable operating profit EUR 252 thousand (78).
-- Profit before taxes EUR 242 thousand (48).
-- Profit for October–December EUR 217 thousand (55).
-- Earning per share EUR 0.018 (0.005).
Business operations
QPR Software focuses on providing software and professional services to
organizations 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 operations and to improve and execute
their strategies 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
We estimate the growth of process mining software and related services to
accelerate compared to previous year. This software product category is still
relatively new, but competition and investments are increasing strongly in this
market.
In developed markets, competition is expected to increase for process and
enterprise architecture modeling software and performance management services.
Whereas in emerging markets, meaningful growth potential for these software
products is still expected.
Outlook for 2017
QPR will continue to invest in sales activities for its in-house developed
process mining software and the related services. QPR estimates that this
business will grow significantly this year.
The tightened competition in the software business for process and enterprise
architecture modeling and performance management is expected to have a negative
impact on sales in parts of QPR’s reseller channel, especially in developed
markets. To offset this negative impact, QPR seeks growth in emerging markets
by renewing its reseller partner channel related to these products.
In its home market in Finland, QPR will especially focus to develop and deliver
process modeling and performance management products. In operational
development consulting we will invest in developing and extending the key
customerships.
The Company estimates that its net sales will grow in 2017, but the operating
profit will remain slightly lower than previous year due to growth investments.
The planned increase in costs is mainly related to accelerating software
development and investments in international business.
KEY FIGURES
--------------------------------------------------------------------------------
EUR in thousands, unless Oct-Dec, Oct-Dec Change Jan-Dec Jan-Dec, Change
otherwise indicated 2016 2015 , % , 2016 2015 , %
Net sales 2,315 2,520 -8 8,634 9,436 -8
EBITDA 479 284 69 1,628 1,190 37
% of net sales 20.7 11.3 18.9 12.6
Operating profit 252 78 222 761 368 107
% of net sales 10.9 3.1 8.8 3.9
Profit before tax 242 48 402 710 347 105
Profit for the period 217 55 292 568 338 68
% of net sales 9.4 2.2 6.6 3.6
Earnings per share, EUR 0.018 0.005 293 0.047 0.028 68
Equity per share, EUR 0.261 0.234 12 0.261 0.234 12
Cash flow from operating 199 -379 152 1,419 406 249
activities
Cash and cash equivalents 565 585 -3 565 585 -3
Net borrowings -565.0 -85.0 565 -565.0 -85.0 565
Gearing, % -17.4 -2.9 -17.4 -2.9
Equity ratio, % 46.3 42.7 46.3 42.7
Return on equity, % 27.6 7.7 18.4 11.1
Return on investment, % 30.0 10.9 24.6 12.0
--------------------------------------------------------------------------------
REPORTING
QPR Software innovates, develops, sells and delivers software and services
aimed at operational development in organizations to international markets. QPR
Software reports one operating segment: Operational development of
organizations. In addition to this, the Company reports revenue from products
and services as follows: Software licenses, Software maintenance services,
Software rentals, and Consulting. Software rentals and Software maintenance
services together form the recurring revenue reported by the Company. Recurring
revenue is based on long-term contracts continuing for the time being or for a
fixed period of several years. Rental and maintenance charges are typically
invoiced annually in advance.
The geographical areas reported are Finland, the rest of Europe (also including
Russia and Turkey), and the rest of the world. Net sales are reported according
to the customer’s location.
In the half year Jan–June 2016 financial report, the Company renamed a term in
order to comply with the European Securities and Markets Authority´s (ESMA)
recommendations for alternative key figures, which was effective from July 3,
2016. The previously used term “operating profit excluding non-recurring items”
is now known as “comparable operating profit”. Items having an impact on
comparable operating profit are, for example, non-recurring items related to
streamlining or restructuring business. Comparable operating profit is
calculated by eliminating these items from operating profit. Interest-bearing
net debt is calculated by deducting cash and cash equivalents from
interest-bearing liabilities.
REVIEW BY THE CEO
The business environment still remained challenging and economic growth was
weak in most markets, especially in the Company’s largest market area, Europe
(including Finland). On the other hand, the demand for process mining, being at
the beginning of its life-cycle, increased strongly. We acquired and extended
several significant client engagements with big international corporations.
Consequently, our net sales for this product area grew significantly during the
past year.
Thanks to our patented technology, early market entry, and innovative
functionalities, our process mining software QPR ProcessAnalyzer is in
excellent position to continue its strong market growth. In May, we received
additional intellectual property protection for our process mining technology,
when the United States Patent and Trademark Office awarded already the second
patent for the technology in question. The latest patent now safeguards the
technology behind predicting the probability of future events based on process
analysis.
In process and enterprise architecture modeling and performance management
software, we will sustain our strong position with solution development. In our
home market in Finland, operational development consulting will complement
these solutions.
At the end of 2016, we started to increase our investments in product
development. During the first part of this year, we will build especially our
marketing and delivery resources. We will seek growth in process mining and
especially in its international software markets.
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
2016 2015 , 2016 2015 ,
% %
--------------------------------------------------------------------------------
Software licenses 370 440 -16 1,316 1,427 -8
Software 713 735 -3 2,776 2,873 -3
maintenance
services
Software rentals 426 446 -5 1,670 1,774 -6
Consulting 806 899 -10 2,872 3,362 -15
--------------------------------------------------------------------------------
Total 2,315 2,520 -8 8,634 9,436 -8
--------------------------------------------------------------------------------
NET SALES BY GEOGRAPHIC AREA
--------------------------------------------------------------------------------
EUR in thousands Oct-Dec, Oct-Dec Change Jan-Dec, Jan-Dec, Change
2016 2015 , 2016 2015 ,
% %
--------------------------------------------------------------------------------
Finland 1,481 1,813 -18 5,634 6,499 -13
Europe incl. 491 463 6 1,748 1,740 0
Russia and Turkey
Rest of the world 342 243 40 1,252 1,197 5
--------------------------------------------------------------------------------
Total 2,315 2,520 -8 8,634 9,436 -8
--------------------------------------------------------------------------------
January–December 2016
Net sales for 2016 were EUR 8,634 thousand (9,436), representing a decrease of
eight per cent. This was due to lower sales in Finland, where especially
consulting net sales declined. Net sales of operational development consulting
and technical SAP consulting decreased, but net sales of process mining and
analysis consulting increased.
International net sales grew slightly (+2%) due to significantly increased
sales in process mining software, although the international reseller sales
decreased in process and enterprise architecture modeling and performance
management software. However, the new reseller partners had a positive impact
on net sales of reselling channel and did reduce the sales decline.
Software license net sales decreased (-8%) due to lower sales in Finland. Vast
majority of license net sales were derived from international markets where
sales increased.
Software maintenance services (-3%) and software rental net sales (-6%)
decreased compared to previous year. This was mainly due to expiration of a few
significant long-term contracts, which was not fully compensated by new sales.
The share of recurring revenue was 51% (49) of total net sales.
Consulting net sales decreased by 15%, which was especially caused by a
significant decline in sales during the first quarter of the year. Net sales
from process mining and analysis services grew, but sales from technical SAP
consulting and operational development consulting decreased.
As for the Group net sales, 65% (69) were derived fom Finland, 20% (18) from
the rest of Europe (including Russia and Turkey) and 15% (13) from the rest of
the world.
October–December 2016
Net sales were EUR 2,315 thousand (2,520). Net sales decreased by 8% compared
to corresponding period in the previous year. This was due to lower sales in
Finland, where both consulting and software sales decreased. International net
sales grew by 18%.
Software license net sales decreased by 16% compared to October–December in the
previous year due to the decline in net sales of enterprise architecture and
process modeling software in Finland. Net sales of international software
licenses increased.
Software maintenance services (-3%) and software rental net sales (-5%)
decreased compared to previous year. This was mainly due to expiration of a few
significant long-term contracts, which was not fully compensated by new sales.
The share of recurring revenue was 49% (47) of total net sales.
Consulting net sales decreased by 10%, which was mainly caused by operational
development consulting and technical SAP consulting.
As for the Group net sales, 64% (72) were derived fom Finland, 21% (18) from
the rest of Europe (including Russia and Turkey) and 15% (10) from the rest of
the world.
FINANCIAL PERFORMANCE
January–December 2016
The Group operating profit improved significantly in 2016 from the previous
year and was EUR 761 thousand (368), representing 8.8% of net sales (3.9).
Comparable operating profit was EUR 801 thousand (368). The items that had an
impact on comparable operating profit were related to the streamlining of
operations implemented in early 2016, and mainly included personnel expenses.
Costs decreased significantly and especially personnel costs were lower than in
the previous year. Further investments were made in the Company’s new software
products.
The Group’s fixed costs were EUR 7,472 thosand (8,510) in the reporting period
and they decreased by 12% compared to year-on-year. Personnel costs represented
72% (76) of fixed costs, equaling to EUR 5,362 thousand (6,477).
Profit before taxes was EUR 710 thousand (347) and profit for the period was
EUR 568 thousand (338). Taxes recorded for the period were EUR 142 thousand
(9). Earnings per share (fully diluted) were EUR 0.047 (0.028).
October–December 2016
The Group operating profit was EUR 252 thousand (78), representing 10.9% of net
sales (3.1). Operating profit increased from the previous year due to lower
costs. Especially personnel costs decreased significantly.
The Group’s fixed costs were EUR 1,965 thousand (2,286) in the reporting period
and they decreased by 14% compared to year-on-year. Personnel costs represented
68% (76) of fixed costs, equaling to EUR 1,337 thousand (1,734).
Profit before taxes was EUR 242 thousand (48) and profit for the period was EUR
217 thousand (55). Earnings per share (fully diluted) were EUR 0.018 (0.005).
FINANCE AND INVESTMENTS
Cash flow from operating activities in 2016 was EUR 1,419 thousand (406), and
in the fourth quarter EUR 199 thousand (-379). The significant growth of cash
flow resulted mainly from improved profit and change in invoicing interval.
Change in invoicing interval also caused a significant amount of value added
taxes to be paid already at the end of 2015, which had a positive impact on
cash flow. Cash and cash equivalents at the end of the financial year were EUR
565 thousand (585).
Investments during the financial year were EUR 698 thousand (1,148), and
consisted mainly of product development investments.
Net financial expenses were EUR 51 thousand (21). Financial items included
foreign exchange currency losses (net) of EUR 40 thousand (20). In
October–December net financial expenses were EUR 10 thousand (30), and included
foreign exchange currency losses (net) of EUR 10 thousand (29).
At the end of the financial year, the Company did not have any interest-bearing
liabilities. The gearing ratio was -17% (-3). Current liabilities include
deferred revenues in total of EUR 852 thousand (1,209). Annualized return on
investment was 25% (12) in the financial year, and 30% (11) in
October–December.
At the end of the financial year, equity ratio was 46% (43) and the
consolidated shareholders’ equity was EUR 3,252 thousand (2,914). Annualized
return on equity was 18% (11) in January–December and 28% (8) in
October–December.
The Annual General Meeting on March 22, 2016 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, 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–December were approximately 94% (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 1,818 thousand
(1,821), representing 21% 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 621 thousand
(782). The amortization of capitalized product development expenses in the
quarter was EUR 569 thousand (462).
In October-December, product development expenses were EUR 568 thousand (466),
representing 24.5% of net sales (18). Product development expenses do not
include amortization of capitalized product development expenses. Product
development expenses were capitalized for a total amount of EUR 160 thousand
(174). The amortization of capitalized product development expenses in the
reporting period was EUR 157 thousand (116).
PERSONNEL
At the end of the reporting period, the Group employed a total of 63 persons
(83). Average number of personnel in 2016 was 71 (86).
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
2016, the maximum annual bonus of executive management team, including the CEO,
is 30% of the annual base salary. A bonus totaling EUR 10 thousand (8) is paid
to the executive management team for 2016. More information on incentive plans
can be found in the Annual Report 2015
(http://cdn.qpr.com/sites/default/files/QPR_Software_Annual_Report_2015_1.pdf).
QPR SOFTWARE’S STRATEGY FOR 2017–2019
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 offers customers a variety of services for operational
development planning and execution.
The Company focuses its product development especially to meet with the
challenges organizations face in leading and developing their operations in
digitalizing world. The Company’s focus areas for development are process
mining and 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.
The Company accelerates the product development by increasing its resources in
a controlled manner and allocating them especially to process mining, with the
target of gaining a significant share of this growing market. In software
development, special focus is placed on excellent user experience.
In the next few years, QPR seeks to grow especially its international software
sales. In order to reach this target, the Company will this year increase
resources and investments in international marketing and sales.
SHARE AND SHAREHOLDERS
--------------------------------------------------------------------------------
Trading of shares Jan-Dec, Jan-Dec, Change, %
2016 2015
Shares traded, pcs 901,526 4,558,065 -80
Volume, EUR 970,905 6,350,859 -85
% of shares 7.5 38.0
Average trading price, EUR 1.08 1.39 -23
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shares and market capitalization Dec 31, 2016 Dec 31, 2015 Change, %
--------------------------------------------------------------------------------
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 1,171 1,212 -3
Closing price, EUR 1.20 1.20 -
Market capitalization, EUR 14,385,425 14,385,425 -
Book counter value of all treasury 50,271 50,271 -
shares, EUR
Total purchase value of all treasury 439,307 439,307 -
shares, EUR
Treasury shares, % of all shares 3.7 3.7 -
--------------------------------------------------------------------------------
The Annual General Meeting held on March 22, 2016 approved the Board's proposal
that a per-share dividend of EUR 0.02 (0.05), a total of EUR 240 thousand
(599), be paid for the financial year 2015. The dividend was paid to
shareholders entered in the Company's shareholder register, maintained by
Euroclear Finland Oy, on the record date of March 24, 2016. The dividend
payment date was April 5, 2016.
OTHER EVENTS DURING THE REPORTING PERIOD
In January, QPR and the Swedish business and IT services company iStone
announced that they have signed a reseller agreement for QPR ProcessAnalyzer.
The partnership creates new opportunities in automated process mapping and
process flow optimization, especially for those organizations using the ERP
system Infor M3.
QPR and PricewaterhouseCoopers (PwC) Portugal announced in February that they
have signed a consulting agreement on using QPR ProcessAnalyzer in PwC’s
process and operational development consulting in Portugal. QPR ProcessAnalyzer
enables automated process analysis based on existing data from enterprise IT
systems, utilizing technology patented in the United States by QPR.
In March, QPR completed co-determination negotiations with its personnel.
QPR signed an agreement in March on delivering software for business process
management purposes to one of the world’s largest lighting manufacturing
companies. The signed agreement is valid for three years, and the value of the
entire three-year agreement is approximately EUR 0.2 million before reseller
commissions.
In March, QPR announced the launch of QPR MobileDashboard, an application that
makes it even easier to access and browse actionable performance information on
the go.
QPR was listed in April as a representative vendor in the Gartner Market Guide
for Enterprise Business Process Analysis (EBPA). Globally the Gartner Market
Guide lists 22 representative vendors offering solutions in this market.
In May, QPR received additional intellectual property protection for its
process mining technology. This was already the second patent that the United
States Patent and Trademark Office has awarded for the technology in question.
The patented technology is utilized in QPR ProcessAnalyzer, an application
developed by QPR. QPR’s previous patent from 2015 related to the utilization of
event instance data obtained from information management systems to help
organizations analyze and improve their business processes. The latest patent
now safeguards the technology behind predicting the probability of future
events based on process analysis.
In June, the Company announced the release of the new QPR Suite 2016, the
complete portfolio of business management tools for planning, executing and
monitoring strategy-driven operations. The newest developments in QPR
technology bring enhancements to user experience and enable easy integration
between QPR products and third party software. New features of the QPR Suite
2016 further strengthen QPR’s offering as a value-adding solution provider for
strategy execution, business-IT alignment, performance and process management
and process mining.
In June, QPR made a deal to deliver QPR ProcessDesigner and QPR Metrics, as
well as professional consulting services to a leading European engineering
group. The duration of the contract made is three years, and it is worth well
over EUR 0.2 million.
In August, QPR struck a deal with a leading furniture retailer in Saudi Arabia
to deliver a comprehensive, easy-to-use software solution for strategy
execution and quality management. The deal is a significant market opening in
Saudi Arabia, where the demand for software solutions on strategy execution and
quality management is experiencing strong growth in both private and public
sectors.
In September, QPR delivered process mining and process performance management
software to a leading IT and business process outsourcing service provider. The
customer is a member of Fortune 500, offering services to customers globally
from over 50 locations worldwide. The customer uses QPR ProcessAnalyzer for
continuously analyzing and monitoring the business process services provided to
its customers. This helps the customer to improve the efficiency and quality of
their services, and to proactively ensure that service-level agreements are
met. QPR ProcessAnalyzer automatically generates a variety of visual analyses
for discovering process flow charts, variations, bottlenecks and KPIs based on
the customer’s operational data. The three-year contract is worth approximately
0.25 million.
In November, QPR was informed that the Finnish Market Court has annulled the
procurement decision made by the City of Helsinki on July 2, 2015, to choose
QPR Software’s offer of delivering its process modeling and enterprise
architecture tool as a service. The procurement decision was made for a
contract period of 4 years and valued at EUR 1.5 million. Procurement agreement
has not been signed, and QPR has not delivered services or booked income based
on the procurement decision. In its decision, the Market Court orders the City
of Helsinki not to make a procurement agreement based on the procurement
decision.
In December, QPR announced that the Ministry of Finance in Finland orders
public sector enterprise architecture modeling service and related professional
services from QPR. The service is available to all parties participating in
public sector enterprise architecture development and approved by the
Ministry’s Public Sector ICT Department. The contract term covers the years
2017–2020. The contract value depends on the amount of user rights and
professional services to be ordered for the architecture modeling service, but
during the first two years of the contract term is EUR 0.2 million in minimum
value.
OTHER EVENTS AFTER THE REPORTING PERIOD
In February 2017, QPR announced to deliverprocess mining software to a leading
European energy company producing heat and electricity from several energy
sources including but not limited to wind, hydro, solar and biomass. The
company aims to use QPR ProcessAnalyzer for continuous monitoring and
measurement of their customer interfacing business processes like quotation,
contracting and invoicing. This customer identified process mining as a new
opportunity for enhancing customer satisfaction and profitability, and chose
QPR ProcessAnalyzer for its unique set of features enabled by the patented
process mining technology.
In February, QPR announced to deliver process mining software and professional
services to a leading global high tech company, which serves large enterprises,
consumers and governments. Before investing in automation and robotics, the
customer wants to make sure that investments are targeted and prioritized
correctly. Process mining was evaluated as a perfect methodology for this. The
company chose QPR as service and software provider for superior expertise and
technical capabilities in process mining. The contract is worth over EUR 0.2
million.
GOVERNANCE
The Annual General Meeting (AGM) on March 22, 2016 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, Juho Malmberg and Topi Piela. In its meeting following the AGM, 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 term of office of the auditor expires at the
end of the next AGM.
The AGM authorized the Board to decide on an issuing new shares and conveying
own shares held by the Company (share issue) either in one or in several
occasions. The share issue can be carried out as against payment or without
consideration on terms to be determined by the Board.
All authorizations of the Board and other decisions made by the AGM are
available on the stock exchange release published by the Company on March 22,
2016 and available on the investors section of the Company's web site,
(http://www.qpr.com/investors/annual-general-meeting/annual-general-meeting-2015
).
SHORT-TERM RISKS AND UNCERTAINTIES
Internal control and risk management at QPR Software aims to ensure that the
Company operates efficiently and effectively, distributes reliable information,
complies with regulations and operational principles, reaches its strategic
goals, reacts to changes in the market and operational environment, and ensures
the continuity of its business.
QPR has identified the following three groups of risks related to its
operations: risks related to business operations (country, customer, personnel,
legal), risks related to information and products (QPR products, IPR, data
security) and risks related to financing (foreign currency, short-term cash
flow). The Company has an insurance policy for property, operational and
liability risks.
Financial risks include reasonable credit risk concerning individual business
partners, which is characteristic to any international business. QPR seeks to
limit this credit risk by continuous monitoring of standard payment terms,
receivables and credit limits. In 2016, EUR 57 thousand (49) of credit losses
were recorded. The amount of trade receivables over 60 days past due was 12%
(6) of total trade receivables at the end of the quarter. The significant
increase was due to delay of a single notable receivable, which however was
received in January 2017.
Approximately 81% of Group’s trade receivables were in euro at the end of the
quarter (82). At the end of the quarter, the Company had not hedged its
non-euro trade receivables.
QPR has initiated an arbitration process due to a customer’s decision to
dissolve a contract, as QPR regards this dissolution unjustified. The value of
the contract is less than EUR 100 thousand and less than EUR 50 thousand has
been recognized as revenue. The customer has made a counterclaim with demands
worth under EUR 100 thousand. QPR believes that the counterclaim made by the
customer is unfounded.
No significant changes have taken place in the Company’s short-term risks and
uncertainties during the quarter. Risks and risk management related to the
Company’s business are further described in the Annual Report 2015, pages 14-15
(http://cdn.qpr.com/sites/default/files/QPR_Software_Annual_Report_2015_1.pdf).
THE BOARD OF DIRECTORS’ PROPOSAL ON DIVIDEND
The distributable funds of the parent company were EUR 528 thousand at December
31, 2016. The Board of Directors proposes to the Annual General Meeting on
March 28, 2017 that a dividend of EUR 0.03 per share be paid to shareholders
for the financial year 2016, totaling EUR 360 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 30, 2017. The
Board of Directors proposes to the AGM that the dividend be paid on April 7,
2017.
No material changes have taken place in the Company’s financial position after
the end of the financial year.
FINANCIAL INFORMATION
In 2017, QPR Software Plc will publish its financial information in Finnish and
English as follows:
-- Annual Report 2016: Friday, March 3, 2017
-- Interim Report 1–3/2017: Thursday, April 27, 2017
-- Half Year Report 1–6/2017: Thursday, August 3, 2017
-- Interim Report 1–9/2017: Thursday, October 26, 2017
The Annual General Meeting will be held on Tuesday, March 28, 2017.
QPR SOFTWARE PLC
BOARD OF DIRECTORS
Further information:
Jari Jaakkola, CEO
Tel. +358 (0) 40 5026 397
Distribution:
NASDAQ OMX Helsinki Ltd
Main Media
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
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EUR in thousands, unless Oct-De Oct-De Change Jan-De Jan-De Change
otherwise indicated c, c 2015 , % c, c, , %
2016 2016 2015
--------------------------------------------------------------------------------
Net sales 2,315 2,520 -8 8,634 9,436 -8
Other operating income - - 18 1 2,460
Materials and services 98 156 -37 419 558 -25
Employee benefit expenses 1,337 1,734 -23 5,362 6,477 -17
Other operating expenses 401 346 16 1,243 1,211 3
--------------------------------------------------------------------------------
EBITDA 479 284 69 1,628 1,190 37
Depreciation and amortization 227 206 10 866 822 5
--------------------------------------------------------------------------------
Operating profit 252 78 222 761 368 107
Financial income and expenses -10 -30 -67 -51 -21 143
--------------------------------------------------------------------------------
Profit before tax 242 48 402 710 347 105
Income taxes -25 7 -460 -142 -9 1,484
--------------------------------------------------------------------------------
Profit for the period 217 55 292 568 338 68
Earnings per share, EUR 0.018 0.005 293 0.047 0.028 68
(basic and diluted)
Consolidated statement of
comprehensive income:
Profit for the period 217 55 568 338
Other items in comprehensive
income that may be reclassified
subsequently to profit or loss:
Exchange differences on -10 5 9 -21
translating foreign operations
--------------------------------------------------------------------------------
Total comprehensive income 206 61 577 317
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
EUR in thousands Dec 31, Dec 31, Change,
2016 2015 %
--------------------------------------------------------------------------------
Assets
Non-current assets:
Intangible assets 1,955 2,041 -4
Goodwill 513 513 0
Tangible assets 193 274 -30
Other non-current assets 27 27 0
--------------------------------------------------------------------------------
Total non-current assets 2,687 2,855 -6
Current assets:
Trade and other receivables 4,619 4,592 1
Cash and cash equivalents 565 585 -3
--------------------------------------------------------------------------------
Total current assets 5,184 5,177 0
Total assets 7,871 8,033 -2
================================================================================
Equity and liabilities
Equity:
Share capital 1,359 1,359 0
Other funds 21 21 0
Treasury shares -439 -439 0
Translation differences -233 -242 -4
Invested non-restricted equity fund 5 5 0
Retained earnings 2,538 2,210 15
--------------------------------------------------------------------------------
Equity attributable to shareholders of the parent 3,252 2,914 12
company
Non-current liabilities:
Non-interest-bearing liabilities 0 9 -100
--------------------------------------------------------------------------------
Total non-current liabilities 0 9 -100
Current liabilities:
Interest-bearing liabilities - 500
Advances received 852 1,209 -30
Accrued expenses and prepaid income 3,033 2,932 3
Trade and other payables 735 468 57
--------------------------------------------------------------------------------
Total current liabilities 4,619 5,109 -10
Total liabilities 4,619 5,119 -10
Total equity and liabilities 7,871 8,033 -2
================================================================================
CONSOLIDATED CASH FLOW STATEMENT
--------------------------------------------------------------------------------
EUR in thousands Oct-Dec Oct-Dec Change Jan-Dec Jan-Dec Change
, 2016 2015 , % , 2016 , 2015 , %
--------------------------------------------------------------------------------
Cash flow from operating
activities:
Profit for the period 217 55 292 568 338 68
Adjustments to the profit 272 198 37 1,070 850 26
Working capital changes -283 -679 -58 -110 -645 -83
Interest and other financial -6 -7 -15 -47 -38 25
expenses paid
Interest and other financial 1 3 -50 5 12 -62
income received
Income taxes paid -1 51 -102 -66 -111 -40
--------------------------------------------------------------------------------
Net cash from operating 199 -379 152 1,419 406 249
activities
Cash flow from investing
activities:
Purchases of tangible and -202 -221 -9 -698 -1,148 -39
intangible assets
--------------------------------------------------------------------------------
Net cash used in investing -202 -221 -9 -698 -1,148 -39
activities
Cash flow from financing
activities:
Proceeds from short term - 500 - 500
borrowings
Repayments of short term - - -500 -
borrowings
Dividends paid - - -240 -599 -60
--------------------------------------------------------------------------------
Net cash used in financing - 500 0 -740 -99 646
activities
Net change in cash and cash -3 -100 -97 -19 -841 -98
equivalents
Cash and cash equivalents at 567 683 -17 585 1,426 -59
the beginning of the period
Effects of exchange rate 1 1 -21 -1 1 -299
changes on cash and cash
equivalents
--------------------------------------------------------------------------------
Cash and cash equivalents at 565 585 -3 565 585 -3
the end of the period
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
--------------------------------------------------------------------------------
EUR in Share Other Translatio Treasur Invested Retained Total
thousand capita funds n y non-restricted earnings
s l difference shares equity fund
s
--------------------------------------------------------------------------------
Equity 1,359 21 -221 -439 5 2,471 3,196
Jan 1,
2015
Dividends -599 -599
paid
Repurchas
e of
shares
Comprehen -21 338 317
sive
income
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity 1,359 21 -242 -439 5 2,210 2,914
Dec 31,
2015
Dividends -240 -240
paid
Repurchas
e of
shares
Comprehen 9 568 577
sive
income
--------------------------------------------------------------------------------
Equity 1,359 21 -233 -439 5 2,538 3,252
Dec 31,
2016
--------------------------------------------------------------------------------
NOTES TO INTERIM FINANCIAL STATEMENTS
ACCOUNTING PRINCIPLES
This report complies with requirements of IAS 34 Interim Financial Reporting.
Starting from the beginning of 2016, the Group has applied certain new or
revised IFRS standards and IFRIC interpretations as described in the
Consolidated Financial Statements 2015. The implementation of these new and
revised requirements have not impacted the reported figures. For all other
parts, the accounting principles and methods are the same as they were in the
2015 financial statements.
When preparing the consolidated financial statements, management is required to
make estimates and assumptions regarding the future and to consider the
appropriate application of accounting principles, which means that actual
results may differ from those estimated.
All amounts presented in this report are consolidated figures, unless otherwise
noted. The amounts presented in the report are rounded, so the sum of
individual figures may differ from the sum reported. This report is unaudited.
During the reporting period, the Group did not have any financial instruments
measured at fair value.
INTANGIBLE AND TANGIBLE ASSETS
-----------------------------------------------------------------
EUR in thousands Jan-Dec, 2016 Jan-Dec, 2015
-----------------------------------------------------------------
Increase in intangible assets:
Acquisition cost Jan 1 7,862 6,956
Increase 659 906
Increase in tangible assets:
Acquisition cost Jan 1 1,707 1,465
Increase 39 242
-----------------------------------------------------------------
CHANGE IN INTEREST-BEARING LIABILITIES
-----------------------------------------------------------------
EUR in thousands Jan-Dec, 2016 Jan-Dec, 2015
-----------------------------------------------------------------
Interest-bearing liabilities Jan 1 500 -
Proceeds from short term borrowings - 500
Repayments 500 -
-----------------------------------------------------------------
Interest-bearing liabilities Dec 31 - 500
-----------------------------------------------------------------
PLEDGES AND COMMITMENTS
--------------------------------------------------------------------------------
EUR in thousands Dec 31, Dec 31, Change,
2016 2015 %
--------------------------------------------------------------------------------
Business mortgages (held by the Company) 1,390 1,392 0
Minimum lease payments based on lease
agreements:
Maturing in less than one year 289 357 -19
Maturing in 1-5 years 345 89 288
--------------------------------------------------------------------------------
Total 635 446 42
Total pledges and commitments 2,024 1,838 10
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT BY QUARTER
--------------------------------------------------------------------------------
EUR in thousands Q4 2016 Q3 2016 Q2 2016 Q1 Q4 2015 Q3 2015
2016
--------------------------------------------------------------------------------
Net sales 2,315 2,104 2,173 2,042 2,520 1,989
Other operating income - - 12 6 - -
Materials and services 98 68 112 141 156 148
Employee benefit expenses 1,337 1,108 1,361 1,557 1,734 1,398
Other operating expenses 401 321 257 264 346 239
--------------------------------------------------------------------------------
EBITDA 479 607 456 86 284 204
Depreciation and 227 222 226 191 206 206
amortization
--------------------------------------------------------------------------------
Operating profit 252 385 230 -105 78 -1
Financial income and -10 -11 -12 -18 -30 11
expenses
--------------------------------------------------------------------------------
Profit before tax 242 374 217 -123 48 10
Income taxes -25 -93 -42 18 7 13
--------------------------------------------------------------------------------
Profit for the period 217 281 175 -105 55 23
--------------------------------------------------------------------------------
GROUP KEY FIGURES
--------------------------------------------------------------------------------
EUR in thousands, unless otherwise Jan-Dec or Dec 31, Jan-Dec or Dec 31,
indicated 2016 2015
--------------------------------------------------------------------------------
Net sales 8,634 9,436
Net sales growth, % -8.5 -1.1
EBITDA 1,628 1,190
% of net sales 18.9 12.6
Operating profit 761 368
% of net sales 8.8 3.9
Profit before tax 710 347
% of net sales 8.2 3.7
Profit for the period 568 338
% of net sales 6.6 3.6
Return on equity (per annum), % 18.4 11.1
Return on investment (per annum), % 24.6 12.0
Borrowings - 500
Cash and cash equivalents 565 585
Net borrowings -565 -85
Equity 3,252 2,914
Gearing, % -17.4 -2.9
Equity ratio, % 46.3 42.7
Total balance sheet 7,871 8,033
Investments in non-current assets 698 1,148
% of net sales 8.1 12.2
Product development expenses 1,818 1,821
% of net sales 21.1 19.3
Average number of personnel 71 86
Personnel at the beginning of period 83 78
Personnel at the end of period 63 83
Earnings per share, EUR 0.047 0.028
Equity per share, EUR 0.261 0.234
--------------------------------------------------------------------------------
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