Interim / Quarterly Report • Aug 7, 2019
Interim / Quarterly Report
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| in thousand euros | H1 2019 | H1 2018 | Change in % |
|---|---|---|---|
| Sales | 101,033 | 63,161 | +60 |
| EBIT | 11,751 | 7,762 | +51 |
| EBT | 11,643 | 7,599 | +53 |
| Group profit for the period | 7,728 | 5,156 | +50 |
| Earnings per share (in euros) | 1.22 | 0.80 | +53 |
| Cash flow from operating activities | -18,541 | -20,294 | –/– |
| Investments | 2,640 | 2,767 | -5 |
| Order book (IFRS, in million euros, as at 30 June) | 81.0 | 68.1 | +19 |
| Employees as at 30 June | 624 | 553 | +13 |
| in thousand euros | 30 Jun 2019 | 31 Dec 2018 | Change in % |
|---|---|---|---|
| Cash and cash equivalents | 20,462 | 56,084 | -64 |
| Equity (including non-controlling interests) | 64,053 | 69,516 | -8 |
| Equity ratio (in %) | 43.1 | 47.9 | -4.8 percentage points |
| Loans | 0 | 0 | –/– |
| Q2 2019 | Q2 2018 | Change in % |
|---|---|---|
| 60,593 | 35,971 | +68 |
| 9,381 | 5,292 | +77 |
| 9,280 | 5,246 | +77 |
| 6,154 | 3,572 | +72 |
| 0.97 | 0.55 | +75 |
| YSNG.DE |
|---|
| YSN |
| 727650 |
| DE0007276503 |
| 28 Jun 2019 | 29 Jun 2018 | |
|---|---|---|
| Share price (in euros) | 114.50 | 124.40 |
| Number of shares | 6,500,000 | 6,500,000 |
| Market capitalisation (in euros) | 744,250,000 | 808,600,000 |
| 52W high /low (in euros) | H: 130.90 / L: 79.70 |
H: 132.00 / L: 77.80 |
| H1 2019 | H1 2018 | |
|---|---|---|
| Average daily trading volume (Xetra) | 1,527 | 1,771 |
In the first half-year 2019, secunet Group generated sales revenue of 101.0 million euros. Compared to the same period of the previous year (63.2 million euros), this represents an increase of 60% or 37.8 million euros. The growth in sales results primarily from the increased product business (trade goods, licences, maintenance and support). The significantly positive change on the previous year is mainly attributable to the revenues in conjunction with the secunet healthcare konnektor which was approved in December 2018.
For the same reasons, sales in the second quarter of 2019 amounted to 60.6 million euros, a significant increase of 24.6 million euros, or 68%, on sales in the prior-year quarter (36.0 million euros).
The earnings before interest and taxes (EBIT) of secunet Group improved by 4.0 million euros, or 51%, compared to the first halfyear 2018, rising from 7.8 million euros to 11.8 million euros.
The improvement in EBIT is primarily attributable to business in conjunction with the secunet healthcare konnektor.
The individual expenditure items showed the following developments:
The cost of sales rose by 32.2 million euros, or 70%, in the first six months of 2019, from 46.0 million euros in the same period of the previous year to 78.2 million euros. The primary reason for this is growth in the hardware business, as a result of which materials expenses for the use of trade goods have increased.
In the course of expanded sales activities, selling expenses rose by 15%, or 0.9 million euros, from 6.3 million euros in the previous year to 7.2 million euros.
In order to cope with the increasing and more complex tasks arising from Company growth, the workforce has also grown in the administrative areas. Accordingly, the general administration costs of 3.4 million euros in the first half of 2019 were up by 0.5 million euros, or 19%, on the previous year's value (2,9 million euros).
The financial result for the first half of 2019 was -108 thousand euros compared with 7 thousand euros the previous year. Earnings before tax totalled 11.6 million euros, compared with 7.6 million euros in the previous year.
Due to improved earnings, tax expenses increased from 2.4 million euros in the previous year to 3.9 million euros in the first half of 2019. The tax ratio of 33% is the same as that of the previous year.
After taxes, the Group profit for the period from January to June 2019 amounted to 7.7 million euros, compared with 5.2 million euros in the previous year. Earnings per share were 0.80 euros in the first half of 2018 and 1.22 euros in the first half of the current year.
secunet Group is divided into the Public Sector and Business Sector business units.
The Public Sector business unit is geared towards public utility providers. Due to the strong growth in the healthcare market (secunet healthcare konnektor), which is allocated to the Business Sector, the Public Sector business unit accounted for 57% of Group sales in the first half-year 2019, compared with 88% in the previous year.
The Public Sector business unit offers its customers the SINA product family, i. e. solutions (software, hardware and management) for highly secure, cryptographic processing, transmission and storage of classified information with varying levels of confidentiality. The Public Sector business unit also offers products for electronic passports, automated (biometric) border controls and the ELSTER electronic tax declaration. Furthermore, the portfolio includes a wide range of IT security products and services for public customers, ranging from IT security consulting and training to the equipment of large infrastructures with high-security technology and public key infrastructures.
Sales in the Public Sector business unit increased by 4%, or 2.3 million euros, year-on-year, from 55.5 million euros in the first half of 2018 to 57.8 million euros in the same period of the current year. The growth was largely the result of increased product turnover (trade goods, licences, maintenance and support) – primarily for the SINA product family. Service sales remained at an unchanged high level.
Expenses in the Public Sector business unit changed as follows: costs of sales increased by 8% from 40.4 million euros to 43.4 million euros. At 5.1 million euros in the first half of 2019, selling expenses are at the same level as in the previous year (5.2 million euros). General administration costs were 2.0 million euros in the first half of 2019, compared with 2.5 million euros in the same period of 2018, a year-on-year decrease of 16%. Overall, expenses increased by 6%. With EBIT of 6.7 million euros in the first half of 2019, the Public Sector business unit was unable to match the previous year's result (7.3 million euros).
The Business Sector business unit offers IT security consulting and solutions for the healthcare market, the automotive industry and for providers in the field of critical infrastructures (including utilities). The healthcare market segment has made a very successful start: as a result of sales revenue in conjunction with the secunet healthcare konnektor, revenue in the Business Sector business unit in the first half-year 2019 rose sharply by 35.6 million euros to 43.3 million euros compared with the previous year's level (7.7 million euros). The business unit's share in the Group's sales revenue thus also increased significantly to 43% (previous year: 12%). Since shipment of the healthcare konnektors took place as planned in the first half of 2019, the bulk of business with the healthcare konnektor was also focused on this period. The high konnektor revenue can therefore be regarded as a one-off effect: no further significant deliveries of healthcare konnektors are expected from the second half of 2019 onwards. Further contributions to revenue will arise mainly from maintenance contracts.
Total expenses in the Business Sector business unit amounted to 38.2 million euros in the first half of 2019, compared with 7.2 million euros in the same period of the previous year. Expenses rose less strongly than sales, with the result that the business unit generated EBIT of 5.0 million euros in the first six months of 2019, compared with 0.5 million euros in the prior-year period. The improvement in EBIT is mainly attributable to business in conjunction with the secunet healthcare konnektor.
The following items on the balance sheet show a significant change as at 30 June 2019 compared with the figures as at 31 December 2018:
secunet has not taken out any loans and has an unchanged debt/equity ratio of 0%.
As a result of the increased earnings before taxes, cash flow from operating activities after the first six months of the 2019 financial year improved to -18.5 million euros compared with -20.3 million euros in the same period of the previous year. Significant cash outflows resulted from the utilisation of provisions for variable remuneration and increased tax payments.
At -2.6 million euros in the first half-year 2019, cash flow from investment activity was roughly on a par with the prior-year period (-2.8 million euros).
In the first half of 2019, a dividend of around 13.2 million euros (previous year: 7.8 million euros) was paid to the shareholders from the 2018 balance sheet profit of secunet Security Networks AG. This was the main reason for the higher cash outflow of 14.4 million euros from financing activities in the first half of 2019, following 7.7 million euros in the previous year.
Overall, after the first six months of the 2019 financial year, there was an outflow of cash and cash equivalents of 35.6 million euros. Cash holdings thus amounted to 20.5 million euros as at 30 June 2019.
In the first six months of the current year 2019, secunet invested 2.6 million euros in intangible assets and tangible fixed assets compared with 2.8 million euros in the prior-year period.
In the previous year's period, 1.5 million euros was invested in the development of new products. In the first half-year 2019, 0.5 million euros was invested in developments.
At the same time, investments in the new procurement and replacement of hardware, software and other operating and office equipment rose from around 1.3 million euros in the previous year to around 2.1 million euros due to the growing number of employees and the upgrading of the IT systems used.
As at 30 June 2019, secunet Group employed 624 people (previous year: 553). This is 71 persons or 13% more than on the same reporting date in the previous year.
As at 30 June 2019, secunet Group's order book in accordance with IFRS amounted to 81.0 million euros, after 68.1 million euros as at the previous year's reporting date.
The business development of secunet Group in the first six months of the current financial year was good.
At the time of preparation of the 2018 consolidated financial statements in March 2019, the Company's Management Board still expected a slight increase in sales revenue for the 2019 financial year compared with the 2018 financial year. Due to rising costs, the Management Board also anticipated an EBIT margin slightly below the previous year's level and thus also EBIT slightly below that of the previous year. Against the backdrop of the significant increase in sales revenues in the first quarter of 2019 and the positive outlook for the financial year as a whole, the Management Board published an improved outlook for 2019 for secunet Group in its release (Insider Information) of 2 May 2019. The forecast since then is for sales revenues to reach around 190 million euros and earnings before interest and taxes (EBIT) around 30 million euros (2018 financial year: sales revenues 163.3 million euros, EBIT 26.9 million euros).
Based on the positive business development so far in the current financial year and an optimistic outlook for the second half of the year, also supported by the consistently well-filled order book, the Management Board confirms its forecast.
The Management Board's fundamental assessment of the opportunities and risks for secunet Group has not changed significantly since the 2018 consolidated financial statements were prepared.
There are no risks that could jeopardize the continued existence of the Company, nor are such risks currently discernible for the future.
This Interim Group Management Report contains statements regarding the future performance of secunet Group, as well as economic and political developments. These statements are opinions that we have formed based on the information currently available to us. Should the assumptions on which these statements are based not be applicable or should further risks arise, the actual results may deviate from the results currently expected. We cannot therefore offer any guarantee as to the accuracy of these statements.
Essen, 6 August 2019
Axel Deininger Torsten Henn
Dr Kai Martius Thomas Pleines
of secunet Security Networks Aktiengesellschaft for the period from 1 January to 30 June 2019
(according to IFRS) as at 30 June 2019
Assets
| in euros | 30 Jun 2019 | 31 Dec 2018 1 |
|---|---|---|
| Current assets | ||
| Cash and cash equivalents | 20,462,286.31 | 56,084,381.70 |
| Trade receivables | 35,957,981.34 | 41,776,937.04 |
| Intercompany financial assets | 40,947.90 | 452,438.07 |
| Contract assets | 18,986,162.00 | 2,648,354.51 |
| Inventories | 22,230,065.27 | 19,348,793.59 |
| Other current assets | 1,454,089.26 | 1,132,135.08 |
| Total current assets | 99,131,532.08 | 121,443,039.99 |
| Non-current assets | ||
| Property, plant and equipment | 5,142,576.00 | 4,555,737.00 |
| Right-of-use assets | 18,002,145.74 | – |
| Intangible assets | 6,913,415.72 | 5,990,220.00 |
| Goodwill | 4,625,031.00 | 4,625,031.00 |
| Non-current financial assets | 5,861,596.22 | 5,860,888.00 |
| Trade receivables | 5,514,843.18 | 0.00 |
| Deferred taxes | 2,042,383.55 | 1,592,036.82 |
| Other non-current assets | 1,537,561.43 | 1,142,447.60 |
| Total non-current assets | 49,639,552.84 | 23,766,360.42 |
| Total assets | 148,771,084.92 | 145,209,400.41 |
1 The Group adopted IFRS 16 for the first time as at 1 January 2019. Due to the transitional provision applied, the comparative figures have not been restated.
| Liabilities | ||
|---|---|---|
| Current liabilities Trade accounts payable 17,535,920.21 22,797,180.71 Intercompany payables 63,291.95 283,951.48 Lease liabilities 2,700,159.60 – Other provisions 7,831,797.54 12,577,879.75 Income tax liabilities 1,531,877.09 6,695,131.05 Other current liabilities 4,060,862.88 4,739,511.25 Contract liabilities 9,730,112.45 8,682,677.88 Total current liabilities 43,454,021.72 55,776,332.12 Non-current liabilities Lease liabilities 15,451,508.06 – Deferred taxes 1,860,295.44 1,886,488.94 Provisions for pensions 7,825,718.27 6,781,816.00 Other provisions 321,152.00 321,152.00 Contract liabilities 15,805,117.83 10,927,251.63 Total non-current liabilities 41,263,791.60 19,916,708.57 Equity Share capital 6,500,000.00 6,500,000.00 Capital reserves 21,922,005.80 21,922,005.80 Other reserves -1,980,450.71 -1,627,934.01 Revenue reserves 36,723,625.48 42,363,484.81 Equity attributable to parent company shareholders 63,165,180.57 69,157,556.60 Non-controlling interests 888,091.03 358,803.12 Total equity 64,053,271.60 69,516,359.72 Total liabilities 148,771,084.92 145,209,400.41 |
in euros | 30 Jun 2019 | 31 Dec 2018 1 |
|---|---|---|---|
1 The Group adopted IFRS 16 for the first time as at 1 January 2019. Due to the transitional provision applied, the comparative figures have not been restated.
(according to IFRS) for the period from 1 January 2019 to 30 June 2019
| in euros | 1 Apr– 30 Jun 2019 |
1 Apr– 30 Jun 2018 |
1 Jan– 30 Jun 2019 |
1 Jan– 30 Jun 2018 |
|---|---|---|---|---|
| Sales revenue | 60,592,812.44 | 35,970,854.27 | 101,032,671.88 | 63,161,164.35 |
| Cost of sales | -44,915,385.44 | -25,712,151.08 | -78,194,447.13 | -45,976,906.05 |
| Gross profit on sales | 15,677,427.00 | 10,258,703.19 | 22,838,224.75 | 17,184,258.30 |
| Selling expenses | -4,055,065.63 | -3,300,883.16 | -7,242,782.76 | -6,299,830.75 |
| Research and development expenses | -342,959.32 | -246,849.25 | -407,782.92 | -364,319.87 |
| General administrative costs | -1,866,520.74 | -1,479,430.57 | -3,405,183.48 | -2,852,993.81 |
| Other operating income | 122.24 | 58,222.14 | 122.24 | 104,842.14 |
| Other operating expenses | -31,671.52 | 2,054.00 | -31,591.52 | -9,574.00 |
| Earnings before interest and tax (EBIT) | 9,381,332.03 | 5,291,816.35 | 11,751,006.31 | 7,762,382.01 |
| Interest income | 21,272.05 | 56,444.44 | 69,015.11 | 69,420.20 |
| Interest expenses | -122,871.74 | -34,018.89 | -176,630.15 | -62,664.74 |
| Profit and loss portions of affiliated companies that are entered in the balance sheet in accordance with the equity method |
0.00 | -68,350.90 | 0.00 | -169,899.21 |
| Earnings before tax (EBT) | 9,279,732.34 | 5,245,891.00 | 11,643,391.27 | 7,599,238.26 |
| Income taxes | -3,125,468.40 | -1,674,096.20 | -3,915,438.99 | -2,443,155.94 |
| Group profit for the period | 6,154,263.94 | 3,571,794.80 | 7,727,952.28 | 5,156,082.32 |
| of which attributable to shareholders of secunet AG | 6,249,104.49 | 3,571,794.80 | 7,916,338.91 | 5,156,082.32 |
| of which attributable to non-controlling interests | -94,840.55 | 0.00 | -188,386.63 | 0.00 |
| Earnings per share (diluted / undiluted) | 0.97 | 0.55 | 1.22 | 0.80 |
| Average number of shares outstanding (diluted / undiluted), units | 6,469,502 | 6,469,502 | 6,469,502 | 6,469,502 |
(according to IFRS) for the period from 1 January 2019 to 30 June 2019
| 1 Apr– 30 Jun 2019 |
1 Apr– 30 Jun 2018 |
1 Jan– 30 Jun 2019 |
1 Jan– 30 Jun 20188 |
|---|---|---|---|
| 6,154,263.94 | 3,571,794.80 | 7,727,952.28 | 5,156,082.32 |
| -920,000.00 | 0.00 | -920,000.00 | 0.00 |
| 293,756.00 | 0.00 | 293,756.00 | 0.00 |
| -626,244.00 | 0.00 | -626,244.00 | 0.00 |
| 273,727.30 | -1,456.11 | 273,727.30 | -8,257.20 |
| -352,516.70 | -1,456.11 | -352,516.70 | -8,257.20 |
| 5,801,747.24 | 3,570,338.69 | 7,375,435.58 | 5,147,825.12 |
| 5,896,587.79 | 3,570,338.69 | 7,563,822.21 | 5,147,825.12 |
| -94,840.55 | 0.00 | -188,386.63 | 0.00 |
(according to IFRS) for the period from 1 January 2019 to 30 June 2019
| in euros | 1 Jan– 30 Jun 2019 |
1 Jan– 30 Jun 2018 |
|---|---|---|
| Cash flow from operating activities | ||
| Earnings before tax (EBT) | 11,643,391.27 | 7,599,238.26 |
| Depreciation and amortisation of tangible and intangible fixed assets | 3,062,975.26 | 1,009,844.53 |
| Change in provisions | -4,684,597.94 | -8,219,191.54 |
| Book gains/losses (net) on the sale of intangible assets and of property, plant and equipment | 213.76 | 9,574.00 |
| Interest result | 107,615.04 | -6,755.46 |
| Change in receivables, contract assets, inventories and other assets | -19,219,631.75 | 4,516,506.65 |
| Change in liabilities, contract liabilities and deferred income | -234,354.89 | -20,279,434.01 |
| Profit and loss portions of affiliated companies that are entered in the balance sheet in accordance with the equity method |
0.00 | 169,899.21 |
| Tax paid | -9,216,489.50 | -5,093,379.47 |
| Cash from operating activities | -18,540,878.75 | -20,293,697.83 |
| Cash flow from investing activities | ||
| Purchase of intangible assets and of property, plant and equipment | -2,639,421.33 | -2,766,806.70 |
| Proceeds from the sale of intangible assets and of property, plant and equipment | 2,843.46 | 6,006.00 |
| Purchase of financial assets | -708.22 | -33,586.31 |
| Cash outflow from investing activities | -2,637,286.09 | -2,794,387.01 |
| Cash flow from financing activities | ||
| Dividend payment | -13,197,784.08 | -7,763,402.40 |
| Repayment portion of lease payments1 | -1,199,123.95 | 0.00 |
| Interest received | 69,015.11 | 44,731.30 |
| Interest paid | -114,212.15 | -5,448.74 |
| Cash outflow from financing activities | -14,442,105.07 | -7,724,119.84 |
| Effects of exchange rate changes on cash and cash equivalents | -1,825.48 | -1,134.01 |
| Change in cash and cash equivalents | -35,622,095.39 | -30,813,338.69 |
| Cash and cash equivalents at the beginning of the period | 56,084,381.70 | 62,922,886.67 |
| Cash and cash equivalents at the end of the period | 20,462,286.31 | 32,109,547.98 |
1 The Group adopted IFRS 16 for the first time as at 1 January 2019. Due to the transitional provision applied, the comparative figures have not been restated.
(according to IFRS) for the period from 1 January 2019 to 30 June 2019
| Other reserves | ||||||||
|---|---|---|---|---|---|---|---|---|
| in euros | Share capital | Capital reserves |
Reserve for treasury shares |
Currency conversion differences from the currency conversion of financial statements of foreign subsidiaries |
Revaluation of defined benefit pension plans |
Income tax attributable to components of the other income /loss |
Total other reserves |
|
| Equity as at 31 Dec 2017 / 1 Jan 2018 |
6,500,000.00 | 21,922,005.80 | -103,739.83 | -5,490.41 | -2,120,568.20 | 682,337.88 | -1,547,460.56 | |
| Adjustment amount due to first-time adoption of IFRS 9 |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||
| Group profit 1 Jan – 30 Jun 2018 |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||
| Other comprehensive income /loss 1 Jan – 30 Jun 2018 |
0.00 | -8,257.20 | 0.00 | 0.00 | -8,257.20 | |||
| Consolidated comprehensive income 1 Jan – 30 Jun 2018 |
0.00 | -8,257.20 | 0.00 | 0.00 | -8,257.20 | |||
| Dividend payment | ||||||||
| Equity as at 30 Jun 2018 / 1 Jul 2018 |
6,500,000.00 | 21,922,005.80 | -103,739.83 | -13,747.61 | -2,120,568.20 | 682,337.88 | -1,555,717.76 | |
| Change in the consolidated Group |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||
| Group profit 1 Jul– 31 Dec 2018 |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||
| Other comprehensive income /loss 1 Jul– 31 Dec 2018 |
0.00 | 0.00 | -106,060.00 | 33,843.75 | -72,216.25 | |||
| Consolidated comprehensive income 1 Jul – 31 Dec 2018 |
0.00 | 0.00 | -106,060.00 | 33,843.75 | -72,216.25 | |||
| Equity as at 31 Dec 2018 / 1 Jan 2019 |
6,500,000.00 | 21,922,005.80 | -103,739.83 | -13,747.61 | -2,226,628.20 | 716,181.63 | -1,627,934.01 | |
| Change in the consolidated Group |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||
| Group profit 1 Jan – 30 Jun 2019 |
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||
| Other comprehensive income /loss – Change in the consolidated Group |
0.00 | 273,727.30 | 0.00 | 0.00 | 273,727.30 | |||
| Other comprehensive income /loss 1 Jan – 30 Jun 2019 |
0.00 | 0.00 | -920,000.00 | 293,756.00 | -626,244.00 | |||
| Other comprehensive income /loss 1 Jan – 30 Jun 2019 |
0.00 | 273,727.30 | -920,000.00 | 293,756.00 | -352,516.70 | |||
| Consolidated comprehensive income 1 Jan – 30 Jun 2019 |
0.00 | 273,727.30 | -920,000.00 | 293,756.00 | -352,516.70 | |||
| Dividend payment | 0.00 | 0.00 | ||||||
| Equity as at 30 Jun 2019 | 6,500,000.00 | 21,922,005.80 | -103,739.83 | 259,979.69 | -3,146,628.20 | 1,009,937.63 | -1,980,450.71 | |
| Total | Non-controlling interests |
Equity attributable to shareholders of secunet AG |
Revenue reserves |
|---|---|---|---|
| 59,087,334.27 | 0.00 | 59,087,334.27 | 32,212,789.03 |
| -11,300.00 | 0.00 | -11,300.00 | -11,300.00 |
| 5,156,082.32 | 0.00 | 5,156,082.32 | 5,156,082.32 |
| -8,257.20 | 0.00 | -8,257.20 | 0.00 |
| 5,136,525.12 -7,763,402.40 |
0.00 0.00 |
5,136,525.12 -7,763,402.40 |
5,144,782.32 -7,763,402.40 |
| 56,460,456.99 | 0.00 | 56,460,456.99 | 29,594,168.95 |
| 460,982.48 | 458,958.36 | 2,024.12 | 2,024.12 |
| 12,667,136.50 | -100,155.24 | 12,767,291.74 | 12,767,291.74 |
| -72,216.25 | 0.00 | -72,216.25 | 0.00 |
| 13,055,902.73 | 358,803.12 | 12,697,099.61 | 12,769,315.86 |
| 69,516,359.72 | 358,803.12 | 69,157,556.60 | 42,363,484.81 |
| 359,260.38 | 717,674.54 | -358,414.16 | -358,414.16 |
| 7,727,952.28 | -188,386.63 | 7,916,338.91 | 7,916,338.91 |
| 273,727.30 | 0.00 | 273,727.30 | 0.00 |
| -626,244.00 | 0.00 | -626,244.00 | 0.00 |
| -352,516.70 | 0.00 | -352,516.70 | 0.00 |
| 7,734,695.96 | 529,287.91 | 7,205,408.05 | 7,557,924.75 |
| -13,197,784.08 | 0.00 | -13,197,784.08 | -13,197,784.08 |
| 64,053,271.60 | 888,091.03 | 63,165,180.57 | 36,723,625.48 |
Consolidated statement of changes in equity
Other reserves
Currency conversion differences from the currency conversion of financial statements of foreign subsidiaries
(according to IFRS) for the period from 1 January 2019 to 30 June 2019
These Consolidated Interim Financial Statements as at 30 June 2019 have been prepared in compliance with the provisions of International Accounting Standard (IAS) 34 "Interim Financial Reporting", which governs interim financial statements in accordance with International Financial Reporting Standards. They are Condensed Consolidated Interim Financial Statements in accordance with IAS 34 as adopted by the EU, which means they do not include all the information required by IFRS for consolidated financial statements at the end of a financial year. The Consolidated Interim Financial Statements must therefore be read in conjunction with the IFRS consolidated financial statements as at 31 December 2018 (Consolidated Financial Statements). These Consolidated Interim Financial Statements have not been audited, but have been reviewed by an auditor pursuant to Article 115 of the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG). The Condensed Consolidated Interim Financial Statements and the Interim Group Management Report for the first halfyear 2019 were approved by the Management Board of secunet Security Networks AG on 6 August 2019.
The consolidation principles and the method of currency translation correspond to those used for the Consolidated Annual Financial Statements for the 2018 financial year. The accounting and valuation methods were retained. The Consolidated Financial Statements of secunet Security Networks AG as at 31 December 2018 were prepared on the basis of Articles 315 and 315e of the German Commercial Code (Handelsgesetzbuch, HGB) and in accordance with the International Financial Reporting Standards (IFRS) as they are to be applied in the European Union.
IAS 20 has been applied for the first time, as this is the first time that such material circumstances have arisen. Government subsidies for assets are offset against the procurement/production costs of the subsidised asset and thus represent a reduction in procurement costs. The subsidy is recognised on a pro rata basis in the income statement in the form of lower depreciation.
Other subsidies are recognised as income in the period in which the entitlement arises.
The values shown in the consolidated balance sheet, consolidated income statement, consolidated statement of comprehensive income, consolidated cash flow statement and consolidated statement of changes in equity correspond to the normal course of business of secunet Group and do not include any extraordinary items.
The calculation of income taxes for domestic companies is based on a tax rate of 31.93%. The calculation of income taxes for foreign companies is based on the relevant national tax rates.
The preparation of the Consolidated Interim Financial Statements requires a series of assumptions and estimates on the part of management. As a result, it is possible that the figures reported in the Consolidated Interim Financial Statements may deviate from the actual future figures. The main assumptions and estimates are fundamentally unchanged compared to the Consolidated Financial Statements as at 31 December 2018.
The following standards were to be applied for the first time in the 2019 financial year:
| interpretation | Content of the amendment |
|---|---|
| IFRS 9 | Prepayment Features with Negative Compensation |
| IFRS 16 | Lease Accounting |
| Annual Improve ments to IFRS 2015 –2017 |
Amendments to standards IFRS 3, IAS 12 and IAS 23 |
| Amendment to IAS 28 |
Long-term Interests in Associates and Joint Ventures |
| Amendment to IAS 19 |
Accounting for an adjustment, curtailment or settlement of a defined benefit plan |
| IFRIC 23 | Uncertainty over Income Tax Treatments |
With the exception of IFRS 16, the amended standards and interpretations that came into force on 1 January 2019 have no effect on secunet Group.
The effects of IFRS 16 on the consolidated balance sheet and income statement are explained in the following paragraphs.
IFRS 16 introduces a uniform accounting model, according to which leases are to be recognised in the balance sheet of the lessee. A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are exceptions for short-term leases and leases for low-value assets. The accounting of the lessor is comparable with the current standard – this means that lessors will continue to classify leases as finance or operating leases.
To date, the Group has classified all leases in which it was the lessee as operating leases, with the result that no asset or liability items had to be recognised in the balance sheet. The lease payments were recognised as expenses in the income statement.
In future, the Group will report new assets (right-of-use assets) and lease liabilities for these leases in accordance with IFRS 16. The nature of the expenses associated with these leases will change as the Group now recognises depreciation on right-of-use assets and interest results from lease liabilities.
The marginal borrowing rates applied range from 1.0% to 2.1%.
In the case of leases previously classified as operating leases in accordance with IAS 17, the lease liabilities are recognised at the present value of the remaining lease payments.
The Group is not currently active as a lessor.
The Group applied IFRS 16 for the first time as at 1 January 2019 using the modified retrospective method. The cumulative effect arising from the application of IFRS 16 was reported as an adjustment to the opening balance of revenue reserves as at 1 January 2019: comparative information has not been adjusted.
In the changeover, the Group made use of the simplification rules in terms of retaining the definition of a lease. This means that the Group applies IFRS 16 to all contracts concluded before 1 January 2019 that have been identified as leases in accordance with IAS 17 or IFRIC 4. In addition, the term of leases for contracts with renewal options was determined retroactively.
The changeover had the following effects as at 1 January 2019:
| in million euros | Rented buildings | Vehicle leasing | Total |
|---|---|---|---|
| Right-of-use assets |
18.4 | 0.9 | 19.3 |
| Lease liabilities | 18.4 | 0.9 | 19.3 |
| Revenue reserves |
0.00 | 0.00 | 0.00 |
In addition to secunet Security Networks AG, the Consolidated Financial Statements include all associate companies that are controlled by secunet Security Networks AG. Control is considered to be in place if secunet has the power of disposition over the associate company, has a right to variable returns from the investment and has the opportunity to use the power of disposition over the associate company in a way that can influence the variable returns.
Non-controlling interests (minority shareholders) exist as a result of the consolidation of the two subsidiaries finally safe GmbH, Essen, and secustack GmbH, Dresden.
Compared with 31 December 2018, the group of consolidated companies has changed as follows as at 30 June: secunet SwissIT AG, Solothurn (Switzerland), liquidated (effective date: 30 June 2019) and deconsolidated, secustack GmbH, Dresden, newly founded and consolidated for the first time (effective date 1 April 2019).
The group of consolidated companies as at 30 June 2019 thus consists of secunet AG, secunet Service GmbH, secunet International Management GmbH, secunet International GmbH&Co. KG, finally safe GmbH (all Essen), secustack GmbH (Dresden) and secunet s.r.o. (Prague, Czech Republic). The consolidated subsidiary secunet s.r.o. (Prague, Czech Republic) is in liquidation.
As secunet SwissIT AG was already under liquidation, its deconsolidation only resulted in an insignificant deconsolidation loss of 32 thousand euros.
With effect from 1 April 2019, secustack GmbH was fully consolidated by secunet AG on account of the control exercised as of this date (51% of the shares and thus the majority of voting rights). The company was newly founded.
secunet paid a total of 625 thousand euros in cash for the proportionate share capital and the capital reserve. The fair value of the consideration is thus 625 thousand euros. Immaterial transaction costs were incurred.
The non-controlling interests were valued at 600 thousand euros at the acquisition date. This corresponds to the proportionate net assets (49%) at the time of acquisition.
The following assets and liabilities were acquired at the date of acquisition:
in thousand euros
| Cash | 637 |
|---|---|
| Intangible assets | 588 |
The carrying amounts of the assets correspond to their fair values.
As at 30 June 2019, the Company held 30,498 treasury shares, unchanged from 31 December 2018; this corresponds to 0.5% of the share capital.
In the first six months of the financial year, a total of 0.9 million euros from the revaluation of the defined benefit pension plans as at 30 June 2019 was recognised in the other comprehensive income of secunet Group, with no effect on profit or loss, which reduced equity. The revaluation includes the effects of the reduction in the actuarial interest rate from 1.9% as at 31 December 2018 to 1.3% as at 30 June 2019. In this connection, an effect from deferred taxes totalling 0.3 million euros had an opposite effect on equity.
The development project for the secunet communicator fulfilled the criteria for mandatory capitalisation as at the reporting date. Development costs amounting to 0.5 million euros were capitalised as intangible assets.
The dividend payment of secunet Security Networks AG is based on the Company's annual financial statements in accordance with commercial law. In accordance with the resolution passed by the Annual General Meeting on 15 May 2019, a dividend of 2.04 euros per share, i.e. a total of 13,197,784.08 euros, was paid from the reported balance sheet profit for the 2018 financial year.
secunet Group is split into two business units: the Public Sector business unit and the Business Sector business unit. Both business units are shown separately for the purposes of segment reporting, as they meet at least one of the quantitative thresholds defined in IFRS 8.13.
The Public Sector business unit offers its customers the SINA product family, i. e. solutions (software, hardware and management) for highly secure, cryptographic processing, transmission and storage of classified information with varying levels of confidentiality. Further solutions from the Public Sector business unit include products for electronic passports, automated (biometric) border controls and the ELSTER electronic tax declaration. Furthermore, a wide range of IT security products and services for public customers, ranging from IT security consulting and training to the equipment of large infrastructures with high-security technology and public key infrastructures, are also offered.
The Business Sector business unit offers IT security consulting and solutions for the healthcare market, the automotive industry and for providers in the field of critical infrastructures (including utilities).
| in thousand euros | Public Sector | Business Sector | secunet H1 2018 |
|---|---|---|---|
| Segment revenue | 55,492 | 7,669 | 63,161 |
| Cost of sales | -40,392 | -5,585 | -45,977 |
| Selling expenses | -5,197 | -1,103 | -6,300 |
| Research and development expenses | -167 | -197 | -364 |
| Administrative costs | -2,449 | -308 | -2,757 |
| Segment result (EBIT) | 7,287 | 476 | 7,763 |
| Interest result | 6 | ||
| Income from investments | -170 | ||
| Group profit before tax | 7,599 | ||
| Goodwill | 3,325 | 282 | 3,607 |
The accounting principles for the segments are identical to those used for the Consolidated Interim Financial Statements. Using apportionments, expenses (e.g. overhead costs) that are not directly allocable to the reportable segments are allocated to the reportable segments. A revenue-based allocation table is used for most cost items. The segments are managed on the basis of the segment results.
secunet Group realises its sales revenue entirely within the framework of contracts with customers.
The following overview breaks down sales by geographical characteristics, main revenue streams and revenue recognition.
With the exception of non-essential components, the segments' assets are focused on the domestic market.
| Public Sector | Business Sector | Group | ||||
|---|---|---|---|---|---|---|
| in thousand euros | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 |
| Geographical allocation | ||||||
| Domestic | 49,675.2 | 48,618.8 | 43,031.1 | 7,518.0 | 92,706.3 | 56,136.8 |
| Abroad | 8,093.8 | 6,873.0 | 232.9 | 151.2 | 8,326.7 | 7,024.2 |
| Total | 57,769.0 | 55,491.8 | 43,264.0 | 7,669.2 | 101,033.0 | 63,161.0 |
| Revenue generation | ||||||
| Consultancy business | 10,430.7 | 11,452.5 | 3,705.9 | 5,716.1 | 14,136.6 | 17,168.6 |
| Product business | 47,338.3 | 44,039.3 | 39,558.1 | 1,953.1 | 86,896.4 | 45,992.4 |
| Total | 57,769.0 | 55,491.8 | 43,264.0 | 7,669.2 | 101,033.0 | 63,161.0 |
| Recognition of sales revenue | ||||||
| Over time | 22,877.6 | 16,622.4 | 5,886.8 | 6,820.3 | 28,764.4 | 23,442.7 |
| At a point in time | 34,891.4 | 38,869.4 | 37,377.2 | 848.9 | 72,268.6 | 39,718.3 |
| Total | 57,769.0 | 55,491.8 | 43,264.0 | 7,669.2 | 101,033.0 | 63,161.0 |
The carrying amounts and fair values of the financial instruments reported in the balance sheet are as follows:
| 30 Jun 2019 | Carrying amounts | Fair value | ||||||
|---|---|---|---|---|---|---|---|---|
| in euros | Mandatory as FVTPL |
At amortised cost |
Other financial liabilities |
Total carrying amounts |
Level 1 | Level 2 | Level 3 | Total fair values |
| Financial assets measured at fair value |
||||||||
| Non-current financial assets |
5,861,596.22 | – | – | 5,861,596.22 | – | 5,861,596.22 | – | 5,861,596.22 |
| Financial assets not measured at fair value |
||||||||
| Cash and cash equivalents |
– | 20,462,286.31 | – | 20,462,286.31 | – | – | – | 0.00 |
| Trade receivables | – | 41,472,824.52 | – | 41,472,824.52 | – | – | – | 0.00 |
| Intercompany financial assets |
– | 40,947.90 | – | 40,947.90 | – | – | – | 0.00 |
| Other current and non-current assets |
– | 2,991,650.69 | – | 2,991,650.69 | – | – | – | 0.00 |
| 0.00 | 64,967,709.42 | 0.00 | 64,967,709.42 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Financial liabilities not measured at fair value |
||||||||
| Trade accounts payable |
– | – | 17,535,920.21 | 17,535,920.21 | – | – | – | 0.00 |
| Intercompany payables |
– | – | 63,291.95 | 63,291.95 | – | – | – | 0.00 |
| Other current liabilities |
– | – | 4,060,862.88 | 4,060,862.88 | – | – | – | 0.00 |
| 0.00 | 0.00 | 21,660,075.04 | 21,660,075.04 | 0.00 | 0.00 | 0.00 | 0.00 |
| 31 Dec 2018 | Carrying amounts | Fair value | ||||||
|---|---|---|---|---|---|---|---|---|
| in euros | Mandatory as FVTPL |
At amortised cost |
Other financial liabilities |
Total carrying amounts |
Level 1 | Level 2 | Level 3 | Total fair values |
| Financial assets measured at fair value |
||||||||
| Non-current financial assets |
5,860,888.00 | – | – | 5,860,888.00 | – 5,860,888.00 | – | 5,860,888.00 | |
| Financial assets not measured at fair value |
||||||||
| Cash and cash equivalents |
– | 56,084,381.70 | – | 56,084,381.70 | – | – | – | 0.00 |
| Trade receivables | – | 41,776,937.04 | – | 41,776,937.04 | – | – | – | 0.00 |
| Intercompany financial assets |
– | 452,438.07 | – | 452,438.07 | – | – | – | 0.00 |
| Other current and non-current assets |
– | 2,274,582.68 | – | 2,274,582.68 | – | – | – | 0.00 |
| 0.00 100,588,339.49 | 0.00 100,588,339.49 | 0.00 | 0.00 | 0.00 | 0.00 | |||
| Financial liabilities not measured at fair value |
||||||||
| Trade accounts payable |
– | – | 22,797,180.71 | 22,797,180.71 | – | – | – | 0.00 |
| Intercompany payables |
– | – | 283,951.48 | 283,951.48 | – | – | – | 0.00 |
| Other current liabilities |
– | – | 4,739,511.25 | 4,739,511.25 | – | – | – | 0.00 |
| 0.00 | 0.00 | 27,820,643.44 | 27,820,643.44 | 0.00 | 0.00 | 0.00 | 0.00 |
Mr Axel Deininger took over as Chairman of the Management Board of secunet Security Networks AG with effect from 1 June 2019. He succeeds Dr Rainer Baumgart, who has retired. Torsten Henn (Chief Operating Officer (COO)) and Dr Kai Martius (Chief Technical Officer (CTO)) were appointed as new members of the Management Board with effect from 1 June 2019. Together with Chief Financial Officer (CFO) Thomas Pleines, the Management Board thus consists of four members.
The consolidated companies of secunet Group have dealings with the main shareholder Giesecke&Devrient GmbH, Munich, and its affiliated companies in the course of their normal business activities. Furthermore, the main shareholder is granted short-term loans. All transactions are conducted in accordance with standard market terms.
In the first six months of the 2019 financial year, no members of the Management Board were promised or granted any benefits by a third party with regard to their activities as members of the Management Board. In the first six months of the 2018 financial year, the members of the Supervisory Board did not receive any further remuneration or benefits for services provided personally, in particular consulting and agency services, beyond the remuneration of the Supervisory Board regulated in the Articles of Association of secunet Security Networks AG. Neither the members of the Management Board nor the members of the Supervisory Board receive any loans from the Company.
There were no significant events after the balance sheet date.
Essen, 6 August 2019
Axel Deininger Torsten Henn
Dr Kai Martius Thomas Pleines
To secunet Security Networks Aktiengesellschaft, Essen:
We have reviewed the Condensed Consolidated Interim Financial Statements – comprising the consolidated balance sheet, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated cash flow statement, the consolidated statement of changes in equity and selected explanatory notes – and the Interim Group Management Report of secunet Security Networks Aktiengesellschaft, Essen, for the period from 1 January to 30 June 2019, which are integral parts of the Half-Year Report pursuant to Article 115 of the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG). The preparation of the Condensed Consolidated Interim Financial Statements in accordance with International Accounting Standard IAS 34 "Interim Financial Reporting", as adopted by the EU, and of the Interim Group Management Report in accordance with the requirements of the German Securities Trading Act (WpHG) applicable to interim group management reports is the responsibility of the Company's management. Our task is to issue a review report on the Condensed Consolidated Interim Financial Statements and on the Interim Group Management Report based on our review.
We conducted our review of the Condensed Consolidated Interim Financial Statements and the Interim Group Management Report in accordance with the German Generally Accepted Standards for Financial Statement Audits as promulgated by the Institut der Wirtschaftsprüfer (IDW). These standards require that we plan and perform the review in such a way that we can preclude, through critical appraisal and with reasonable assurance, that the Condensed Consolidated Interim Financial Statements have not been prepared, in all material respects, in accordance with IAS 34 "Interim Financial Reporting" as adopted by the EU, and that the Interim Group Management Report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act (WpHG) applicable to interim group management reports. A review is essentially limited to the questioning of Company personnel and analytical assessments and therefore does not provide the same assurance as is attainable in a financial statement audit. Since, in accordance with our mandate, we have not performed an audit of the financial statements, we cannot issue an auditor's report.
Based on our review, no matters have come to our attention that cause us to presume that the Condensed Consolidated Interim Financial Statements have not been prepared, in all material respects, in accordance with IAS 34 "Interim Financial Reporting" as adopted by the EU, or that the Interim Group Management Report has not been prepared, in all material respects, in accordance with the requirements of the German Securities Trading Act (WpHG) applicable to interim group management reports.
Düsseldorf, 6 August 2019
KPMG AG Wirtschaftsprüfungsgesellschaft
Auditor Auditor
Bornhofen Dr Sommerhoff
"To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the Consolidated Interim Financial Statements give a true and fair view of the assets, liabilities, financial position and results of operations of the Group, and the Interim Group Management Report includes a true and fair presentation of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remainder of the financial year."
Essen, 6 August 2019
Axel Deininger Torsten Henn
Dr Kai Martius Thomas Pleines
7 August Half-Year Report 2019
6 November Group Quarterly Statement as at 30 September 2019
Issued by secunet Security Networks AG Kurfürstenstraße 58 45138 Essen, Germany
Investor Relations secunet Security Networks AG Kurfürstenstraße 58 45138 Essen, Germany Tel.: +49 201 54 54-12 27 Fax: +49 201 54 54-12 28 E-mail: [email protected] Internet:www.secunet.com
sam waikiki, Hamburg, Germany www.samwaikiki.de
Text secunet Security Networks AG
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