Earnings Release • May 14, 2007
Earnings Release
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Dear Stockholders,
The first quarter 2007 was again characterized by increasing business figures and a number of very interesting new projects. This is a development, the intensity of which surprised us and of course made us very happy. With a multitude of new customers, we can be very satisfied with the number of received orders in the first quarter.
In addition, implementation of our large projects has already resulted in good utilization of our resources and in an attractive expansion of our installed basis.
Consequently, we are substantially closer to our long-term goal of achieving a greatly expanded presence on the market with NEXUS products.
NEXUS set the goal last year to bet consistently on innovation and increased sales by 2008 and only secondly in improved profits. We have implemented this strategy over the past years with great determination and have surpassed our targets for the most part.
It is especially significant that we have acquired a strong customer base and a number of new national and international projects.
This is a result, which is especially thanks to our innovative technology and our consistent orientation to customers.
Consequently, our customers expect that we continue to set standards in the development of medical information processing and provide substantial benefits to our customers in our customer projects with solid and technologically mature products. This is a challenge, which we have to work on hard to master.
Whether we achieve our ambitious goals of the current year will depend on it. In spite of the very good results from last year, we want to again achieve a big increase in sales and profits. At the same time, consolidation of the group and of our product portfolio is an essential goal of the current year.
We are very happy that we have already succeeded in the first quarter in surpassing our targets and earned a substantial contribution to our annual goal.
Consequently, the positive development of the last 19 quarters has been continued without a break.
Sales increased from EUR 5.3 million to EUR 6.3 million (+19.3 %) during the first three months. The Healthcare Software Division continued to develop strongly and recorded sales of 5.2 million with an increase of 20.5 %. Sales of NEXUS Schweiz were consolidated in the first quarter.
The operating result of the Group also developed positively in the first quarter. The result before taxes improved slightly from KEUR 376 to KEUR 358 (+5.0 %). KEUR 374 was achieved following KEUR 317 previously (+18.0 %).
As a result, we have surpassed the strong figures from the previous year and are substantially above our planned target.
The operative cash flow increased from KEUR 232 in Q1-2006 to KEUR 834 in Q1-2007. The balance relations have not changed essentially compared to Dec. 31, 2006. The amount of cash on hand remains high at 17.4 million euros and ensures long-term development of the company.
Very important milestones in large projects are coming up, and we will have to prove that we can provide our customers with innovation and added value on a high level in spite of increased business volume. Although the challenge is very big, we are convinced that we are on the right long-term path with our strategy.
Sincerely,
Dr. Ingo Behrendt CEO - NEXUS AG
of Business Figures
NEXUS Group sales increased from KEUR 5,287 to KEUR 6,309 (+19.3 %) in the first three months of the year 2006. The increase in sales is due to the inclusion of NEXUS Schweiz on one hand, and on the other hand due to the continuing strong demand for NEXUS products.
The Healthcare Software segment is responsible for the good development of sales; its sales increased by 20.5 % compared to the same period of the previous year from KEUR 4,298 to KEUR 5,177.
Sales in the area of Healthcare Service increased by 14.5 % from KEUR 989 to KEUR 1.132.
This is above all due to further increases of our market share in Switzerland, Austria and the rest of Europe. The consolidation of NEXUS Schweiz was part of this. The share of sales outside of Germany increased overall from 24.4 % to 43.2 %.
Growth stimuli in the first quarter came very clearly from international business, while fewer sales were recorded in Germany. The reason for that is that fewer projects were invoiced in the first quarter.
| Sales by regions | 01/01/ - 03/31/06 |
01/01/ - 03/31/07 |
∆ in % |
|---|---|---|---|
| KEUR | KEUR | ||
| Germany | 3,998 | 3,585 | -10.3 |
| Swizerland | 732 | 1,886 | 157.7 |
| Austria | 174 | 360 | 106.9 |
| Italy | 40 | 51 | 27.5 |
| Rest of Europe / USA | 316 | 347 | 9.8 |
| Arabien region | 27 | 80 | 196.3 |
| Total | 5,287 | 6,309 | 19.3 |
| Sales by divisions | 01/01/ - 03/31/06 |
01/01/ - 03/31/07 |
∆ in % |
|---|---|---|---|
| KEUR | KEUR | ||
| Healthcare Software | 4,298 | 5,177 | 20.5 |
| Healthcare Service | 989 | 1,132 | 14.5 |
| Total | 5,287 | 6,309 | 19.3 |
The positive development of the operating result of the last quarters continued during the reporting period. The Group result improved by 18.0 % to KEUR 374 (previous year: KEUR 317), and the result before taxes improved by 5.0 % to KEUR 376 (previous year: KEUR 358).
The EBITDA increased by KEUR 161 in the first three months of 2007 (previous year: KEUR 956) to KEUR 1,117 (+16.8 %) now. Consequently, the positive development of the EBITDA compared to 2006 quarters has been confirmed again. This reflects the demand for products of the NEXUS Group and the consistent use of synergy potential within the Group. The highly investment in influencing the market development and the partially heavily expenses for integration of acquired companies are introduced in the operative result.
There was a movement of results in the business divisions in the first quarter 2007.
The result in the segment of Healthcare Software was with KEUR 349 following KEUR 381 about KEUR 32 below the previous year, while segment Healthcare Service increased result by about KEUR 50 to TEUR 27 (previous year: -KEUR 23).
Despite the high investment and acquisitions took place the Group continues to have a large amount of cash funds. Cash reserves amounted to KEUR 17,411 on the cutoff date (Dec. 31, 2006: KEUR 17,446).
Number of employees developed like: see chart below.
Prices of NEXUS stocks experienced a slight upward trend during the first three months. Starting from a "year opening price" of € 3.31, it increased by somewhat more than 10 % to € 3.65 on 30 March 2007. At the beginning of April, the stock price reacted to the company report about winning an order in Saudi Arabia, and this reaction continued positively until the middle of April. Subsequently, the price consolidated somewhat at € 3.79 at the end of April.
| June 18th |
|---|
| August 13th |
| November 14th |
| November 22nd |
| Dt. Röntgenkongress, Berlin (D) | 17 - 19 May |
|---|---|
| GMDS HIS-meeting, Ludwigshafen (D) | 20 - 21 June |
| NEXUS on the Lake, Luzern (CH) | September 26th |
| eHealthcare congress, Nottwil (CH) | September 27th |
| NEXUS AG customers day, Heidelberg (D) | 9 - 10 October |
| MEDICA, Düsseldorf (D) | 14 - 17 November |
| DGPPN, Berlin (D) | 21 - 24 November |
| Dt. Kongress für Perinatale Medizin, Berlin (D) | 11/29/ - 12/01/ |
Regardless of whether you want paper or electronic documents from NEXUS, we provide you with the requested information. E-mail us at [email protected], and you will receive our financial reports or product information as soon as possible. These documents are available for downloading from our homepage www.nexusag.de. If you would like information on the telephone, you can call our Investor Relations Team at +49 7721-8482-320.
Approximately 40,000 patients are treated annually in the institutions of the Viennese Hospital Association (KAV). In the future, individual drug doses will be packed and distributed completely automatically in hospital pharmacies using the "Unit Dose System"; consequently, the danger of incorrect medication has been eliminated almost completely with respect to the process. In interaction with special software from NEXUS AG, the safety of patients has been increased greatly, the hospital staff has less work and the legally required documentation of drug therapy is guaranteed.
The Viennese Hospital Association spends approx. 117 million euros for patient drugs each year. Drugs were previously noted in writing by nurses and later packed individually for each patient. The eight pharmacies of the three KAV hospitals – Rudolf Foundation, Kaiser-Franz-Josef Hospital and Hietzing Hospital – provide about 6,100 drug packages daily. In addition to the substantial need for workers' time, possible error sources such as illegible writing or putting drugs in the wrong package could never be excluded completely. This is a risk potential, which has now been reduced substantially with the optimization of the medication process in KAV.
The complete complex process of drug administration will be supported by an EDP system in the future. The
new system will be started in the Kaiser-Franz-Joseph Hospital for one ward each in three clinics and three geriatric centers. After a successful trial period, it will be used for 1,400 beds and then in all of Vienna in the coming years. The complete process from prescriptions to administration of individual doses in line with patient needs will be supported and checked electronically.
Besides protecting patients from possible erroneous medication, electronic support and checking of drug administration in the institutions of the Viennese Hospital Association will also provides relief from the required documentation of the various care and therapy steps, which is increasingly required by law and absolutely required for a possible certification process.
Each individual process of patient medication is documented. The status of drug administration can be checked at any time and place, and increases or decreases of doses can be prescribed and set directly. In addition, drug administration can be booked directly using the existing billing system.
Thanks to the comprehensive reform started last year, the Viennese city hospitals and nursing homes not only hope to achieve almost 100 % patient safety using new technologies, but also to cut costs by approx. 10 percent.
The Director's Holdings of the supervisory board and the executive board were as follows on March 31, 2007 in comparison to the previous year:
We continued our trend of the last 19 quarters by succeeding a total growth of 19.3 % and 18.0 % improvement of results, although there were ambitious intensions from last year. This is a very pleasant performance as 2007 is a year of investment in the development of markets. After heavily expenses in company integration and project launches our acting focus for this year is the realisation of our large amount of new projects.
A very relevant issue is to implement these high quality projects just in time. With these projects we are setting milestones within the different markets, which determines our business and our development for the next few years.
| Directors Holdings | Numbers of stocks owned |
Numbers of options | |||
|---|---|---|---|---|---|
| Supervisory Board | |||||
| Dr. jur. Hans-Joachim König | 81,099 | 0 | |||
| Prev. year: 81,099 | Previous year: 0 | ||||
| Prof. Dr. Alexander Pocsay | 0 | 0 | |||
| Previous year: 0 | Previous year: 0 | ||||
| Ronny Dransfeld | 0 | 0 | |||
| Previous year: 0 | Previous year: 0 | ||||
| Prof. Dr. Ulrich Krystek | 0 | 0 | |||
| Previous year: 0 | Previous year: 0 | ||||
| Dipl.-Betriebsw. (FH) Wolfgang Dörflinger |
0 | 0 | |||
| Previous year: 0 | Previous year: 0 | ||||
| Dr. Dietmar Kubis | 0 | 0 | |||
| Previous year: 0 | Previous year: 0 | ||||
| Executive Board | |||||
| Dr. Ingo Behrendt (MBA) | 82,000 | 355,000 | |||
| Prev. year: 82,000 | Prev. year: 165,000 | ||||
| Dipl.-Betriebsw. (FH) | 116,147 | 15,000 | |||
| Stefan Burkart | Prev. year: 116,147 | Previous year: 0 |
This meaning is also for projects in Germany, which has a strong effect to the market by its quantity. But parallely for the major orders of Switzerland, Austria and Saudi Arabia in equal measure. To handle these projects successfully means to generate high growth potentials for future.
We are enthusiastic by this development und initiated next steps, to manage all the associated challenges. Also we have defined further targets, which we have to fulfil, too, this year. For example new market growth possibilities, developing of new products and further regional expansion.
The current success story of NEXUS propitiates us, to manage the variety of challenges and to continue the positive development in future.
This interim report from the NEXUS Group as of March 31st, 2007 has been prepared in keeping with the International Financial Reporting Interpretations (IFRS). The interpretation of the International Financial Reporting Interpretation Committee (IFRIC) has been taken into account. The same accounting and valuation methods were used in the interim accounts as in the consolidated financial statements of the business year 2006. The report has not been audited.
| Consolidated Profit and L oss Acc ount |
2006 | 2007 |
|---|---|---|
| KEUR | KEUR | |
| 1. Revenue | 5,287 | 6,309 |
| 2. Increase / decrease in finished goods and work in progress | -3 | 232 |
| 3. Other capitalized company work | 815 | 856 |
| 4. Other operating income | 227 | 286 |
| 5. Cost of materials | 1,284 | 1,462 |
| a) Cost of raw materials and supplies | 1,183 | 1,346 |
| b) Cost for purchased services | 101 | 116 |
| 6. Personnel expenses | 2,899 | 3,844 |
| a) Wages and salaries | 2,430 | 3,281 |
| b) Social costs | 469 | 563 |
| 7. Depreciation and amortization of fixed intangible and tangible assets |
825 | 998 |
| 8. Other operating expenses | 1,189 | 1,234 |
| a) Cost of operation | 343 | 347 |
| b) Cost of distribution | 271 | 283 |
| c) Cost of administration | 522 | 543 |
| d) Other expenses | 53 | 61 |
| 9. Other taxes | 4 | 3 |
| 10. Expenses from associated companies | – | – |
| 11. Other interest and similar income | 233 | 235 |
| 12. Revenue from associated companies | – | – |
| 13. Profit resulting from sale of other stocks | 0 | 1 |
| 14. Depreciation of financial assets and losses resulting from the sale of assets |
– | – |
| 15. Interest payable and other similar charges | 0 | 2 |
| Profit before tax |
358 | 376 |
| 16. Income taxes | -41 | -2 |
| Annual net profit |
317 | 374 |
| Are attributable to: | ||
| Minority interest | -1 | 23 |
| Stockholders of parent company | 318 | 351 |
| Weighted average of issued shares (in thousands) | 13,720 | 13,748 |
| Result per share in EUR (diluted and undiluted ) |
0.02 | 0.03 |
| Balance shee t as of 03/31/2007 (IFRS) asse ts |
12/31/2006 | 03/31/2007 | |
|---|---|---|---|
| KEUR | KEUR | ||
| Long -term capital |
|||
| I. Intangible assets | |||
| 1. Concessions, industrial property rights, and rights and assets as well as licenses for such rights and assets |
130 | 121 | |
| 2. Goodwill | 7,749 | 7,731 | |
| 3. Development costs | 8,311 | 8,354 | |
| 4. Customer Base / Technology | 2,656 | 2,569 | |
| II. Property, plant and equipment | |||
| 1. Tenant installations | 5 | 5 | |
| 2. Other equipment, factory and office equipment | 689 | 784 | |
| III. Financial assets | |||
| 1. Investments in associates | 48 | 48 | |
| 2. Other loans | 40 | 40 | |
| IV. Deferred taxes | 4,559 | 4,617 | |
| long -term capital |
24,187 | 24,269 | |
| Short -term capital |
|||
| I. Inventories | |||
| 1. Raw materials and supplies | 75 | 75 | |
| 2. Work in progress | 195 | 461 | |
| 3. Finished goods | 42 | 96 | |
| 4. Down payment made | – | 17 | |
| II. Receivables and other assets | |||
| 1. Trade receivables | 7,175 | 6,854 | |
| 2. Receivables from associated companies | 11 | 17 | |
| 3. Other assets | 2,047 | 3,037 | |
| 4. Tax refund claims | 368 | 432 | |
| III. Securities | 14,691 | 14,352 | |
| IV. Cash and cash equivalents | 2,755 | 3,059 | |
| Total Short -term capital |
27,359 | 28,400 | |
| Total Assets |
51,546 | 52,669 |
| Balance shee t as of 03/31/2007 (IFRS) Equity and liabilities |
12/31/2006 | 03/31/2007 |
|---|---|---|
| KEUR | KEUR | |
| equit y |
||
| I. Subscribed capital | 13,720 | 13,805 |
| II. Capital reserve | 39,131 | 39,254 |
| III. Other reserves | 1 | 1 |
| IV. Equity capital difference from currency translation | 8 | 2 |
| V. Valution reserve for financial instruments | -94 | -180 |
| VI. Reserve for pensions | -126 | -122 |
| VII. Loss carry-forward | -11,370 | -10,666 |
| VIII. Annual net profit / loss | 704 | 351 |
| Equit y capital attributable to stockholders of the parent compan y |
41,974 | 42,445 |
| Minority interest | 286 | 309 |
| Total Equit y |
42,260 | 42,754 |
| Long -term liabilities |
||
| I. Pension provisions | 595 | 578 |
| II. Other provisions | 1,921 | 1,928 |
| Total long -term liabilities |
2,516 | 2,506 |
| Short -term liabilities |
||
| I. Tax provisions | 43 | 42 |
| II. Other provisions | 715 | 578 |
| III. Bank loans | 43 | – |
| IV. Received payments or orders | 187 | 262 |
| V. Trade accounts payable | 2,343 | 1,922 |
| VI. Liabilities with associated companies | 15 | 30 |
| VII. Other liabilities | 3,424 | 4,575 |
| Total Short -term liabilities |
6,770 | 7,409 |
| Total equit y and liabilities |
51,546 | 52,669 |
| Cash Flow |
2006 | 2007 |
|---|---|---|
| KEUR | KEUR | |
| 1. Cash Flow from operating activities |
||
| Profit before tax | 358 | 376 |
| Depreciation and amortization of intangible assets and plant, equipment and other fixed assets |
825 | 998 |
| Other expenses / income with no impact on cash | 0 | -92 |
| Depreciation of financial assets | 0 | 0 |
| Profit / loss from disposal of long term capital | 5 | 0 |
| Profit / loss from disposal of securities | 0 | 1 |
| Increase / decrease in inventories | -30 | -337 |
| Increase / decrease in trade receivables and other assets that cannot be allocated to investing or financing activities |
-1,166 | -701 |
| Changes in provision | -714 | -142 |
| Increase / decrease in trade accounts payable and other liabilities that cannot be allocated to investing or financing activities |
932 | 568 |
| Interest paid | 0 | -2 |
| Interest payments received | 90 | 234 |
| Income taxes paid | -68 | -69 |
| Income taxes received | 0 | |
| 232 | 834 | |
| 2. Cash Flow from financing activities |
||
| Cash paid for investments in property, plant and equipment / intangible assets | -850 | -856 |
| Cash received from disposal of securities | 5,826 | 203 |
| Cash paid for investments in scurities | -507 | 0 |
| 4,469 | -653 | |
| 3. Cash Flow from financing activities |
||
| Increase in share capital by edition of equity options | 0 | 85 |
| Allocation to capital reserve by edition of equity options | 0 | 81 |
| Amount paid out for redeeming loans | 0 | -43 |
| 0 | 123 | |
| 4. Cash and cash equivalents at end of fiscal year |
||
| Cash-relevant changes in cash and cash equivalents (sum of 1 + 2 + 3) | 4,701 | 304 |
| Change in currency translation adjustment | -1 | 0 |
| Cash and cash equivalents at beginning of fiscal year | 3,151 2,755 |
|
| 7,851 | 3,059 | |
| 5. Composition of cash and cash equivalents |
||
| Cash on hand | 7,873 | 3,059 |
| Bank liabilities due on demand | -22 | 0 |
| 7,851 | 3,059 |
| de velopme nt of group e quity |
capital ubscribed S |
reserves apital C |
provisions ther O |
from conversion diference curency quity E |
financial instruments for eserve R |
pensions for eserve R |
loss forward onsolidated carry C |
profit onsolidated deficit / C |
company to attributable parent cap. of stockh. quity E |
interest inority M |
equity um S |
capital ed uthoriz A |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| KEUR | KEUR | KEUR | KEUR | KEUR | KEUR | KEUR | KEUR | KEUR | KEUR | KEUR | KEUR | |
| Consolidated equit y as of 12/31/2005 |
13,720 | 38,886 | 1 | 8 | 4 | -139 | -11,632 | 262 | 41,110 | 190 | 41,300 | 6,860 |
| Transfer of 2005 consolidated loss to consolidated loss carry-forward |
262 | -262 | 0 | 0 | ||||||||
| Total income entered directly in equity capital |
-98 | 13 | -85 | -85 | ||||||||
| Profit before tax 2006 | 704 | 704 | 96 | 800 | ||||||||
| Overall result of the period |
0 | 0 | 0 | 0 | -98 | 13 | 0 | 704 | 619 | 96 | 715 | |
| Stock-based payment | 114 | 114 | 114 | |||||||||
| Compensation of IPO costs 2000 | 131 | 131 | 131 | |||||||||
| Consolidated equit y on 12/31/2006 |
13,720 | 39,131 | 1 | 8 | -94 | -126 | -11,370 | 704 | 41,974 | 286 | 42,260 | 6,860 |
| Profit before tax 2006 entered directly in accumulated deficit |
704 | -704 | 0 | 0 | ||||||||
| Total income entered directly in equity capital |
-6 | -86 | 4 | -88 | -88 | |||||||
| Profit before tax 03/31/2007 | 351 | 351 | 23 | 374 | ||||||||
| Overall result of the period |
0 | 0 | 0 | -6 | -86 | 4 | 0 | 351 | 263 | 23 | 286 | |
| Edition of equity options to employees |
85 | 81 | 166 | 166 | ||||||||
| Stock-based payment | 42 | 42 | 42 | |||||||||
| Consolidated equit y on 03/31/2007 |
13,805 | 39,254 | 1 | 2 | -180 | -122 | -10,666 | 351 | 42,445 | 309 | 42,754 | 6,860 |
NEXUS AG, Auf der Steig 6, D-78052 Villingen-Schwenningen Telefon +49 (0)7721 8482 -0, Fax +49 (0)7721 8482-888 www.nexus-ag.de, [email protected]
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