Interim / Quarterly Report • Feb 20, 2018
Interim / Quarterly Report
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| FIGURES IN € k | Oct. 1, 2017 - Dec. 31, 2017 |
Oct. 1, 2016 - Dec. 31, 2016 |
Change | |
|---|---|---|---|---|
| Revenues | 4,283 | 5,537 | -23 % | |
| of which segment1 | Digital Mammography | 3,003 | 2,660 | 13 % |
| Other Diagnostics | 1,280 | 2,877 | -56 % | |
| EBITDA | 2,200 | 3,220 | -32 % | |
| EBITDA margin | 51 % | 58 % | ||
| EBIT | 1,954 | 2,875 | -32 % | |
| EBIT margin | 46 % | 52 % | ||
| Net financial result | -406 | 1,565 | ||
| EBT | 1,548 | 4,440 | -65 % | |
| Net profit for the period | 1,547 | 4,427 | -65 % | |
| Earnings per share in € (basic) | 0.85 | 2.43 | -65 % | |
| Earnings per share in € (diluted) | 0.85 | 2.40 | -65 % | |
| Dec. 31, 2017 | Sep. 30, 2017 | Change | ||
| Equity capital | 34,058 | 32,511 | 5 % | |
| Intangible assets | 11,623 | 11,722 | -1 % | |
| Non-current and current liabilities | 12,051 | 16,568 | -27 % | |
| Balance sheet total | 46,109 | 49,079 | -6 % | |
| Equity ratio in % | 74 % | 66 % | ||
| Liquid funds2 | 10,319 | 29,735 | -65 % | |
| Employees3 | 93 | 94 |
1 Excluding intersegment revenues.
2 Cash
3 Full-time equivalents as of balance sheet date.
| As at December 31, 2017 | |
|---|---|
| Industry sector | Software / Medical Technology |
| Subscribed capital | € 1,820,000.00 |
| No. of shares | 1,820,000 |
| Last quotation on December 30, 2016 | € 37.95 |
| Last quotation on December 29, 2017 | € 39.62 |
| High/low in fiscal year 2017/2018 | € 39.83 / € 38.75 |
| Market capitalization | € 72.108 m |
| Treasury stock | 0 (0 %) |
| Free float | 17.8 % |
| Prime Standard (Regulated market) | Frankfurt and Xetra |
| Over-the-counter markets | Berlin, Dusseldorf, Munich, Stuttgart |
| Indices | CDAX, PrimeAS, TechnologyAS, DAXsector Soft ware, DAXsubsector Software, GEX |
| ISIN / WKN / Ticker symbol | DE000A0LBFE4 / A0LBFE / M3V |
| KEY FIGURES (IFRS)1 | ||
|---|---|---|
| LETTER TO THE SHAREHOLDERS3 | ||
| THE MEVIS SHARE5 | ||
| INTERIM MANAGEMENT REPORT Q1 2017/20187 | ||
| Preamble7 | ||
| Basics of the company7 | ||
| Structure7 | ||
| Short summary of business activities 7 | ||
| Reporting segments 8 | ||
| Economic report8 | ||
| Earnings position8 | ||
| Financial position 9 | ||
| Net asset position9 | ||
| Material events occurring after the balance sheet date9 | ||
| Opportunities and risk report9 | ||
| Outlook10 | ||
| INCOME STATEMENT11 | ||
| STATEMENT OF COMPREHENSIVE INCOME 11 | ||
| STATEMENT OF FINANCIAL POSITION12 | ||
| STATEMENT OF CASH FLOW 13 | ||
| STATEMENT OF CHANGES IN EQUITY 14 | ||
| NOTES TO THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 201715 | ||
| Basic information15 | ||
| General disclosures 15 | ||
| Recognition and measurement methods15 | ||
| Effects of new accounting standards15 | ||
| Selected notes on the balance sheet and income statement 16 | ||
| 1. | Revenues16 | |
| 2. | Staff costs 16 | |
| 3. | Other operating expenses16 | |
| 4. | Depreciation and amortization 16 | |
| 5. | Net financial result 17 | |
| 6. | Income taxes17 | |
| 7. | Equity-method investments17 | |
| 8. | Current other financial assets 17 | |
| 9. | Shareholders´ equity17 | |
| 10. | Other financial liabilities 18 | |
| 11. | Transactions with related parties 18 | |
| 12. | Contingent receivables and contingent liabilities18 | |
| 13. | Earnings per share18 | |
| 14. | Segment information18 | |
| 15. | Post balance sheet events19 | |
| DISCLAIMER20 | ||
| FINANCE CALENDAR 201821 |
from left: Marcus Kirchhoff, Dr. Robert Hannemann
Dear Shareholders, Customers, Business Associates and Employees
Following the very strong financial year 2016/2017, sales declined as expected in the first quarter of the new fiscal year, with a significant increase in the services business. Cooperation with and integration into Varex Imaging is progressing well: In October 2017, for example, we granted a loan of US\$ 19.2 million to our majority shareholder Varex Imaging Deutschland AG, sales with Varian and Varex Imaging are increasing in importance, and during the course of the fiscal year, we expect further steps towards organizational and administrative integration into our parent company.
Our performance in detail: Sales in the first quarter of fiscal year 2017/2018 came to € 4,283 k, about 23 % below the previous year (€ 5,537 k). The previous year's figures include the one-time sale of MeVisLab usage rights in the amount of € 1,800 k as part of the service revenues of the Other Diagnostics segment. Revenues from new licenses fell by 13 % to € 1,086 k and maintenance business fell by 4 %. The services business, mainly cloud-based technology – excluding the MeVisLab usage rights – more than doubled with a strong increase to € 1,434 k. Revenues in the Digital Mammography segment increased by 12 % to € 3,003 k (previous year: € 2,660 k), while revenues in the Other Diagnostics segment fell to € 1,280 k (previous year: € 2,877 k), which corresponds to growth of 19 % for this segment – excluding the MeVisLab usage rights.
As planned, operating costs rose slightly in the first quarter. Personnel expenses increased by 3 %, whereas other operating expenses in the first quarter fell to € 441 k (previous year: € 496 k) compared to the same quarter of the previous year.
As a result of the decline in revenues, EBITDA (earnings before financial result, taxes, depreciation and amortization) decreased by 32 % compared to the previous year from € 3,220 k to € 2,200 k.
As expected, depreciation, amortization and impairments of intangible assets and property, plant and equipment fell by 29 % to € 246 k (prev. year: € 345 k), while amortization of development services declined by € 96 k to € 108 k (prev. year: € 204 k). Thus, earnings before financial result and taxes (EBIT) amounted to € 1,954 k in the reporting period (prev. year: € 2,875 k). The EBIT margin decreased slightly to 46 % compared to a previous year value of 52 %.
The financial result declined significantly in the period under review to € -406 k (prev. year: € 1,565 k). In comparison to the previous year, there were significant changes in the balance of income and expenses from exchange rate differences of € -445 k (prev. year: € 1,620 k), as well as in the earnings of the 51 % share in MeVis BreastCare GmbH & Co. KG of € 5 k (prev. year: € -74 k), which is recognized at equity.
Earnings before taxes (EBT) came to € 1,548 k in the reporting period (prev. year: € 4,440 k). Accordingly, the EBT margin decreased significantly to 36 % compared to the previous year's value of 80 %. The tax result came to € -1 k (prev. year: € -13 k).
Net profit after taxes therefore amounted to € 1,547 k (prev. year: € 4,427 k), corresponding with undiluted earnings per share of € 0.85 (prev. year: € 2.43).
As of December 31, 2017, liquid funds decreased by € -19,416 k compared to the end of the fiscal year 2016/2017 to € 10,319 k, mainly due to the granting of a loan to Varex Imaging Deutschland AG.
For fiscal year 2017/2018, a significant decline in revenues to between € 14.5 million and € 15.0 million is expected. In addition to the non-recurring effect of € 1.8 million reported in Q1 2017 from the sale of MeVisLab usage rights, a declining business expectation of the Digital Mammography segment is contributing to this development, although this segment will still be the main generator of sales. Earnings before financial result and taxes (EBIT) should also decline significantly to between € 3.0 million and € 3.5 million as a result of the expected sales development. As in the previous reporting period, the Executive Board will regularly review its expectations during fiscal year 2017/2018 based on current business developments.
We would like to take this opportunity to once again thank all employees for their exceptional performance as well as our business associates, customers and shareholders for their confidence in us!
Marcus Kirchhoff Dr. Robert Hannemann
Chairman & CEO Member of the Executive Board
The highest price recorded for the MeVis share in electronic XETRA trading over the reporting period was € 39.83, and the lowest price was € 38.75. MeVis Medical Solutions AG finished the first quarter with a share price of € 39.62 (XETRA) compared to € 39.11 on September 30, 2017 or € 37.95 on December 30, 2016. As a result, the value of the MeVis share at the end of the first quarter of the current fiscal year rose by just under 1 % compared to the closing price at the end of the 2016/2017 fiscal year. Over the last twelve months, the MeVis share has performed slightly better (+4 %). Market capitalization was around € 72.11 million at the end of the period, in relation to the 1,820,000 shares in circulation. The number of registered deposit accounts at the end of the period, at 655, was significantly reduced compared with December 31, 2016 (769).
In April 2015, VMS Deutschland Holdings GmbH acquired a majority shareholding in MeVis Medical Solutions AG following a voluntary public tender offer. Since October20, 2015, a control and profit and loss transfer agreement has been in force between VMS Deutschland Holdings GmbH and MeVis Medical Solutions AG, in which VMS Deutschland Holdings GmbH has committed itself, at the request of each outside shareholder, to purchase its MeVis shares for a cash settlement in the amount of € 19.77 per share. Alternatively, VMS Deutschland Holdings GmbH guarantees those outside shareholders of MeVis Medical Solutions AG, who do not wish to make use of the settlement offer, for the duration of the domination and profit and loss transfer agreement, the annual payment of a compensatory amount per fiscal year of MeVis Medical Solutions AG for every registered share of MeVis Medical Solutions AG with a pro rata share in the share capital of € 1.00 per share in the amount of € 1.13 gross / € 0.95 net.
With the spin-off agreement dated December 28, 2016 and registration in the commercial register on October 21, 2017, the transfer of the shares in MMS AG from VMS Deutschland Holdings GmbH to Varex Imaging Deutschland AG, an indirect subsidiary of Varex Imaging Corporation, Salt Lake City, Utah, was resolved with economic effect as of December 30, 2016. The domination and profit and loss transfer agreement between MMS AG and VMS Deutschland Holdings GmbH is also subject of the spin-off agreement. Varex Imaging Deutschland AG has thus adopted the above-mentioned obligations.
| 3 M Dec. 31, 2017 |
12 M Sept. 30, 2017 |
9 M Jun. 30, 2017 |
|
|---|---|---|---|
| Closing price in € | 39.62 | 39.11 | 37.25 |
| Period high in € | 39.83 | 41.00 | 41.00 |
| Period low in € | 38.75 | 35.90 | 35.90 |
| Market capitalization in million € (XETRA ultimo) | 72.1 | 71.2 | 67.8 |
| Number of shares | 1,820,000 | 1,820,000 | 1,820,000 |
| Price-to-earnings ratio (XETRA ultimo) | 11.65 | 12.66 | 12.82 |
| Earnings per share in € (basic) | 0.85 | 3.09 | 2.18 |
| Earnings per share in € (diluted) | 0.85 | 3.09 | 2.18 |
At the end of the reporting period Varex Imaging Deutschland AG, an indirect subsidiary of the Varex Imaging Corporation, Salt Lake City, Utah, USA, held 73.65 % of the share capital of MeVis Medical Solutions AG. Other institutional shareholders include HANSAINVEST Hanseatische Investment-GmbH, which holds approximately 5.51 % of the share capital in MeVis Medical Solutions AG, and Oppenheim Asset Management Services S.à.r.l., which holds approximately 3.01 %, according to shareholder notifications that we have received. As a result, around 17.83 % of shares are currently in free float.
Fig.: Shareholder structure as at December 31, 2017 (In accordance with the shareholder notifications received by us.)
As resolved during the Annual General Meeting on June 7, 2016, MeVis Medical Solutions AG, Bremen, (hereafter: "MMS AG" or "Company") has changed its fiscal year. The Company's fiscal year starts on October 1 and ends on September 30 of the following year. Accordingly, the first quarter of fiscal year 2017/2018, which is reported upon here, covers the period from October 1 to December 31, 2017. The previous year's figures indicated below refer to the first quarter of fiscal year 2016/2017, the period from October 1 to December 31, 2016.
Through a joint venture with Siemens Healthcare GmbH, Munich (hereafter: "Siemens"), MMS AG holds 51 % of MeVis BreastCare GmbH & Co. KG, Bremen, (hereafter: "MBC" or "MBC KG").
Since April 21, 2015, MMS AG has belonged to the Varian Group under the leadership of Varian Medical Systems, Inc., Palo Alto, California, USA, through VMS Deutschland Holdings GmbH, Darmstadt. With the spin-off agreement dated December 28, 2016, the transfer of the shares in MeVis Medical Solutions AG, amounting to 73.65 % of the total share capital, from VMS Deutschland Holdings GmbH, Darmstadt, an indirect subsidiary of Varian Medical Systems, Inc. of Palo Alto, California, USA, to Varex Imaging Deutschland AG was resolved. The object of the spin-off agreement is also the control and profit-and-loss transfer agreement between MMS AG and VMS Deutschland Holdings GmbH. Varex Imaging Deutschland AG is managed by the Varex Imaging Corporation, Salt Lake City, Utah, USA, which has emerged as a spin-off from Varian Medical Systems, Inc., Palo Alto, California, USA. Varex Imaging Deutschland AG, an indirect subsidiary of Varex Imaging Corporation, received an authorization from VMS Deutschland Holdings GmbH on December 31, 2016 to exercise the voting rights in MeVis Medical Solutions AG, Bremen, Germany, for an unlimited period of time and not bound by instructions. The spin-off was entered in the commercial register of VMS Deutschland Holdings GmbH on October 12, 2017. Varex Imaging Corporation prepares the consolidated financial statements for the largest and smallest group of entities and MMS AG is included in these. The consolidated financial statements are filed with the U.S. Securities and Exchange Commission (SEC) and can be obtained from the head office of the group parent company.
MMS AG and its affiliate MBC KG (hereinafter also collectively: "MeVis" or the "Companies") develop innovative software for analyzing and evaluating image data and marketing it to equipment manufacturers of medical devices and providers of medical IT platforms.
Clinical focuses are image-based early detection and diagnosis of epidemiologically important diseases such as breast, lung, liver and prostate cancer, as well as neurological disorders. The software applications support many of the imaging modalities available. These not only include X-ray modalities such as computed tomography, digital mammography or digital tomosynthesis, but also magnetic resonance imaging, digital sonography and the simultaneous use of multiple modalities (multimodality). MeVis supplies technologies and software applications for global medical industry leaders, meeting their needs and helping them to strengthen their technological leadership positions.
Besides the sale of software licenses, maintenance contracts and services in the field of software development for medical technology companies, MeVis also offers services to clinical end customers. These include threedimensional technical visualizations ("MeVis Distant Services"), interactive online training options to improve the diagnostic capabilities of clinicians and special online applications in teleradiology ("MeVis Online Services).
For reporting purposes and internal governance, MeVis has two operating segments ("Digital Mammography" and "Other Diagnostics").
The Digital Mammography segment develops and markets software products which support breast diagnostic imaging and intervention. Aside from the original products for digital mammography, new software applications for other imaging modalities such as ultrasound, magnetic resonance imaging and tomosynthesis were added. These products are sold to the medical technology company Hologic.
In addition to the breast diagnostics business based on magnetic resonance imaging conducted with the customer Invivo Corporation, the Other Diagnostics segment also includes digital radiology products (e.g. magnetic resonance imaging (MRI), computed tomography (CT), etc.) for other types of diseases such as lung, prostate and intestinal disorders as well as general image-based analysis and diagnostics of radiology images. Furthermore, the business with Vital Images for lung diagnostics and general analysis of MR-image data is included in this segment. Other main activities in this segment include the services of "MeVis Distant Services" for technical visualizations, which are used in training, for publications, presentations and for research purposes. In addition, this segment includes MeVis Online Services, e.g. interactive online trainings ("MeVis Online Academy") to improve the diagnostic capabilities of clinical end customers.
Sales in the first quarter of fiscal year 2017/2018 came to € 4,283 k, about 23 % below the previous year (€ 5,537 k). Licensing business declined by 13 % in the third quarter to € 1,086 k (prev. year: € 1,251 k), and maintenance business fell by 4 % to € 1,763 k (prev. year: € 1,834 k). The service business fell from € 2,447 k in the previous-year period to € 1,434 k. In the previous year, the revenues from services also include the oneoff revenue from the sale of MeVisLab usage rights of € 1,800 k.
Revenues thus amounted to € 4,283 k in the first quarter of the year (prev. year: € 5,537 k), of which € 3,003 k was attributable to the Digital Mammography segment (prev. year: € 2,660 k) and € 1,280 k to Other Diagnostics (prev. year: € 2,877 k). At 70 % (prev. year: 71 %, without one-off revenue from sale of usage rights), the Digital Mammography segment continues to be the main source of revenues at the Company.
Personnel expenses increased by 3 % to € 1,823 k (prev. year: € 1,771 k). MMS AG had 105 employees on average in the first quarter of the fiscal year 2017/2018. This corresponds to 93 full-time equivalents (prev. year: 105 employees or 92 full-time equivalents).
Other operating expenses were down year on year and totalled € 441 k (prev. year: € 496 k). These expenses mainly comprised rental/leasing expenses of € 149 k (prev. year: € 146 k), legal and consulting costs of € 47 k (prev. year: € 27 k), travel expenses of € 33 k (prev. year: € 64 k) and cost of preparing and auditing financial statements of € 26 k (prev. year: € 20 k).
EBITDA (earnings before financial result, taxes, depreciation and amortization) totalled € 2,200 k in the period under review (prev. year: € 3,220 k). Accordingly, the EBITDA margin decreased by a considerable margin to 51 % (prev. year: 58 %).
As expected, depreciation, amortization and impairments of intangible assets and property, plant and equipment fell by 29 % to € 246 k (prev. year: € 345 k), while amortization of development services declined by € 96 k to € 108 k (prev. year: € 204 k).
Earnings before financial result and taxes (EBIT) amounted to € 1,954 k in the reporting period (prev. year: € 2,875 k). The EBIT margin decreased to 46 % compared to a previous year value of 52 %.
The financial result declined significantly in the period under review to € -406 k (prev. year: € 1,565 k). In comparison to the previous year, there were significant changes in the balance of income and expenses from exchange rate differences of € -445 k (prev. year: € 1,620 k), as well as in the earnings of the 51 % share in MeVis BreastCare GmbH & Co. KG of € 5 k (prev. year: € -74 k), which is recognized at equity.
Earnings before taxes (EBT) came to € 1,548 k in the reporting period (prev. year: € 4,440 k). Accordingly, the EBT margin decreased significantly to 36 % compared to the previous year's value of 80 %. The tax result came to € -1 k (prev. year: € -13 k).
Net profit after taxes therefore amounted to € 1,547 k (prev. year: € 4,427 k).
Undiluted earnings per share fell to € 0.85 (prev. year: € 2.43).
Cash flow from current operating activities came to € 993 k (prev. year: € 902 k) in the period under review. This comprises earnings before financial result and taxes (EBIT) of € 1,954 k (prev. year: € 2,875 k), adjusted for depreciation in the amount of € 246 k (prev. year: € 345 k), the total of interest paid and received in the amount of € 4 k (prev. year: € 43 k), the total of taxes paid and received in the amount of € -70 k (prev. year: € -13 k), changes in trade receivables and other assets in the amount of € -850 k (prev. year: € -2,305 k), and changes in trade payables and other liabilities in the amount of € -291 k (prev. year: € -48 k).
Net cash inflow from investing activities stood at € -139 k in the period under review (prev. year: € -16 k) and predominantly comprised payments for investments.
Cash flow from financing activities amounted to € -20,168 k, as profit of the fiscal year 2016 of € 4,157 k was paid out and a loan of € 16,011 k was granted to Varex Imaging Deutschland AG.
The liquidity-relevant change in cash and cash equivalents came to € -19,314 k in the period under review (prev. year: € 886 k).
Liquid funds amounted to € 10,319 k (September 30, 2017: € 29,735 k) as of the balance sheet date. They consist solely of cash.
Total assets decreased by € 2,970 k to € 46,109 k as of the end of the first quarter (September 30, 2017: € 49,079 k). The equity ratio increased slightly to 74 % (September 30, 2017: 66 %). Equity covered 219 % of fixed assets (September 30, 2017: 208 %), and fixed assets amounted to 51 % of current assets (September 30, 2017: 47 %). Fixed assets fell to 34 % of total assets (September 30, 2017: 32 %).
The decrease in assets is largely due to the trend in liquidity. As a result of the net income for the period, the equity capital increased by 5 % to € 34,058 k (September 30, 2017: € 32,511 k) and current liabilities fell to € 11,750 k (September 30, 2017: € 16,267 k) as a result of the payment of the profit transfer in fiscal year 2016/2017. There were no other significant changes in liabilities.
There have been no transactions of material significance for the Company after the reporting date.
No material changes have occurred with regard to the risk situation of the Company since the beginning of the fiscal year. Therefore, the statements, made in the opportunities and risk report of the annual financial statements for the fiscal year as of September 30, 2017, remain valid.
For fiscal year 2017/2018, a significant decline in revenues to between € 14.5 million and € 15.0 million is expected. In addition to the non-recurring effect of € 1.8 million reported in Q1 2017 from the sale of MeVisLab usage rights, a declining business expectation of the Digital Mammography segment is contributing to this development, although this segment will still be the main generator of sales. Earnings before financial result and taxes (EBIT) should also decline significantly to between € 3.0 million and € 3.5 million as a result of the expected sales development.
As in the previous reporting period, the Executive Board will regularly review its expectations during fiscal year 2017/2018 based on current business developments.
Bremen, February 20, 2018
Marcus Kirchhoff Dr. Robert Hannemann Chairman & CEO Member of the Executive Board
for the period October 1 through December 31, 2017
| FIGURES IN € k | Notes | Oct. 1 - Dec. 31, 2017 |
Oct. 1 - Dec. 31, 2016 |
|---|---|---|---|
| Revenues | 1 | 4,283 | 5,537 |
| Other operating income | 255 | 149 | |
| Cost of material | -74 | -199 | |
| Staff costs | 2 | -1,823 | -1,771 |
| Other operating expenses | 3 | -441 | -496 |
| Earnings before financial result, taxes, deprecia tion and amortization (EBITDA) |
2,200 | 3,220 | |
| Depreciation, amortization and impairment of intangible and tangible assets |
4 | -246 | -345 |
| Earnings before financial result and tax (EBIT) | 1,954 | 2,875 | |
| Share of profit of equity-method investments | 5 | -74 | |
| Interest income | 39 | 25 | |
| Other net financial result | -450 | 1,614 | |
| Net financial result | 5 | -406 | 1,565 |
| Earnings before tax (EBT) | 1,548 | 4,440 | |
| Income tax | 6 | -1 | -13 |
| Net loss/profit for the period | 1,547 | 4,427 | |
| Earnings per share in € | 13 | ||
| Basic | 0.85 | 2.43 | |
| Diluted | 0.85 | 2.40 |
for the period October 1 through December 31, 2017
| FIGURES IN € k | Notes | Oct. 1 - Dec. 31, 2017 |
Oct. 1 - Dec. 31, 2016 |
|---|---|---|---|
| Net loss/profit for the period | 1,547 | 4,427 | |
| Items that are never recognized as profit or loss | 0 | 0 | |
| Items that have been or could be recognized as profit | |||
| or loss | 0 | 0 | |
| Other comprehensive income | 0 | 0 | |
| Total comprehensive income | 1,547 | 4,427 |
as of December 31, 2017
| FIGURES IN € k | Notes | Dec. 31, 2017 | Sep. 30, 2017 |
|---|---|---|---|
| Non-current assets | |||
| Intangible assets | 11,623 | 11,722 | |
| Property, plant and equipment | 308 | 316 | |
| Joint venture/Equity investments | 7 | 1,996 | 1,991 |
| Trade receivables | 1,636 | 1,636 | |
| 15,563 | 15,665 | ||
| Current assets | |||
| Trade receivables | 4,007 | 3,362 | |
| Other financial assets | 8 | 16,070 | 150 |
| Other assets | 150 | 167 | |
| Cash and cash equivalents | 10,319 | 29,735 | |
| 30,546 | 33,414 | ||
| ASSETS | 46,109 | 49,079 | |
| Equity capital | 9 | ||
| Subscribed capital | 1,820 | 1,820 | |
| Capital reserve | 7,475 | 7,475 | |
| Revaluation reserve | 202 | 226 | |
| Retained earnings | 24,561 | 22,990 | |
| 34,058 | 32,511 | ||
| Non-current liabilities | |||
| Provisions | 301 | 301 | |
| 301 | 301 | ||
| Current liabilities | |||
| Provisions | 138 | 138 | |
| Trade payables | 279 | 279 | |
| Other financial liabilities | 10 | 7,030 | 11,393 |
| Deferred income | 2,853 | 3,029 | |
| Other liabilities | 295 | 204 | |
| Income tax liabilities | 1,155 | 1,224 | |
| 11,750 | 16,267 | ||
| EQUITY AND LIABILITIES | 46,109 | 49,079 |
for the period October 1 through December 31, 2017
| FIGURES IN € k | Notes | Oct. 1 - Dec. 31, 2017 |
Oct. 1 - Dec. 31, 2016 |
|
|---|---|---|---|---|
| Earnings before financial result and tax (EBIT) | 1,954 | 2,875 | ||
| + | Depreciation and amortization and impairments | 5 | 246 | 345 |
| +/- | Other non-cash expenses/income | 0 | 5 | |
| + | Interest received | 4 | 43 | |
| - | Tax paid | -70 | -13 | |
| +/- | Decrease/increase in trade receivables and other assets |
-850 | -2,305 | |
| -/+ | Decrease/increase in trade payables and other li abilities |
-291 | -48 | |
| = | Cash flow from operating activities | 993 | 902 | |
| - | Purchase of property, plant and equipment | -139 | -14 | |
| - | Purchase of intangible assets | |||
| (excl. development cost) | 0 | -2 | ||
| = | Cash flow from investing activities | -139 | -16 | |
| - | Payments to shareholders (profit transfer) | -4,157 | 0 | |
| - | Granting of loans | -16,011 | 0 | |
| = | Cash flow from financing activities | -20,168 | 0 | |
| Change in cash and cash equivalents | -19,314 | 886 | ||
| Effect of exchange rates on cash and cash equivalents |
-102 | 1,257 | ||
| + | Cash at the beginning of the period | 29,735 | 24,356 | |
| = | Cash at the end of the period | 10,319 | 26,499 |
for the period October 1 through December 31, 2017
| Re | |||||
|---|---|---|---|---|---|
| Subscribed | Capital | valuation | Retained | ||
| FIGURES IN € k | capital | reserve | reserve | earnings | Total |
| Balance on Oct. 1, 2016 | 1,820 | 8,219 | 326 | 22,524 | 32,889 |
| Net profit | 0 | 0 | 0 | 4,427 | 4,427 |
| Total comprehensive | |||||
| income | 0 | 0 | 0 | 4,427 | 4,427 |
| Issue of stock options | 0 | 4 | 0 | 0 | 4 |
| Transfer from revaluation re | |||||
| serve to retained earnings | |||||
| based on amortization | 0 | 0 | -26 | 26 | 0 |
| Balance on Dec. 31, 2016 | 1,820 | 8,223 | 300 | 26,977 | 37,320 |
| Balance on Oct. 1, 2017 | 1,820 | 7,475 | 226 | 22,990 | 32,511 |
| Net profit | 0 | 0 | 0 | 1,547 | 1,547 |
| Total comprehensive | |||||
| income | 0 | 0 | 0 | 1,547 | 1,547 |
| Transfer from revaluation re | |||||
| serve to retained earnings | |||||
| based on amortization | 0 | 0 | -24 | 24 | 0 |
| Balance on Dec. 31, 2017 | 1,820 | 7,475 | 202 | 24,561 | 34,058 |
MeVis Medical Solutions AG ("MMS AG", "MeVis" or "Company" for short) was incorporated at the end of 1997 and commenced business in 1998. It has its registered office in Bremen/Germany. Its address is Caroline-Herschel-Str. 1, 28359 Bremen. MMS AG is registered in the Commercial Register of the District Court of Bremen (HRB 23791 HB).
Since April 21, 2015, MMS AG has belonged to the Varian Group under the leadership of Varian Medical Systems, Inc., Palo Alto, California, USA, through VMS Deutschland Holdings GmbH, Darmstadt. With the spin-off agreement dated December 28, 2016, the transfer of the shares in MeVis Medical Solutions AG, amounting to 73.65 % of the total share capital, from VMS Deutschland Holdings GmbH, Darmstadt, an indirect subsidiary of Varian Medical Systems, Inc. of Palo Alto, California, USA, to Varex Imaging Deutschland AG was resolved. The object of the spin-off agreement is also the control and profit-and-loss transfer agreement between MMS AG and VMS Deutschland Holdings GmbH. Varex Imaging Deutschland AG is managed by the Varex Imaging Corporation, Salt Lake City, Utah, USA, which has emerged as a spin-off from Varian Medical Systems, Inc., Palo Alto, California, USA. Varex Imaging Deutschland AG, an indirect subsidiary of Varex Imaging Corporation, received an authorization from VMS Deutschland Holdings GmbH on December 31, 2016 to exercise the voting rights in MeVis Medical Solutions AG, Bremen, Germany, for an unlimited period of time and not bound by instructions. The spin-off was entered in the commercial register of VMS Deutschland Holdings GmbH on October 12, 2017. Varex Imaging Corporation prepares the consolidated financial statements for the largest and smallest group of entities and MMS AG is included in these. The consolidated financial statements are filed with the U.S. Securities and Exchange Commission (SEC) and can be obtained from the head office of the group parent company.
The interim financial statements of MeVis Medical Solutions AG, Bremen as at December 31, 2017 were prepared in accordance with Section 315a (1) of the German Commercial Code (HGB) in line with the rules and regulations in force on the balance sheet date and approved by the European Union of the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB) as well as the interpretations of the International Financial Reporting Interpretations Committee (IFRIC). Accordingly, this interim report as at December 31, 2017 was prepared in conformity with IAS 34 "Interim Reporting". The notes to the interim financial statements are presented in abridged form in line with the option provided by IAS 34. The interim financial statements and interim management report have neither been audited nor subjected to accounting review.
The interim financial statements from October 1 to December 31, 2017 use the same recognition and measurement policies as the individual financial statement according to IFRS for the fiscal year 2016/2017. The interim financial statements as of December 31, 2017 must therefore be read in conjunction with the individual financial statements according to IFRS for the fiscal year as of September 30, 2017.
MMS AG's interim financial statements as of December 31, 2017 including the previous year's figures have been prepared in accordance with IFRS as endorsed by the European Union as of September 30, 2017. The same accounting and valuation principles were applied that were used in preparing the individual financial statements according to IFRS for the fiscal year as at September 30, 2017 and in addition, IAS 34 "Interim reporting" was applied. New announcements of the IASB applicable as at December 31, 2017 had no material impacts on the MeVis financial statements.
Revenues break down by type as follows:
| Oct. 1 - Dec. 31, | Oct. 1 - Dec. 31, | |
|---|---|---|
| FIGURES IN € k | 2017 | 2016 |
| Maintenance (software service contracts) | 1,763 | 1,834 |
| Services | 1,434 | 2,447 |
| Software and licenses | 1,086 | 1,251 |
| Hardware | 0 | 5 |
| 4,283 | 5,537 |
The average headcount was 103 (prev. year: 105). This is equivalent to an average of 93 full-time positions (prev. year: 92). The average figures include 2 testers (as a rule, students employed on a negligible part-time basis) (prev. year: 9).
| FIGURES IN € k | Oct. 1 - Dec. 31, 2017 |
Oct. 1 - Dec. 31, 2016 |
|---|---|---|
| Rental/leasing expenses | 149 | 146 |
| Legal and consulting costs | 47 | 27 |
| Travel expenses | 33 | 64 |
| Cost of preparing and auditing financial statements | 26 | 20 |
| Vehicle costs | 23 | 15 |
| Energy costs | 18 | 16 |
| Internet expenses | 18 | 13 |
| Maintenance/repairs | 14 | 68 |
| Hospitality costs | 13 | 12 |
| Training costs | 12 | 31 |
| Others | 88 | 84 |
| 441 | 496 |
| Oct. 1 - Dec. 31, | Oct. 1 - Dec. 31, | |
|---|---|---|
| FIGURES IN € k | 2017 | 2016 |
| Amortization of industrial property rights and | ||
| similar rights and customer bases | 88 | 99 |
| Amortization of capitalized development expenses | 108 | 204 |
| Depreciation of property, plant and equipment | 50 | 42 |
| 246 | 345 |
The net financial result as of December 31, 2017 amounted to € -406 k (prev. year: € 1,565 k). It mainly consisted of the balance of income and expenses from exchange rate differences of € -445 k (prev. year: € 1,620 k), the result derived from equity-method investments amounting to € 5 k (prev. year: € -74 k) and interest income € 39 k (prev. year: € 25 k).
Income tax expenses mainly resulted from withholding tax on capital.
Financial assets concern the equity interest of 51 %, valued in accordance with the equity method, in the MeVis BreastCare GmbH & Co. KG, Bremen, as well as the MeVis BreastCare Verwaltungsgesellschaft mbH, Bremen.
| FIGURES IN € k | Dec. 31, 2017 | Sep. 30, 2017 |
|---|---|---|
| Loans granted | 16,011 | 0 |
| Other receivables | 59 | 148 |
| Other | 0 | 2 |
| 16,070 | 150 |
The loan of \$ 19.2 million granted to Varex Imaging Deutschland AG is in place since October 16, 2017 and bears interest at 1 % p. a.
Other receivables amounted to € 59 k (September 30, 2016: € 148 k) against MeVis BreastCare GmbH & Co. KG, Bremen.
The assets and liabilities of MBS KG had to be completely revalued in connection with the acquisition of the 49 % interest in MBS KG from Siemens AG and the subsequent full consolidation of MBS KG in 2008. To the extent that this increase in value was attributable to the 51 % interest in MBS KG already held by the Company, the difference had to be allocated to the revaluation reserve. The amount of € 1,688 k allocated comprised intangible assets of € 2,411 k less deferred taxes of € 723 k thereon. Amounts corresponding with the amortization recognized on these assets are transferred proportionately to retained earnings. With the merger of MBS KG into MMS AG in the fiscal year 2013, the values from the revaluation reserve were also transferred into the individual IFRS financial statements.
| Oct. 1 - Dec. 31, | Oct. 1 - Dec. 31, | |
|---|---|---|
| FIGURES IN € k | 2017 | 2016 |
| Status as at October 1 | 226 | 326 |
| -Transfer of the amount corresponding to write-downs and the as sociated deferred taxes to retained earnings, without an impact on |
||
| profit and loss | -24 | -26 |
| Status as at December 31 | 202 | 300 |
| FIGURES IN € k | Dec. 31, 2017 | Sep. 30, 2017 |
|---|---|---|
| Liabilities to affiliated companies | 5,211 | 9,368 |
| Staff liabilities | 1,819 | 2,025 |
| 7,030 | 11,393 |
The liabilities to affiliated companies comprise the transfer of German GAAP (HGB) profit for the fiscal year 2016/2017.
Staff liabilities primarily comprise the costs for accrued vacation entitlements, bonuses and the 13th salary.
On October 16, 2017, MMS AG concluded a loan agreement with Varex Imaging Deutschland AG under which MMS AG granted Varex Imaging Deutschland AG a loan in the amount of \$ 19.2 million, which bears interest at 1 % p. a..
In comparison with the contingent receivables and contingent liabilities presented the individual financial statement according to IFRS for the fiscal year 2016/2017, no changes occurred in the first quarter of the current fiscal year.
Earnings per share equal the profit on continuing activities or profit (after tax) divided by the weighted average number of shares outstanding during the financial year. Earnings per share (fully diluted) are calculated on the assumption that all securities, stock options and stock awards with a potentially dilutionary effect are converted or exercised.
The weighted average of shares outstanding is determined by taking account of shares redeemed and reissued subject to a chronological weighting.
As of the balance sheet date, there were no more outstanding stock options.
| Dec. 31, 2017 | Dec. 31, 2016 | |
|---|---|---|
| Net result for the period in € k | 1,547 | 4,427 |
| Weighted average of shares outstanding during the reporting period | ||
| - basic | 1,820,000 | 1,820,000 |
| Dilution through stock options | 0 | 21,892 |
| Weighted average of shares outstanding during the reporting period | ||
| - diluted | 1,820,000 | 1,841,892 |
| Basic earnings per share in € | 0.85 | 2.43 |
| Diluted earnings per share in € | 0.85 | 2.40 |
As of December 31, 2017 the activities of the Company were still subdivided into the reportable segments of Digital Mammography and Other Diagnostics. The management of each of these segments reports directly to the Executive Board of MMS AG in its function as the responsible corporate entity.
Segment net profit and loss, which corresponds to earnings before financial result and tax (EBIT), constitutes the key benchmark for assessing and controlling the earnings position of a particular segment.
| Digital Mammography |
Other Diagnostics |
Total | ||||
|---|---|---|---|---|---|---|
| Oct. 1 - Dec. 31 | Oct. 1 - Dec. 31 | Oct. 1 - Dec. 31 | ||||
| FIGURES IN € k | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 |
| Segment revenues | 3,003 | 2,660 | 1,280 | 2,877 | 4,283 | 5,537 |
| Depreciation and amortization | -200 | -297 | -46 | -48 | -246 | -345 |
| Operating expenses | -725 | -654 | -1,172 | -1,316 | -1,897 | -1,970 |
| Result of operating activities | 2,078 | 1,709 | 62 | 1,513 | 2,140 | 3,222 |
| Other operating income | 99 | 43 | 156 | 106 | 255 | 149 |
| Other operating expenses | -172 | -145 | -269 | -351 | -441 | -496 |
| Segment net profit/loss | 2,005 | 1,607 | -51 | 1,268 | 1,954 | 2,875 |
No material events occurred after the balance sheet date.
Bremen, February 20, 2018
Marcus Kirchhoff Dr. Robert Hannemann Chairman & CEO Member of the Executive Board
This report contains forward-looking statements which are based on management's current estimates of future developments. Such statements are subject to risks and uncertainties, which MeVis Medical Solutions AG is not able to control or estimate with any precision, e.g. future market conditions and the general economic environment, the behavior of other market participants, the successful integration of new acquisitions and government acts. If any of these uncertainties or imponderabilities materialize or if the assumptions on which these statements are based prove to be incorrect, this may cause actual results to deviate materially from those expressly or implicitly contained in these statements. MeVis Medical Solutions AG does not intend and is under no obligation to update the forward-looking statements in the light of any events or developments occurring after the date of this report.
Deviations may occur between the accounting data contained in this report and that submitted to the Bundesanzeiger for technical reasons (e.g. conversion of electronic formats). In the case of any doubt, the version submitted to the Bundesanzeiger will prevail.
This report is also available in a German-language version. In case of any doubt, the German-language version takes priority over the English-language one.
The report is available for downloading in both languages in the internet at: http://www.mevis.de/en/investor-relations/financial-reports/
| January 23, 2018 | Annual Report 2016/2017 |
|---|---|
| February 20, 2018 | Interim Report for Q1 2017/2018 |
| March 14, 2018 | Annual General Meeting, Bremen |
| May 15, 2018 | Interim Report for H1 2017/2018 |
| Aug./Sep., 2018 | Small Cap Conference, Frankfurt am Main |
| August 21, 2018 | Interim Report for Q3 2017/2018 |
Caroline-Herschel-Str. 1 28359 Bremen Germany
Phone +49 421 22495 0 Fax +49 421 22495 999 [email protected]
www.mevis.de
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