Quarterly Report • May 30, 2018
Quarterly Report
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GROUP HALF-YEAR REPORT 2017/2018
| TO SHAREHOLDERS | 5 | |
|---|---|---|
| KPS in the capital market | 6 | |
| Price performance of the KPS share | 6 | |
| Shareholder structure | 6 | |
| Investor relations | 6 | |
| Financial calendar | 7 | |
| Analysts' research | 7 | |
| Share information | 7 | |
| INTERIM MANAGEMENT REPORT | 9 | |
| 1 | Economic Report | 10 |
| 1.1 Macroeconomic development | 10 | |
| 1.2 Sector-specific framework conditions | 10 | |
| 1.3 Business performance | 11 | |
| 1.4 Financial position, asset situation, and results of operations | 11 | |
| 1.4.1 Results of operations for the KPS Group | 11 | |
| 1.4.2 Asset situation and capital structure | 13 | |
| 1.4.3 Alternative Performance Measures (APM) | 15 | |
| 1.5 Employees | 15 | |
| 1.6 Follow-up report | 16 | |
| 2 | Opportunities and risk report | 16 |
| 3 | Outlook report | 17 |
| INTERIM FINANCIAL STATEMENTS | 19 | |
| Group Income Statement | 20 | |
| Group Balance Sheet | 22 | |
| Group Cash Flow Statement | 24 | |
| Group Statement of Changes in Shareholders' Equity | 26 | |
| Segment Reporting | 28 | |
| NOTES | 30 |
Development of the fixed assets 40
GROUP
In a good economic environment with the highest global growth rates since 2011, the international equity markets concluded the year on a positive note. A closing price of 12,917.64 points on 29 December 2017 brought the DAX index a growth in value of 11.4 % for the year overall in 2017. Within this period, the Dow Jones was able to achieve a rate of increase of 24.3 % and this was significantly supported by the expansive fiscal policy of the US Federal Reserve. Most importantly, performance in the emerging economies was particularly positive. Driven by Asian technology stocks and the accelerated economic growth in the emerging economies, the MSCI Emerging Markets Index went up by more than 30 percent.
During the reporting year 2017/2018, the share of KPS AG lagged significantly behind the development of the DAX and posted a price loss of 47.5 % during the reporting period. The performance curve was primarily defined by two significant price drops in October 2017 and at the end of January 2018. Accordingly, the price in spring and summer of 2017 to the middle of October moved sideways at a high level of just under 17 euros. At the beginning of the business year 2017/2018, the KPS share reached its high during the reporting period at 16.98 euros on 6 October. The price then fell significantly to 11.70 euros up to 13 November 2017. During the subsequent months, the price recovered by 26.5 % to 14.80 euros on 16 January 2018. Since this intermediate high, the price provided an exaggerated reflection of the downward movement experienced by the DAX and reached its low during the reporting period of 8.73 euros on 27 March 2018. The share concluded the reporting period at 8.89 euros on 29 March 2018.
The average daily trading volume of the KPS share at all German stock exchanges amounted to 40,673 nopar shares (previous year: 24,443 shares) in the period under review. The market capitalization of KPS AG was 332.6 million euros (previous year: 658.5 million euros) as a result of the price losses over the course of the first half-year at 31 March 2018 based on 37,412,100 shares (all information based on Xetra prices).
The shareholder structure of KPS AG has traditionally been defined by the four company founders who held the majority of the voting shares at 56.6 % in the reporting year 2017/2018.
A change in the shareholder structure came about as a result of the reduction in the shareholding of the former Board Member, Dietmar Müller, to 10.5% of the capital stock. On 11 October 2017, Mr. Müller announced the start of a bookbuilding process for institutional investors. The reallocation of 11.7% of the capital stock to institutional investors Allianz Global Investors, Union Investment and DWS on 30 June 2017 yields a free float of around 36.75.
In the first-half of 2017/2018, KPS AG published disclosures immediately to institutional investors, financial analysts, and private shareholders about current business development and important events for the share price development of the company beyond the reporting obligations under statutory regulations and stock exchange rules.
During the period under review, the Executive Board of KPS AG communicated proactively with the financial and business press to present the profile of the company to the capital market. The Executive Board of KPS AG presented the corporate development and the corporate strategy in the context of roadshows at European financial centers. The Board also took part in several capital market conferences in Frankfurt, Munich and Lyon. In the first half-year, KPS AG also made use of the opportunities of a telephone conference with capital market participants to communicate the financial figures for the year 2016/2017. It also broadcast a webcast for participants in the capital market to publish the figures for the first quarter of 2017/2018.
Oddo Seydler Bank AG is acting as the designated sponsor for the preparation of binding bid and offer prices for appropriate liquidity, and it ensures the corresponding tradability of the KPS share. Any investors interested in additional information can go to the Investor Relations section on the home page under www.kps. com/de.investor-relations.html.
10 August 2018 Publication of the figures in the 3rd quarter of 2017/2018
The performance of the KPS share is continuously analyzed and evaluated by the investment company GBC Research and the leading banks Landesbank Baden-Württemberg (LBBW) and Oddo BHF AG. The analysts unanimously emphasized their recommendations to buy the KPS share in their latest studies on business performance and the perspectives of the company. Henning Steinbrink, analyst at Oddo BHF, raised the target price in his report dated 15 February 2018 to 17.00 euros and sees the reporting of the acquisition costs in the first quarter of the business year in conjunction with the strong sector development as positive messages for the outlook on the year 2017/2018 as a whole. In view of the strategic acquisitions and the positive sector environment, LBBW analyst Mirko Maier set the target price at 15.00 euros in his report dated 19 February 2018. Matthias Greiffenberger from GBC continues to perceive KPS as the European market leader for digital transformation in the area of retail and logistics to be well positioned in order to benefit from the lively demand in this sector. Greffenberger sets the price target at 16.60 euros in conjunction with the industrialization of the consulting initiative.
| Sector | Software (IT service provider) |
|---|---|
| ISIN | DE000A1A6V48 |
| WKN | A1A6V4 |
| Ticker symbol | KCS |
| First listing | 14 July 1999 |
| Number and type of shares | 37,412,100 registered no-par value ordinary shares (no-par shares) |
| Capital stock | 37,412,100.00 euros |
| Stock exchange | Frankfurt, Stuttgart, Hamburg, Berlin-Bremen, Düsseldorf and Munich, and XETRA |
| Market segment | Regulated market |
| Transparency level | Prime Standard |
| Designated sponsor | Oddo Seydler Bank AG |
| High/low | 16.98 / 8.73 euros |
| Opening price | 16.94 euros |
| Closing price | 8.89 euros |
| Market capitalization | 332.6 million euros |
(Status: 31 March 2018)
GROUP
The global economy continues to gather pace. According to the International Monetary Fund (IMF), growth at 3.9 % looks set to continue in 2018 – after a rise of 3.8 % in 2017. This would mean that the strongest global growth since 2011 was achieved in 2017. The IMF experts slightly raised their forecast from October 2017 by 0.2 percentage points for the current year. This is largely due to the momentum and expectations derived from an expansive fiscal policy in the United States for this year and next year. The economic upswing in Europe also endures and further strong growth has been observed in the emerging economies. The IMF continues to anticipate positive growth of 3.9 % for the global economy in 2019.
The growth in the global economy is essentially being driven by capacity utilization in Europe supported by an expansive monetary policy, full employment in the US economy, the strong performance of Asian and European emerging economies, and the good performance of raw-materials exporters after three weak years. In 2017, and at the beginning of 2018, the capital markets were therefore able to benefit in emerging economies and developing countries, as well as in the developed economies, in spite of a slight easing since the beginning of the year.
Over the coming years, experts at the IMF expect a slight weakening of global growth. As soon as the production gaps in the developed economies close, the growth rates will once again return to pre-crisis levels. Factors such as demographic change in the industrial countries and comparatively modest productivity rates exert a restraining effect on growth. Growth in the USA will ease on account of the predictable end to the expansive fiscal policy and there is a significant need for consolidation in some emerging economies and developing countries in relation to fiscal policy.
The short-term balance between opportunities and risks for the development of the global economy are tending toward risk in the upcoming quarters. The experts at the IMF perceive the reasons for this in the potential for a sudden turnaround for fiscal policy, falling consent within society for international economic integration, growing tensions in international trade relations, the risk of increasingly protectionist policies and geopolitical tensions. 1
The economy in the eurozone has continued its upswing over the course of the past year. According to joint forecasts by the leading German-based economic research institutes, the economy should increase by 2.3 % in 2018. Until recently, economic output advanced significantly faster than production potential with an average rate of 2.5 % and this was therefore stronger than in virtually any other advanced economy. Expansion of production was driven in particular by domestic consumption in the first half of the year, which benefited from an increase in real income due to rising employment. The upswing was evident in virtually all eurozone countries, while unemployment rates fell in all member countries. This resulted in an average unemployment rate in the eurozone of 9.1 % and a further reduction to 7.8 % in 2019 is anticipated over the coming two years. Consumer prices were 1.5 % above the year-earlier period when they rose strongly to nearly 2 % on account of the underlying impact of energy prices in 2016. 2
In spring 2018, the German economy is currently undergoing a boom. The pace of expansion is likely to continue accelerating after a dip at the beginning of the year that was due to the exceptional wave of influenza. In 2018 and 2019, the boom is predicted to continue but the macroeconomic capacity limits will restrict growth. In spite of this barrier, the pace of growth remains high. Owing to the fact that global economic growth is only declining at a slow rate, exports continue to be buoyant and the domestic economy is likely to continue experiencing dynamic development on account of the favorable employment market. 3
As reported by the Federal Association of German Management Consultants (BDU), the boom in the consulting sector in Germany continued in 2017. Total sales in the sector rose by 8.5 % to 31.5 billion euros in Germany in 2017 by comparison with 2016. Management consultants also perceive strong sector growth of 8.4 % for the year 2018. Only the lack of consulting talent will restrict additional growth. The need for change at economic and administrative level is strengthening the demand arising from the German economy and the public sector. The pacemaker is
3 http://gemeinschaftsdiagnose.de/wp-content/uploads/2018/04/GD_F18_Langfassung_unkorrigiert.pdf
1 https://www.imf.org/en/Publications/WEO/Issues/2018/03/20/world-economic-outlook-april-2018#Introduction
2 https://www.ifw-kiel.de/pub/kieler-konjunkturberichte/2018/kkb_40_2018-q1_euroraum_de.pdf
ongoing digital transformation. 78 % of market participants issued a positive growth forecast for the business year 2018 and thereby confirmed the positive prospects for the sector. 4
Furthermore, the economic sentiment in the information industry is at a long-time high as reflected in the "Information Industry" sector report produced by the Center for European Economic Research (ZEW). Highs have been achieved over the past two years and these values were again exceeded in the first quarter of 2018. 5
In the first half-year of 2017/2018, KPS posted sales of 88.4 million euros and thereby an increase of 7 % compared with the year-earlier period (82.8 million euros). This development was essentially driven by the company purchases carried out during the reporting period and the acquisition of transformation projects.
KPS continues to follow the defined growth strategy based on the cornerstones of internationalization and innovation powered by consistent expansion of the business areas and the extended geographical access achieved through acquisitions in the first quarter. Because of these future-oriented investments, Earnings before interest and taxes (EBIT) fell to 7.5 million euros in the first half-year compared with 12.5 million euros in the year-earlier period. As a result of the strategic acquisitions, the personnel expenses rose disproportionately to the sales which alongside M&A-related depreciation and amortization led to reduced EBIT compared with the year-earlier period. An increase in sales generated by the acquisitions is expected in future, which again reduces the currently high personnel expenses in relative terms.
The acquisitions of ICE Consultants Europe SL, Infront Consulting & Management GmbH and Envoy Digital Ltd made in the first half of the year expanded the group of consolidated companies of KPS. The integration process of the three subsidiary companies in the Group formed a key function of the first half-year 2017/2018.
The KPS Group did not reach the corporate targets defined by the Supervisory Board and the Executive Board for the first half of the business year 2017/2018.
Sales were significantly above the level of the previous year and they were slightly above expectations at the beginning of the business year 2017/2018. Earnings Before Interest and Taxes were substantially below the level of the previous year and they were also below expectations at the beginning of the business year 2017/2018.
Income statement of the KPS Group in accordance with IFRS (abbreviated version)
| in KEuross | 2017/2018 | 2016/2017 |
|---|---|---|
| Revenues | 88,367 | 82,833 |
| Own work capitalized | 1,518 | 1,301 |
| Other operating income | 704 | 391 |
| Cost of materials | -37,995 | -35,861 |
| Personnel expenses | -30,845 | -25,767 |
| Other operating expenses | -12,384 | -9,766 |
| Operating result before deprecia tion and amortization (EBITDA) |
9,365 | 13,131 |
| Depreciation and amortization (M&A adjusted) |
-402 | -637 |
| Operating result (EBIT) adjusted | 8,963 | 12,494 |
| Amortization and depreciation (M&A related) |
-1,451 | 0 |
| Operation result (EBIT) related | 7,512 | 12,494 |
| Financial result | -29 | -46 |
| Earnings before income taxes* | 7,483 | 12,448 |
| Income tax | -2,008 | -2,148 |
| Earnings after income taxes | 5,475 | 10,300 |
* corresponds to the result from ordinary activities
4 obs/BDU Bundesverband Deutscher Unternehmensberater; https://www.presseportal.de/pm/9562/3885085
5 http://ftp.zew.de/pub/zew-docs/brepikt/201801BrepIKT.pdf
ICE Consultants Europe S.L., Spain, Infront Consulting & Management GmbH, KPS Strategie-, Prozess- und IT-Consulting GmbH, Austria and Envoy Digital Limited, England contributed to earnings for the business half-year for the first time. The business figures can therefore only be compared with those of the previous year to a certain extent. In order to separately present the one-off effects of amortization of intangible assets arising from the company acquisitions, additional reporting lines were added in the income statement so that the EBIT adjusted by these amortizations could be presented. The following table shows the individual contribution of the companies to revenues and EBIT:
| Company | Revenues | EBIT |
|---|---|---|
| ICE Consultants Europe, S.L. | 5,511 | 1,255 |
| Infront Consulting & Management GmbH |
1,052 | 140 |
| KPS Strategie-, Prozess- und IT-Consulting GmbH |
0 | -164 |
| Envoy Digital Limited | 607 | 7 |
In the first half-year of the business year 2017/2018, revenues rose by 6.7 % to 88.4 (previous year: 82.8) million euros. The result enabled the company to exceed the original expectations. Alongside acquisitions, this is primarily due to acquiring transformation projects with prestigious customers from retail and the consumer goods industry.
Own work capitalized amounted to 1.5 (previous year: 1.3) million euros over the business half-year under review. This relates to the intangible assets developed in-house (development costs).
As was the case in the equivalent year-earlier period, other operating income in the reporting period includes income from operational, additional services, such as charges passed on, and income from release of provisions. It also includes partial release of the second earn-out instalment in the context of the acquisition of Saphira Consulting A/S, since the contractually agreed target parameter will not be achieved during the reporting year. Overall, other operating income increased by comparison with the equivalent yearearlier period by 80.1 % from 0.4 million euros to 0.7 million euros.
During the first half-year of 2017/2018, the cost trend adjusted appropriately to business performance, taking into account the increase in sales. The project-related cost of materials, which primarily includes the costs for subcontracted services, went up proportionately compared with the sales increase during the reporting period by 6.0 % from 35.9 million euros to 38.0 million euros.
Personnel expenses amounted to 30.8 (previous year: 25.8) million euros and the increase in these expenses of 5.1 million euros or 19.7 % was therefore disproportionately higher compared with the equivalent year-earlier period. The reason for this increase was due in particular to the rise in sales and the associated increase in the number of new consultants appointed during the expansion of the workforce. At 31 March 2018, 614 (on the equivalent statement date in the previous year: 459) employees were working in the KPS Group. In the first half-year of 2017/2018, the number of employees increased by 127 compared with 487 employees at the end of the business year 2016/2017. The increase in the number of employees results almost exclusively from the company acquisitions carried out over the course of the reporting half-year. These contributed 124 employees to the total workforce.
Other operating expenses increased by 26.5 % to 12.4 (previous year: 9.8) million euros compared with the equivalent year-earlier reporting period. They mainly include travel expenses and vehicle operating costs, non-project-related subcontracted services, and premises and operating costs.
Depreciation and amortization at 1.9 million euros rose significantly compared with the level of the first half-year 2016/2017 at 0.6 million euros. The proportion of the M&A-related depreciation and amortization amounts to 1.5 million euros (previous year: 0).
In the first half-year 2017/2018, the financial result of the Group was 0.0 million euros and therefore remained unchanged from the equivalent year-earlier value.
The total amount of taxes on income and earnings amounted to 2.0 (previous year: 2.1) million euros and includes current expenses for corporate income tax, solidarity surcharge, and trade tax.
The consolidated income for the period under review fell back by 46.8 % from 10.3 million euros to 5.5 million euros.
EBITDA decreased by 3.7 million euros from 13.1 million euros in the previous year to 9.4 million euros in the reporting period. The EBITDA margin amounted to 10.6 % and was therefore below the year-earlier value at 15.9 % during the first half-year 2017/2018. Personnel expenses are the main reason for this.
EBIT decreased from 12.5 million euros in the previous year by 5.0 million euros to 7.5 million euros in the first half of the business year 2017/2018. This corresponds to a decrease by 40 %. Based on sales of 88.4 (previous year: 82.8) million euros, the EBIT margin of 8.5 % fell back compared with the value for the previous year at 15.1 %. Alongside the increase in personnel expenses, the M&A-related depreciation and amortization are primarily responsible here.
The consolidated income for the period fell by 4.8 million euros from 10.3 million euros in the previous year to 5.5 million euros. This corresponds to a rise of 46.9 % compared with the first halfyear of 2016/2017.
The diluted and basic earnings per share amounted to 0.15 euros in the first half of the business year 2017/2018 compared with 0.28 euros in the previous year. The number of shares increased by 133,365 compared with the previous year because the treasury shares held in the portfolio in the previous year were transferred to the sellers in the course of purchasing Infront Consulting & Management GmbH.
| in KEuross | 31.03.2018 | 30.09.2017 |
|---|---|---|
| Non-current assets | 91,345 | 51,910 |
| Current assets | 62,305 | 50,973 |
| Total assets | 135,650 | 102,883 |
| Shareholders' equity | 60,555 | 66,188 |
| Non-current liabilities | 21,108 | 4,644 |
| Current liabilities | 71,987 | 32,051 |
| Total liabilities | 93,095 | 36,695 |
| Total shareholders' equity and liabilities |
153,650 | 102,883 |
A monitoring and controlling system is in place in the KPS Group which is directed toward increasing the value of the entire group. Targets are derived from this for the individual segments and Group companies. Controlling is managed at Group level and is implemented through the segments down to the individual profit center levels. Periodic controlling is carried out on the basis of the accounting and valuation principles defined by international accounting standards. Alongside sales and EBIT, specific segment and profit-center parameters are used as indicators for controlling.
Financial management at KPS has always been directed toward safeguarding the liquidity of the company at all times. It encompasses capital-structure, cash and liquidity management.
The earnings generated in the reporting half-year provided the necessary liquid funds for continuing operations and for financing reasonable additional growth of KPS. Additional growth at KPS was financed from borrowings.
On 31 March 2018, the KPS Group had cash amounting to 6.1 (previous year: 6.7) million euros. There were bank liabilities amounting to 31.4 (previous year: 0.0) million euros on the reporting date 31 March 2018. Net liquidity amounted to -25.3 (previous year: 6.7) million euros on the reporting date 31 March 2018.
Cash flow from current activities amounted to 0.8 million euros in the first half of the current business year compared with 1.1 million euros in the previous year. Cash flow from investment activities amounted to -21.6 (previous year: -4.3) million euros and essentially related to the acquisition of ICE Consultants Europe, S.L., Spain, Infront Consulting & Management GmbH, Hamburg and Envoy Digital Limited, England. Cash flow from financial activities amounted to 13.1 (previous year: 0.0) million euros in the first half-year. The increase essentially resulted from the dividend payment carried out in the first half-year. In the previous year, the dividend payment was only made in the second reporting half-year.
The KPS Group has a term-congruent balance sheet structure. The increased business scope is reflected in the balance sheet total. On 31 March 2018, this amounted to 153.7 (previous year: 102.8) million euros and therefore increased by 50.8 million euros or 49.3 %.
On 31 March 2018, the assets tied up in medium to long-term assets amount to 91.3 (previous year: 51.9) million euros. These primarily relate to the goodwill from company acquisitions of KPS AG amounting to 65.1 (previous year: 32.2) million euros, other intangible assets amounting to 16.6 (previous year: 10.1) million euros, property, plant and equipment amounting to 1.1 (previous year: 1.0) million euros, and capitalized deferred taxes amounting to 8.6 (previous year: 8.6) million euros.
Receivables from future production orders, trade receivables, and other assets recognized under current assets amounting to a total of 56.1 million euros increased by 44.2 million or 11.9 % compared with the year-earlier value of 26.8 million euros.
The share in equity attributable to shareholders of KPS AG decreased by 5.6 million euros compared with the previous year and amounted to 60.6 (previous year: 66.2) million euros on 31 March 2018. The equity ratio fell back from 64.3 % to 39.4 % during the period under review. A detailed explanation is provided in the statement of changes in shareholders' equity.
Non-current liabilities relate to deferred tax liabilities, non-current liabilities, and non-current provisions amounting to 21.1 (previous year: 4.6) million euros. These include earnings-related purchase price instalments from the takeover of company acquisitions transacted, provisions for a bonus program of the Vice Presidents, and pension provisions. There were no other non-current liabilities on the balance sheet date.
Currently liabilities increased by 39.9 million euros compared with the year-earlier reporting date and amount to 72.0 (previous year: 32.1) million euros.
Liabilities to banks amounted to 31.4 (previous year: 0) million euros on the reporting date 31 March 2018.
Trade liabilities increased by 6.3 million euros to 17.7 (previous year: 11.5) million euros.
KPS AG uses alternative performance measures (APM), which are not defined according to the IFRS, for its standard and mandatory publications. The definitions of the Alternative Performance Measures (APM) were disclosed on the website at www.kps.com/ en.investor-relations.html.
Our employees convince our customers through their expert knowledge and their exceptional commitment. This is based on a high level of specialist qualification and continuous advanced training for our employees. We also apply these benchmarks when recruiting new personnel. Our key guiding principles are an optimum customer-centric approach, exceptional performance and commitment, safeguarding and improvement of our quality standards, and a positive working environment.
On 31 March 2018, the KPS Group employed a total of 614 employees (previous year: 487). This means that the workforce increased by 127 employees or 26.1 % in the business year 2017/2018. This is essentially due to the acquisitions in the first reporting half-year. In Germany, we employed a workforce of 484 employees (previous year: 457), which is equivalent to a share of 78.8 % (previous year: 93.8 %) in the Group overall. The average number of employees in the period under review amounted to 497 (previous year: 460). The rise by 37 employees or 8.0 % is primarily based on the increase in business volume and the company acquisitions carried out.
Personnel expenses increased by 5.1 million euros or by 19.7 % to 30.8 (previous year: 25.8) million euros in the first business half-year 2017/2018.
The following table provides an overview of the development of the number of employees broken down by regions and functions.
| 31.03.2018 | 30.09.2017 | Change | |
|---|---|---|---|
| Employees by region | |||
| Germany | 484 | 457 | 27 |
| Spain | 60 | 0 | 60 |
| England | 34 | 0 | 34 |
| Denmark | 20 | 16 | 4 |
| Switzerland | 11 | 12 | -1 |
| Austria | 5 | 0 | 5 |
| Netherlands | 0 | 2 | -2 |
| Total | 614 | 487 | 127 |
| Employees by function | |||
| Executive Board | 1 | 1 | 0 |
| Managing Directors |
15 | 5 | 10 |
| Consultants | 529 | 426 | 103 |
| Administration | 67 | 53 | 14 |
| Apprentices | 2 | 2 | 0 |
Alongside the Managing Directors listed above, the Chairman of the Executive Board of KPS AG, Mr. Leonardo Musso, has been appointed as a Managing Director (in a total of fifteen companies). From 31 March 2018, sixteen persons were therefore employed as Managing Directors in the KPS Group.
Up to the date when this Group Management Report was prepared, no reportable events or changes occurred overall which affect the view of the position of the Group provided in these consolidated financial statements.
Since 31 March 2018, no events of particular importance have occurred which we expect to exert a significant influence on the asset situation, financial position and results of operations of the KPS Group.
The KPS Group did not succeed in fully attaining the corporate targets defined by the Supervisory Board and the Executive Board for the first half of the business year 2017/2018. Sales and most importantly earnings were significantly above the level for the previous year as well as exceeding expectations at the beginning of the business year 2017/2018.
KPS made a successful start in the business year 2017/2018 and the Group was able to lay important foundations for future growth with investments and internationalization of the business. On the basis of current knowledge today, the Supervisory Board and the Executive Board expect sales in the current year to develop in line with expectations. The previous planning for EBIT in the current business year of 23 – 26 million euros no longer applies on the basis of the M&A-related depreciation and amortization. Against this background, the Executive Board and the Supervisory Board are planning an EBIT of 16 – 20 million euros for the current business year.
The economic development in Germany and our most important European markets and the associated change in investment behavior exerted a significant impact on the financial position and results of operations, and the asset situation of the KPS Group. In the course of our re-search activities, we regularly analyze studies and forecasts of the key economic institutes to gain the necessary overview of the likely development of the economy in markets relevant to us.
On the basis of the order backlog currently in place and extending over an above-average period, we do not expect any negative impacts on the KPS Group over the short term taking the present economic situation into account. However, we do not exclude the possibility that a sustained negative economic development could exert a negative impact on sales and income over the medium and long term.
We refer to the comprehensive report in the Annual Report 2016/2017 for a presentation and assessment of the individual risks. There have not been any significant changes since then.
The Executive Board and the management at KPS AG have an overall positive assessment of the situation. We are in an excellent position to address the challenges of the future, particularly as a result of the acquisitions made. Also against this background, KPS has a robust financial structure and income position. Our commit ted and highly qualified employees will continue to make a major contribution to the success of the company in future.
When making plans for the business year 2017/2018, the Executive Board is continuing to assume stable growth. Significant growth could be realized in the second quarter after the first quarter lagged significantly behind expectation following a disproportion reduction in resources by one of our major customers. On the back of increasing dynamic growth, we confirm the sales forecast for the business year 2017/2018 (sales: 160 – 170 million euros). As a result of the M&A-related depreciation and amortization and the increased personnel costs, EBIT fell significantly by comparison with the first half-year 2016/2017. We are therefore correcting our earnings forecast from previously 23 – 26 million euros to 16 – 20 million euros.
Our forecast is based on factors and projections about future busi ness and economic developments known to us today. If major changes occur in business developments and framework condi tions which cannot be predicted from today's perspective, there is nevertheless an under-lying risk that the projected sales and earn ings targets may not be achieved.
Unterföhring, May 2018 The Executive Board
GROUP
| in KEuros | 2017/2018 | 2016/2017 | |
|---|---|---|---|
| 1 | Revenues | 88,367 | 82,833 |
| 2 | Own work capitalized | 1,518 | 1,301 |
| 3 | Other operating income | 704 | 391 |
| 4 | Cost of materials | -37,995 | -35,861 |
| 5 | Personnel expenses | -30,845 | -25,767 |
| 6 | Other operating expenses | -12,384 | -9,788 |
| 7 | Operating result before depreciation and amortization (EBITDA) | 9,365 | 13,109 |
| 8 | Depreciation and amortization (M&A adjusted)* | -402 | -615 |
| 9 | Operating result (EBIT) adjusted * | 8,963 | 12,494 |
| 10 | Depreciation and amortization (M&A related) | -1,451 | 0 |
| 11 | Operating result (EBIT) | 7,512 | 12,494 |
| 12 | Financial income | 3 | 4 |
| 13 | Financial expenses | -32 | -50 |
| 14 | Financial result | -29 | -46 |
| 15 | Earnings before income taxes** | 7,483 | 12,448 |
| 16 | Income tax | -2,008 | -2,148 |
| 17 | Earnings after income taxes | 5,475 | 10,300 |
| Number of shares in thousands – basic/diluted weighted average |
37,412 | 37,279 | |
| in KEuros | |||
| Earnings per share | 37,412 | ||
| – basic | 0.15 | 0.28 | |
| – diluted | 0.15 | 0.28 |
* adjusted by depreciation and amortization on the assets disclosed as part of company mergers and on the acquired customer relationships (M&A related)
** corresponds to earnings from ordinary activities
for the period from 1 October to 31 March
| in KEuros | 2017/2017 | 2016/2017 |
|---|---|---|
| Earnings after income taxes | 5,475 | 10,300 |
| Expenses and income recognized in equity with no effect on the income statement | 53 | 119 |
| Comprehensive income | 5,528 | 10,419 |
Group Balance Sheet
as at 31 March 2018
| in KEuros | 31.03.2018 | 30.09.2017 |
|---|---|---|
| I. | Property, plant and equipment | 1,093 | 994 |
|---|---|---|---|
| II. | Goodwill | 65,051 | 32,227 |
| III. | Other intangible assets | 16,575 | 10,063 |
| IV. | Deferred tax assets | 8,626 | 8,626 |
| 91,345 | 51,910 |
| I. | Future receivables from production orders | 5,934 | 5,442 |
|---|---|---|---|
| II. | Trade receivables | 48,009 | 37,450 |
| III. | Other receivables and financial assets | 2,161 | 1,344 |
| IV. | Entitlements to income tax rebates | 131 | 72 |
| V. | Cash and cash equivalents | 6,070 | 6,665 |
| 62,305 | 50,973 | ||
| Total assets | 153,650 | 102,883 |
|---|---|---|
| in KEuros | 31.03.2018 | 30.09.2017 | |
|---|---|---|---|
| A. SHAREHOLDERS' EQUITY | |||
| Shares in equity attributable to shareholders of KPS AG | |||
| I. | Subscribed capital | 37,412 | 37,291 |
| II. | Capital reserve | -10,224 | -11,595 |
| III. | Retained earnings | 663 | 663 |
| IV. | Other comprehensive income | -594 | -647 |
| V. | Net profit | 33,298 | 40,476 |
| Total equity | 60,555 | 66,188 | |
| LIABILITIES | |||
| B. | NON-CURRENT LIABILITIES | ||
| I. | Non-current provisions | 17,857 | 2,420 |
| II. | Other non-current liabilities | 0 | 538 |
| III. | Deferred tax liabilities | 3,251 | 1,686 |
| 21,108 | 4,644 | ||
| C. | CURRENT LIABILITIES | ||
| I. | Trade liabilities | 17,738 | 11,475 |
| II. | Financial liabilities | 31,386 | 0 |
| III. | Advance payments received | 3,277 | 1,540 |
| IV. | Tax provisions | 2,328 | 1,872 |
| V. | Other provisions | 12,011 | 9,555 |
| VI. | Other liabilities | 5,247 | 6,821 |
| VII. Income tax liabilities | 0 | 788 | |
| 71,987 | 32,051 | ||
| Total liabilities | 93,095 | 36,695 | |
| Total of shareholders' equity and liabilities | 153,650 | 102,883 |
for the period from 1 October to 31 March
| in KEuros | 2017/2018 | 2016/2017 |
|---|---|---|
| A. Current business operations | ||
| 1. Earnings before interest and income taxes (EBIT) | 7,511 | 12,494 |
| 2. Depreciation of fixed assets | 1,853 | 615 |
| 3. Change in current assets | -7,296 | -9,007 |
| 4. Change in provisions | -1,320 | 232 |
| 5. Other non-cash expenses and income | -657 | 362 |
| 6. Change in other liabilities | 4,009 | -1,443 |
| 7. Losses from asset disposals | 0 | 0 |
| 8. Taxes paid | -3,282 | -2,088 |
| 9. Interest received | 3 | 3 |
| Cash inflow from current business operations | 820 | 1,168 |
| B. Investment activities |
||
| 1. Investments in property, plant and equipment | -68 | -149 |
| 2. Investments in intangible assets | -1,916 | -1,301 |
| 3. Investments in the acquisition of Saphira | 0 | -2,886 |
| 4. Investments in the acquisition of ICE | -10,354 | 0 |
| 5. Investments in the acquisition of Infront | -4,285 | 0 |
| 6. Investments in the acquisition of Envoy | -4,951 | 0 |
| 7. Cash receipts from sale of assets | 0 | 0 |
| Cash outflow from investment activities | -21,574 | -4,336 |
| C. Financial activities |
||
| 1. Interest paid | -28 | -10 |
| 2. Dividend payouts | -13,094 | 0 |
| Cash outflow from financial activities | -13,122 | -10 |
| D. Net change in cash funds |
-33,876 | -3,178 |
| E. Cash funds at the beginning of the period |
9,428 | 12,606 |
| F. Consolidation related change in cash funds |
1,895 | 0 |
| G. Cash funds at the end of the period |
-22,553 | 9,428 |
| in KEuros | 31.03.2018 | 31.03.2017 |
|---|---|---|
| Cash in hand and bank balances | 6,070 | 9,428 |
| Bank liabilities with terms of up to three months | -31,386 | 0 |
| Cash funds | -25,316 | 9,428 |
as at 31 March 2018
| in KEuros | Subscribed capital | Treasury shares | Total of subscribed capital |
|
|---|---|---|---|---|
| 30.09.2016 | 37,412 | -121 | 37,291 | |
| Acquisition of treasury shares | 0 | 0 | 0 | |
| Disposal of treasury shares | 0 | 0 | 0 | |
| Equity transactions with shareholders | ||||
| Dividend payout | 0 | 0 | 0 | |
| Other changes | 0 | 0 | 0 | |
| Changes recognized without affecting income | 0 | 0 | 0 | |
| Group earnings | 0 | 0 | 0 | |
| Allocation to retained earnings | 0 | 0 | 0 | |
| 31.03.2017 | 37,412 | -121 | 37,291 | |
| Acquisition of treasury shares | 0 | 0 | 0 | |
| Disposal of treasury shares | 0 | 0 | 0 | |
| Equity transactions with shareholders | ||||
| Dividend payout | 0 | 0 | 0 | |
| Other changes | 0 | 0 | 0 | |
| Changes recognized without affecting income | 0 | 0 | 0 | |
| Group earnings | 0 | 0 | 0 | |
| Allocation to retained earnings | 0 | 0 | 0 | |
| 30.09.2017 | 37,412 | -121 | 37,291 | |
| Acquisition of treasury shares | 0 | 0 | 0 | |
| Disposal of treasury shares | 0 | 121 | 121 | |
| Equity transactions with shareholders | ||||
| Dividend payout | 0 | 0 | 0 | |
| Other changes | 0 | 0 | 0 | |
| Changes recognized without affecting income | 0 | 0 | 0 | |
| Group earnings | 0 | 0 | 0 | |
| Allocation to retained earnings | 0 | 0 | 0 | |
| 31.03.2018 | 37,412 | 0 | 37,412 |
| Equity | Net profit | Accumulated other comprehensive income |
Capital reserve Retained earnings OCI | |
|---|---|---|---|---|
| 58,394 | 32,979 | -944 | 663 | -11,595 |
| 0 | 0 | 0 | 0 | |
| 0 | 0 | 0 | 0 | |
| 0 | 0 | 0 | 0 | |
| 0 | 0 | 0 | 0 | |
| 119 | 0 | 119 | 0 | 0 |
| 10,300 | 10,300 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | |
| 68,813 | 43,279 | -825 | 663 | -11,595 |
| 0 | 0 | 0 | 0 | |
| 0 | 0 | 0 | 0 | |
| -12,302 | -12,302 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | |
| 0 | 178 | 0 | 0 | |
| 9,499 | 9,499 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | |
| 66,188 | 40,476 | -647 | 663 | -11,595 |
| 0 | 0 | 0 | 0 | |
| 1,934 | 442 | 0 | 0 | 1,371 |
| -13,094 | -13,094 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | |
| 0 | 53 | 0 | 0 | |
| 5,474 | 5,474 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | |
| 60,555 | 33,298 | -594 | 663 | -10,224 |
in KEuros
| Presentation by business areas | Management consulting/ Transformation consulting |
System integration | ||
|---|---|---|---|---|
| Earnings position | 31.03.2018 | Previous year | 31.03.2018 | Previous year |
| Sales | 72,518 | 74,958 | 746 | 1,276 |
| Production costs | -52,620 | -52,096 | -445 | -814 |
| Business development | -2,521 | -2,037 | -129 | -157 |
| Operating costs | -5,642 | -3,235 | -165 | -131 |
| EBITDA | 11,735 | 17,590 | 7 | 174 |
| Depreciation and amortization | -496 | -530 | 0 | 0 |
| EBIT | 11,239 | 17,060 | 7 | 174 |
| Interest | -12 | 0 | 0 | 0 |
| Taxes | -3,005 | -2,933 | -2 | -30 |
| Products/Licenses | Other | Total | ||||
|---|---|---|---|---|---|---|
| Previous year | 31.03.2018 | Previous year | 31.03.2018 | Previous year | 31.03.2018 | Previous year |
| 15,103 | 6,598 | 0 | 0 | 88,367 | 82,832 | |
| -814 | -11,758 | -4,438 | 0 | 0 | -64,823 | -57,348 |
| -157 | -125 | -120 | 0 | 0 | -2,775 | -2,314 |
| -131 | -419 | -310 | -5,178 | -6,385 | -11,404 | -10,061 |
| 174 | 2,801 | 1,730 | -5,178 | -6,385 | 9,365 | 13,109 |
| 0 | -11 | -13 | -1,347 | -72 | -1,853 | -616 |
| 174 | 2,790 | 1,717 | -6,525 | -6,457 | 7,511 | 12,493 |
| 0 | 0 | 0 | -17 | -46 | -29 | -46 |
| -30 | -746 | -295 | 1,745 | 1,110 | -2,008 | -2,148 |
KPS Aktiengesellschaft (KPS AG) is a company operating internationally based in Germany with registered office at Betastraße 10H, 85774 Unterföhring. The company with register number HRB 123013 is registered with the Munich Local Court (Amtsgericht München).
KPS AG is a successful company for business transformation consulting and process optimization in retail and the consumer goods sector. We advise our customers on strategic, process and technology issues and successfully implement universal solutions which safeguard their performance over the long term.
The consolidated interim financial statements drawn up by KPS AG for the period from 1 October 2017 to 31 March 2018 were prepared in accordance with IAS 34 "Interim Financial Reporting". The consolidated interim financial statements should be read in conjunction with the consolidated financial statements drawn up as at 30 September 2017.
This interim financial report is prepared on the basis of the halfyear financial statements drawn up for the companies in accordance with the uniform accounting and valuation rules for the Group as at 31 March 2018. The same accounting and valuation principles are used for the consolidated interim financial statements as for the consolidated financial statements drawn up as at 30 September 2017. The values included in this interim financial report were calculated using the International Financial Reporting Standards (IFRS). The interim income tax expense during the year was calculated on the basis of the estimated effective income tax rate for the entire year. The interim report was not audited by the auditor and was not subject to an audit review
The consolidated financial statements include the legal and business parent company of the Group and all the domestic and foreign subsidiary companies over which KPS AG exercises control of the financial and business policy in order to derive the corresponding benefit.
Alongside KPS AG as the legal parent company, the scope of consolidation covers the following companies in which KPS AG has a direct or indirect shareholding and which are included in the consolidated financial statements on the basis of full consolidation.
.
| Shareholding | Registered office | Capital and voting share 31.03.2018 (Previous year) |
|---|---|---|
| KPS Business Transformation GmbH | Unterföhring | 100% |
| (100%) | ||
| KPS Services GmbH | Unterföhring | 100% |
| (100%) | ||
| KPS Consulting Verwaltungs GmbH | Unterföhring | 100% |
| (100%) | ||
| KPS Consulting GmbH & Co. KG | Unterföhring | 100% |
| (100%) | ||
| KPS Consulting AG | Zürich/Switzerland | 100% (100%) |
| KPS Solutions GmbH | Unterföhring | 100% (100%) |
| KPS digital GmbH | Dortmund | 100% |
| (100%) | ||
| KPS Consulting A/S | Virum/Denmark | 100% |
| (100%) | ||
| Saphira Consulting A/S 1 | Virum/Denmark | 0% |
| (100%) | ||
| KPS B.V. | Amsterdam/Netherlands | 100% |
| (100%) | ||
| KPS Consulting Inc. | Wilmington/USA | 100% |
| (100%) | ||
| KPS Strategie-, Prozess- und IT-Consulting GmbH |
Vienna/Austria | 100% (0%) |
| ICE Consultants Europe S.L. | Barcelona/Spain | 100% |
| (0%) | ||
| Infront Consulting & Management GmbH | Hamburg | 100% |
| (0%) | ||
| Envoy Digital Limited | London/England | 100% |
| (0%) | ||
| 1 On 1 October 2018, Saphira Consulting A/S, Denmark, previously a separate entity within the group of consolidated companies | ||
| was merged with KPS Consulting A/S, Denmark. |
On 2 October 2017, KPS AG acquired 100% of the shares in ICE Consultants Europe S.L., Spain.
ICE Consultants Europe S.L. – hereinafter referred to as ICE – with registered office in Barcelona, Spain, was established with the shareholder agreement dated 18 June 2001.
The object of the company is process consulting in the area of information technology, primarily SAP consulting, Application Management Services (AMS), and the transaction of all business associated with this.
During the half-year under review, ICE contributed 5,511 KEuros to the sales of the KPS Group, while the operating result (EBIT) for the reporting half-year includes 1,255 KEuros. The earnings generated by the acquired business after tax since the date of first-time consolidation amounted to 931 KEuros.
The fair value of the consideration (purchase price) is made up of the cash paid amounting to 10,354 KEuros and a conditional purchase price of 7,540 KEuros. The conditional purchase price has to be paid in the years 2018 – 2022 if the EBIT of Saphira develops consistently in line with expectations. The purchase price for 100% of the shares in ICE can be allocated to the acquired assets and liabilities as follows, and taking into account the cash and cash equivalents acquired led to the following net cash outflow:
| ICE Consultants Europe S.L. | Book value before acquisition |
Adjustment to fair value |
Fair Value |
|---|---|---|---|
| in KEuros | |||
| Acquired assets and liabilities | |||
| Goodwill | 0 | 13,669 | 13,669 |
| Other intangible assets | 0 | 4,031 | 4,031 |
| Property, plant and equipment | 69 | 0 | 69 |
| Other non-current assets | 2,305 | 0 | 2,305 |
| Cash and cash equivalents | 646 | 0 | 646 |
| Other provisions | 0 | 0 | 0 |
| Other liabilities | 1,818 | 0 | 1,818 |
| Deferred taxes | 0 | 1,008 | 1,008 |
| Net assets | 1,202 | 16,692 | 17,894 |
| Fair value of the considerations | 17,894 | ||
| of which conditional considerations included therein | 7,540 | ||
| Cash and cash equivalents taken over | 646 | ||
| Expected net cash outflow from the acquisition | 17,248 | ||
| Net outflow of liquid funds in the business year 2017/2018 | |||
| Consideration in the form of cash paid | 10,354 | ||
| Less acquired liquid funds | -646 | ||
| Net cash outflow in the business year 2017/2018 | 9,708 |
The purchase price allocation reflects all the information in relation to the revaluation amounts calculated on the acquisition date, but this has not currently been concluded. There may therefore still be changes in the allocation of the purchase price to the individual assets.
The goodwill resulting from the acquisition primarily relates to the capabilities of the employees taken over from ICE and the expected synergies from integration in the existing business operation of KPS AG.
Acquired receivables amounting to 2,304 KEuros are included in other current assets. The gross amounts of the contractual receivables amount to 2,335 KEuros. Impairments amounting to 31 KEuros were formed for non-recoverable receivables.
On 2 January 2018, KPS AG acquired 100% of the shares in Infront Consulting & Management GmbH.
Infront Consulting & Management GmbH – hereinafter referred to as Infront – with registered office in Hamburg was established with the shareholder agreement dated 8 December 1999.
The object of the company is management consulting in the area of business administration, in particular strategy, organization, and business optimization, and the transaction of all business associated with this.
During the reporting half-year under review, Infront contributed 1,052 KEuros to the sales of the KPS Group, while the operating result (EBIT) for the reporting half-year includes 140 KEuros. The earnings generated by the acquired business after tax since the date of first-time consolidation amounted to 111 KEuros.
The fair value of the consideration (purchase price) is made up of the cash paid amounting to 4,285 KEuros, transferred treasury shares with a value of 1,934 KEuros, and a conditional purchase price of 6,625 KEuros. The conditional purchase price has to be paid in the years 2018 – 2023 if the EBT develops consistently in line with expectations. The purchase price for 100% of the shares in Infront can be allocated to the acquired assets and liabilities as follows, and taking into account the cash and cash equivalents acquired led to the following net cash outflow:
| Infront Consulting & Management GmbH | Book value before acquisition |
Adjustment to fair value |
Fair Value |
|---|---|---|---|
| in KEuros | |||
| Acquired assets and liabilities | |||
| Goodwill | 0 | 11,820 | 11,820 |
| Other intangible assets | 0 | 834 | 834 |
| Property, plant and equipment | 79 | 0 | 79 |
| Other non-current assets | 1,141 | 0 | 1,141 |
| Cash and cash equivalents | 103 | 0 | 103 |
| Other provisions | 549 | 0 | 549 |
| Other liabilities | 336 | 0 | 336 |
| Deferred taxes | 0 | 248 | 248 |
| Net assets | 438 | 12,406 | 12,844 |
| Fair value of the considerations | 12,844 | ||
| of which conditional considerations included therein | 6,625 | ||
| Cash and cash equivalents taken over | 103 | ||
| Expected net cash outflow from the acquisition | 12,741 | ||
| Net outflow of liquid funds in the business year 2017/2018: | |||
| Consideration in the form of cash paid | 4,285 | ||
| Consideration in the form of own shares paid | 1,934 | ||
| Less acquired liquid funds | -103 | ||
| Net cash outflow in the business year 2017/2018 | 6,116 |
The purchase price allocation reflects all the information in relation to the revaluation amounts calculated on the acquisition date, but this has not currently been concluded. There may therefore still be changes in the allocation of the purchase price to the individual assets.
The goodwill resulting from the acquisition primarily relates to the capabilities of the employees taken over from Infront and the expected synergies from integration in the existing business operation of KPS AG.
Acquired receivables amounting to 992 KEuros are included in the current assets. The gross amounts of the contractual receivables amount to 992 KEuros. No non-recoverable receivables are known.
On 9 February 2018, KPS AG acquired 100% of the shares in Envoy Digital Limited, England.
Envoy Digital Limited – hereinafter referred to as Envoy – with registered office in London was established with the shareholder agreement dated 3 November 1997.
The object of the company is consulting in the area of information technology, primarily SAP consulting, and the transaction of business associated with this.
During the half-year under review, Envoy contributed 607 KEuros to the sales of the KPS Group, while the operating result (EBIT) for the reporting half-year includes 7 KEuros. The earnings generated by the acquired business after tax since the date of first-time consolidation amounted to 7 KEuros.
The fair value of the consideration (purchase price) is made up of the cash paid and cash still to be paid in the second business halfyear amounting to 5,996 KEuros and a conditional purchase price of 3,722 KEuros. The conditional price has to be paid in the years 2018 – 2023 if the EBT of Envoy develops consistently in line with expectations. The purchase price for 100% of the shares in Envoy can be allocated to the acquired assets and liabilities as follows, and taking into account the cash and cash equivalents acquired led to the following net cash outflow:
| Envoy Digital Ltd. | Book value before acquisition |
Adjustment to fair value |
Fair Value |
|---|---|---|---|
| in KEuros | |||
| Acquired assets and liabilities | |||
| Goodwill | 0 | 7,336 | 7,336 |
| Other intangible assets | 0 | 1,626 | 1,626 |
| Property, plant and equipment | 48 | 0 | 48 |
| Other non-current assets | 930 | 0 | 930 |
| Cash and cash equivalents | 914 | 0 | 914 |
| Other provisions | 441 | 0 | 441 |
| Other liabilities | 385 | 0 | 385 |
| Deferred taxes | 0 | 309 | 309 |
| Net assets | 1,066 | 8,653 | 9,719 |
| Fair value of the considerations | 9,719 | ||
| of which conditional considerations included therein | 3,722 | ||
| Cash and cash equivalents taken over | 914 | ||
| Expected net cash outflow from the acquisition | 8,805 | ||
| Net outflow of liquid funds in the business year 2017/2018 | |||
| Consideration in the form of cash paid | 5,996 | ||
| less acquired liquid funds | -914 | ||
| Net cash outflow in the business year 2017/2018 | 5,082 |
The purchase price allocation reflects all the information in relation to the revaluation amounts calculated on the acquisition date, but this has not currently been concluded. There may therefore still be changes in the allocation of the purchase price to the individual assets.
The goodwill resulting from the acquisition primarily relates to the capabilities of the employees taken over from Envoy and the expected synergies from integration in the existing business operation of KPS AG.
Acquired receivables amounting to 486 KEuros are included in other current assets. The gross amounts of the contractual receivables amount to 486 KEuros. No non-recoverable receivables are known.
We refer to the consolidated financial statements dated 30 September 2017 for information about related companies and persons (related parties). As at 31 March 2018, no significant changes had taken place.
The Declaration of Compliance on the German Corporate Governance Code required pursuant to Article 161 of the Stock Corporation Law (AktG) was submitted for the business year 2016/2017 and is permanently available on the company's website www.kps.com.
No major events took place after the balance sheet date which will have exerted a significant development on the business development of the KPS Group.
I hereby declare to the best of my knowledge and in accordance with the accounting principles to be applied for interim reporting that the Consolidated Financial Statements for the first half-year present a true and fair view of the asset situation, financial position and results of operations of the Group corresponding to the actual circumstances and the Consolidated Management Report for the first half-year presents a true and fair view of the performance of the business including the business result and the position of the KPS Group such that an appropriate view of the significant circumstances is conveyed and the significant opportunities and risks of the likely development of the KPS Group are described for the remaining business year.
Unterföhring, May 2018
KPS AG The Executive Board
| ITEM | ACQUISITION OR PRODUCTION COSTS | |||||
|---|---|---|---|---|---|---|
| in KEuros | 30.09.2017 | Additions | Additions from company mergers |
Disposals | 31.03.2018 | |
| I.) Intangible assets |
||||||
| 1. Concessions, industrial property rights and similar rights and assets, and licenses in such rights and assets |
||||||
| a.) if acquired | 7,716 | 399 | 6,301 | 208 | 14,208 | |
| b.) if internally generated | 7,492 | 1,517 | 0 | 0 | 9,009 | |
| 2. Advance payments received |
0 | 0 | 0 | 0 | 0 | |
| 3. Goodwill |
47,243 | 0 | 32,824 | 0 | 80,067 | |
| Intangible assets | 62,451 | 1,916 | 39,125 | 208 | 103,284 | |
| II.) Property, plant and equipment | ||||||
| 1. Business and office equipment |
2,723 | 64 | 174 | 0 | 2,961 | |
| 2. Low-value assets |
0 | 4 | 0 | 4 | 0 | |
| 3. Advance payments received |
0 | 0 | 0 | 0 | 0 | |
| Property, plant and equipment | 2,723 | 68 | 174 | 4 | 2,961 | |
| Total fixed assets | 65,174 | 1,984 | 39,299 | 212 | 106,245 |
| BOOK VALUE | ACCUMULATED DEPRECIATION | |||
|---|---|---|---|---|
| 31.03.2018 30.09.2017 |
31.03.2018 | Disposals | Additions | 30.09.2017 |
| 8,675 | 5,533 | 208 | 1,530 | 4,211 |
| 7,900 | 1,109 | 0 | 175 | 934 |
| 0 0 |
0 | 0 | 0 | |
| 65,051 32,227 |
15,016 | 0 | 0 | 15,016 |
| 81,626 42,290 |
21,658 | 208 | 1,705 | 20,161 |
| 1,093 | 1,868 | 8 | 148 | 1,728 |
| 0 0 |
0 | 0 | 0 | |
| 0 0 |
0 | 0 | 0 | |
| 1,093 | 1,868 | 8 | 148 | 1,728 |
| 82,719 43,284 |
23,526 | 216 | 1,853 | 21,889 |
KPS AG Beta-Straße 10H 85774 Unterföhring Germany
Investor Relations Tel.:+49-8935631-0 Email: [email protected]
KPS AG on the Internet www.kps.com
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