Quarterly Report • Aug 7, 2015
Quarterly Report
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Interim report as per June 30, 2015
| 2. Quarter | January-June | |||||
|---|---|---|---|---|---|---|
| 2015 | 2014 | Change | 2015 | 2014 | Change | |
| kEUR | kEUR | kEUR | kEUR | |||
| Sales | 13,974 | 11,510 | 21% | 27,633 | 22,573 | 22% |
| EBITDA | 1,501 | 1,170 | 28% | 3,090 | 2,547 | 21% |
| EBITDA margin | 11% | 10% | 1 pp | 11% | 11% | 0 pp |
| EBIT | 1,208 | 919 | 31% | 2,546 | 2,035 | 25% |
| EBIT margin | 9% | 8% | 1 pp | 9% | 9% | 0 pp |
| Financial income | 524 | 571 | -8% | 1,080 | 1,158 | -7% |
| Net income | 1,315 | 790 | 66% | 2,709 | 2,655 | 2% |
| Earnings per share (EUR) | 0,10 | 0,06 | 67% | 0,20 | 0,20 | 0% |
| Employees incl. freelancers | 528 | 460 | 15% | 528 | 460 | 15% |
| Liquid assets | 26,987 | 24,300 | 11% | 26,987 | 24,300 | 11% |
| Operating cash flow | -1,900 | 854 | – | -3,062 | 3,795 | – |
The following Group Management Report provides information on the performance of the SYZYGY Group (hereinafter referred to as "SYZYGY", the "Group" or the "Company"). The consolidated financial statements on which the Group Management Report is based have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial year corresponds to the calendar year.
The SYZYGY Group is an international provider of creative, technological and media services for digital marketing. Overall, the Group had around 530 employees, including freelancers, at locations in Germany, the UK, Poland and the US as at the balance sheet date.
The Group consists of SYZYGY AG as the holding company and eight subsidiaries: Ars Thanea ska, Hi-ReS! Berlin GmbH, Hi-ReS! New York Inc, Hi-ReS! London Ltd, SYZYGY Deutschland GmbH, SYZYGY UK Ltd, uniquedigital GmbH and Unique Digital Marketing Ltd.
The SYZYGY Group's operating units cover the entire digital marketing value chain: from strategic consulting to project planning, concepts and design to technical realisation of brand platforms, business applications, websites, digital campaigns and mobile apps. Online marketing services such as media planning, search engine marketing/optimisation and affiliate programmes are also a major business area. Digital illustrations, animations and the development of games for smartphones and tablets round off the range of services.
The business focus is on the automotive, telecommunications/IT and consumer goods industries, as well as financial services.
The organisational structure of the SYZYGY Group is decentralised. As the management holding company, SYZYGY AG manages the subsidiaries on the basis of quantitative and qualitative targets (management by objectives). The management teams in the individual companies operate largely independently, within the constraints of their targets and budgets. A control and reporting system is in place for management and monitoring purposes within the Group. It compares the financial figures against the budget on a monthly basis, while also highlighting key opportunities and risks.
DRS 20 stipulates that financial and non-financial performance indicators must be included in reporting if they are also used for the Group's internal management.
The main financial performance indicators used for managing the SYZYGY Group are sales and earnings before interest and taxes (EBIT). They are presented and explained in detail in the following Management Report.
SYZYGY does not use any non-financial performance indicators for managing the Group or for management decision-making. In line with its style of corporate management, which is based on sustainable growth, SYZYGY has nonetheless identified non-financial factors that are considered to be important for the longterm success of the Group. Some of these are listed below.
As a service provider, the Group's performance depends to a very significant extent on the skill and commitment of its employees. In order to retain them and gain new talent, SYZYGY seeks to offer its staff an interesting, diverse and pleasant working environment. This includes regular internal and external training and development activities, attractive locations that provide an inspiring work environment and welcoming office space with room for creativity, interaction and personal contacts, an open and communicative management culture, flexible working hours, cooperation with universities to promote the next generation of talent, and corporate events.
Digital marketing is in a constant state of flux. Innovative technologies and changes in user behaviour require ongoing adaptation of the service portfolio and the constant development of internal skillsets.
With the aim of anticipating this change and playing an active role in shaping it, the SYZYGY Group organises a Digital Innovation Day, at which international thought leaders and bestselling authors discuss innovation issues relating to digital marketing.
At operational level, regular training and development activities ensure that employees in software development, IT management, design, information architecture, consulting and project management are at all times familiar with the latest technologies, design principles and methods.
Winning prestigious awards for creative work and efficiency is an important indicator of the Group's performance. It also enhances the Group's attractiveness to (potential) clients and employees. SYZYGY regularly participates in national and international competitions.
Marco Seiler, founder and CEO of the SYZYGY Group, was awarded the highly regarded "Agency Person of the Year" prize in January 2015. It is conferred annually by marketing industry magazine Horizont.
The business backdrop in the second quarter of 2015 was one of positive economic conditions. Following growth of 0.4 per cent in the first quarter of 2015, the wider Eurozone economy continued to expand in the second quarter of 2015. A 4-year high was reached, in spite of the escalating financial crisis in Greece. Experts nevertheless warn of the almost incalculable risks for the entire Eurozone if Greece were to face insolvency.
Oil price trends, the further escalation of geopolitical tensions in the Ukraine conflict and tightening of monetary policy in the US are weighing on the economy and the markets affected.
The continuing weakness of the euro is supporting exports, while low interest rates and the accompanying higher levels of lending are generating positive momentum in the Eurozone. World Bank economists raised their growth forecast to 1.5 per cent for 2015, up from the original figure of 1.1 per cent.
The leading research institutes – ifo, Insee and Istat – expect gross domestic product (GDP) to grow in real terms in the third and fourth quarters of 2015, rising by 0.5 per cent in each case.
The German economy started the year with two strong quarters. The ifo Business Climate Index for Germany's commercial sector fell slightly in June, following three rises in a row. Respondents' expectations became gloomier, with the majority now only slightly optimistic. In contrast, the ifo Business Climate Index for the service sector advanced again in June, reaching its highest level since July 2011. This indicates that service providers are expecting business to improve significantly in the coming months and are planning their employment strategy with expansion in mind.
Berlin-based economic research institute DIW expects a growth rate of around 0.5 per cent compared to the previous quarter and confirms that service sectors are driving current growth.
The economic climate remains positive in the UK, although the British Chambers of Commerce downgraded their growth forecast for 2015 from 2.7 per cent to 2.3 per cent following a weak first quarter. The main reasons for the weakness are the foreign trade deficit and decline in investment from 7.5 per cent in 2014 to 4.4 per cent in 2015. According to the British Chambers of Commerce, the drop is only temporary and medium-term expectations remain stable.
Statistics for the performance of the advertising market in the second quarter of 2015 were largely unavailable when this report was being prepared. SYZYGY also accepts that the validity of advertising statistics is limited since different survey methods produce widely different results and forecasts. Given the generally robust economy in the first two quarters of 2015 and positive forecasts for the year 2015 as a whole, it can nonetheless be assumed that companies have tended to increase their marketing budgets.
Information provider Nielsen reports that the German advertising market performed well in the first six months of the year compared to the same period of the previous year, growing 1.7 per cent. According to the study, German firms invested EUR 13.4 million gross in advertising. In the mobile advertising segment, sales were up 61.7 per cent. All experts agree that this trend is continuing and digital media will remain the driver of growth going forward.
According to the IPA Bellwether Report, at the end of the first quarter of 2015 the advertising industry in the UK had recorded stronger growth in the preceding four quarters than for any budget year during the last decade. Experts also expect that in 2015 the UK will become the first country in the world to invest half of all advertising budgets in digital media. Information service eMarketer expects more than GBP 16.2 billion to be available for advertising budgets in 2015.
The headcount at the SYZYGY Group increased further in the period covered by the report. The SYZYGY Group had a total of 482 permanent employees as at June 30, 2015, 10 more than as at March 31, 2015, and 62 more than at the end of the corresponding quarter of the previous year. Strong growth in Group sales led to a proportionate expansion of the workforce.
The number of freelancers was around 46 (based on FTEs) as at the reporting date, 6 more than in the first half of 2014.
271 people (56%) worked in the four German companies and 131 (27%) in the UK agencies. Ars Thanea employed 72 members of staff (15%) as at the end of the quarter, while Hi-ReS! New York had 8 employees.
In terms of employees by function, there were no significant changes during the period under review. The technology section now comprises 24 per cent of employees. The proportion of staff in the design section (20%) and in project management (18%) fell by one percentage point in each case. The proportion in strategy/ consulting increased by one percentage point to 9 per cent. The online marketing section still comprises 19 per cent of employees. 50 people worked in administration as at the end of the reporting period. This corresponds to 10 per cent of the workforce and marks a fall of 2 per cent.
On average over the period, 534 people – including around 50 freelancers – worked for the SYZYGY Group. Annualised sales per head were therefore EUR 104,000 (previous year: EUR 103,000, with an average headcount of 440).
SYZYGY invested around EUR 0.6 million in intangible assets and fixed assets in the first half of 2015. This consisted of investment in equipment for employees at the SYZYGY Group's various locations.
The SYZYGY Group reports billings and sales. The sales figures are arrived at by deducting media costs from billings. Media costs are incurred in the online marketing subsidiaries as transitory items on the revenue and expenses side.
In the period under review, the SYZYGY Group achieved very strong growth with regard to both figures. Billings were up 17 per cent to EUR 68.5 million compared to the same period of the previous year, while sales advanced by 22 per cent to EUR 27.6 million. In both cases these were new records for a half-year period.
The key factors contributing to this strong performance are the acquisition of significant new clients and major expansion of existing client relationships.
A positive aspect to note is that all segments made a contribution to the strong results.
SYZYGY generated 43 per cent of its sales from clients in the automotive industry, 4 percentage points more than in the same period of the previous year. The consumer goods sector accounted for around 24 per cent of sales (as in the previous year), while 11 per cent was generated with companies from the IT and telecommunications industry (previous year: 13 per cent). The proportion of sales attributable to clients from the financial sector
remained unchanged at 8 per cent. Some 14 per cent of sales came from firms that cannot be assigned to any of these four key areas. In absolute terms, growth was achieved across all industries.
61 per cent of SYZYGY's total sales were generated from its ten largest clients, a slight drop of 4 percentage points compared to the same period in the prior year.
The cost of sales rose by 25 per cent to EUR 20.1 million. This was slightly in excess of sales growth since a substantial amount of work was handled by freelancers due to the very strong order book. Gross margin thus fell by two percentage points to 27 per cent.
At EUR 2.5 million, general administrative costs rose slightly by 5 per cent compared to the previous year's figure. The growth of the SYZYGY Group requires additional expenditure on administration, although this expenditure is rising at a significantly lower rate than sales growth.
Sales and marketing costs totalled EUR 2.5 million in the first six months of 2015, remaining almost unchanged as sales rose (previous year: EUR 2.3 million). Investment in business development and marketing campaigns that was initiated in preceding periods has resulted in a number of new client accounts and interest from prospective clients.
Depreciation of fixed assets amounted to EUR 0.5 million, as in the prior-year period.
The SYZYGY Group's profitability rose by 25 per cent, increasing from EUR 2.0 million to EUR 2.5 million or 9.2 per cent compared to the same period of the previous year.
SYZYGY again generated strong financial income of EUR 1.1 million in the reporting period through active management of liquid funds. This figure is marginally below the previous year's level and corresponds to an annualised return of around 7 per cent on average available liquidity reserves. Financial income primarily comprises interest income from corporate bonds and gains realised on securities.
Buoyant business performance at the SYZYGY Group is reflected in pre-tax income of EUR 3.6 million. In the same period of the previous year, the figure was EUR 3.5 million, meaning that pre-tax income increased by 3 per cent. After income taxes of EUR 0.9 million, net income was EUR 2.7 million.
Undiluted earnings per share were EUR 0.20 for the first half of 2015, based on the average available 12,694 thousand shares qualifying for participation in the profits and after deducting minority shares of EUR 0.2 million. This corresponds to the level of the same period in the prior year.
In accordance with IFRS 8, which is based on the management approach, SYZYGY uses geographical criteria to report segments and thus distinguishes between Germany, the UK and "Other segments". The latter include Ars Thanea and Hi-ReS! New York. Under IFRS 8.13, these companies are not big enough to be reported as geographically independent segments.
Growth of the SYZYGY Group was driven chiefly by the German agencies and the companies in the "Other segments".
The German agencies made a particularly significant contribution in the first half of the year, boosting their sales by 26 per cent to EUR 16.6 million compared to the first half of 2014. Operating income saw disproportionate growth, climbing 43 per cent to EUR 2.7 million.
The UK segment continued to perform well in the period covered by the report, with sales up 8 per cent to EUR 8.5 million. At EUR 0.9 million, operating income was down slightly, although an EBIT margin of 11 per cent still represented strong profitability. The fact that the Company is now also working for AVIS USA significantly boosted business at the US subsidiary, leading to more sales being allocated to "Other segments".
Sales of EUR 2.8 million were generated in "Other segments", representing dynamic growth of 21 per cent. Operating income amounted to EUR 0.4 million, corresponding to an EBIT margin of 14 per cent.
The breakdown of sales by segment was as follows in the first half of 2015: 60 per cent of revenue was generated by the German companies, 30 per cent by the UK agencies and 10 per cent by Ars Thanea and Hi-ReS! New York. With regard to EBIT, 68 per cent came from the Germany segment, 22 per cent from the UK and 10 per cent from the other segments.
SYZYGY had liquidity reserves totalling EUR 26.9 million as at the balance sheet date, corresponding to a decrease of EUR 8.3 million or 23 per cent compared with December 31, 2014. Liquid funds were down EUR 6.3 million to EUR 6.7 million (-49 per cent), while securities holdings fell only slightly by 9 per cent, to EUR 20.3 million.
75 per cent of funds were invested in corporate bonds, while 25 per cent were accounted for by bank deposits. The average residual maturity of the bonds was 7.7 years.
Total cash flow of the SYZYGY Group was negative as at the reporting date, at EUR -6.7 million. This decrease is mainly accounted for by negative operating cash flow from financing transactions, reflecting payment of the dividend of EUR -4.4 million, and negative operating cash flow from business operations of EUR -3.1 million. As a consequence of strong cash flow in the previous year, which resulted in a drop in working capital due to the particular reporting date, balance sheet items comprising working capital returned to normal in the first half of the year. The servicing of accounts payable and provisions also led to a cash outflow of EUR -3.8 million in the period covered by the report. The level of capital commitment
also increased due to a rise in trade receivables and other assets, at EUR -1.8 million. Net income for the period of EUR 2.7 million was a positive factor in the first half of the year. The reduction of advance payments from clients had a negative impact of EUR -1.1 million.
Positive cash flow from investing activities of EUR 0.8 million was due to a small reduction in the securities portfolio.
The SYZYGY Group's total assets fell to EUR 79.7 million as at the reporting date. The decrease of EUR 3.8 million compared to December 31, 2014 represents a 5 per cent drop.
Non-current assets increased by around 5 per cent to EUR 32.1 million due to exchange rate differences.
In current assets, liquid funds fell by EUR 6.3 million to EUR 6.7 million and securities declined by EUR 1.9 million.
Due to dynamic business growth, accounts receivable rose by EUR 3.1 million to EUR 19.2 million.
At EUR 50.2 million, equity was EUR 0.8 million or 1.6 per cent below the figure as at December 31, 2014, corresponding to an equity ratio of 63 per cent.
Other accumulated net income was EUR 1.9 million, having risen by EUR 0.8 million. This item mainly comprises unrealised rate changes for foreign exchange positions and unrealised price changes on securities.
At EUR 26.0 million, current liabilities fell by EUR 3.0 million or 10 per cent compared to yearend 2014. This is mainly due to the servicing of obligations arising from the supply of goods and services (accounts payable and provisions).
As with any private-sector business, the SYZYGY Group is subject to factors over which it has no control. Changes in the general economic environment and sentiment, both actual and perceived, can have a positive or negative impact on the Group's growth.
All statements about the future of the Group are based on information and findings that were known and available at the time this report was prepared. Since this information is subject to constant change, forecasts invariably involve a number of uncertainties. As a result, actual results may differ in subsequent periods.
The SYZYGY Group draws up its forecasts on the basis of its organic development. Acquisitions can have a positive or negative effect on the future growth of the Group.
Business performance can also benefit from the acquisition of major new clients and from expanding existing client relationships by gaining additional budgets above and beyond scheduled projects.
SYZYGY currently expects moderate growth in the Group's core markets. Overall, factors that are likely to promote economic growth predominate.
It is expected that Germany and the UK will again grow more strongly than other European countries. In its updated forecast, the German Council of Economic Experts estimates that the Eurozone will grow at a rate of 1.3 per cent; in Germany, GDP is expected to increase by 1.8 per cent. The forecast by the Halle Institute for Economic Research is comparable, at 2.0 per cent.
In the UK, the forecasts published by the British Chambers of Commerce average 2.7 per cent for the year as a whole. Since this growth is being driven primarily by private consumption and the property market, observers point to falling saving rates and rising levels of debt among private households as potential problems. Experts thus expect the recovery to weaken over the medium term.
The general state of the economy is one of the main factors that determines companies' willingness to invest in marketing campaigns. In view of the positive economic outlook at present, SYZYGY expects advertising budgets to rise in 2015. It is also to be expected that online advertising will continue to grow as a proportion of total budgets.
For the overall German market, forecasts range from 1.4 to 2.0 per cent, according to estimates by PwC, Carat, Magna Global and eMarketer. The forecasts for online advertising published by the German Association for the Digital Economy (BVDW) assume growth of around 6.5 per cent.
Growth is expected to be somewhat higher in the UK, which is one of the top 5 advertising markets in the world, along with Germany. AA/WARC believes that advertising spend will increase by 5.6 per cent overall. Forecasts for online advertising suggest growth of 13.0 per cent, according to AA/WARC. In the UK, mobile advertising formats are experiencing very high growth rates of around 44 per cent. Almost half of all spending will thus be allocated to Internet advertising in the UK in 2015.
Two factors provide the SYZYGY Group with a very favourable backdrop for further growth: the generally positive macroeconomic outlook for Germany and the UK; and the ongoing shift of marketing budgets to digital channels. Having said that, purely online advertising, to which the above statistics refer, represents just one aspect of the complex digital marketing sector and only makes up part of the Group's portfolio of services.
The SYZYGY Group is maintaining the forecast given in the Annual Report and expects to be able to increase its sales organically in the current financial year by around 20 per cent to approximately EUR 55.0 million. Operating income is expected to increase ahead of sales. All segments will contribute to this growth.
Earnings per share are likely to rise to EUR 0.40.
The results of the SYZYGY Group will be determined by the performance of the operating units and the future interest income of SYZYGY AG.
"To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated financial statements give a true and fair view of the net assets, financial position and results of operations of the Group, and the Group Management Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group."
Bad Homburg v. d. H., July 31, 2015 SYZYGY AG
The Management Board
| ASSETS | 06/30/2014 12/31/2014 | |||
|---|---|---|---|---|
| kEUR | kEUR | kEUR | ||
| Non-current assets | ||||
| Goodwill | 26,643 | 23,467 | 25,362 | |
| Fixed assets, net | 3,480 | 3,472 | 3,335 | |
| Other assets | 702 | 615 | 635 | |
| Deferred tax assets | 1,236 | 1,845 | 1,238 | |
| Total non-current assets | 32,061 | 29,399 | 30,570 | |
| Current assets | ||||
| Cash and cash equivalents | 6,737 | 7,362 | 13,017 | |
| Marketable securities | 20,250 | 16,938 | 22,157 | |
| Accounts receivable, net | 19,167 | 17,107 | 16,039 | |
| Prepaid expenses and other current assets | 1,466 | 2,064 | 1,670 | |
| Total current assets | 47,620 | 43,471 | 52,883 | |
| Total assets | 79,681 | 72,870 | 83,453 | |
| EQUITY AND LIABILITIES | 06/30/2015 | 06/30/2014 12/31/2014 | ||
| kEUR | kEUR | kEUR | ||
| Equity | ||||
| Common stock* | 12,828 | 12,828 | 12,828 | |
| Additional paid-in capital | 20,306 | 20,294 | 20,294 | |
| Own shares | -739 | -226 | -831 | |
| Accumulated other comprehensive income | 1,852 | 842 | 1,042 | |
| Retained earnings | 15,650 | 15,734 | 17,610 | |
| Minorities | 317 | -117 | 91 | |
| Total Equity | 50,214 | 49,355 | 51,034 | |
| Non-current liabilities | ||||
| Long term liability | 3,373 | 1,644 | 3,373 | |
| Deferred tax liabilities | 144 | 142 | 120 | |
| Total non-current liabilities | 3,517 | 1,786 | 3,493 | |
| Current liabilities | ||||
| Tax accruals and liabilities | 665 | 1,755 | 174 | |
| Accrued expenses | 9,271 | 4,724 | 8,172 | |
| Customer advances | 6,079 | 4,378 | 6,913 | |
| Accounts payable | 8,402 | 10,404 | 11,467 | |
| Other current liabilities | 1,533 | 468 | 2,200 | |
| Total current liabilities | 25,950 | 21,729 | 28,926 | |
| Total liabilities and equity | 79,681 | 72,870 | 83,453 |
* Contingent Capital EUR 1,200,000 (prior year: EUR 1,200,000).
| 2. Quarter | January-June | ||||||
|---|---|---|---|---|---|---|---|
| 2015 | 2014 | Change | 2015 | 2014 | Change | ||
| kEUR | kEUR | kEUR | kEUR | ||||
| Billings | 34,536 | 31,360 | 10% | 68,523 | 58,746 | 17% | |
| Media costs | -20,562 | -19,850 | 4% | -40,890 | -36,173 | 13% | |
| Sales | 13,974 | 11,510 | 21% | 27,633 | 22,573 | 22% | |
| Cost of revenues | -10,179 | -8,192 | 24% | -20,067 | -15,999 | 25% | |
| Sales and marketing expenses | -1,266 | -1,272 | -0% | -2,495 | -2,298 | 9% | |
| General and administrative expenses |
-1,158 | -1,212 | -4% | -2,489 | -2,362 | 5% | |
| Other operating income/expense, net |
-163 | 85 | – | -36 | 121 | – | |
| Operating profit | 1,208 | 919 | 31% | 2,546 | 2,035 | 25% | |
| Financial income, net | 524 | 571 | -8% | 1,080 | 1,158 | -7% | |
| Special items from first and de-consolidation |
0 | -315 | -100% | 0 | 335 | -100% | |
| Income before taxes | 1,732 | 1,175 | 47% | 3,626 | 3,528 | 3% | |
| Income taxes | -417 | -385 | 8% | -917 | -873 | 5% | |
| Total net income of the period | 1,315 | 790 | 66% | 2,709 | 2,655 | 2% | |
| thereof net income share to other shareholders |
97 | 48 | 102% | 226 | 132 | 71% | |
| thereof net income share to shareholders of SYZYGY AG |
1,218 | 742 | 64% | 2,483 | 2,523 | -2% | |
| Items that will not be reclassified to profit and loss: |
0 | 0 | – | 0 | 0 | – | |
| Items that will or may be reclassified to profit and loss: |
|||||||
| Currency translation adjustment | 388 | 866 | -55% | 1,961 | 1,017 | 93% | |
| Net unrealized gains/losses on mark. sec., net of tax |
-1,151 | 350 | – | -1,151 | 180 | – | |
| Other comprehensive income | -763 | 1,216 | – | 810 | 1,197 | -32% | |
| Comprehensive income | 552 | 2,054 | -73% | 3,519 | 3,852 | -9% | |
| thereof income share to other shareholders |
97 | 48 | 102% | 226 | 132 | 71% | |
| thereof income share to shareholders of SYZYGY AG |
455 | 2,006 | -77% | 3,293 | 3,720 | -11% | |
| Earnings per share from total operations (basic in EUR) |
0.10 | 0.06 | 67% | 0.20 | 0.20 | 0% | |
| Earnings per share from total operations (diluted in EUR) |
0.10 | 0.06 | 67% | 0.20 | 0.20 | 0% |
| Accum. other compre hensive income |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Number of shares (in 1,000) |
Common stock | Additional paid-in capital |
Own shares | Retained earnings | Foreign exchange currency |
Unrealised gains and losses |
Equity attributable to shareholders of SYZYGY AG |
Minority interest | Total equity | |
| Shares | kEUR | kEUR | kEUR | kEUR | kEUR | kEUR | kEUR | kEUR | kEUR | |
| Januar 1, 2014 | 12,828 12,828 20,207 | -554 16,789 | -1,611 | 1,256 48,915 | -238 48,677 | |||||
| Net income of the period |
4,399 | 4,399 | 340 | 4,739 | ||||||
| Other compre hensive income |
1,169 | 228 | 1,397 | 0 | 1,397 | |||||
| Comprehensive income |
4,399 | 1,169 | 228 | 5,796 | 340 | 6,136 | ||||
| Changes from first consolidation and in shares |
0 | -11 | -11 | |||||||
| Dividend | -3,578 | -3,578 | -3,578 | |||||||
| Sale of own shares |
87 | 328 | 415 | 415 | ||||||
| Purchase of own shares |
-605 | -605 | -605 | |||||||
| Dec. 31, 2014 | 12,828 12,828 20,294 | -831 | 17,610 | -442 | 1,484 50,943 | 91 51,034 | ||||
| Januar 1, 2015 | 12,828 12,828 20,294 | -831 | 17,610 | -442 | 1,484 50,943 | 91 51,034 | ||||
| Net income of the period |
2,483 | 2,483 | 226 | 2,709 | ||||||
| Other compre hensive income |
1,961 | -1,151 | 810 | |||||||
| Comprehensive income |
2,483 | 1,961 | -1,151 | 3,293 | 226 | 3,519 | ||||
| Dividend | -4,443 | -4,443 | -4,443 | |||||||
| Sale of own shares |
12 | 92 | 104 | 104 | ||||||
| June 30, 2015 | 12,828 12,828 20,306 | -739 15,650 | 1,519 | 333 49,897 | 317 50,214 |
| January-June | |||
|---|---|---|---|
| 2015 | 2014 | 2014 | |
| kEUR | kEUR | kEUR | |
| 2,709 | 2,655 | 4,739 | |
| 0 | 57 | 0 | |
| 544 | 512 | 2,554 | |
| -520 | -625 | -1,034 | |
| 35 | 52 | 61 | |
| 0 | -650 | -2,031 | |
| 260 | 961 | 841 | |
| -1,836 | -3,374 | -2,058 | |
| -1,089 | 1,318 | 3,680 | |
| -3,790 | 2,364 | 6,141 | |
| 625 | 525 | 1,517 | |
| -3,062 | 3,795 | 14,410 | |
| 457 | -10 | 122 | |
| -573 | -706 | -1,380 | |
| -28,617 | -12,877 | -37,972 | |
| 29,634 | 14,415 | 34,817 | |
| 0 | -953 | -907 | |
| 0 | 10 | 10 | |
| 901 | -121 | -5,310 | |
| -4,443 | -3,578 | -3,578 | |
| 0 | -11 | -11 | |
| 0 | 415 | -190 | |
| -4,443 | -3,174 | -3,779 | |
| -6,604 | 500 | 5,321 | |
| 13,017 | 6,728 | 6,728 | |
| 324 | 134 | 968 | |
| 6,737 | 7,362 | 13,017 | |
Pursuant to the provisions of section 37 y WpHG (German Securities Trading Act) in conjunction with Article 37 w para. 2 WpHG, the financial report of SYZYGY AG for the first six months of 2015 comprises interim consolidated financial statements and an interim Group Management Report. The interim consolidated financial statements were prepared in accordance with the requirements of International Financial Reporting Standards (IFRS) for interim financial reporting as applicable within the European Union. The unaudited interim financial statements were prepared in compliance with IAS 34 and in accordance with DRS 16. Accordingly, the company elected to produce a short-form report, compared with the consolidated financial statements as at December 31, 2014. The Management Report was prepared in accordance with the applicable requirements of the WpHG.
The same accounting and consolidation principles were applied as described in the notes to the financial statements in the 2014 annual report. Individual items in the balance sheet and consolidated statement of comprehensive income are likewise presented using the same valuation principles as described and applied in the annual report for 2014. The financial figures and associated information must therefore be read in conjunction with the annual report on the consolidated financial statements for 2014. The interim consolidated financial statements have not been subject to an auditor's review, in accordance with Article 37 w para. 5 WpHG.
The SYZYGY Group is an international provider of creative, technological and media services for digital marketing.
SYZYGY AG acts as a management holding company by providing central services relating to strategy, planning, technology development, administration, accounting, IT infrastructure and finance. SYZYGY AG also supports the subsidiaries in new business activities and generates sales from projects with third parties.
As operating entities, the subsidiaries are responsible for providing consultancy and other services. With branches in Bad Homburg, Berlin, Frankfurt/Main, Hamburg, Munich, London, New York and Warsaw, the Group's subsidiaries cover the entire digital marketing value chain: from strategic consulting to project planning, concepts and design to technical realisation of brand platforms, business applications, websites, online campaigns and mobile apps. Online media services such as planning, search engine marketing/optimisation and affiliate programmes are also a major business area. Digital illustrations, animations and gaming round off the range of services.
The Group's business focus is on the automotive, telecommunications/IT, retail and consumer goods, and financial services industries.
As at June 30, 2015, the following subsidiaries were included in the consolidated financial statements of SYZYGY AG and fully consolidated:
Information on general consolidation principles is provided in the 2014 annual report from page 64 onwards.
Application of IFRS 8 requires segment reporting in accordance with the Group's management approach. SYZYGY thus bases segment reporting on geographical criteria.
As holding company, SYZYGY AG mainly delivers services to the operating units and therefore needs to be considered separately. Sales that SYZYGY AG generates with third parties are reported under the Germany segment, as is the pro rata operating income.
The Germany segment comprises SYZYGY Deutschland GmbH, uniquedigital GmbH and Hi-ReS! Berlin GmbH. The UK segment consists of SYZYGY UK Ltd, Unique Digital Marketing Ltd and Hi-ReS! London Ltd. Due to their size, Hi-ReS! New York Inc and Ars Thanea ska fail to qualify as independent geographical segments. As they cannot be allocated to either of the geographical segments, they are summarised in other segments.
In prior year, the Germany segment additionally included Hi-ReS! Hamburg GmbH.
The individual segments apply the same accounting principles as the consolidated entity.
The criteria used by SYZYGY AG to assess the performance of the segments include sales and operating income (EBIT). Transactions between segments, which are charged at market prices, were eliminated.
Segment assets are equivalent to total assets plus the goodwill attributable to the respective segment, less receivables attributable to companies in the same segment.
Segment investments comprise investments in intangible assets and fixed assets.
Segment liabilities correspond to total liabilities excluding equity, less liabilities attributable to companies in the same segment.
| 06/30/2015 | Germany | UK | Other segments | functions and consolidation Central |
Total |
|---|---|---|---|---|---|
| kEUR | kEUR | kEUR | kEUR | kEUR | |
| Billings | 34,626 | 14,423 | 19,706 | -232 | 68,523 |
| Media costs | -18,005 | -5,954 | -16,931 | 0 | -40,890 |
| Sales | 16,621 | 8,469 | 2,775 | -232 | 27,633 |
| of which internal sales | 93 | 220 | 72 | -385 | 0 |
| Operating income (EBIT) | 2,736 | 903 | 387 | -1,480 | 2,546 |
| Financial income | 59 | 9 | 1 | 1,011 | 1,080 |
| Income before taxes (EBT) | 2,795 | 912 | 388 | -469 | 3,626 |
| Assets | 24,399 | 24,648 | 17,439 | 13,195 | 79,681 |
| of which goodwill | 8,841 | 11,095 | 6,707 | 0 | 26,643 |
| Investments | 472 | 41 | 51 | 9 | 573 |
| Depreciations and amortisation | 333 | 113 | 80 | 18 | 544 |
| Segment liabilities | 12,362 | 5,941 | 10,322 | 842 | 29,467 |
| Employees as per balance sheet date | 253 | 131 | 80 | 18 | 482 |
| 06/30/2014 | Germany | UK | Other segments | functions and consolidation Central |
Total |
|---|---|---|---|---|---|
| kEUR | kEUR | kEUR | kEUR | kEUR | |
| Billings | 31,718 | 18,450 | 9,294 | -716 | 58,746 |
| Media costs | -18,573 | -10,599 | -7,001 | 0 | -36,173 |
| Sales | 13,145 | 7,851 | 2,293 | -716 | 22,573 |
| of which internal sales | 462 | 338 | 75 | -875 | 0 |
| Operating income (EBIT) | 1,913 | 1,388 | 369 | -1,635 | 2,035 |
| Financial income | -2 | 2 | 1 | 1,157 | 1,158 |
| Income before taxes (EBT) | 1,911 | 1,390 | 370 | -143 | 3,528 |
| Assets | 26,814 | 24,751 | 10,999 | 10,306 | 72,870 |
| of which goodwill | 8,841 | 11,099 | 3,527 | 0 | 23,467 |
| Investments | 261 | 139 | 428 | 1 | 829 |
| Depreciations and amortisation | 300 | 78 | 25 | 109 | 512 |
| Segment liabilities | 16,208 | 7,960 | 7,128 | -7,781 | 23,515 |
| Employees as per balance sheet date | 204 | 128 | 67 | 21 | 420 |
SYZYGY is authorised to resell or call in treasury shares or to offer treasury shares to third parties in the course of acquiring companies. Treasury shares do not entitle the Company to any dividend or voting rights. The extent of the share buyback is shown as a separate item to be deducted from equity.
16,562 treasury shares were transferred to the former shareholders of Hi-ReS! London. The profit on sale of treasury shares amounted to kEUR 12 and was accounted in other comprehensive income, not affecting net income.
As at June 30, 2015, SYZYGY thus held 133,438 treasury shares at average acquisition costs of EUR 5.54.
Transactions in shares in their own organisation by board members of listed companies are called directors' dealings. In the period under review, the management board member Marco Seiler sold 106,842 SYZYGY shares at an average stock price of EUR 9.13 and the management board member Andrew P. Stevens sold 20,000 SYZYGY shares at an average stock price of EUR 7.86. Apart from that, board members did not buy or sell any SYZYGY shares.
Current holdings of shares and transactions carried out in the period under review are disclosed in the following tables:
| Number of shares | Marco Seiler |
Andrew P. Stevens |
Erwin Greiner |
Total |
|---|---|---|---|---|
| As per December 31, 2014 | 538,121 | 325,000 | 0 | 863,121 |
| Purchases | 0 | 0 | 0 | 0 |
| Sales | -106,842 | -20,000 | 0 | -126,842 |
| As per June 30, 2015 | 431,279 | 305,000 | 0 | 736,279 |
Management board: shares
| Number of shares | Michael Mädel |
Wilfried Beeck |
Ralf Hering |
Total |
|---|---|---|---|---|
| As per December 31, 2014 | 20,000 | 120,000 | 0 | 140,000 |
| Purchases | 0 | 0 | 0 | 0 |
| Sales | 0 | 0 | 0 | 0 |
| As per June 30, 2015 | 20,000 | 120,000 | 0 | 140,000 |
| Number of options | Marco Seiler |
Andrew P. Stevens |
Erwin Greiner |
Total |
|---|---|---|---|---|
| As per December 31, 2014 | 72.000 | 120.000 | 60.000 | 252.000 |
| Granted | 0 | 0 | 0 | 0 |
| Exercised | 0 | -48.000 | -24.000 | -72.000 |
| As per June 30, 2015 | 72.000 | 72.000 | 36.000 | 180.000 |
SYZYGY AG pays the difference between the exercise price and share price at the exercise date in cash instead of issuing new shares. Accordingly, the liabilities are recorded as accruals on a pro rata basis.
The members of the Supervisory Board do not hold any options.
As at June 30, 2015, the shareholders' structure has slightly changed compared to December 31, 2014. The WPP Group still held 30 per cent, Marco Seiler now holds 3.4 per cent and Andrew P. Stevens now holds 2.4 per cent of the shares. Due to transferring shares to the former shareholders of Hi-Res! London in the course of the acquisition, treasury stock changed from 1.2 per cent to 1.0 per cent of shares. The free float was thus 63.2 per cent. As at the reporting date, the total number of shares was 12,828 thousand.
"To the best of our knowledge, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the interim management report of the group includes a fair review of the group's development and performance of its position, together with a description of the principal opportunities and risks associated with the expected development of the group in the remaining months of the financial year, in accordance with German proper accounting principles of interim consolidated reporting."
Bad Homburg v. d. H., July 31, 2015 SYZYGY AG
The Management Board
Zurich Capital Market Conference, Zurich / September 9 Interim Report as per 09/30/2015 / October 30 German Equity Forum, Frankfurt / November 23 Capital Market Conference (MKK), Munich / December 8
Investor Relations Im Atzelnest 3 61352 Bad Homburg (Germany)
Contact: Susan Wallenborn
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