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QPR Software Oyj — Interim / Quarterly Report 2016
Aug 2, 2016
3334_rns_2016-08-02_c9bc395c-6614-45cd-bf1e-e7da32d7d9b3.html
Interim / Quarterly Report
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QPR SOFTWARE HALF YEAR FINANCIAL REPORT JANUARY – JUNE 2016
QPR SOFTWARE HALF YEAR FINANCIAL REPORT JANUARY – JUNE 2016
QPR SOFTWARE PLC STOCK EXCHANGE RELEASE AUGUST 2, 2016 AT 9.30 AM
SECOND QUARTER PROFITS IMPROVED YEAR-ON-YEAR
Summary April – June 2016
-- Net sales EUR 2,173 thousand (2015: 2,402).
-- Operating profit EUR 230 thousand (32).
-- Operating margin 10.6% (1.3).
-- Comparable operating profit EUR 230 thousand (32).
-- Cash flow from operating activities EUR 192 thousand (- 380).
-- Profit before taxes EUR 217 thousand (16).
-- Profit for the quarter EUR 175 thousand (35).
-- Earnings per share EUR 0.015 (0.003).
Summary January – June 2016
-- Net sales EUR 4,215 thousand (2015: 4,926).
-- Operating profit EUR 125 thousand (291).
-- Operating margin 3.0% (5.9).
-- Comparable operating profit EUR 165 thousand (291).
-- Cash flow from operating activities EUR 1,422 thousand (1,066).
-- Profit before taxes EUR 95 thousand (289).
-- Profit for the period EUR 70 thousand (260).
-- Earnings per share EUR 0.006 (0.022).
Business operations
QPR Software focuses on providing organizations software and professional
services for operational development. Our software and services are used in
over 50 countries. The Company offers its customers insight to their business
operations through modeling, analysis and performance monitoring. This insight
enables customers to streamline and improve business operations and to execute
their strategies swiftly and effectively.
OUTLOOK
Operating environment and market outlook
QPR expects the demand for process mining software to grow in its home market
in Finland, as well as in the broader European market. The software market for
process mining is relatively new and, for the time being, its market size is
still small. Market maturity varies greatly from one country to another, but
already last year we experienced strong market growth in several European
countries. This growth is expected to continue this year, and the Company
believes that its QPR ProcessAnalyzer product has a strong position in the
market.
In developed markets, competition in process and enterprise architecture
modeling and performance management software is expected to continue to
increase. In developing markets, especially in the Middle East and Africa,
there is still strong growth potential for these software products.
Outlook for 2016
The Company´s outlook is unchanged.
In process mining software and process analysis services, QPR continues to
invest in direct sales in Finland and in international channel sales. The
Company estimates that this business will continue to grow this year.
In process and enterprise architecture modeling and performance management
software, the tightened competition is expected to continue to have a negative
impact on sales in part of QPR´s reseller channel, especially in developed
markets. To offset this impact, QPR seeks growth from new reseller
partnerships, especially from Middle East and Africa.
The Company believes that in its home market, Finland, it will maintain the
leading position as a process modeling and analysis software vendor targeting
operational development functions in organizations; as well as to preserve
QPR’s position in operational development consulting. This position has
strengthened over the past few years.
The Company estimates that its comparable operating profit will grow in 2016
compared to 2015.
KEY FIGURES
EUR in thousands, Apr-Jun Apr-Jun Change, Jan-Jun Jan-Ju Change Jan-Dec
unless otherwise , 2016 , 2015 % , 2016 n, , % , 2015
indicated 2015
Net sales 2,173 2,402 -9.5 4,215 4,926 -14.4 9,436
EBITDA 456 243 87.2 542 702 -22.8 1,190
% of net sales 21.0 10.1 12.9 14.2 12.6
Operating profit 230 32 615.6 125 291 -57.2 368
% of net sales 10.6 1.3 3.0 5.9 3.9
Profit before tax 217 16 1,238.2 95 289 -67.2 347
Profit for the 175 35 406.5 70 260 -72.9 338
period
% of net sales 8.1 1.4 1.7 5.3 3.6
Earnings per share, 0.015 0.003 403.5 0.006 0.022 -73.0 0.028
EUR
Equity per share, 0.221 0.229 -3.8 0.221 0.229 -3.8 0.234
EUR
Cash flow from 192 -380 150.6 1,422 1,066 33.4 406
operating
activities
Cash and cash 900 1,134 -20.7 900 1,134 -20.7 585
equivalents
Net borrowings -900 -1,134 -20.7 -900 -1,134 -20.7 -85
Gearing, % -32.8 -39.7 -32.8 -39.7 -2.9
Equity ratio, % 65.2 57.6 65.2 57.6 42.7
Return on equity, % 25.2 4.4 5.0 17.2 11.1
Return on 29.9 1.0 8.8 19.2 12.0
investment, %
REPORTING
QPR Software innovates, develops, sells and delivers software and services in
international markets aimed at operational development. QPR Software reports
one operating segment: Operational development of organizations. In addition to
this, the Company reports revenue from products and services as follows:
Software licenses, Software maintenance services, Software rentals, and
Consulting. Software rentals and Software maintenance services together form
the recurring revenue reported by the Company. Recurring revenue is based on
long-term contracts continuing for the time being or for a fixed period of
several years. Typically rental and maintenance charges are invoiced annually
in advance.
The geographical areas reported are Finland, the rest of Europe (including
Russia and Turkey), and the rest of the world. Net sales are reported according
to the customer´s location.
In the January – June 2016 interim report the Company has renamed a term used
in financial reporting to comply with the European Securities and Markets
Authority´s (ESMA) recommendations for alternative key figures. The new term
used for previously used “operating profit excluding non-recurring items” is
“comparable operating profit”. Items having an impact on comparable operating
profit are, for example, non-recurring items related to business streamlining
or restructuring. Comparable operating profit is calculated by eliminating
these items from operating profit. Interest-bearing net debt is calculated by
deducting cash and cash equivalents out of interest-bearing liabilities.
REVIEW BY THE CEO
After a challenging first quarter, our profit development made a clear upturn
in the second quarter from April to June. As a result of streamlining our
operations, EBITDA doubled year-on-year and operating profit exceeded 10% of
net sales.
The business environment remained challenging and economic growth was weak in
most markets. This was the case especially in the Company’s largest market
area, Europe (including Finland). Channel license net sales were negatively
affected by the tightened competition in process modeling software, as well as
performance management software.
However, in the second quarter we received many positive signals that indicate
accelerating growth in the process mining market. Our net sales in this product
area grew over 50 % and we acquired many significant customers among large
international corporations. Due to our patented technology, early go-to-market
strategy and innovative functionalities, our process mining software QPR
ProcessAnalyzer is in excellent position to continue its strong revenue growth.
Our patented technology in question received additional intellectual property
protection in May, when the United States Patent and Trademark Office awarded
already the second patent for this technology.
In 2015, we invested in recruiting and training new reseller partners; as well
as in marketing and product launches in new markets. In process mining
software, we expanded distribution especially into developed European markets,
such as Germany, Sweden, Belgium and the Netherlands. For performance
management and process modeling software, we recruited many new resellers from
Middle East, Africa and South America.
We believe these investments will have a positive impact on net sales this
year, but at the same time, we estimate that the tightened competition will
continue to have a negative impact on sales in part of QPR´s reseller channel.
We estimate that comparable operating profit will grow in 2016, as compared to
2015.
Jari Jaakkola
CEO
NET SALES DEVELOPMENT JANUARY 1 – JUNE 30, 2016
April – June 2016
Net sales in the second quarter were EUR 2,173 thousand (2,402) and decreased
10% from the corresponding period of the previous year. This was mainly due to
a decrease in process modeling and performance management software net sales in
the international sales channel. Process mining software and related consulting
net sales grew significantly, over 50% compared to prior year.
Software license net sales decreased 39% compared to previous year. Net sales
were negatively affected by the tightened competition in process and enterprise
architecture modeling software, as well as performance management software.
Net sales from software maintenance services and software rentals decreased
(-6% and -7%, respectively). Currency exchange rates had a slightly negative
impact on software maintenance service net sales. The share of recurring
revenues was 50% (48) of total net sales.
Consulting net sales were on the same level as in the previous year (+1%).
Technical SAP consulting net sales decreased, but process mining consulting net
sales increased significantly.
Of the Group net sales, 71% (65) derived from Finland, 18% (19) from the rest
of Europe (including Russia and Turkey) and 11% (16) from the rest of the
world.
NET SALES BY PRODUCT GROUP
EUR in thousands Apr-Jun, Apr-Jun, Change Jan-Jun, Jan-Jun Change Jan-Dec
2016 2015 , 2016 , 2015 , , 2015
% %
Software 249 409 -39 453 764 -41 1,427
licenses
Software 672 715 -6 1,355 1,451 -7 2,873
maintenance
services
Software rentals 414 445 -7 828 884 -6 1,774
Consulting 839 833 1 1,579 1,828 -14 3,362
Total 2,173 2,402 -10 4,215 4,926 -14 9,436
NET SALES BY GEOGRAPHIC AREA
EUR in thousands Apr-Jun, Apr-Jun, Change Jan-Jun, Jan-Jun Change Jan-Dec
2016 2015 , 2016 , 2015 , , 2015
% %
Finland 1,549 1,575 -2 2,967 3,321 -11 6,499
Europe incl. 389 446 -13 796 905 -12 1,740
Russia and
Turkey
Rest of the 235 382 -38 452 701 -36 1,197
world
Total 2,173 2,402 -10 4,215 4,926 -14 9,436
January – June 2016
Net sales in the January – June reporting period were EUR 4,215 thousand
(4,926). The decrease in net sales was due to weaker sales in software licenses
and consulting services.
Software license net sales decreased 41% compared to previous year. Net sales
were negatively affected by tightened competition in process modeling and
performance management software.
Software maintenance services net sales and software rental net sales decreased
(-7% and -6%, respectively). Currency exchange rates had a negative impact to
software maintenance service net sales. The share of recurring revenues was 52%
(47) of total net sales.
Consulting net sales (-14%) were negatively affected by the decrease in
technical SAP consulting net sales and a slow start in operational development
consulting projects at the beginning of the year.
Of the Group net sales, 70% (67) derived from Finland, 19% (18) from the rest
of Europe (including Russia and Turkey) and 11% (14) from the rest of the
world.
FINANCIAL PERFORMANCE
April – June 2016
In the second quarter, the Group’s operating profit improved due to expense
reductions and was EUR 230 thousand (32), or 10.6% of net sales (1.3).
Especially personnel expenses were lower than in the previous year. Investments
into new software products and international sales channel were continued.
The Group´s fixed costs in the quarter were EUR 1,844 thousand (2,221), and
decreased 19.0% compared to the corresponding period in the previous year.
Personnel expenses represented 73.8% (77.6) of the fixed costs and were EUR
1,361 thousand (1,723).
Profit before taxes in the quarter was EUR 217 thousand (16) and profit for the
period was EUR 175 thousand (35). Taxes recorded for the period were EUR 42
thousand (-18). Earnings per share (fully diluted) were EUR 0.015 (0.003).
January – June 2016
In the January – June reporting period, the Group operating profit was EUR 125
thousand (291), or 3.0% of net sales (5.9). Operating profit decreased from the
previous year due to lower net sales.
Comparable operating profit was EUR 165 thousand (291). The items that have an
impact on comparable operating profit are related to the streamlining of
operations implemented in early 2016, and mainly include personnel expenses.
The Group´s fixed costs were EUR 3,856 in the reporting period (4,381), and
decreased 12.0% compared to previous year. Personnel costs represented 75.7%
(76.4) of fixed costs and were EUR 2,918 thousand (3,345). Credit losses,
inclusive in fixed costs, totaled EUR 8 thousand (19).
Profit before taxes in the reporting period was EUR 95 thousand (289) and
profit for the period was EUR 70 thousand (260). Taxes recorded for the period
were EUR 24 thousand (29). Earnings per share (fully diluted) were EUR 0.006
(0.022).
FINANCE AND INVESTMENTS
Cash flow from operating activities was EUR 1,422 thousand (1,066) in January -
June. The growth in cash flow was due to more efficient working capital
management and lower investments. Cash and cash equivalents at the end of the
second quarter were EUR 900 thousand (1,134).
Investments in the first half of the year totaled EUR 366 thousand (754).
Investments were mainly related to product development expenditure.
Net financial items in the review period January - June were EUR -30 thousand
(-2). Net financial expenses included net foreign exchange losses of EUR 22
thousand (2). In April – June net financial items were EUR -12 thousand (-16),
and included net foreign exchange currency losses of EUR 12 thousand (16).
At the end of the second quarter, the Company had no interest-bearing
liabilities. The gearing ratio was -33% (-40). Current liabilities include
deferred revenue in total of EUR 2,427 thousand (1,910). Annualized return on
investment was 9% (19) in the reporting period January – June and 30% (1) in
April – June.
At the end of the second quarter, equity ratio was 65% (58) and the
consolidated shareholders’ equity was EUR 2,745 thousand (2,854). Annualized
return on equity was 5% (17) in the reporting period January – June and 25% (4)
in April – June.
The Annual General Meeting held on March 22, 2016 authorized the Board of
Directors to decide on issuing a maximum of 4,000,000 new shares, to decide on
conveyance of a maximum of 700,000 own shares held by the Company, and to
decide on acquiring a maximum of 250,000 own shares. The authorizations are in
force until the next Annual General Meeting.
PRODUCT DEVELOPMENT
In the April – June reporting period, product development expenses were EUR 418
thousand (468), and represented 19% of net sales (19). Product development
expenses do not include amortization of capitalized product development
expenses. Product development expenses were capitalized for a total amount of
EUR 161 thousand (193). The amortization of capitalized product development
expenses in the quarter was EUR 147 thousand (114).
In the reporting period January – June, product development expenses were EUR
906 thousand (948), and represented 22% of net sales (19). Product development
expenses do not include amortization of capitalized product development
expenses. Product development expenses were capitalized for a total amount of
EUR 340 thousand (360). The amortization of capitalized product development
expenses in the quarter was EUR 256 thousand (229).
PERSONNEL
At the end of the reporting period, the Group employed a total of 69 persons
(86). The average number of personnel during the second quarter was 70 (88) and
75 (85) in the review period January – June.
For incentive purposes, the Company has a bonus program that covers all
employees. Remuneration of the top management consists of salary, fringe
benefits and a possible annual bonus based on net sales performance. In 2016,
the maximum annual bonus of the executive management team, including the CEO,
is 30% of the annual base salary. More information on the bonus program can be
found in the Annual Report 2015
(http://cdn.qpr.com/sites/default/files/QPR_Software_Annual_Report_2015_1.pdf).
SHARES AND SHAREHOLDERS
Trading of shares Jan-Jun, Jan-Jun, Change, Jan-Dec,
2016 2015 % 2015
Shares traded, pcs 366,396 3,358,905 -89 4,558,065
Volume, EUR 387,159 4,811,303 -92 6,350,859
% of shares 3.1 28.0 38.0
Average trading price, EUR 1.06 1.43 -26 1.39
Shares and market capitalization Jun 30, Jun 30, Change, Dec 31,
2016 2015 % 2015
Total number of shares, pcs 12,444,863 12,444,863 - 12,444,863
Treasury shares, pcs 457,009 457,009 - 457,009
Book counter value, EUR 0.11 0.11 - 0.11
Outstanding shares, pcs 11,987,854 11,987,854 - 11,987,854
Number of shareholders 1,198 1,219 -2 1,212
Closing price, EUR 1.00 1.46 -32 1.20
Market capitalization, EUR 11,987,854 17,502,267 -32 14,385,425
Book counter value of all treasury 50,271 50,271 - 50,271
shares, EUR
Total purchase value of all 439,307 439,307 - 439,307
treasury shares, EUR
Treasury shares, % of all shares 3.7 3.7 - 3.7
The Annual General Meeting held on March 22, 2016 approved the Board's proposal
to pay a per-share dividend of EUR 0.02 (0.05), a total of EUR 240 thousand
(599) for the financial year 2015. Dividends were paid to all shareholders
registered in the Company's shareholder register, maintained by Euroclear
Finland Oy, on the record date of March 24, 2016. Dividends were paid on April
5, 2016.
The Annual General Meeting approved the Board´s proposal to authorize the Board
of Directors, subject to its discretion, on payment of an extra dividend of EUR
0.01 during 2016. The authorization is valid until 31 December, 2016.
OTHER EVENTS DURING THE QUARTER
In January, QPR and the Swedish business and IT services company iStone
announced that they have signed a reseller agreement for QPR ProcessAnalyzer -
the software that enables automated process analysis based on existing data
from Enterprise Resource Planning (ERP) systems. The partnership creates new
opportunities in automated process mapping and process flow optimization,
especially for those organizations using the ERP system Infor M3.
QPR Software and PricewaterhouseCoopers (PwC) Portugal announced in February
that they have signed a consulting agreement on using QPR ProcessAnalyzer in
PwC’s process and operational improvement consulting in Portugal. QPR
ProcessAnalyzer enables automated process analysis based on existing data from
enterprise IT systems, utilizing technology patented in the United States by
QPR.
In March, QPR completed co-determination negotiations with its personnel. As a
result of the negotiations, the Company reduces its annual expenses by
approximately EUR 0.7 million. Of the total, EUR 0.1 million will be realized
by reducing external purchases and EUR 0.6 million through personnel
reductions.
QPR signed an agreement in March on delivering software for business process
management purposes in one of the world’s largest lighting manufacturing
companies. The signed agreement is valid for three years, and the value of the
entire three year agreement is approximately EUR 0.2 million before reseller
commissions.
In March, QPR announced the launch of QPR MobileDashboard, an application that
makes it even easier to access and browse actionable performance information on
the go.
QPR Software was listed in April as a representative vendor in the Gartner
Market Guide for Enterprise Business Process Analysis (EBPA). Globally the
Gartner Market Guide lists 22 representative vendors offering solutions in this
market.
In May, QPR received additional intellectual property protection for its
process mining technology. This was already the second patent that the United
States Patent and Trademark Office has awarded for the technology in question.
The patented technology is utilized in QPR ProcessAnalyzer, an application
developed by QPR. QPR’s previous patent from 2015 related to the utilization of
event instance data obtained from information management systems to help
organizations analyze and improve their business processes. The latest patent
now safeguards the technology behind predicting the probability of future
events based on process analysis.
In June, the Company announced the release of the new QPR Suite 2016, the
complete portfolio of business management tools for planning, executing and
monitoring strategy-driven operations. The newest developments in QPR
technology bring enhancements to user experience and enable easy integration
between QPR products and third party software. New features of the Suite
further strengthen QPR’s offering as a value-adding solution provider for
strategy execution, business-IT alignment, performance and process management
and process mining.
In June, QPR made a deal to deliver QPR ProcessDesigner and QPR Metrics, as
well as professional consulting services to a leading European engineering
group. The duration of the contract made is three years, and it is worth well
over 0,2 million euros.
EVENTS AFTER THE REPORTING PERIOD
There were no significant events after the reporting period.
GOVERNANCE
The Annual General Meeting on March 22, 2016 resolved that the number of Board
Members is four (4).
The Annual General Meeting re-elected Kirsi Eräkangas, Vesa-Pekka Leskinen,
Juho Malmberg and Topi Piela as members of the Company´s Board of Directors.
The term of office of the members of the Board of Directors expires at the end
of the next Annual General Meeting. At its organizing meeting, the Board of
Directors elected Vesa-Pekka Leskinen as its Chairman.
The Annual General Meeting re-elected Authorized Public Accountants KPMG Oy Ab
as QPR Software´s auditor with Kirsi Jantunen, Authorized Public Accountant,
acting as principal auditor. The term of office of the auditor expires at the
end of the next Annual General Meeting.
The Annual General Meeting decided to authorize the Board of Directors to
decide on an issue of new shares and conveyance of the own shares held by the
Company (share issue) either in one or in several occasions. The share issue
can be carried out as a share issue against payment or without consideration on
terms to be determined by the Board of Directors.
All authorizations of the Board and other decisions made by the Annual General
Meeting are available in their entirety on the stock exchange release published
by the Company on March 22, 2016 and available on the investors section of the
Company's web site, http://www.qpr.com/investors/stock-exchange-releases.htm.
SHORT-TERM RISKS AND UNCERTAINTIES
Internal control and risk management at QPR Software aims to ensure that the
Company operates efficiently and effectively, distributes reliable information,
complies with regulations and operational principles, reaches its strategic
goals, reacts to changes in the market and operational environment; and ensures
the continuity of its business.
QPR has identified the following three groups of risks related to its
operations: risks related to business operations (country, customer, personnel,
legal), risks related to information and products (QPR products, IPR, data
security) and risks related to financing (foreign currency, short-term cash
flow). The Company has an insurance policy for property, operational and
liability risks.
Financial risks include reasonable credit risk concerning individual business
partners, which is characteristic to any international business. QPR seeks to
limit this credit risk by continuous monitoring of standard payment terms,
receivables and credit limits. The amount of trade receivables over 60 days
past due was 14% (11) of total trade receivables at the end of the reporting
period.
Approximately 69% of Group’s trade receivables were in Euro at the end of the
reporting period (66). At the end of the reporting period, the Company had not
hedged its non-euro trade receivables.
QPR has initiated an arbitration process due to a customer´s decision to
dissolve a contract, as QPR regards this dissolution unjustified. The value of
the contract is less than EUR 100 thousand and less than EUR 50 thousand has
been recognized as revenue.
No significant changes have taken place in the Company’s short-term risks and
uncertainties during the quarter. Risks and risk management related to the
Company’s business are further described in the Annual Report 2015, pages 14-15
(http://cdn.qpr.com/sites/default/files/QPR_Software_Annual_Report_2015_1.pdf).
FINANCIAL INFORMATION
QPR Software will publish the interim report in English and Finnish on the
following date:
-- Interim Report Q3/2016: Thursday, October 27, 2016
QPR SOFTWARE PLC
BOARD OF DIRECTORS
Further information:
Jari Jaakkola, CEO
Tel. +358 (0) 40 5026 397
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Main Media
Neither this press release nor any copy of it may be taken, transmitted or
distributed, directly or indirectly, in or into the United States of America or
its territories or possessions.
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
EUR in thousands, unless Apr-Ju Apr-Ju Change Jan-Ju Jan-Ju Change Jan-De
otherwise indicated n, n, , % n, n, , % c,
2016 2015 2016 2015 2015
Net sales 2,173 2,402 -10 4,215 4,926 -14 9,436
Other operating income 12 1 1,099 18 1 1,705 1
Materials and services 112 149 -25 253 254 -1 558
Employee benefit 1,361 1,723 -21 2,918 3,345 -13 6,477
expenses
Other operating expenses 257 287 -11 521 625 -17 1,211
EBITDA 456 243 88 542 702 -23 1,190
Depreciation and 226 211 7 417 411 2 822
amortization
Operating profit 230 32 618 125 291 -57 368
Financial income and -12 -16 -23 -30 -2 1,391 -21
expenses
Profit before tax 217 16 1,258 95 289 -67 347
Income taxes -42 18 -335 -24 -29 -16 -9
Profit for the period 175 35 407 70 260 -73 338
Earnings per share, EUR 0.015 0.003 407 0.006 0.022 -73 0.028
(basic and diluted)
Consolidated statement
of
comprehensive income:
Profit for the period 175 35 70 260 338
Other items in
comprehensive income
that may be
reclassified
subsequently to profit
or loss:
Exchange differences on 3 7 1 -3 -21
translating foreign
operations
Income tax relating to - - - - -
components of other
comprehensive income
Total comprehensive 178 42 71 257 317
income
CONSOLIDATED BALANCE SHEET
EUR in thousands Jun Jun Change Dec
30, 30, , 31,
2016 2015 % 2015
Assets
Non-current assets:
Intangible assets 2,030 1,996 2 2,041
Goodwill 513 513 0 513
Tangible assets 234 337 -31 274
Other non-current assets 27 27 0 27
Total non-current assets 2,804 2,873 -2 2,855
Current assets:
Trade and other receivables 2,934 2,856 3 4,592
Cash and cash equivalents 900 1,134 -21 585
Total current assets 3,834 3,990 -4 5,177
Total assets 6,638 6,863 -3 8,033
Equity and liabilities
Equity:
Share capital 1,359 1,359 0 1,359
Other funds 21 21 0 21
Treasury shares -439 -439 0 -439
Translation differences -241 -224 8 -242
Invested non-restricted equity fund 5 5 0 5
Retained earnings 2,040 2,131 -4 2,210
Equity attributable to shareholders of the 2,745 2,854 -4 2,914
parent company
Non-current liabilities:
Non-interest-bearing liabilities 1 17 -92 9
Total non-current liabilities 1 17 -92 9
Current liabilities:
Interest-bearing liabilities - - 500
Advances received 2,427 1,910 27 1,209
Accrued expenses and prepaid income 1,136 1,633 -30 2,932
Trade and other payables 328 449 -27 468
Total current liabilities 3,891 3,992 -3 5,109
Total liabilities 3,892 4,009 -3 5,119
Total equity and liabilities 6,638 6,863 -3 8,033
CONSOLIDATED CASH FLOW STATEMENT
EUR in thousands Apr-Ju Apr-Ju Change Jan-Jun, Jan-Ju Change Jan-De
n, n, , % 2016 n, , % c,
2016 2015 2015 2015
Cash flow from
operating activities:
Profit for the period 175 35 400 70 260 -73 338
Adjustments to the 285 259 10 474 448 6 850
profit
Working capital -230 -557 -59 948 499 90 -645
changes
Interest and other -10 -17 -39 -30 -18 67 -38
financial
expenses paid
Interest and other 1 7 3 7 -57 12
financial
income received
Income taxes paid -29 -106 -73 -43 -129 -67 -111
Net cash from 192 -380 151 1,422 1,066 33 406
operating activities
Cash flow from
investing activities:
Purchases of tangible -167 -314 -47 -366 -754 -51 -1,148
and
intangible assets
Net cash used in -167 -314 -47 -366 -754 -51 -1,148
investing activities
Cash flow from
financing activities:
Proceeds from short - - - - 500
term
borrowings
Repayments of - - -500 - -
short-term
borrowings
Dividends paid -240 -599 -60 -240 -599 -60 -599
Net cash used in -240 -599 -60 -739.687 -599 23 -99
financing activities
Net change in cash and -215 -1,294 -83 316 -287 -210 -841
cash
equivalents
Cash and cash 1,116 2,427 -54 585 1,426 -59 1,426
equivalents at the
beginning of the
period
Effects of exchange -2 0 -2 -5 -64 1
rate changes on cash
and cash equivalents
Cash and cash 900 1,134 -21 900 1,134 -21 585
equivalents at the
end of the period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR in Share Other Translatio Treasur Invested Retained Total
thousand capita funds n y non-restricted earnings
s l difference shares equity fund
s
Equity 1,359 21 -221 -439 5 2,471 3,196
Jan 1,
2015
Dividends -599 -599
paid
Repurchas
e of
shares
Comprehen -3 260 257
sive
income
Equity 1,359 21 -224 -439 5 2,131 2,854
Jun 30,
2015
Dividends
paid
Repurchas
e of
shares
Comprehen -18 78 60
sive
income
Equity 1,359 21 -242 -439 5 2,210 2,914
Dec 31,
2015
Dividends -240 -240
paid
Repurchas
e of
shares
Comprehen 1 70 71
sive
income
Equity 1,359 21 -241 -439 5 2,040 2,745
Jun 30,
2016
NOTES TO HALF YEAR FINANCIAL REPORT
ACCOUNTING PRINCIPLES
This report complies with requirements of IAS 34 ”Interim Financial Reporting”.
Starting from the beginning of 2016, the Group has applied certain new or
revised IFRS standards and IFRIC interpretations as described in the
Consolidated Financial Statements 2015. The implementation of these new and
revised requirements have not impacted the reported figures. For all other
parts, the accounting principles and methods are the same as they were in the
2015 financial statements.
When preparing the consolidated financial statements, management is required to
make estimates and assumptions regarding the future and to consider the
appropriate application of accounting principles, which means that actual
results may differ from those estimated.
All amounts presented in this report are consolidated figures, unless otherwise
noted. The amounts presented in the report are rounded, so the sum of
individual figures may differ from the sum reported. This report is unaudited.
During the reporting period, the Group did not have any financial instruments
measured at fair value.
INTANGIBLE AND TANGIBLE ASSETS
EUR in thousands Jan-Jun, Jan-Jun, Jan-Dec,
2016 2015 2015
Increase in intangible assets:
Acquisition cost Jan 1 7,862 6,956 6,956
Increase 343 526 906
Increase in tangible assets:
Acquisition cost Jan 1 1,707 1,465 1,465
Increase 23 228 242
CHANGE IN INTEREST-BEARING LIABILITIES
EUR in thousands Jan-Jun, Jan-Jun, Jan-Dec,
2016 2015 2015
Interest-bearing liabilities Jan 1 500 - -
Proceeds from short term borrowings - - 500
Repayments 500 - -
Interest-bearing liabilities Jun - - 500
30/Dec 31
PLEDGES AND COMMITMENTS
EUR in thousands Jun 30, Jun 30, Dec 31, Change,
2016 2015 2015 %
Business mortgages (held by the 1,390 1,392 1,392 0
Company)
Minimum lease payments based on
lease agreements:
Maturing in less than one year 257 353 357 -28
Maturing in 1-5 years 407 259 89 357
Total 664 611 446 49
Total pledges and commitments 2,054 2,003 1,838 12
CONSOLIDATED INCOME STATEMENT BY QUARTER
EUR in thousands Q2 2016 Q1 2016 Q4 2015 Q3 Q2 2015 Q1 2015
2015
Net sales 2,173 2,042 2,520 1,989 2,402 2,524
Other operating income 12 6 - - 1 -
Materials and services 112 141 156 148 149 105
Employee benefit expenses 1,361 1,557 1,734 1,398 1,723 1,622
Other operating expenses 257 264 346 239 287 338
EBITDA 456 86 284 204 243 459
Depreciation and 226 191 206 206 211 200
amortization
Operating profit 230 -105 78 -1 32 259
Financial income and -12 -18 -30 11 -16 14
expenses
Profit before tax 217 -123 48 10 16 272
Income taxes -42 18 7 13 18 -47
Profit for the period 175 -105 55 23 35 225
GROUP KEY FIGURES
EUR in thousands, unless Jan-Jun or Jun Jan-Jun or Jun Jan-Dec or Dec
otherwise indicated 30, 2016 30, 2015 31, 2015
Net sales 4,215 4,926 9,436
Net sales growth, % -14.4 5.1 -1.1
EBITDA 542 702 1,190
% of net sales 12.9 14.3 12.6
Operating profit 125 291 368
% of net sales 3.0 5.9 3.9
Profit before tax 95 289 347
% of net sales 2.2 5.9 3.7
Profit for the period 70 260 338
% of net sales 1.7 5.3 3.6
Return on equity (per 5.0 17.2 11.1
annum), %
Return on investment (per 8.8 19.2 12.0
annum), %
Borrowings - - 500
Cash and cash equivalents 900 1,134 585
Net borrowings -900 -1,134 -85
Equity 2,745 2,854 2,914
Gearing, % -32.8 -39.7 -2.9
Equity ratio, % 65.2 57.6 42.7
Total balance sheet 6,638 6,863 8,033
Investments in non-current 366 754 1,148
assets
% of net sales 8.7 15.3 12.2
Product development 906 948 1,821
expenses
% of net sales 21.5 19.2 19.3
Average number of personnel 75 85 86
Personnel at the beginning 83 78 78
of period
Personnel at the end of 69 86 83
period
Earnings per share, EUR 0.006 0.022 0.028
Equity per share, EUR 0.221 0.229 0.234