2015-07-30 08:00:00 CEST
2015-07-30 08:00:06 CEST
REGULATED INFORMATION
QPR Software - Interim report (Q1 and Q3)
JANUARY–JUNE NET SALES INCREASED 5%, INVESTMENTS IN GROWTH CONTINUED
QPR SOFTWARE PLC STOCK EXCHANGE RELEASE, JULY 30, 2015 AT 9.00 AM
INTERIM REPORT JANUARY - JUNE 2015
JANUARY-JUNE NET SALES INCREASED 5%, INVESTMENTS IN GROWTH CONTINUED
Summary January - June 2015
-- Net sales EUR 4,926 thousand (2014: 4,689).
-- Net sales rose 5% due to increase in consulting and software license net
sales.
-- Operating profit decreased to EUR 291 thousand (451), due to increased
outlays in growth.
-- Operating margin was 5.9% (9.6)
-- Cash flow from operating activities EUR 1,066 thousand (828).
-- Profit before taxes EUR 289 thousand (435).
-- Profit for the period EUR 260 thousand (382).
-- Earnings per share EUR 0.022 (0.032).
Summary April - June 2015
-- Net sales EUR 2,402 thousand (2014: 2,465).
-- Net sales decreased slightly due to decrease in software maintenance and
rental net sales. In the reporting period there were no large license sales
closures.
-- Operating profit decreased to EUR 32 thousand (344). The decrease was
mainly due to increases in outlays in new software products and
international distribution.
-- Operating margin was 1.3% (14.0)
-- Cash flow from operating activities was negative EUR 380 thousand (311).
The negative development was due to timing changes in invoicing compared to
last year, growth in operative working capital and smaller profit than in
previous year.
-- Profit before taxes EUR 16 thousand (332).
-- Profit for the quarter EUR 35 thousand (288).
-- Earnings per share EUR 0.003 (0.024).
Business operations
QPR Software focuses on providing organizations software and professional
services for operational development. Our software and services are used in
over 50 countries. The Company offers its customers insight to their business
operations through modeling, analysis and performance monitoring. This insight
enables customers to streamline and improve business operations and to execute
their strategies swiftly and effectively. The Company´s product portfolio has
been strongly renewed in recent years. The new software products offer
customers innovative and efficient tools for organizations to model their
various operations, to model processes based on actual event data and to
analyze causes for potential performance problems.
OUTLOOK
Operating environment, market outlook and outlook for 2015
The leading market research companies estimate that global IT services market
demand grows in 2015 by 2-3 %, compared to 2014. The Company estimates that in
its relevant markets demand for enterprise architecture modeling, measurement
and process analysis software as well as related services will develop faster
than the global IT services market.
In 2015, the Company increases its growth investments in international
distribution of innovative software products developed by the Company. In
international markets, the Company operates mainly through its resellers and
continues to put effort in recruiting new resellers. In its home market
Finland, the Company seeks growth especially from enterprise architecture and
process modeling software sales, process analysis software sales and its
consulting business.
The Company updated is outlook for 2015 on June 8th, and estimated that the
weakened market on second quarter would remain weak over summer, but would
improve gradually towards the end of the year. Despite the market situation,
QPR estimates its net sales to grow this year compared to 2014 (EUR 9,541
million), but its profitability to remain lower than in the previous year due
to higher expenses. The Company estimates its operating profit in 2015 to be 6
- 11 % of net sales (2014: 11.5%), depending on software license sales.
Seasonality of large software deals can affect significantly net sales and
profit of one individual quarter.
KEY FIGURES
--------------------------------------------------------------------------------
EUR in thousands, Apr-Jun Apr-Jun Change Jan-Jun Jan-Ju Change Jan-Dec
unless otherwise 2015 2014 , % 2015 n 2014 , % 2014
indicated
--------------------------------------------------------------------------------
Net sales 2,402 2,465 -2.5 4,926 4,689 5.1 9,541
EBITDA 243 522 -53.4 702 826 -15.0 1,857
% of net sales 10.1 21.2 14.2 17.6 19.5
Operating profit 32 344 -90.7 291 451 -35.5 1,095
% of net sales 1.3 14.0 5.9 9.6 11.5
Profit before tax 16 332 -95.1 289 435 -33.6 1,065
Profit for the 35 288 -88.0 260 382 -32.0 890
period
% of net sales 1.4 11.7 5.3 8.1 9.3
Earnings per share, 0.003 0.024 -87.9 0.022 0.032 -32.2 0.074
EUR
Equity per share, 0.229 0.220 4.2 0.229 0.220 4.2 0.257
EUR
Cash flow from -380 311 -222.2 1,066 828 28.7 1,617
operating
activities
Cash and cash 1,134 1,127 0.6 1,134 1,127 0.6 1,426
equivalents
Free cash flow -694 110 312 391 702
Net borrowings -1,134 -1,127 0.6 -1,134 -1,127 0.6 -1,426
Gearing, % -39.7 -41.2 -39.7 -41.2 -44.6
Equity ratio, % 57.6 54.8 57.6 54.8 44.0
Return on equity, % 4.4 40.8 17.2 27.2 29.3
Return on 1.0 56.6 19.2 31.6 35.4
investment, %
--------------------------------------------------------------------------------
REPORTING
This report complies with requirements of IAS 34 Interim Financial Reporting.
Starting from the beginning of 2015, the Group has applied certain new or
revised IFRS standards and IFRIC interpretations as described in the
Consolidated Financial Statements 2014. The implementation of these new and
revised requirements have not impacted the reported figures. For all other
parts, the accounting principles and methods are the same as they were in the
2014 financial statements. This report is unaudited.
QPR Software innovates, develops, sells and delivers to international markets
software and services aimed at operational development in organizations. QPR
Software reports one operating segment: Operational development of
organizations. In addition to this, the Company reports revenue from products
and services as follows: Software license sales, Software maintenance services,
Software rentals, and Consulting. Software rentals and Software maintenance
services together form the recurring revenue reported by the Company. Recurring
revenue is based on long-term contracts continuing for the time being or for a
fixed period of several years. Typically rental and maintenance charges are
invoiced annually in advance.
As geographic information QPR Software reports geographical areas Finland, rest
of Europe including Russia and Turkey, and rest of the world. Net sales are
reported by the customer´s location.
REVIEW BY THE CEO
After a good first quarter, the market for the Company´s products and services
weakened in April - July, which led into a slight decrease in net sales
compared to previous year. The operating environment was impacted by weak
economic growth in several markets, in some cases negative growth. The economic
growth was weak especially in the Company's largest market area Europe
(including Finland). According to the Company´s update in outlook, published by
QPR on June 8, 2015, we estimate the weakened market outlook to remain weak
throughout the summer, but to improve gradually towards the end of the year.
In the reporting period there were no large license sales closures. The amount
of offers made and their average size has increased this year, and thus based
on activities in the market the Company expects improving performance towards
the end of the year. New resellers have favourably contributed to the amount of
offers. This year the company has signed 13 new reseller agreements.
In the second quarter 2015, the Company´s software license net sales reached 8%
growth, mainly due to growth in sales of the Company´s new software products.
Consulting net sales grew slightly (+2%) as well. However, software maintenance
net sales (-10%) and software rental net sales (-7%) decreased, which was due
to expiration of a few significant contracts last year or in the beginning of
this year.
Fixed costs increased 9% in the second quarter, due to outlays in software
development and international distribution and sales. With these outlays, we
seek good organic growth especially through our new software products, launched
in the 2010s. These products are QPR ProcessAnalyzer (analyzes event data in IT
systems) and modeling software QPR EnterpriseArchitect. In international
business, the Company's growth strategy is based on software sales through
continued expansion of international reseller channel. The main target for the
Company in its home market Finland is strengthening its software products´
leading position and to further expand its local consulting business.
Jari Jaakkola
CEO
NET SALES DEVELOPMENT
Net sales in the second quarter were EUR 2,402 thousand (2,465) and decreased
3% from the corresponding period of the previous year.
NET SALES BY PRODUCT GROUP
--------------------------------------------------------------------------------
EUR in thousands Apr-Jun Apr-Jun Change Jan-Jun Jan-Jun Change Jan-Dec
2015 2014 , % 2015 2014 , % 2014
--------------------------------------------------------------------------------
Software 409 379 8 764 680 12 1,470
licenses
Software 715 791 -10 1,451 1,554 -7 3,093
maintenance
services
Software rentals 445 477 -7 884 920 -4 1,901
Consulting 833 818 2 1,828 1,535 19 3,077
--------------------------------------------------------------------------------
Total 2,402 2,465 -3 4,926 4,689 5 9,541
--------------------------------------------------------------------------------
NET SALES BY GEOGRAPHIC AREA
--------------------------------------------------------------------------------
EUR in thousands Apr-Jun Apr-Jun Change Jan-Jun Jan-Jun Change Jan-Dec
2015 2014 , % 2015 2014 , % 2014
--------------------------------------------------------------------------------
Finland 1,575 1,614 -2 3,321 3,058 9 6,193
Europe incl. 446 523 -15 905 987 -8 2,035
Russia and
Turkey
Rest of the 382 327 17 701 644 9 1,313
world
--------------------------------------------------------------------------------
Total 2,402 2,465 -3 4,926 4,689 5 9,541
--------------------------------------------------------------------------------
April - June 2015
Software license net sales grew 8% compared to previous year, and vast majority
of license sales was derived from international markets. However, software
maintenance services net sales and software rental net sales decreased (-10%
and -7%). This was due to expiration of a few significant contracts, which was
not fully compensated by maintenance services and rental new sales. Customer
churn remained low measured by the number of expired contracts, but among them
there were several economically significant ones. The share of recurring
revenue (software maintenance services and software rentals) was 48% (51) of
total net sales.
Consulting net sales in the first quarter grew slightly (+2%). The development
compared to previous year was relatively evenly spread in various consulting
business areas.
Out of the Group net sales 65% (65) were derived from Finland, 19% (21) from
the rest of Europe (including Russia and Turkey) and 16% (13) from the rest of
the world.
January - June 2015
Software license net sales grew 12% compared to previous year, and vast
majority of license sales was derived from international markets. Software
maintenance services net sales and software rental net sales decreased (-7% and
-4%). This was due to expiration of a few significant contracts, which was not
fully compensated by maintenance services and rental new sales. Customer churn
remained low measured by the number of expired contracts, but among them there
were several economically significant ones. The share of recurring revenue was
47% (53) of total net sales.
Consulting net sales in the first quarter grew strongly, which led to 19%
increase in consulting net sales in January - June.
Out of the Group net sales 67% (65) were derived from Finland, 18% (21) from
rest of the Europe (including Russia and Turkey) and 14% (14) from the rest of
the world.
FINANCIAL PERFORMANCE
April - June 2015
In the second quarter, the Group's operating profit was EUR 32 thousand (344),
or 1.3% of net sales (14.0). Operating profit decreased from the previous year
mainly due to increased expenses arising on outlays made into new software
products and international sales channel. The majority of these outlays are new
recruitments and thus increased personnel costs.
The Group´s fixed costs were EUR 2,221 thousand (2,039), and grew 8.9% compared
to the corresponding period in the previous year. Personnel expenses
represented 77,6% (76,4) of the fixed costs and were EUR 1,723 thousand
(1,557).
Profit before taxes in the quarter was EUR 16 thousand (332) and profit for the
period was EUR 35 thousand (288). Taxes recorded for the period were EUR -18
thousand (43). Earnings per share (fully diluted) were EUR 0.003 (0.024).
January - June 2015
In January - June, the Group operating profit was EUR 291 thousand (451), or
5.9% of net sales (9.6). Operating profit decreased from the previous year
mainly due to increased costs in the second quarter. The costs were increased
mainly by growth in international sales channel personnel and other operating
costs, as well as product development personnel costs.
The Group´s fixed costs were EUR 4,381 in the reporting period (4,086), and
grew 7.2% compared to previous year. Personnel costs represented 76.4% (75.4)
of fixed costs and were EUR 3,345 thousand (3,082). Credit losses, inclusive in
fixed costs, totaled EUR 19 thousand (19).
Profit before taxes in the quarter was EUR 289 thousand (435) and profit for
the period was EUR 260 thousand (382). Taxes recorded for the period were EUR
29 thousand (53). Earnings per share (fully diluted) were EUR 0.022 (0.032).
FINANCE AND INVESTMENTS
Cash flow from operating activities was EUR 1,066 thousand (828) in January -
June. Cash and cash equivalents at the end of the quarter were EUR 1,134
thousand (1,127).
Investments in the first half of the year totaled EUR 754 thousand (437).
Investments consisted mainly of product development and extension of the office
facilities.
Net financial items in the review period were EUR -2 thousand (-16). Net
financial expenses included net foreign exchange losses of EUR 2 thousand (16).
In April - June net financial items were EUR -16 thousand (-12), and included
net foreign exchange currency losses of EUR 16 thousand (13).
At the end of the quarter, the Company had no interest-bearing liabilities. The
gearing ratio was -40% (-41). Current liabilities include deferred revenue in
total of EUR 1,910 thousand (1,886). Annualized return on investment was 19%
(32) in the reporting period January - June and 1% (57) in April - June.
At the end of the quarter, equity ratio was 58% (55) and the consolidated
shareholders' equity was EUR 2,854 thousand (2,736). Annualized return on
equity was 17% (27) in the reporting period January - June and 4% (41) in April
- June.
The Annual General Meeting on March 12, 2015 authorized the Board of Directors
to decide on issuing a maximum of 4,000,000 new shares, to decide on conveyance
of a maximum of 700,000 own shares held by the Company, and to decide on
acquiring a maximum of 250,000 own shares. The authorizations are in force
until the next Annual General Meeting.
PRODUCT DEVELOPMENT
The Company develops software and consulting service products to be used by its
customers. Software product development costs in the reporting period January -
June were 90% of the total product development costs. 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.
In April - June, product development expenses were EUR 468 thousand (470), and
represented 19% of net sales (19). Product development expenses do not include
amortization of capitalized product development expenses. Product development
expenses were capitalized for a total amount of EUR 193 thousand (173). The
amortization of capitalized product development expenses in the quarter was EUR
114 thousand (92).
In the reporting period January - June, product development expenses were EUR
948 thousand (936), and represented 19% of net sales (20). Product development
expenses do not include amortization of capitalized product development
expenses. Product development expenses were capitalized for a total amount of
EUR 360 thousand (320). The amortization of capitalized product development
expenses in the reporting period was EUR 229 thousand (176).
PERSONNEL
At the end of the quarter, the Group employed a total of 86 persons (79).
Average number of personnel during the quarter was 85 (81).
For incentive purposes, the Company has a bonus program that covers all
employees. Remuneration of the top management consists of salary, fringe
benefits and a possible annual bonus based on net sales performance. In 2015,
the maximum annual bonus of executive management team, including the CEO, is
30% of the annual base salary. More information on incentive plans can be found
in the Annual Report 2014
(http://www.qpr.com/sites/default/files/QPRSoftwareAnnualReport2014.pdf).
SHARES AND SHAREHOLDERS
--------------------------------------------------------------------------------
Trading of shares Jan-Jun, Jan-Jun, Change, Jan-Dec,
2015 2014 % 2014
--------------------------------------------------------------------------------
Shares traded, pcs 3,358,905 1,213,420 177 2,828,001
Volume, EUR 4,811,303 1,140,398 322 2,751,903
% of shares 28.0 9.8 23.6
Average trading price, EUR 1.43 0.94 52 0.97
Treasury shares acquired during the 0 37,400 -100 37,400
year, pcs
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shares and market capitalization Jun 30, Jun 30, Change, Dec 31,
2015 2014 % 2014
--------------------------------------------------------------------------------
Total number of shares, pcs 12,444,863 12,444,863 - 12,444,863
Treasury shares, pcs 457,009 457,009 - 457,009
Book counter value, EUR 0.11 0.11 - 0.11
Outstanding shares, pcs 11,987,854 11,987,854 - 11,987,854
Number of shareholders 1,219 708 72 820
Closing price, EUR 1.46 0.94 55 1.01
Market capitalization, EUR 17,502,267 11,268,583 55 12,107,733
Book counter value of all treasury 50,271 50,271 0 50,271
shares, EUR
Total purchase value of all 439,307 430,307 2 439,307
treasury shares, EUR
Treasury shares, % of all shares 3.7 3.7 - 3.7
--------------------------------------------------------------------------------
The Annual General Meeting held on March 12, 2015 approved the Board's proposal
that a per-share dividend of EUR 0.05 (0.04), a total of EUR 599 thousand
(480), be paid for the financial year 2014. The dividend was paid to
shareholders entered in the Company's shareholder register, maintained by
Euroclear Finland Oy, on the record date of March 16, 2015. The dividend
payment date was April 8, 2015.
OTHER EVENTS DURING THE REPORTING PERIOD
QPR Software´s sales and deliveries were organized from the beginning of 2015
into four units: Operational Development Software, Operational Development
Consulting, Process Intelligence and Channel Business.
Miika Nurminen was appointed Senior Vice President, Operational Development
Consulting, and member of the Executive Management Team as of January 1, 2015.
Nurminen has previously held several leadership positions in QPR Software.
Sari Törmälä was appointed Senior Vice President, Operational Development
Software, and member of the Executive Management Team as of February 23, 2015.
Before QPR Törmälä worked in Kunnan Taitoa Oy, a service provider for the local
government sector in Finland providing financial and personnel management
services, where she as a member of the Executive Management Team was
responsible for sales and customers. Sari Törmälä´s employment at QPR ended in
June 2015. The business units Operational Development Consulting and
Operational Development Software were combined as of July 1, and Miika Nurminen
was appointed to lead the unit.
In February, QPR announced that it expands co-operation with a European public
sector health care organization and delivers a project for the organization's
operational development purposes. The total value of the software and
consulting services, delivered by QPR and thus recognizable during the first
half of 2015, is around EUR 140 thousand. Target of the agreed project is to
improve the customer's operations, development and performance as well as
project management. In addition, the project aims for better alignment between
business and IT by linking the business area service layer with IT services.
In March, QPR announced that QPR Software is recognized in international
research company Gartner Inc.´s Market Guide for Enterprise Business Process
Analysis (EBPA) report. The Gartner EBPA Market Guide evaluated the Enterprise
business process analysis marketplace and depicts Gartner's analysis of how
certain vendors measure against criteria for that marketplace. Gartner
evaluated the EBPA vendors on the focus and importance of different use cases,
as well as about the focus and importance of the different EBPA capabilities.
In April, QPR announced that The U.S. Patent and Trademark Office has granted a
patent to a technology for analyzing and improving business processes with
event instance date, developed by QPR Software. The patented technology
utilizes event instance data obtained from information management systems, and
helps organizations to analyze and develop their business processes. The patent
supports the sale of QPR ProcessAnalyzer software and QPR process intelligence
consulting as well as opens up new opportunities for OEM business.
In April, the Company also announced that the City of Helsinki, the capital of
Finland, has decided to approve QPR Software's offer for delivering process and
enterprise architecture tool as a service. The value of the entire four year
agreement period is EUR 1.5 million, out of which the share of revenue booked
as software rentals is over 75%. QPR´s competitor appealed to the technical
board of the City of Helsinki and to the Market Court and delivered a claim for
correction against this purchase decision. The City decided to return the case
for further preparation into its sourcing unit and made a new decision to
approve QPR´s offer in July 2015. The terms and conditions of the new decision
are the same to QPR as in the first decision in April. QPR´s competitor has
appealed both to the technical board of the City of Helsinki and to the Market
Court with a claim for correction against also this new purchase decision.
QPR Software´s Chief Financial Officer Päivi Martti´s employment ended at QPR
in June 2015. Jaana Mattila, who has worked in the Company as Business
Controller since March 2015, was selected as new Chief Financial Officer.
Mattila has previously worked, among others, as Finance Director in Fazer Amica
and as CFO in Biohit Oyj.
OTHER EVENTS AFTER THE REPORTING PERIOD
After the reporting period, except for the city of Helsinki decision that was
described above, there were no other significant events.
GOVERNANCE
The Annual General Meeting on March 12, 2015 resolved that the Board of
Directors consists of four (4) ordinary members. The AGM re-elected the
following members to the Board of Directors: Kirsi Eräkangas, Vesa-Pekka
Leskinen and Topi Piela. The AGM selected Juho Malmberg, as a new member, to
join the Board of Directors. Juho Malmberg has previously held leadership
positions, among others, in Accenture, KONE and Zenrobotics. In its meeting
following the Annual General Meeting, the Board of Directors elected Vesa-Pekka
Leskinen as Chairman of the Board.
The AGM elected KPMG Oy Ab, Authorized Public Accountants, to continue as QPR
Software Plc's auditors, with Kirsi Jantunen, Authorized Public Accountant,
acting as principal auditor.
The AGM authorized the Board to decide on issuing new shares, conveying own
shares held by the Company, and repurchasing the Company's own shares.
All authorizations of the Board and other decisions made by the Annual General
Meeting are available in their entirety on the stock exchange release published
by the Company on March 12, 2015 and available on the investors section of the
Company's web site,
http://www.qpr.com/annual-general-meeting/annual-general-meeting-2015
SHORT-TERM RISKS AND UNCERTAINTIES
Internal control and risk management in QPR Software aims to ensure that the
Company operates efficiently and effectively, distributes reliable information,
complies with regulations and operational principles, reaches its strategic
goals, reacts to changes in the market and operational environment, and ensures
the continuity of its business.
QPR has identified the following four groups of risks related to its
operations: risks related to business operations (country, customer, service
delivery, personnel, legal and financial risks as well as risks related to the
Company's resellers), risks related to information and products (QPR products,
IPR, data security), risks related to financing (foreign currency, bad debt),
and risks related to new businesses (growth of new business, product
development investments in new business). The Company has an insurance policy
for property, operational and liability risks.
Financial risks include reasonable credit risk concerning individual business
partners, which is characteristic to any international business. QPR seeks to
limit this credit risk by continuous monitoring of standard payment terms,
receivables and credit limits. The amount of trade receivables over 60 days
past due was 11% (10) of total trade receivables at the end of the quarter.
Approximately 66% of Group's trade receivables were in euro at the end of the
quarter (70). At the end of the quarter, the Company had not hedged its
non-euro trade receivables.
No significant changes have taken place in the Company's short-term risks and
uncertainties during the quarter. Risks and risk management related to the
Company's business are further described in the Annual Report 2014, pages
12-14.
(http://www.qpr.com/sites/default/files/QPRSoftwareAnnualReport2014.pdf).
FINANCIAL INFORMATION
In 2015, QPR Software will publish interim reports in English and Finnish on
the following dates:
-- Interim Report Q3/2015: Wednesday, October 22, 2015
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 Apr-Ju Apr-Ju Change Jan-Ju Jan-Ju Change Jan-De
otherwise indicated n, n, , % n, n, , % c,
2015 2014 2015 2014 2014
--------------------------------------------------------------------------------
Net sales 2,402 2,465 -3 4,926 4,689 5 9,541
Other operating income 1 10 1 25 26
Materials and services 149 92 62 254 177 44 337
Employee benefit 1,723 1,557 11 3,345 3,082 9 6,092
expenses
Other operating expenses 287 304 -6 625 629 -1 1,281
--------------------------------------------------------------------------------
EBITDA 243 522 -53 702 826 -15 1,857
Depreciation and 211 178 19 411 375 10 761
amortization
--------------------------------------------------------------------------------
Operating profit 32 344 -91 291 451 -35 1,095
Financial income and -16 -12 -2 -16 -30
expenses
--------------------------------------------------------------------------------
Profit before tax 16 332 -95 289 435 -34 1,065
Income taxes 18 -43 -142 -29 -53 -45 -175
--------------------------------------------------------------------------------
Profit for the period 35 288 -88 260 382 -32 890
Earnings per share, EUR
(basic and diluted) 0.003 0.024 -88 0.022 0.032 -32 0.074
Consolidated statement
of
comprehensive income:
Profit for the period 35 288 260 382 890
Other items in
comprehensive
income that may be
reclassified
subsequently to profit
or loss:
Exchange differences on 7 7 -3 -1 -40
translating foreign
operations
Income tax relating to - - - - -
components of other
comprehensive income
--------------------------------------------------------------------------------
Total comprehensive 42 295 257 381 850
income
CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
EUR in thousands June June Change Dec
30, 30, , 31,
2015 2014 % 2014
--------------------------------------------------------------------------------
Assets
Non-current assets:
Intangible assets 1,996 1,704 17 1,815
Goodwill 513 513 0 513
Tangible assets 337 193 75 175
Other non-current assets 27 89 -69 27
--------------------------------------------------------------------------------
Total non-current assets 2,873 2,499 15 2,529
Current assets:
Trade and other receivables 2,856 3,256 -12 4,572
Cash and cash equivalents 1,134 1,127 1 1,426
--------------------------------------------------------------------------------
Total current assets 3,990 4,383 -9 5,998
0
Total assets 6,863 6,882 0 8,527
================================================================================
Equity and liabilities
Equity:
Share capital 1,359 1,359 0 1,359
Other funds 21 21 1 21
Treasury shares -439 -430 2 -439
Translation differences -224 -182 23 -221
Invested non-restricted equity fund 5 5 7 5
Retained earnings 2,131 1,963 9 2,471
--------------------------------------------------------------------------------
Equity attributable to shareholders of the 2,854 2,736 4 3,196
parent company
Non-current liabilities:
Non-interest-bearing liabilities 17 33 -47 25
--------------------------------------------------------------------------------
Total non-current liabilities 17 33 -47 25
Current liabilities:
Advances received 1,910 1,886 1 1,261
Accrued expenses and prepaid income 1,633 1,828 -11 3,223
Trade and other payables 449 399 13 822
--------------------------------------------------------------------------------
Total current liabilities 3,992 4,112 -3 5,305
Total liabilities 4,009 4,146 -3 5,331
Total equity and liabilities 6,863 6,882 0 8,527
================================================================================
CONSOLIDATED CASH FLOW STATEMENT
--------------------------------------------------------------------------------
EUR in thousands Apr-Ju Apr-Ju Change Jan-Ju Jan-Ju Change Jan-De
n 2015 n 2014 , % n 2015 n 2014 , % c 2014
--------------------------------------------------------------------------------
Cash flow from operating
activities:
Profit for the period 35 288 -88 260 382 -32 887
Adjustments to the 259 184 41 448 374 20 725
profit
Working capital changes -557 -117 376 499 162 208 25
Interest and other -17 -3 467 -18 -7 157 -13
financial expenses paid
Interest and other 7 0 7 1 600 3
financial income
received
Income taxes paid -106 -42 152 -129 -84 54 -10
--------------------------------------------------------------------------------
Net cash from operating -380 311 -222 1,066 828 29 1,617
activities
Cash flow from investing
activities:
Purchases of tangible -314 -201 56 -754 -437 73 -915
and intangible assets
--------------------------------------------------------------------------------
Net cash used in -314 -201 56 -754 -437 73 -915
investing activities
Cash flow from financing
activities:
Repayments of long-term - - -100 - -113 -100 -113
borrowings
Repurchase of shares - - -100 - -35 -100 -44
Dividends paid -599 -480 -599 -480 -480
--------------------------------------------------------------------------------
Net cash used in -599 -480 25 -599 -628 -5 -637
financing activities
Net change in cash and -1,294 -370 250 -287 -237 21 65
cash
equivalents
Cash and cash 2,427 1,496 62 1,426 1,365 4 1,365
equivalents at the
beginning of the period
Effects of exchange rate 0 1 -5 0 -4
changes on cash and
cash equivalents
--------------------------------------------------------------------------------
Cash and cash 1,134 1,127 1 1,134 1,127 1 1,426
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 -181 -395 5 2,061 2,871
Jan 1,
2014
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
--------------------------------------------------------------------------------
Dividends
paid
Repurchas -9 -9
e of
shares
Comprehen -39 508 469
sive
income
--------------------------------------------------------------------------------
Equity 1,359 21 -221 -439 5 2,471 3,196
Dec 31,
2014
Dividends -599 -599
paid
Repurchas
e of
shares
Comprehen -3 260 257
sive
income
--------------------------------------------------------------------------------
Equity 1,359 21 -224 -439 5 2,131 2,854
Jun 30,
2015
--------------------------------------------------------------------------------
NOTES TO INTERIM FINANCIAL STATEMENTS
ACCOUNTING PRICIPLES
This report complies with requirements of IAS 34 ”Interim Financial Reporting”.
Starting from the beginning of 2015, the Group has applied certain new or
revised IFRS standards and IFRIC interpretations as described in the
Consolidated Financial Statements 2014. The implementation of these new and
revised requirements have not impacted the reported figures. For all other
parts, the accounting principles and methods are the same as they were in the
2014 financial statements.
When preparing the consolidated financial statements, management is required to
make estimates and assumptions regarding the future and to consider the
appropriate application of accounting principles, which means that actual
results may differ from those estimated.
All amounts presented in this report are consolidated figures, unless otherwise
noted. The amounts presented in the report are rounded, so the sum of
individual figures may differ from the sum reported. This report is unaudited.
During the reporting period, the Group did not have any financial instruments
measured at fair value.
INTANGIBLE AND TANGIBLE ASSETS
------------------------------------------------------------------------------
EUR in thousands Jan-Jun 2015 Jan-Jun 2014 Jan-Dec 2014
------------------------------------------------------------------------------
Increase in intangible assets:
Acquisition cost Jan 1 6,650 6,112 6,112
Increase 526 400 538
Increase in tangible assets:
Acquisition cost Jan 1 1,425 1,351 1,351
Increase 228 37 74
------------------------------------------------------------------------------
CHANGE IN INTEREST-BEARING LIABILITIES
------------------------------------------------------------------------------
EUR in thousands Jan-Jun 2015 Jan-Jun 2014 Jan-Dec 2014
------------------------------------------------------------------------------
Interest-bearing liabilities Jan 1 - 113 113
Repayments - -113 -113
------------------------------------------------------------------------------
Interest-bearing liabilities Mar 31/ - - -
Dec 31
------------------------------------------------------------------------------
PLEDGES AND COMMITMENTS
--------------------------------------------------------------------------------
EUR in thousands Jun 30, Jun 30, Dec 31, Change,
2015 2014 2014 %
--------------------------------------------------------------------------------
Business mortgages (held by the 1,392 1,392 1,391 0
Company)
Minimum lease payments based on
lease
agreements
Maturing in less than one year 353 159 304 16
Maturing in 1-5 years 259 46 436 -41
--------------------------------------------------------------------------------
Total 611 205 740 -17
Total pledges and commitments 2,003 1,596 2,131 -6
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT BY QUARTER
--------------------------------------------------------------------------------
EUR in thousands Q2 2015 Q1 2015 Q4 2014 Q3 Q2 2014 Q1 2014
2014
--------------------------------------------------------------------------------
Net sales 2 402 2 524 2 685 2 167 2 465 2 225
Other operating income 1 - - 1 10 15
Materials and services 149 105 94 66 92 85
Employee benefit expenses 1 723 1 622 1 640 1 370 1 557 1 525
Other operating expenses 287 338 336 316 304 325
--------------------------------------------------------------------------------
EBITDA 243 459 615 416 522 305
Depreciation and 211 200 198 189 178 197
amortization
--------------------------------------------------------------------------------
Operating profit 32 259 417 227 344 107
Financial income and -16 14 -8 -5 -12 -4
expenses
--------------------------------------------------------------------------------
Profit before tax 16 272 409 222 332 103
Income taxes 18 -47 -68 -54 -43 -10
--------------------------------------------------------------------------------
Profit for the period 35 225 341 167 288 93
--------------------------------------------------------------------------------
GROUP KEY FIGURES
--------------------------------------------------------------------------------
EUR in thousands, unless otherwise Jan-Jun or Jan-Jun or Jan-Dec or Dec 31,
indicated Jun 30, Jun 30, 2014
2015 2014
--------------------------------------------------------------------------------
Net sales 4,926 4,689 9,541
Net sales growth, % 5.1 6.2 9.8
EBITDA 702 826 1,857
% of net sales 14.3 17.6 19.5
Operating profit 291 451 1,095
% of net sales 5.9 9.6 11.5
Profit before tax 289 435 1,065
% of net sales 5.9 9.3 11.2
Profit for the period 260 382 890
% of net sales 5.3 8.1 9.3
Return on equity (per annum), % 17.2 27.2 29.3
Return on investment (per annum), % 19.2 31.6 35.4
Cash and cash equivalents 1,134 1,127 1,426
Free cash flow 312 391 702
Net borrowings -1,134 -1,127 -1,426
Equity 2,854 2,736 3,196
Gearing, % -39.7 -41.2 -44.6
Equity ratio, % 57.6 54.8 44.0
Total balance sheet 6,863 6,882 8,527
Investments in non-current assets 754 437 915
% of net sales 15.3 9.3 9.6
Product development expenses 948 936 1,847
% of net sales 19.2 20.0 19.4
Average number of personnel 85 81 81
Personnel at the beginning of 78 79 79
period
Personnel at the end of period 86 79 78
Earnings per share, EUR 0.022 0.032 0.074
Equity per share, EUR 0.229 0.220 0.257
--------------------------------------------------------------------------------
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