AI assistant
Prodways Group — Interim / Quarterly Report 2023
Sep 29, 2023
1612_ir_2023-09-29_9a0a7a37-35f5-40df-97cd-72a3650e164f.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
PRODWAYS GROUP
Press release
2023 HALF-YEAR FINANCIAL REPORT
including
- 2023 half-year activity report
- Condensed consolidated financial statements at 30 June 2023
- Statutory Auditors' report on the half-year financial information for 2023
- Statement by the person responsible for the 2023 half-year financial report
PRODWAYS GROUP
PRODWAYS GROUP
30 rue de Gramont
75002 PARIS
www.prodways-group.com
1
PRODWAYS GROUP
2023 HALF-YEAR ACTIVITY REPORT
First half of 2023: financial strength and preparation for future growth
In the first half of 2023 PRODWAYS GROUP achieved results in line with its expectations, with revenue growth of 4%, making it possible to reach a level of revenue close to that of the same period last year despite the unfavorable base effect. The current EBITDA margin, which stood at 11%, was lower than last year but in line with the Group's expectations in the first half of the year thanks to good control of margins and overheads.
This first part of the year also demonstrated PRODWAYS' ability to remain profitable and maintain sound financial discipline in this transition year in 2023 with the launch of the BOOST plan. The Company generated €4.6 million in cash flow from operations¹ and received €4 million from the disposal of its stake in BIOTECH DENTAL.
Overall, the Company's net income stood at €3.6 million, above the level of the first half of 2022.
Income statement for the first half of 2023
| (€ million) | H1 2023 | H1 2022 | Change 2023 vs. 2022 | H1 % |
|---|---|---|---|---|
| Revenue | 43.0 | 41.5 | +1.6 | +4% |
| -1% org. | ||||
| Current EBITDA² | 4.8 | 7.9 | (3.1) | -39% |
| Current EBITDA margin | 11% | 19% | - | - |
| Income from ordinary activities² | 2.4 | 5.4 | (3.0) | -55% |
| Operating income | 4.7 | 5.1 | (0.4) | -7% |
| Financial results, tax and minorities interest | (1.2) | (1.6) | +0.5 | -28% |
| Net result in group share | 3.6 | 3.5 | +0.1 | +3% |
Revenue growth of 4% in the first half of 2023
The revenue for the first half of 2023 reached a good level given the return to a more normal seasonality at the beginning of the year.³
In the Systems division, revenue was 9% lower than in the first half of 2022, notably due to the unfavorable base effect on the 3D Software business. This effect was partially offset by the good performance of recurring sales of Materials 3D, which constitute a solid revenue base year after year.
The Products division has enjoyed good momentum since the beginning of the year, with growth of 26% in the first half of 2023, including organic growth of 12%. This performance was driven by the increase in orders in
¹ Cash flow from operations after neutralization of the net borrowing cost and taxes and before change in WCR.
² See the glossary in the appendix for a definition of the alternative performance indicators.
³ As a reminder, the first half of 2022 benefited from exceptionally high revenue in anticipation of the second half of 2022 in the Systems division.
PRODWAYS GROUP
Digital Manufacturing, both in France and Germany, the continued growth of audiology and external growth with the acquisition of AUDITECH in 2022.
A press release focusing on the revenue of the first half of 2023 was published on 24 July (link to the press release).
A current EBITDA margin of 11%
PRODWAYS GROUP achieved current EBITDA of €4.8 million in the first half of 2023, below the level of last year but in line with its expectations in this year of transition and investment.
This decrease in profitability compared to the first half of 2022 is explained by the unfavorable base effect due to the abnormal seasonality in 2022, the exceptional impact of +€900 thousand related to the write-off of a receivable last year, and the increase in the overall payroll announced several months ago in the context of the launch of the BOOST plan.
The current EBITDA margin thus stood at 11% thanks to the good performance of the Group's gross margin, which remained at around 50%, and the control of overheads.
Results by division⁴
| (€ million) | H1 2023 | H1 2022 | Change (in million of euros) | Change (%) | |
|---|---|---|---|---|---|
| Systems | Revenue | 24.0 | 26.4 | (2.5) | -9% |
| Current EBITDA | 2.5 | 6.0 | (3.5) | -58% | |
| Current EBITDA margin (%) | 10% | 23% | (12) pts | - | |
| Income from ordinary activities | 1.7 | 5.0 | (3.3) | -66% | |
| Products | Revenue | 19.1 | 15.3 | +3.9 | 26% |
| Current EBITDA | 3.0 | 2.3 | +0.7 | 30% | |
| Current EBITDA margin (%) | 16% | 15% | +0.6 pt | - | |
| Income from ordinary activities | 1.4 | 0.8 | +0.6 | NA |
Increasing net income
Maintaining healthy profitability, combined with the disposal of a minority stake in BIOTECH DENTAL SMILERS, enabled PRODWAYS GROUP to achieve net income attributable to the owners of the parent of €3.6 million in the first half of 2023, slightly above the level of last year.
This stake was acquired in 2014 for €1.1 million in the context of the emergence of 3D printing for the production of orthodontic aligners. It generated cash inflows of €4 million in April 2023 and a significant capital gain of €2.9 million.
This investment has made it possible to forge a long-term partnership with BIOTECH DENTAL, which has become the French champion of highly technological dental care by introducing digital workflow to dentists. In particular, the company relied on the MOVINGLight® technology developed by PRODWAYS, combined with new developments in 3D materials for orthodontics.
This disposal took place on the occasion of the acquisition of a majority stake in BIOTECH DENTAL by the American medical giant HENRY SCHEIN, also a customer of PRODWAYS GROUP. This customer recently ordered three new MovingLight LD20 printers to complete its production capacity, which now stands at 17 printers.
⁴ The sum of the aggregates of the two divisions must be completed with the intra-group eliminations and the structure to obtain the consolidated result presented above.
PRODWAYS GROUP
PRODWAYS maintains a solid financial position
PRODWAYS GROUP generated €4.6 million in cash flow from operating activities⁵ in the first half of 2023, demonstrating its ability to effectively convert its results into cash and finance its development plan.
This performance was partially offset by the unusually high peak in working capital requirements at 30 June 2023 (+€1.5 million compared to 31 December 2022), due to the harmonization of the Group's accounting tools, which led to delays in payments. The working capital requirement is expected to decrease by the end of 2023.
As a result, PRODWAYS GROUP's financial position once again reflects the discipline the group has demonstrated for many years. With €15 million of available cash, PRODWAYS GROUP has a net debt⁶ €0.9 million (compared to €3.3 million at the end of 2022).
The consolidated financial statements are available in the appendix at the end of this press release.
Outlook: positive signals for 2024
Despite the downward revision of the 2023 outlook during this year of preparation and transition, the various actions deployed internally and with the Group's customers since the beginning of the year lead PRODWAYS to share its confidence in the future growth trajectory. The major industrial projects currently under negotiation are progressing well, with a number of successful technical assessments enabling to reach milestones. In the event of new large commercial success, some of this work could turn into orders towards the end of 2023 or the beginning of 2024, with several dozen orders for MovingLight® printers at stake, associated with significant volumes of 3D materials.
3D material consumption signals are also positive for existing customers. Several of the Group's major customers have already announced their intention to increase their consumption through framework contracts for growing deliveries of materials in 2024.
Geographic expansion of the 3D Software business began in Germany and the UK in the first half of this year, enabling PRODWAYS to address a new fabric of industrial SMEs in its coverage area for 3D printers and print-on-demand services.
Activities with shorter sales cycles are currently gearing up to increase their production capacity by 2024, and to keep pace with the trend towards greater customer numbers, which should be reinforced by the revitalization of sales teams. The Digital Manufacturing business acquired a new printer in the second quarter, and the Audiology business is optimizing the organization of end-user impressions and production workflows.
The performance during the first half of 2023 confirmed the revenue and profitability outlook communicated in June for 2023, of revenue growth of around 5% and current EBITDA margin growth of around 8%.
⁵ See the glossary in the appendix for a definition of the indicators.
4
PRODWAYS GROUP
About PRODWAYS GROUP
PRODWAYS GROUP is a specialist in industrial and professional 3D printing with a unique positioning as an integrated European player. The Group has developed right across the 3D printing value chain (software, machines, materials, parts & services) with a high value-added technological industrial solution. PRODWAYS GROUP offers a wide range of 3D printing systems and premium composite, hybrid and powder materials (SYSTEMS division). The company also manufactures and markets parts on demand, prototypes and small production run 3D printed items in plastic and metal (PRODUCTS division). PRODWAYS GROUP addresses a large number of sectors, particularly in the medical field.
Listed on Euronext Paris (FR0012613610 – PWG), the Group reported in 2022 revenue of €81 million.
For further information: https://www.prodways-group.com
Follow us and keep up with PRODWAYS GROUP’s latest news of PRODWAYS GROUP on Twitter and LinkedIn!
@PRODWAYS
PRODWAYS GROUP
Contacts
INVESTOR RELATIONS
Hugo Soussan
Investor Relations
Tel: +33 (0)1 44 77 94 86
[email protected]
Anne-Pauline Petureaux
Shareholders contact
Tel: +33 (0)1 53 67 36 72
[email protected]
MEDIA CONTACT
Manon Clairet
Financial media relations
Tel: +33 (0)1 53 67 36 73
[email protected]
PRODWAYS GROUP
Appendix
Definition of alternative performance indicators
- Current EBITDA: Operating income before “depreciation, amortization and provisions”, “other items of operating income” and “Group share of the earnings of affiliated companies”.
- Income from ordinary activities: Operating income before “other items of operating income” and “Group share of the earnings of affiliated companies”.
- Net Debt/Net Cash: Net debt/Net cash excluding lease liabilities resulting from the application of IFRS 16 and including the value of treasury stock.
- Cash flow from operations: Cash flow from operating activities before change in working capital requirements and after neutralization of the net borrowing cost and taxes.
6
PRODWAYS GROUP
CONSOLIDATED FINANCIAL STATEMENTS AT 30 JUNE 2023
Consolidated income statement
| (in thousands of euros) | Notes | 30/06/2023 | 30/06/2022 | 31/12/2022 |
|---|---|---|---|---|
| REVENUE | 3.2 | 43,031 | 41,470 | 80,663 |
| Capitalized production | 487 | 1,116 | 1,826 | |
| Inventories and work in progress | (347) | 111 | 767 | |
| Other income from operations | 183 | 1,066 | 1,401 | |
| Purchases consumed | (21,792) | (20,448) | (42,587) | |
| Personnel expenses | (16,755) | (15,298) | (30,380) | |
| Tax and duties | (299) | (326) | (641) | |
| Depreciation, amortization and provisions (net of reversals) | 4.1 | (2,358) | (2,494) | (5,573) |
| Other operating income and expenses | 291 | 195 | 340 | |
| INCOME FROM ORDINARY ACTIVITIES | 2,441 | 5,393 | 5,817 | |
| Non-recurring items in operating income | 3.1 | 2,278 | (393) | (823) |
| Group share of the earnings of affiliated companies | - | 71 | (74) | |
| OPERATING INCOME | 4,719 | 5,071 | 4,920 | |
| Interest on gross debt | (169) | (112) | (281) | |
| Interest on cash and cash equivalents | - | - | - | |
| NET BORROWING COST (A) | 8.4 | (169) | (112) | (281) |
| Other financial income (B) | 29 | 150 | 279 | |
| Other financial expense (C) | (123) | (134) | (246) | |
| FINANCIAL INCOME AND EXPENSES (D = A + B + C) | 8.4 | (263) | (97) | (248) |
| Income tax | 9.1 | (909) | (1,504) | (3,088) |
| NET INCOME FROM CONTINUING OPERATIONS | 3,547 | 3,470 | 1,584 | |
| Net income from discontinued operations | - | - | - | |
| CONSOLIDATED NET INCOME | 3,547 | 3,470 | 1,584 | |
| INCOME ATTRIBUTABLE TO THE PARENT COMPANY SHAREHOLDERS | 3,566 | 3,468 | 1,489 | |
| INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | (19) | 2 | 94 | |
| Average number of shares | 10.2 | 51,442,228 | 51,210,638 | 51,225,160 |
| Earnings per share (in euros) | 10.2 | 0.069 | 0.029 | 0.068 |
| Diluted earnings per share (in euros) | 10.2 | 0.068 | 0.029 | 0.067 |
7
PRODWAYS GROUP
Statement of comprehensive income
| (in thousands of euros) | 30/06/2023 | 30/06/2022 | 31/12/2022 |
|---|---|---|---|
| NET INCOME | 3,547 | 3,470 | 1,584 |
| Currency translation adjustments | (17) | 340 | 165 |
| Tax relating to currency translation adjustments | (63) | - | |
| Actuarial gains and losses on defined benefit plans | 74 | 236 | 366 |
| Tax relating to actuarial gains and losses on defined benefit plans | (19) | (59) | (92) |
| TOTAL OTHER COMPREHENSIVE INCOME | 38 | 454 | 439 |
| of which can be reclassified subsequently to profit and loss | (17) | 277 | 165 |
| of which cannot be subsequently reclassified to profit and loss | 55 | 177 | 274 |
| COMPREHENSIVE INCOME | 3,585 | 3,925 | 2,023 |
| Comprehensive income attributable to parent company shareholders | 3,601 | 3,928 | 1,934 |
| Comprehensive income attributable to non-controlling interests | (16) | (3) | 89 |
8
PRODWAYS GROUP
Consolidated statement of financial position
Assets
| (in thousands of euros) | Notes | 30/06/2023 | 30/06/2022 | 31/12/2022 |
|---|---|---|---|---|
| NON-CURRENT ASSETS | 75,137 | 72,743 | 74,382 | |
| Goodwill | 6.1 | 45,981 | 41,831 | 45,981 |
| Other intangible assets | 6.2 | 12,198 | 11,936 | 12,360 |
| Property, plant and equipment | 6.3 | 16,304 | 16,039 | 15,206 |
| Investments in affiliated companies | - | 1,285 | - | |
| Other financial assets | 653 | 782 | 647 | |
| Deferred tax assets | 9.2 | 1 | 870 | 188 |
| CURRENT ASSETS | 43,965 | 44,645 | 43,607 | |
| Net inventories | 4.2 | 8,662 | 8,006 | 9,157 |
| Net trade receivables | 4.3 | 15,124 | 13,063 | 15,877 |
| Contract assets | 4.3 | 56 | 48 | 53 |
| Other current assets | 4.4 | 4,012 | 2,796 | 3,173 |
| Tax receivables payable | 9.1 | 1,473 | 1,865 | 1,242 |
| Cash and cash equivalents | 8.2 | 14,638 | 18,868 | 14,104 |
| ASSETS HELD FOR SALE | 1,139 | |||
| TOTAL ASSETS | 119,102 | 117,389 | 119,128 |
9
PRODWAYS GROUP
Equity and liabilities
| (in thousands of euros) | Notes | 30/06/2023 | 30/06/2022 | 31/12/2022 |
|---|---|---|---|---|
| EQUITY ATTRIBUTABLE TO OWNER OF THE PARENT | 70,861 | 68,893 | 67,063 | |
| Share capital^{(1)} | 10.1 | 25,750 | 25,632 | 25,632 |
| Share premiums^{(1)} | 86,161 | 85,755 | 85,948 | |
| Retained earnings and other reserves^{(2)} | (41,050) | (42,494) | (44,516) | |
| INTEREST ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 88 | 38 | 131 | |
| NON-CURRENT LIABILITIES | 19,262 | 21,156 | 20,012 | |
| Long-term provisions | 5.2 | 775 | 691 | 803 |
| Long-term financial debt – portion due in more than one year | 8.1 | 11,936 | 14,424 | 13,557 |
| Lease liabilities – portion due in more than one year | 8.3 | 5,810 | 5,356 | 4,885 |
| Deferred tax liabilities | 9.2 | 741 | 684 | 767 |
| CURRENT LIABILITIES | 28,891 | 27,302 | 31,922 | |
| Short-term provisions | 11 | 1,142 | 806 | 1,174 |
| Long-term financial debt – portion due in less than one year | 8.1 | 3,745 | 2,787 | 3,963 |
| Lease liabilities – portion due in less than one year | 8.3 | 1,913 | 1,701 | 1,661 |
| Operating payables | 4.5 | 8,524 | 7,697 | 10,443 |
| Contract liabilities | 4.3 | 737 | 2,086 | 1,397 |
| Other current liabilities | 4.5 | 12,409 | 11,731 | 12,827 |
| Tax liabilities payable | 9.1 | 422 | 493 | 457 |
| TOTAL LIABILITIES | 119,102 | 117,389 | 119,128 |
(1) Of the consolidating parent company.
(2) Including profit (loss) for the period.
10
PRODWAYS GROUP
Consolidated statement of cash flows
| (in thousands of euros) | Notes | 30/06/2023 | 30/06/2022 | 31/12/2022 |
|---|---|---|---|---|
| NET INCOME FROM CONTINUING OPERATIONS | 3,547 | 3,470 | 1,584 | |
| Accruals | 2,841 | 1,835 | 5,038 | |
| Elim. of gains and losses on disposal and dilution gains and losses | (2,885) | 17 | 146 | |
| Elim. of income from associates | - | (71) | 74 | |
| CASH FLOW FROM OPERATING ACTIVITIES (BEFORE NEUTRALIZATION OF THE COST OF NET FINANCIAL DEBT AND TAXES) | 3,503 | 5,251 | 6,841 | |
| Elim. of expenses related to the net borrowing cost | 8.2 | 169 | 112 | 281 |
| Elim. of tax expenses (income) | 9.1 | 909 | 1,504 | 3,088 |
| CASH FLOW FROM OPERATING ACTIVITIES (AFTER NEUTRALIZATION OF THE COST OF NET FINANCIAL DEBT AND TAXES) | 4,581 | 6,867 | 10,211 | |
| Taxes paid | (916) | (853) | (1,447) | |
| Change in working capital requirements | 7.1 | (1,553) | (3,362) | (4,457) |
| NET CASH FLOW FROM OPERATING ACTIVITIES (A) | 2,112 | 2,652 | 4,307 | |
| Investing activities | ||||
| Acquisition of intangible assets | (654) | (1,223) | (2,586) | |
| Acquisition of property, plant and equipment | (724) | (380) | (656) | |
| Disposal of property, plant and equipment and intangible assets | 4 | 11 | 16 | |
| Acquisition of financial investments | (33) | (9) | (16) | |
| Disposal of financial investments | 27 | 44 | 179 | |
| Net cash inflow/outflow on the acquisition/disposal of subsidiaries | 7.2 | 2,899 | (225) | (3,905) |
| NET CASH FLOW FROM INVESTING ACTIVITIES (B) | 1,519 | (1,782) | (6,968) | |
| Financing activities | ||||
| Capital increase | - | - | - | |
| Dividends paid to Group shareholders | - | - | - | |
| Dividends paid to minority shareholders | - | - | - | |
| Other equity transactions | 7.3 | (30) | 22 | (28) |
| Borrowings | 8.1 | - | 2,968 | 4,438 |
| Repayments of borrowings and lease liabilities | 8.1 & 8.3 | (2,909) | (1,840) | (4,338) |
| Net borrowing cost paid | (153) | (112) | (264) | |
| NET CASH FLOW FROM FINANCING ACTIVITIES (C) | (3,092) | 1,038 | (192) | |
| CASH FLOW GENERATED BY ACTIVITIES PERFORMED (D = A + B + C) | 539 | 1,907 | (2,852) | |
| CASH FLOW GENERATED BY DISCONTINUED OPERATIONS | - | - | - | |
| CHANGE IN CASH AND CASH EQUIVALENTS | 539 | 1,907 | (2,852) | |
| Effects of exchange rate changes | (4) | 36 | 51 | |
| OPENING CASH POSITION | 8.2 | 14,096 | 16,897 | 16,897 |
| CLOSING CASH POSITION | 8.2 | 14,631 | 18,841 | 14,096 |
11
PRODWAYS GROUP
Change in consolidated equity
| (in thousands of euros) | Group share or owners of the parent company | Equity – attributable to parent company shareholders | Total equity | ||||
|---|---|---|---|---|---|---|---|
| Capital | Share capital premiums | Treasury shares | Retained earnings and other reserves | Equity – attributable to non-controlling interests | |||
| 2021 closing equity | 25,632 | 85,617 | (131) | (46,307) | 64,812 | 41 | 64,853 |
| Equity transactions | - | - | - | - | - | - | - |
| Free share allocation plan and stock option plan | - | 138 | - | - | 138 | - | 138 |
| Treasury share transactions | - | - | 16 | - | 16 | - | 16 |
| Profit (loss) for the period | - | - | 6 | 3,464 | 3,469 | 2 | 3,470 |
| Gains and losses recognized directly in equity | - | - | - | 459 | 459 | (5) | 454 |
| COMPREHENSIVE INCOME | - | - | 6 | 3,923 | 3,928 | (3) | 3,925 |
| Changes in scope | - | - | - | - | - | - | - |
| JUNE 2022 CLOSING EQUITY | 25,632 | 85,755 | (109) | (42,384) | 68,893 | 38 | 69,931 |
| 2022 closing equity | 25,632 | 85,947 | (159) | (44,357) | 67,063 | 131 | 67,194 |
| Equity transactions | 118 | - | - | (118) | - | - | - |
| Free share allocation plan and stock option plan | - | 214 | - | - | 214 | - | 214 |
| Treasury share transactions | - | - | (17) | - | (17) | - | (17) |
| Dividends | - | - | - | - | - | (35) | (35) |
| Profit (loss) for the period | - | - | - | 3,566 | 3,566 | (19) | 3,547 |
| Gains and losses recognized directly in equity | - | - | - | 35 | 35 | 3 | 38 |
| COMPREHENSIVE INCOME | - | - | - | 3,601 | 3,601 | (16) | 3,585 |
| Changes in scope | - | - | - | - | - | 8 | 8 |
| JUNE 2023 CLOSING EQUITY | 25,750 | 86,161 | (176) | (40,874) | 70,861 | 88 | 70,949 |
12
PRODWAYS GROUP
Notes to the condensed consolidated financial statements
The condensed half-year consolidated financial statements of the PRODWAYS GROUP cover a period of six months, from 1 January to 30 June 2023. They were approved by the Board of Directors on 20 September 2023.
The Group notes seasonal variations in its activities that may affect the level of revenue from one half-year to another. Thus, the interim results are not necessarily indicative of those that can be expected for the full year.
The highlights of the first half of the year are described in the activity report.
Note 1 Accounting principles
1.1 Accounting principles
The Group prepares half-year consolidated financial statements in accordance with IAS 34 "Interim financial information". They do not include all the information required for the preparation of the annual financial statements and should be read in conjunction with the consolidated financial statements for the financial year ended on 31 December 2022, as they appear in the Universal Registration Document approved by the French Financial Markets Authority (Autorité des Marchés Financiers – AMF) on 26 April 2023.
The accounting principles used for the preparation of the half-year consolidated financial statements comply with the regulations and interpretations of the International Financial Reporting Standards (IFRS) as adopted by the European Union as of 30 June 2023. These accounting principles are consistent with those used in the preparation of the annual consolidated financial statements for the financial year ended on 31 December 2022.
The Group has applied all standards, amendments and interpretations that are mandatory for financial years beginning after 1 January 2023:
New standards and interpretations without significant impact on the consolidated financial statements at 30 June 2023:
- amendments to IAS 8 – Definition of accounting estimates;
- amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of accounting policies;
- amendments to IAS 12 – Income tax: deferred tax on assets and liabilities arising from the same transaction.
The new standards, interpretations and amendments to existing standards and applicable to accounting periods beginning on or after 1 January 2023 were not adopted early by the Group on 1 January 2023. They concern:
Standards not adopted by the European Union:
- amendments to IFRS 16 – Lease obligations arising from sale and leaseback;
- amendments to IAS 1:
- classification of liabilities as current or non-current liabilities,
- classification of liabilities as current or non-current – postponement of the implementation date,
- non-current liabilities with covenants;
- amendments to IAS 7 and IFRS 7 – Supplier financing arrangements;
- amendments to IAS 12 – International tax reform – Pillar 2 model rules.
These new standards are being analyzed by the Group when they are applicable to it.
1.2 Valuation methods and rules
The financial statements are presented in euros and are rounded to the nearest thousand.
The financial statements are prepared on a historical cost basis, with the exception of derivative instruments and available-for-sale financial assets, which have been measured at fair value. Other financial assets and liabilities are measured at amortized cost. Hedging instruments are measured at fair value.
The preparation of the financial statements requires that Group management or the subsidiaries' management make estimates and assumptions that affect the reported amounts of assets and liabilities on the consolidated statement of financial position, the reported amounts of income and expense items on the income statement and the commitments relating to the period under review. Actual subsequent results may differ.
The above-mentioned assumptions mainly concern:
- the valuation of the recoverable amounts of assets;
- the measurement of research and development expenses;
13
PRODWAYS GROUP
- the measurement of provisions for risks and expenses;
- the calculation of income upon completion of work in progress;
- the valuation of pension obligations;
- the recoverability of deferred taxes;
- the valuation of the allocation of free shares.
As the Group's consolidated companies operate in different sectors, the valuation and impairment methods used for certain items may vary according to the sector.
The current exposure of the Group's activities to the consequences of climate change is very limited. Therefore, at this stage, the impacts of climate change on the financial statements are not material.
The valuation methods and rules applied to the half-year consolidated financial statements are similar to those described in the notes to the consolidated financial statements for 2022 (please see the Company's Universal Registration Document approved by the AMF on 26 April 2023).
Note 2 Scope of consolidation
The full list of consolidated companies is included in Note 14.
The main changes in scope for the half-year are as follows:
- disposal of VARIA 3D on 8 January 2023;
- disposal of BIOTECH on 30 March 2023;
- merger of AS 3D and AI on 31 May 2023.
14
PRODWAYS GROUP
Note 3 Segment information
In accordance with IFRS 8 – Operating segments, the segment information presented below is based on the internal reporting used by Executive Management to assess the performance of and allocate resources to the various segments. Executive Management is the principal operational decision maker within the meaning of IFRS 8.
The two divisions defined as operating segments are the following (main companies):
- Products division: INITIAL, CREABIS, CRISTAL, PODO 3D, INTERSON; AUDITECH INNOVATIONS; AUDITECH GmbH;
- Systems division: PRODWAYS PRINTERS, DELTAMED, SOLIDSCAPE, AVENAO group, PRODWAYS MATERIALS, PRODWAYS RAF.
The key indicators by division presented in the tables below are the following:
- the backlog, which corresponds to revenue yet to be recognized in respect of orders recorded;
- revenue includes revenue made with other divisions;
- current EBITDA;
- operating result;
- operating income;
- the Research and Development expenses recognized in the assets during the financial year;
- other tangible and intangible investments.
3.1 Reconciliation of the non-IFRS indicators and segment indicators with the consolidated operating income
The Group uses non-IFRS financial information for the purposes of information, management, and planning because they offer a better assessment of its long-term performance. This additional information is not a substitute for any IFRS measures of operating and financial performance.
Operating income includes all income and expenses other than:
- interest income and expenses;
- other financial income and expenses;
- corporate income tax.
To make it easier to compare financial years and monitor its operating performance, the Group has decided to isolate certain non-recurring items of operating income and present "Profit (loss) from continuing operations". It also uses a current EBITDA indicator. These non-accounting indicators do not constitute financial aggregates defined by IFRS; they are alternative performance indicators. They may not be comparable to similarly named indicators by other companies, depending on the definitions used by them.
- The operating result is the operating income before "Other items of operating income", which include the restructuring costs, recognized or fully provisioned if they are liabilities arising from a Group obligation to third parties, which stem from a decision taken by a competent body, and which materialize before the reporting date through the announcement of said decision to third parties and provided the Group no longer expects consideration for these costs. These costs consist primarily of compensation for termination of employment contracts, severance pay, as well as miscellaneous expenses. The other items included on this line of the income statement concern the costs of free share allocations, the costs of acquisition and disposals of activities, the amortization of acquired intangible assets recorded under business combinations, the impairment of goodwill, and all unusual items by their occurrence or amount.
- Current Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) are defined by the Group as operating income before "Net depreciation, amortization and provisions", "Group share of the earnings of affiliated companies" and "Other items of operating income".
The 2023 and 2022 segment income statements are reconciled below with the Group's consolidated financial statements. They are prepared in accordance with the Group's operational reporting.
15
PRODWAYS GROUP
First half of 2023 – segment information
| (in thousands of euros) | Systems | Products | Structure and disposals | Consolidated |
|---|---|---|---|---|
| Backlog at start of the period | - | - | - | - |
| Backlog at the end of the period | 6,443 | 2,079 | (5) | 8,517 |
| REVENUE | 23,963 | 19,144 | (76) | 43,031 |
| Capitalized production | 487 | - | - | 487 |
| Inventories and work in progress | (248) | (99) | - | (347) |
| Other income from operations | 173 | 10 | - | 183 |
| Purchases consumed | (13,891) | (8,235) | 334 | (21,792) |
| Personnel expenses | (8,154) | (7,694) | (908) | (16,755) |
| Tax and duties | (96) | (192) | (12) | (299) |
| Other operating income and expenses | 262 | 63 | (33) | 291 |
| EBITDA | 2,495 | 2,998 | (694) | 4,799 |
| % revenue | 10% | 16% | n/s | 11% |
| Depreciation, amortization, and provisions (net of reversals) | (814) | (1,615) | 71 | (2,358) |
| INCOME FROM ORDINARY ACTIVITIES | 1,681 | 1,383 | (623) | 2,441 |
| % revenue | 7% | 7% | n/s | 6% |
| Payment in shares | - | - | (213) | (213) |
| Restructuring costs | (76) | - | - | (76) |
| Amort. of intangible assets recognized at FV during acquisitions | (280) | (50) | - | (329) |
| Exceptional provisions for impairment of asset values | - | 30 | - | 30 |
| Other | - | - | 2,866 | 2,866 |
| SUB-TOTAL OTHER OPERATING ELEMENTS | (355) | (20) | 2,653 | 2,278 |
| Group share of the earnings of affiliated companies | - | - | - | - |
| OPERATING INCOME | 1,326 | 1,363 | 2,030 | 4,719 |
| % revenue | 6% | 7% | n/s | 11% |
| R&D expenses capitalized over the period | 486 | 50 | - | 536 |
| Other property, plant and equipment and intangible investments | 286 | 528 | 29 | 843 |
16
PRODWAYS GROUP
First half of 2022 – segment information
| (in thousands of euros) | Systems | Products | Structure and disposals | Consolidated |
|---|---|---|---|---|
| Backlog at start of the period | 9,198 | 1,069 | (92) | 10,175 |
| Backlog at the end of the period | 8,667 | 1,290 | (4) | 9,953 |
| REVENUE | 26,420 | 15,253 | (204) | 41,470 |
| Capitalized production | 1,043 | 74 | - | 1,116 |
| Inventories and work in progress | (78) | 189 | - | 111 |
| Other income from operations | 936 | 131 | - | 1,066 |
| Purchases consumed | (14,404) | (6,612) | 568 | (20,448) |
| Personnel expenses | (7,927) | (6,638) | (732) | (15,298) |
| Tax and duties | (120) | (192) | (15) | (326) |
| Other operating income and expenses | 131 | 98 | (35) | 195 |
| EBITDA | 6,001 | 2,303 | (418) | 7,886 |
| % revenue | 22.7% | 15.1% | n/s | 19.0% |
| Depreciation, amortization, and provisions (net of reversals) | (1,042) | (1,519) | 68 | (2,494) |
| INCOME FROM ORDINARY ACTIVITIES | 4,959 | 783 | (350) | 5,393 |
| % revenue | 18.8% | 5.1% | n/s | 13.0% |
| Payment in shares | - | - | (175) | (175) |
| Restructuring costs | 107 | (16) | - | 92 |
| Amort. of intangible assets recognized at FV during acquisitions | (279) | (50) | - | (328) |
| Exceptional provisions for impairment of asset values | (11) | 30 | - | 19 |
| Other | - | - | - | - |
| SUB-TOTAL OTHER OPERATING ELEMENTS | (183) | (35) | (175) | (393) |
| Group share of the earnings of affiliated companies | - | 71 | - | 71 |
| OPERATING INCOME | 4,776 | 820 | (525) | 5,071 |
| % revenue | 18.1% | 5.4% | n/s | 12.2% |
| R&D expenses capitalized over the period | 1,043 | 31 | - | 1,074 |
| Other property, plant and equipment and intangible investments | 135 | 326 | 68 | 529 |
17
PRODWAYS GROUP
3.2 Revenue by geographical area
First half of 2023
| (in thousands of euros) | France | % | Europe | % | North America | % | Other | % | Total | % |
|---|---|---|---|---|---|---|---|---|---|---|
| Systems | 12,663 | 47% | 6,186 | 56% | 3,453 | 100% | 1,661 | 99% | 23,963 | 56% |
| Products | 14,305 | 53% | 4,810 | 44% | 10 | 0% | 19 | 1% | 19,144 | 44% |
| Structure and disposals | (136) | -1% | 60 | 1% | - | - | (76) | 0% | ||
| TOTAL | 26,832 | 100% | 11,056 | 100% | 3,463 | 100% | 1,680 | 100% | 43,031 | 100% |
| % | 62% | 26% | 8% | 4% | 100% |
First half of 2022
| (in thousands of euros) | France | % | Europe | % | North America | % | Other | % | Total | % |
|---|---|---|---|---|---|---|---|---|---|---|
| Systems | 15,099 | 58% | 5,623 | 59% | 3,390 | 96% | 2,309 | 98% | 26,420 | 64% |
| Products | 11,214 | 43% | 3,869 | 41% | 123 | 4% | 48 | 2% | 15,253 | 36% |
| Structure and disposals | (244) | -1% | 41 | 0% | - | - | (204) | 0% | ||
| TOTAL | 26,068 | 100% | 9,532 | 100% | 3,513 | 100% | 2,357 | 100% | 41,470 | 100% |
| % | 63% | 23% | 8% | 6% | 100% |
Note 4 Operational data
4.1 Net depreciation, amortization, and provisions
| (in thousands of euros) | 30/06/2023 | 30/06/2022 | 31/12/2022 |
|---|---|---|---|
| DEPRECIATION, AMORTIZATION AND PROVISIONS | |||
| Net additions to intangible assets | (411) | (374) | (828) |
| Net additions to property, plant and equipment | (805) | (872) | (1,671) |
| Net additions to right-of-use assets | (1,047) | (1,114) | (2,145) |
| SUBTOTAL | (2,263) | (2,360) | (4,644) |
| CHARGES TO PROVISIONS, NET OF REVERSALS | |||
| Net additions to inventories | 183 | (57) | (313) |
| Net additions to current assets | (215) | (100) | (189) |
| Net provisions for risks and expenses | (64) | 23 | (426) |
| SUBTOTAL | (96) | (134) | (928) |
| TOTAL DEPRECIATION, AMORTIZATION AND PROVISIONS | (2,358) | (2,494) | (5,573) |
18
PRODWAYS GROUP
4.2 Inventories and work in progress
Movements in inventories in the consolidated statement of financial position are as follows:
| (in thousands of euros) | 30/06/2023 | 30/06/2022 | 31/12/2022 | ||
|---|---|---|---|---|---|
| Gross value | Depreciation | Net value | Net value | Net value | |
| Raw materials | 5,055 | (562) | 4,493 | 4,079 | 4,797 |
| Work in progress | 903 | - | 903 | 826 | 1,188 |
| Semi-finished and finished goods | 1,304 | (17) | 1,287 | 875 | 1,306 |
| Goods | 2,331 | (352) | 1,979 | 2,225 | 1,866 |
| TOTAL INVENTORIES AND WORK IN PROGRESS | 9,593 | (931) | 8,662 | 8,006 | 9,157 |
4.3 Trade receivables, contract assets and liabilities
Trade receivables are invoiced receivables entitling the issuer to payment.
"Contract assets" and "Contract liabilities" are determined on a contract-by-contract basis. "Contract assets" correspond to contracts in force for which the value of created assets exceeds the advances received. "Contract liabilities" correspond to all contracts in a situation where the assets (receivables in progress) are less than the liabilities (advances from clients and deferred income recorded when the invoices issued exceed the revenue recognized to date).
The backlog (revenue to be recognized) is indicated by division in Note 3.1.
| (in thousands of euros) | 30/06/2023 | 30/06/2022 | 31/12/2022 |
|---|---|---|---|
| Trade receivables | 16,151 | 13,786 | 16,689 |
| Provisions for expected losses | (1,027) | (723) | (812) |
| TRADE RECEIVABLES, NET VALUES | 15,124 | 13,063 | 15,877 |
| CONTRACT ASSETS | 56 | 48 | 53 |
| CONTRACT LIABILITIES | 737 | 2,086 | 1,397 |
4.4 Other current assets
| (in thousands of euros) | 30/06/2023 | 31/12/2022 | ||
|---|---|---|---|---|
| Gross value | Depreciation | Net value | Net value | |
| Advances and down-payments made | 230 | - | 230 | 269 |
| Other receivables | 261 | - | 261 | 222 |
| Social and tax receivables | 1,809 | - | 1,809 | 1,301 |
| Prepaid expenses | 1,712 | - | 1,712 | 1,382 |
| TOTAL OTHER CURRENT ASSETS | 4,012 | - | 4,012 | 3,173 |
19
PRODWAYS GROUP
4.5 Other current liabilities
| (in thousands of euros) | 30/06/2023 | 31/12/2022 |
|---|---|---|
| Suppliers | 8,524 | 9,643 |
| Fixed asset suppliers | - | 800 |
| TOTAL TRADE PAYABLES | 8,524 | 10,443 |
| Advances and down-payments received | 124 | 79 |
| Social security liabilities | 5,788 | 5,636 |
| Tax liabilities | 2,202 | 2,412 |
| Miscellaneous debts | 165 | 833 |
| Deferred income | 4,130 | 3,868 |
| TOTAL OTHER CURRENT LIABILITIES | 12,409 | 12,827 |
Deferred income includes subsidies and research tax credits that will be recognized in profit/loss as the corresponding assets are depreciated.
4.6 Summary of leases
The leases restated under IFRS 16 had a total statement of financial position value of €7.5 million and an impact on the net income statement, attributable to owners of the parent, of €1 thousand. With IFRS 16, the nature of the expenses related to leases has changed as the recognition of expenses on a straight-line basis in respect of leases has been replaced by an amortization expense for "Right-of-use assets" amounting to €1,047 thousand, without distinction between operating leases and finance leases, and by an interest charge for liabilities related to leases amounting to €49 thousand at 30 June 2023.
The movements are detailed in the table below:
| (in thousands of euros) | Property | Other property, plant, and equipment | Prepaid payments | Total net assets | Lease liabilities on the liabilities side of the statement of financial position |
|---|---|---|---|---|---|
| AT 1 JANUARY 2023 | 5,508 | 918 | (37) | 6,389 | 6,546 |
| New leases | 2,038 | 234 | - | 2,271 | 2,271 |
| Changes in scope | - | - | - | - | - |
| Amortization of rights of use | (723) | (324) | - | (1,047) | - |
| Impairment net of reversals of right-of-use assets | - | - | - | - | - |
| Interest expenses | - | - | - | - | 49 |
| Payments (lease expenses canceled) | - | - | (2) | (2) | (1,105) |
| Other changes | (19) | (4) | - | (23) | (21) |
| Disposals/revaluations | - | (31) | - | (31) | (3) |
| Impact of changes in exchange rates | (13) | - | - | (13) | (13) |
| AT 30 JUNE 2023 | 6,791 | 792 | (39) | 7,544 | 7,723 |
| of which lease liabilities due in less than one year | 1,913 | ||||
| of which lease liabilities due in more than one year | 5,810 |
PRODWAYS GROUP
The application of IFRS 16 therefore has a significant impact on EBITDA as defined by the Group (see Note 3.1), with no significant impact on operating income and even less significant on net income. The current EBITDA for the half-year, amounting to €4,799 thousand for the period, would have amounted to €3,426 thousand without the application of IFRS 16.
Note 5 Employee expenses and benefits
5.1 Workforce
| 30/06/2023 | 30/06/2022 | 31/12/2022 | |
|---|---|---|---|
| Workforce at the end of the period | 503 | 450 | 480 |
| Average workforce | 480 | 449 | 437 |
5.2 Provisions for pensions and similar commitments
The long-term provisions related solely to retirement benefits for an amount of €775 thousand. For this half-year, the assumptions used were the same as at 31 December 2022 except for the benchmark IBOXX 10+ discount rate, which changed from 3.77% to 3.61%. The impact on shareholders' equity for the period, due to this rate decrease, was €74 thousand (SORIE).
5.3 Share-based payments (stock options, stock purchase warrants, free share allocation)
PRODWAYS GROUP set up free share allocation plans in 2016, 2019, 2021 and recently in February 2023. Definitive acquisitions of new PRODWAYS GROUP shares for which the vesting conditions were met took place in April 2019 (261,900 shares of the 2016 plan), in February 2021 (186,408 shares of the 2019 plan), in February 2023 (133,481 shares) and after closing this half-year on 1 July 2023 (122,500 shares). At 30 June 2023, there were potential shares under the 2021 and 2023 plans; the table below summarizes the situation of the two plans at said date.
| Free share allocation plans* | Free share allocation 02/2021 PRODWAYS | Free share allocation 01/2023 PRODWAYS |
|---|---|---|
| Original number of recipients | 386 | 377 |
| Support share | PRODWAYS GROUP | PRODWAYS GROUP |
| Potential number of shares | 550,550 | 564,550 |
| Final allocations in the year/cancellations | 133,481 | 200 |
| Cumulative final allocations/cancellations | 133,481/294,569 | |
| Potential share balance | 122,500^{6} | 564,350 |
| Date of establishment | February 2021 | February 2023 |
| Start of the vesting period | February 2021 | February 2023 |
| End of the vesting period | July 2023 | March 2025 |
| End of the lock-up period | July 2023 | March 2026 |
| Total expense recognized (in thousands of euros) excluding social charges | 624 | 139 |
| Potential value of the shares (in thousands of euros) | 199 | 919 |
- Last five years.
6 These shares were allocated on 1 July 2023.
21
PRODWAYS GROUP
Note 6 Property, plant and equipment and intangible assets
6.1 Goodwill
| Net value (in thousands of euros) | 30/06/2023 | 31/12/2022 |
|---|---|---|
| Start of the period | 45,981 | 41,831 |
| First consolidation* | - | 4,150 |
| Deconsolidated | - | - |
| Other changes | - | - |
| Impact of changes in exchange rates | - | - |
| End of the period | 45,981 | 45,981 |
| Of which depreciation at 30 June 2023 | - | - |
- The entries into the scope of consolidation in 2022 concerned the acquisition of AUDITECH INNOVATIONS and AUDITECH GmbH in the Products division.
Goodwill breaks down as follows:
| • Products | 43% |
| • Systems | 57% |
6.2 Other intangible assets
| (in thousands of euros) | Development projects | Other intangible assets | Total |
|---|---|---|---|
| Gross value | |||
| At 1 January 2023 | 13,848 | 14,349 | 28,197 |
| Acquisitions | 536 | 119 | 655 |
| Changes in scope | - | - | - |
| Departures | - | - | - |
| Other changes | - | 17 | 17 |
| Impact of changes in exchange rates | (88) | (34) | (122) |
| At 30 June 2023 | 14,296 | 14,451 | 28,747 |
| Depreciation, amortization, and impairment | |||
| At 1 January 2023 | 8,055 | 7,782 | 15,837 |
| Depreciation and amortization | 223 | 517 | 740 |
| Changes in scope | - | - | - |
| Impairment losses | - | - | - |
| Departures | - | - | - |
| Other changes | (1) | 1 | - |
| Impact of changes in exchange rates | (13) | (15) | (28) |
| At 30 June 2023 | 8,264 | 8,285 | 16,549 |
| Net value | |||
| At 1 January 2023 | 5,793 | 6,567 | 12,360 |
| At 30 June 2023 | 6,032 | 6,166 | 12,198 |
PRODWAYS GROUP
6.3 Property, plant and equipment
| (in thousands of euros) | Land buildings | and Fixtures and equipment | Rights of use – property | or | Rights of use – other property, plant and equipment | Non-current assets in progress | Total |
|---|---|---|---|---|---|---|---|
| Gross value | |||||||
| At 1 January 2023 | 7,539 | 17,317 | 9,993 | 4,019 | 100 | 38,969 | |
| Acquisitions | 3 | 721 | 2,038 | 234 | 1 | 2,997 | |
| Changes in scope | - | (279) | - | - | - | (279) | |
| Departures | - | (24) | - | (77) | - | (101) | |
| Other changes | - | 35 | (20) | (5) | (35) | (25) | |
| Impact of changes in exchange rates | (5) | (46) | (32) | - | (1) | (84) | |
| At 30 June 2023 | 7,537 | 17,724 | 11,979 | 4,171 | 65 | 41,476 | |
| Depreciation, amortization, and impairment | |||||||
| At 1 January 2023 | 1,651 | 14,524 | 4,485 | 3,102 | - | 23,762 | |
| Depreciation and amortization | 186 | 619 | 723 | 324 | - | 1,852 | |
| Changes in scope | - | (279) | - | - | - | (279) | |
| Impairment losses | - | (30) | - | - | - | (30) | |
| Departures | - | (24) | - | (47) | - | (71) | |
| Other changes | 1 | 1 | (1) | - | - | 2 | |
| Impact of changes in exchange rates | (5) | (39) | (19) | - | - | (63) | |
| At 30 June 2023 | 1,833 | 14,772 | 5,188 | 3,379 | - | 25,172 | |
| Net value | |||||||
| At 1 January 2023 | 5,888 | 2,793 | 5,508 | 917 | 100 | 15,206 | |
| AT 30 JUNE 2023 | 5,704 | 2,952 | 6,791 | 792 | 65 | 16,304 |
23
PRODWAYS GROUP
Note 7 Details of cash flows
7.1 Change in working capital requirements
| (in thousands of euros) | Notes | Start of the period | Changes in scope | Change over the year | Other changes | Currency translation adjustments | Closing |
|---|---|---|---|---|---|---|---|
| Net inventories | 9,157 | - | (444) | - | (51) | 8,662 | |
| Net receivables | 15,877 | - | (741) | - | (12) | 15,124 | |
| Contract assets | 53 | - | 3 | - | - | 56 | |
| Advances and down-payments made | 269 | - | (39) | - | - | 230 | |
| Prepaid expenses | 1,382 | - | 333 | (1) | (2) | 1,712 | |
| SUBTOTAL | A | 26,738 | - | (888) | (1) | (65) | 25,784 |
| Trade payables | 9,643 | (32) | (1,099) | 19 | (7) | 8,524 | |
| Contract liabilities | 1,397 | - | (660) | - | - | 737 | |
| Advances and down-payments received | 79 | - | 49 | (1) | (1) | 126 | |
| Deferred income related to operations | 3,625 | - | 190 | (1) | (10) | 3,804 | |
| SUBTOTAL | B | 14,744 | (32) | (1,520) | 17 | (18) | 13,191 |
| WORKING CAPITAL REQUIREMENT | C = A - B | 11,994 | 32 | 632 | (18) | (47) | 12,593 |
| Social and tax receivables | 2,542 | (25) | 764 | 2 | - | 3,283 | |
| Other receivables | 222 | (2) | 40 | - | - | 260 | |
| SUBTOTAL | D | 2,764 | (27) | 804 | 2 | - | 3,543 |
| Tax and social debts | 8,504 | - | (85) | 1 | (8) | 8,412 | |
| Other payables and derivative instruments | 833 | (300) | (287) | - | (116) | 130 | |
| Deferred income from subsidies and research tax credit | 244 | - | 82 | - | - | 326 | |
| SUBTOTAL | E | 9,581 | (300) | (290) | 1 | (124) | 8,868 |
| OTHER ITEMS OF WORKING CAPITAL REQUIREMENT | F = D - E | (6,817) | 273 | 1,094 | 1 | 124 | (5,325) |
| WORKING CAPITAL REQUIREMENT | G = C + F | 5,177 | 305 | 1,726 | (17) | 77 | 7,268 |
7.2 Acquisitions/disposals of equity holdings
The cash flows recorded on the line "Acquisitions/disposals of equity holdings" relate to acquisitions or disposals of shares in subsidiaries on the occasion of a change of control.
| (in thousands of euros) | 30/06/2023 | 30/06/2022 |
|---|---|---|
| Payments | (1,100) | (225) |
| Cash and cash equivalents of the acquired company | - | - |
| Disposal price of consolidated shares | 4,000 | - |
| Cash and cash equivalents of the disposed company | (1) | - |
| TOTAL | 2,899 | (225) |
24
PRODWAYS GROUP
In 2023, the Group sold BIOTECH DENTAL SMILERS and VARIA 3D.
During the half-year, the Group also paid part of the earn-out related to the acquisition of CREABIS (acquisition completed in 2021) and AUDITECH INNOVATIONS and AUDITECH GmbH (acquisitions completed in 2022).
7.3 Other equity transactions
The cash flows recorded on the line "Other equity transactions" concern the acquisitions or disposals of securities of PRODWAYS GROUP or of companies controlled by PRODWAYS GROUP (flows that do not result in a change of control), as well as the cash flows related to purchases and sales of treasury shares under the PRODWAYS GROUP liquidity contract.
| (in thousands of euros) | 30/06/2023 | 30/06/2022 |
|---|---|---|
| Proceeds | - | 22 |
| Payments | (30) | - |
| TOTAL | (30) | 22 |
Note 8 Financing and financial instruments
8.1 Gross financial debt
No loans were taken out during the financial year:
State-guaranteed loans set up in 2020 (€8.4 million in total) are amortized over four years, in accordance with amendments drawn up in 2021.
During the summer after the closing, PRODWAYS GROUP benefited from three new loan refinancings for an amount of €4.9 million following the acquisition of AUDITECH.
Changes in borrowings and financial debt
| (in thousands of euros) | Bank borrowings | Other borrowings | Financial debt | Bank overdrafts | Gross financial debt(2) |
|---|---|---|---|---|---|
| AT 1 JANUARY 2023 | 17,303 | 208 | 17,511 | 9 | 17,520 |
| New loans | - | - | - | 7 | 7 |
| Redemptions | (1,846) | (7) | (1,853) | (9) | (1,862) |
| Other changes(1) | 15 | 1 | 16 | 3 | 19 |
| First consolidation/Deconsolidation | - | - | - | (3) | (3) |
| Impact of changes in exchange rates | - | - | - | - | - |
| AT 30 JUNE 2023 | 15,472 | 202 | 15,674 | 7 | 15,681 |
(1) Changes with no impact on cash and cash equivalents, related to effective interest and accrued interest.
(2) Does not include the lease liability calculated in accordance with IFRS 16.
The "Other borrowings" include repayable advances received by the Group in respect of research and development in particular. These advances cannot be repaid, or only repaid partially according to the success of the operations on the basis of which they were granted.
25
PRODWAYS GROUP
Schedule of borrowings and financial debt
| (in thousands of euros) | 30/06/2023 | <one year | >one year | of which breakdown of maturities at more than one year | ||||
|---|---|---|---|---|---|---|---|---|
| one to two years | two to three years | three to four years | four to five years | >five years | ||||
| Bank borrowings | 15,472 | 3,695 | 11,778 | 3,436 | 3,074 | 1,727 | 671 | 2,870 |
| Other borrowings | 202 | 44 | 158 | 2 | - | - | - | 156 |
| LONG-TERM FINANCIAL DEBT | 15,674 | 3,739 | 11,936 | 3,438 | 3,074 | 1,727 | 671 | 3,026 |
| Bank overdrafts | 7 | 7 | - | - | - | - | - | - |
| GROSS FINANCIAL DEBT | 15,681 | 3,746 | 11,936 | 3,438 | 3,074 | 1,727 | 671 | 3,026 |
8.2 Net restated cash and cash equivalents
| (in thousands of euros) | 30/06/2023 | 31/12/2022 |
|---|---|---|
| AVAILABLE CASH AND CASH EQUIVALENTS (A) | 14,638 | 14,104 |
| Bank overdrafts (b) | 7 | 9 |
| Cash appearing on the SCF (c) = (a) - (b) | 14,631 | 14,096 |
| Financial debt excluding current bank overdrafts (d) | 15,674 | 17,511 |
| NET CASH (DEBT) (C) - (D) | (1,043) | (3,415) |
| Treasury shares | 138 | 159 |
| ADJUSTED NET CASH (NET DEBT) BEFORE IFRS 16 | (905) | (3,256) |
26
PRODWAYS GROUP
8.3 Lease liabilities valued according to IFRS 16
Lease liabilities valued according to IFRS 16 have changed as follows:
| (in thousands of euros) | Lease liabilities |
|---|---|
| At 1 January 2023 | 6,546 |
| Change of method | 2 |
| Restated opening | 6,548 |
| New loans | 2,271 |
| Redemptions | (1,056) |
| Disposals/revaluations and other changes(1) | (27) |
| First consolidation/Deconsolidation | - |
| Impact of changes in exchange rates | (13) |
| AT 30 JUNE 2023 | 7,723 |
(1) Non-cash changes related to accrued interest and revaluation of contracts.
Schedule of lease liabilities
| (in thousands of euros) | 30/06/2023 | <one year | >one year | of which breakdown of maturities at more than one year | ||||
|---|---|---|---|---|---|---|---|---|
| one to two years | two to three years | three to four years | four to five years | >five years | ||||
| LEASE LIABILITIES UNDER IFRS 16 | 7,723 | 1,913 | 5,810 | 1,436 | 1,140 | 961 | 863 | 1,410 |
8.4 Financial income and expenses
| (in thousands of euros) | 30/06/2023 | 30/06/2022 | 31/12/2022 |
|---|---|---|---|
| Interest expenses | (119) | (71) | (201) |
| Interest expenses on lease liabilities | (49) | (41) | (80) |
| Net borrowing cost | (169) | (112) | (281) |
| Other interest income | (26) | (23) | (66) |
| Net exchange gain or loss | (77) | 39 | 108 |
| Financial allowances net of reversals | 9 | - | (9) |
| TOTAL FINANCIAL INCOME AND EXPENSES | (263) | (97) | (248) |
8.5 Off-statement of financial position commitments related to financing
8.5.1 Pledges of the issuer's assets
No pledges, guarantees or sureties existed at the close of the first half of the 2023 financial year.
8.5.2 Other commitments
The Group has two credit lines of €3.3 million not used to date.
No other pledges, guarantees or sureties existed at the close of the first half of the 2023 financial year.
PRODWAYS GROUP
As part of the loans taken out post-closing for the refinancing of AUDITECH, the latter's shares were pledged for an amount of €4.9 million.
Note 9 Income tax
9.1 Details of corporate income tax
Breakdown of tax expense
| (in thousands of euros) | 30/06/2023 | 30/06/2022 | 31/12/2022 |
|---|---|---|---|
| Deferred tax liabilities | (165) | (651) | (1,418) |
| Tax payable | (744) | (853) | (1,670) |
| TAX EXPENSE | (909) | (1,504) | (3,088) |
The income tax expense does not include the Research Tax Credit (CIR) classified as "Other income from operations". However, it includes the Corporate Value-Added Contribution (CVAE).
Tax receivables and payable
| (in thousands of euros) | 30/06/2023 | 31/12/2022 |
|---|---|---|
| Tax receivables | 1,473 | 1,242 |
| Tax liabilities | 422 | 457 |
| NET TAX RECEIVABLE/(DUE) | 1,051 | 785 |
The tax receivable is mainly made up of research tax credit receivables (€1.3 million), which could not be offset against the tax charge payable.
9.2 Deferred taxes
Breakdown of deferred taxes by type
| (in thousands of euros) | 30/06/2023 | 31/12/2022 |
|---|---|---|
| Differences over time | ||
| Retirement and related benefits | 166 | 124 |
| Development costs | (1,024) | (1,083) |
| Rights of use | 42 | 40 |
| Fair values – IFRS 3 | (1,359) | (1,456) |
| Other permanent differences | 8 | 8 |
| SUBTOTAL | (2,166) | (2,367) |
| Temporary differences and other restatements | (359) | 166 |
| Deficits carried forward | 1,785 | 1,622 |
| TOTAL | (740) | (579) |
| DEFERRED TAX LIABILITIES | (741) | (767) |
| DEFERRED TAX ASSETS | 1 | 188 |
28
PRODWAYS GROUP
Deficits carried forward are capitalized due to opportunities for rapid posting of these deficits. Some deferred tax assets resulting from these capitalizations can be charged to tax liabilities because of the net deferred tax liability position of the companies concerned.
Note 10 Equity and earnings per share
10.1 Equity
Shareholders whose shares have been registered for more than two years may benefit from double voting rights.
At 30 June 2023, the share capital of PRODWAYS GROUP SA amounted to €25,750,412, consisting of 51,500,824 fully paid-up shares, each with a nominal value of €0.5, of which 5,336,195 have double voting rights.
10.2 Earnings per share
| 30/06/2023 | 30/06/2022 | 31/12/2022 | |
|---|---|---|---|
| Weighted average number of shares | 51,442,228 | 51,210,638 | 51,225,160 |
| EARNINGS PER SHARE (IN EUROS) | 0.069 | 0.029 | 0.068 |
| EARNINGS PER SHARE FROM ONGOING ACTIVITIES (IN EUROS) | 0.069 | 0.029 | 0.068 |
| Dilutive potential shares* | 687,050 | 359,280 | 360,730 |
| DILUTED EARNINGS PER SHARE (IN EUROS) | 0.068 | 0.029 | 0.067 |
| DILUTED EARNINGS PER SHARE FROM ONGOING ACTIVITIES (IN EUROS) | 0.068 | 0.029 | 0.067 |
Note 11 Other provisions and contingent liabilities
| (in thousands of euros) | Provisions for litigation | Provisions for guarantees given to customers | Other provisions | Total |
|---|---|---|---|---|
| AT 1 JANUARY 2023 | 1,095 | - | 79 | 1,174 |
| Appropriations | - | - | - | - |
| Provisions used | - | - | - | - |
| Reversals | - | - | (9) | (9) |
| Impact on income for the period | - | - | (9) | (9) |
| Changes in scope | - | - | (23) | (23) |
| Other changes | - | - | - | - |
| Impact of changes in exchange rates | - | - | - | - |
| AT 30 JUNE 2023 | 1,095 | - | 47 | 1,142 |
PRODWAYS GROUP
Note 12 Transactions with related parties
Related parties are persons (Directors or managers of PRODWAYS GROUP or its main subsidiaries) or entities owned or managed by these persons. All transactions between related companies and parties are catted out under normal market terms and conditions. The net amounts for related undertakings included in PRODWAYS GROUP SA's statement of financial position and income statement items for the half-year ended 30 June 2023 are as follows:
| (in thousands of euros) | EXAIL TECHNOLOGIES | Subsidiaries of EXAIL TECHNOLOGIES |
|---|---|---|
| INCOME STATEMENT | ||
| Revenue | - | 123 |
| Other income | - | - |
| Purchases and external charges | (209) | (7) |
| Net finance income (expense) | - | - |
| Exceptional income | - | - |
| STATEMENT OF FINANCIAL POSITION | ||
| Trade accounts receivable | - | 91 |
| Deposits and guarantees | - | - |
| Suppliers | 250 | 1 |
| Deferred income | - | 4 |
Note 13 Other notes
13.1 Commitments
The Group's commitments, as they appear in the notes to the consolidated financial statements for 2022, have not changed significantly.
13.2 Exceptional events and litigation
The Group is involved in various legal proceedings. After reviewing each case and seeking counsel, the provisions considered necessary have, as applicable, been recorded in the financial statements.
There are no significant changes in litigation compared with the information given in the notes to the consolidated financial statements at 31 December 2022.
13.3 Subsequent events
PRODWAYS GROUP took out three loans for a total of €4.9 million as part of the refinancing of the acquisition of AUDITECH, and granted a pledge of the same amount as collateral on the shares of AUDITECH.
122,500 shares were granted on 1 July 2023 under the 2021 plan, which is now closed. Only the 2023 plan, described in Section 5.2.1 of the URD of 31 December 2022, remains.
No other significant events took place between 30 June 2023 and the date of the Board of Directors meeting that approved the consolidated financial statements.
30
PRODWAYS GROUP
Note 14 List of consolidated companies
| Company | Parent company | % control | % interest | Method | |||
|---|---|---|---|---|---|---|---|
| 30 June 2023 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| Consolidating company | |||||||
| PRODWAYS GROUP SA | Top | Top | Top | Top | FC | FC | |
| Structure | |||||||
| PRODWAYS ENTREPRENEURS(1) | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| PRODWAYS 2(1) | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| PRODWAYS CONSEIL | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| Systems | |||||||
| 3D SERVICAD | AS 3D | 100 | 100 | 100 | 100 | FC | FC |
| AVENAO SOLUTIONS 3D | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| AVENAO INDUSTRIE(4) | AS 3D | NC | 100 | NC | 100 | NC | FC |
| DELTAMED (Germany) | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| PRODWAYS | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| PRODWAYS MATERIALS (Germany) | DELTAMED | 100 | 100 | 100 | 100 | FC | FC |
| PRODWAYS RAPID ADDITIVE FORGING | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| NEXTCUBE.IO | AS 3D | 64.67 | 64.67 | 64.67 | 64.67 | FC | FC |
| SOLIDSCAPE (United States) | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| Products | |||||||
| BIOTECH DENTAL SMILERS(3) | PRODWAYS ENTREPRENEURS | NC | 20 | NC | 20 | NC | EM |
| CREABIS | INITIAL | 100 | 100 | 100 | 100 | FC | FC |
| CRISTAL | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| INITIAL | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| INTERSON PROTAC | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| PODO 3D | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| SCI CHAVANOD | PRODWAYS GROUP | 100 | 100 | 100 | 100 | FC | FC |
| VARIA 3D (United States)(2) | PRODWAYS GROUP | NC | 70 | NC | 70 | NC | FC |
| AUDITECH INNOVATIONS | INTERSON | 100 | 100 | 100 | 100 | FC | FC |
| AUDITECH GmbH | INTERSON | 100 | 100 | 100 | 100 | FC | FC |
(1) Companies with no activities
(2) Company sold in January 2023
(3) Company sold in March 2023
(4) Company merged into AS 3D on 31 May 2023
31
PRODWAYS GROUP
Statutory Auditors' report on the half-year financial information
(period from 1 January to 30 June 2023)
PRODWAYS GROUP
Registered office : 30 rue de Gramont – 75002 PARIS
To the Shareholders,
In accordance with the mission entrusted to us by your Shareholders' Meeting and pursuant to Article L. 451-1-2 III of the French Monetary and Financial Code, we have:
- conducted a limited review of the condensed half-year consolidated financial statements of PRODWAYS GROUP, relating to the period from 1 January 2023 to 30 June 2023, as attached to this report;
- verified the information given in the half-year activity report.
These condensed half-year consolidated financial statements were prepared under the responsibility of the Board of Directors. Our role is to express a conclusion on these financial statements based on our review.
I - Conclusion on the financial statements
We conducted our review in accordance with the professional standards applicable in France.
A limited review consists mainly of meeting with the members of management in charge of accounting and financial aspects and implementing analytical procedures. This work is less extensive than that required for an audit conducted in accordance with the professional standards applicable in France. Consequently, the assurance that the financial statements, taken as a whole, are free from material misstatement obtained during a limited review is a moderate assurance, lower than that obtained in the context of an audit.
Based on our limited review, we did not identify any material misstatements that would call into question the compliance of the condensed half-year consolidated financial statements with IAS 34, the IFRS standard as adopted in the European Union, on interim financial information.
II - Specific verification
We have also verified the information provided in the half-year management report commenting on the condensed half-year consolidated financial statements on which our limited review was based.
We have no matters to report as to their fair presentation and their consistency with the consolidated financial statements.
Done in Neuilly-sur-Seine and Paris on xxx 2023
The Statutory Auditors
PricewaterhouseCoopers Audit
Christophe Drieu
RSM Paris
Stéphane Marie
32
PRODWAYS GROUP
STATEMENT BY THE PERSON RESPONSIBLE FOR THE HALF-YEAR REPORT
I certify, to the best of my knowledge, that the condensed consolidated financial statements for the past half-year are prepared in accordance with the applicable accounting standards and give a true and fair view of the assets, financial position and results of the company and of all the companies included in the consolidation, and that the above half-year activity report presents a true and fair view of the significant events that occurred during the first six months of the financial year, their impact on the financial statements, the main transactions between related parties and a description of the main risks and uncertainties for the remaining six months of the financial year.
Mickaël Ohana, Chief Executive Officer
33