Published: 2017-10-26 08:00:00 CEST
QPR Software
Interim report (Q1 and Q3)

QPR SOFTWARE INTERIM REPORT JANUARY – SEPTEMBER 2017

Stock Exchange Release October 26, 2017 at 9.00 am

 

SUMMARY

July - September 2017

  • Net sales EUR 1,733 thousand (2016: 2,104). Negative development in net sales was mainly due to lower software license net sales.
  • Operating profit EUR -36 thousand (385).
  • Operating margin -2.1% (18.3).
  • Cash flow from operating activities EUR -426 thousand (-201).
  • Profit before taxes EUR -43 thousand (374).
  • Profit for the quarter EUR -34 thousand (281).
  • Earnings per share EUR -0.003 (0.023).

 January – September 2017

  • Net sales EUR 6,102 thousand (2016: 6,319).
  • Operating profit EUR 244 thousand (509).
  • Operating margin 4.0% (8.1).
  • Cash flow from operating activities EUR 1,223 thousand (1,221).
  • Profit before tax EUR 213 thousand (469).
  • Profit for the period EUR 137 thousand (352).
  • Earnings per share EUR 0.011 (0.029).
  • QPR issued a stock exchange release on 13 October of its revised estimate for full year results. The Company repeats this outlook for 2017.

Business operations

QPR Software´s mission is to make customers agile and efficient in their operations. We innovate, develop, and sell software aimed at analyzing, monitoring, and modeling operations in organizations. Furthermore, we offer customers a variety of consulting services.


OUTLOOK

Operating environment and market outlook

We estimate the growth of process mining software and related services to accelerate compared to previous year. This software product category is still relatively new, but competition and investments are increasing strongly in this market.

In developed markets, competition is expected to increase for process and enterprise architecture modeling software and performance management software. Whereas in emerging markets, growth potential for these software products is still expected.

Outlook for 2017

QPR Software revised its estimate for full year financial results on 13 October 2017, based on changed outlook in software license net sales. QPR also published preliminary information about its July-September financial results. The Company repeats this outlook for 2017.

The value of offers out has developed well since the spring, but at the same time the sales cycles have become longer. In July-September, software license net sales were significantly below our expectations and lower than in the previous year. 

In October-December, net sales and operating result are expected to significantly improve from July-September. This estimate is mainly based on already received orders to the last quarter of the year. QPR now estimates that its 2017 net sales will be on the same level as last year (+/-3% compared to 2016). Earlier, QPR estimated its net sales to grow compared to the previous year (2016: EUR 8,634 thousand). 

Operating profit in 2017 is expected be 4-9% of net sales. Earlier, QPR estimated operating profit to remain slightly lower than in the previous year (2016: EUR 761 thousand, 8.8% of net sales).

  

KEY FIGURES              
               
EUR in thousands, unless otherwise indicated Jul-Sep, 2017 Jul-Sep, 2016 Change, % Jan-Sep, 2017 Jan-Sep, 2016 Change, % Jan-Dec, 2016
               
Net sales 1,733 2,104 -18 6,102 6,319 -3 8,634
EBITDA 199 607 -67 908 1,149 -21 1,628
 % of net sales 11.5 28.8   14.9 18.2   18.9
Operating profit -36 385 -109 244 509 -52 761
 % of net sales -2.1 18.3   4.0 8.1   8.8
Profit before tax -43 374 -111 213 469 -55 710
Profit for the period -34 281 -112 137 352 -61 568
 % of net sales -2.0 13.4   2.2 5.6   6.6
               
Earnings per share, EUR -0.003 0.023 -112 0.011 0.029 -61 0.047
Equity per share, EUR 0.243 0.243 - 0.243 0.243 - 0.261
               
Cash flow from operating
activities
-426 -201 -111 1,223 1,221 0 1,419
Cash and cash equivalents 719 567 27 719 567 27 565
Net borrowings -719 -567 27 -719 -567 27 -565
Gearing, % -23.8 -18.8   -23.8 -18.8   -17.4
Equity ratio, % 68.8 71.5   68.8 71.5   46.3
Return on equity, % -4.5 39.0   5.8 15.8   18.4
Return on investment, % -6.6 50.3   10.9 22.9   24.6

 

REPORTING

QPR Software innovates, develops, sells and delivers software and services in international markets aimed at operational development in organizations. 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 license sales, Software maintenance, Software rentals, and Consulting. Software rentals and Software maintenance 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.

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 head quarter location.


REVIEW BY THE CEO

In July-September, financial results were weaker than we expected and unsatisfactory. This was the case especially in software license net sales, which remained low due to increased duration in sales cycles. However, I expect net sales and operating profit to significantly improve already in this last quarter of the year, compared to July-September.

In product and solution development we made excellent progress during the review period. A new common user interface has been developed to all QPR´s software products. In addition to this, functionalities of our software products have been strengthened particularly for operations support and content publishing to all personnel in customer organizations.

In software development, we will continue to focus on great user experience. Our focus areas are process mining and analytics, process modeling and operational performance monitoring. We believe that the relevant market for these focus areas will grow significantly, as companies collect more and more transaction and other event data from their operations.

In 2017 we have increased our marketing activities, which has led to an increase in our offers to international customers in recent months. Based on orders already received and on development described in this CEO review, net sales and operating result in October-December are expected to significantly improve from July-September.

Jari Jaakkola

CEO


NET SALES DEVELOPMENT

July – September 2017

Third quarter net sales were EUR 1,733 thousand (2,104) and decreased by 18% compared to the corresponding period last year. This was due mainly to a decrease in license net sales. 

Software license net sales decreased by 62% in July-September. Contrary to the previous year, no major software license deals were closed in July-September.

Software maintenance net sales and software rental net sales decreased by 10% and 7% compared to prior year. Changes in currency exchange rates had a negative impact on software maintenance net sales. The recurring revenue (software maintenance and software rentals) share of total net sales was 59% (53).

Consulting net sales increased by 7%, which was due to an upturn in sales and deliveries that started in August.

Of the Group net sales 67% (56) derived from Finland, 19% (22) from the rest of Europe (including Russia and Turkey) and 14% (22) from the rest of the world.

January – September 2017

Net sales in the January – September reporting period were EUR 6,102 thousand (6,319) and decreased by 3% compared to previous year.

Software license net sales grew by 7% compared to previous year, especially due to the strong growth in the first quarter. Software maintenance and software rental net sales decreased by 4% and 7%, respectively, compared to prior year. The share of recurring revenue was 52% (52) of total net sales.

Total software net sales (software license, maintenance and rental) decreased by 2%.

Consulting net sales decreased by 6%, which was due to lower operational development consulting sales and deliveries to Finnish customers.

Of the Group net sales, 68% (66) derived from Finland, 20% (20) from the rest of Europe (including Russia and Turkey) and 12% (14) from the rest of the world. Net sales are reported according to the customer´s head quarter location.
 

NET SALES BY PRODUCT GROUP          
               
EUR in thousands Jul-Sep, 2017 Jul-Sep, 2016 Change,
%
Jan-Sep, 2017 Jan-Sep, 2016 Change,
%
Jan-Dec, 2016
               
Software licenses 189 494 -62 1,009 946 7 1,316
Software maintenance services 641 708 -10 1,988 2,064 -4 2,776
Software rentals 385 415 -7 1,162 1,244 -7 1,670
Consulting 519 487 7 1,943 2,065 -6 2,872
Total 1,733 2,104 -18 6,102 6,319 -3 8,634
               

NET SALES BY GEOGRAPHIC AREA
         
               
EUR in thousands Jul-Sep, 2017 Jul-Sep, 2016 Change,
%
Jan-Sep, 2017 Jan-Sep, 2016 Change,
%
Jan-Dec, 2016
               
Finland 1,161 1,185 -2 4,122 4,152 -1 5,634
Europe incl. Russia and Turkey 335 461 -27 1,221 1,257 -3 1,748
Rest of the world 237 459 -48 759 910 -17 1,252
Total 1,733 2,104 -18 6,102 6,319 -3 8,634

 

FINANCIAL PERFORMANCE

July – September 2017

The July – September Group operating profit was EUR -36 thousand (385), or -2.1% of net sales (18.3). Operating profit decreased mainly due to lower net sales and higher personnel costs.

The Group´s July-September fixed costs were EUR 1,765 thousand (1,651), and increased by 7% compared to the corresponding period in prior year. Personnel expenses represented 73.9% (67.1) of the fixed costs and amounted to EUR 1,304 thousand (1,108).

The Group´s July-September profit before tax was EUR -43 thousand (374) and profit for the period was EUR -34 thousand (281). Earnings per share (undiluted, fully diluted) were EUR -0.003 (0.023).

January – September 2017

In the January – September reporting period, the Group operating profit was EUR 244 thousand (509), or 4.0% (8.1) of net sales.

The Group´s January – September fixed costs were EUR 5,728 (5,507), and increased by 4% compared to prior year. Personnel costs represented 72.9% (73.1) of fixed costs and were EUR 4,176 thousand (4,025).

Profit before taxes in the January – September reporting period was EUR 213 thousand (469) and profit for the period was EUR 137 thousand (352). Tax costs recorded for the period were EUR 76 thousand (117). Earnings per share (undiluted, fully diluted) were EUR 0.011 (0.029).
 

FINANCE AND INVESTMENTS

January – September cash flow from operating activities was EUR 1,223 thousand (1,221). Decrease in working capital contributed to the strong cash flow. Cash and cash equivalents at the end of the reporting period were EUR 719 thousand (567).

January – September investments totaled EUR 713 thousand (496), and were mainly product development expenditure.

Net financial items in the reporting period January - September were EUR 31 thousand (41). Net financial expenses included net foreign exchange losses of EUR 36 thousand (31).

At the end of the reporting period, the Company had no interest-bearing liabilities. The gearing ratio was -24% (-19). Current liabilities included deferred revenue in total of EUR 1,554 thousand (1,758). Annualized return on investment in the reporting period January – September was 11% (23) and in July – September -7% (50).

At the end of the reporting period, the equity ratio was 69% (71) and the consolidated shareholders’ equity was EUR 3,019 thousand (3,025). Annualized return on equity in the reporting period January – September was 6% (16) and in July – September -4% (39).


PRODUCT DEVELOPMENT

QPR innovates and develops software products that analyze, measure and model operations in organizations. Furthermore, we offer customers a variety of related solutions.

At the end of 2016, we started to accelerate our product development by adding resources in a controlled manner. Subsequently, we expect product development expenses to grow this year. Product development expenses do not include amortization of capitalized product development expenses. The capitalized product development expenses are amortized in four years.

The July – September product development expenses added up to EUR 508 thousand (344), equal to 29% (16) of net sales. During July – September product development expenses were capitalized for EUR 190 thousand (121). July – September amortization of capitalized product development expenses was EUR 180 thousand (157).

In the January – September reporting period, product development expenses were EUR 1,729 thousand (1,250), equal to 28% of net sales (20). During January – September product development expenses were capitalized for EUR 639 thousand (461). The January – September amortization of capitalized product development expenses was EUR 498 thousand (412).

The Company develops the following software products: QPR EnterpriseArchitect, QPR Metrics, QPR ProcessDesigner, and QPR ProcessAnalyzer. In addition, QPR develops services and solutions that are complementary to its software.


PERSONNEL

At the end of the reporting period, the Group employed a total of 78 persons (68). We have increased personnel resources especially in product development. The average number of personnel during the third quarter was 78 (68) and during the January-September reporting period 76 (73)

At the end of the reporting period the average age of employees was 39.4 (38.9) years. Women accounted for 24 % (27) of the employees, and men for 76% (73). Sales and marketing employs 15% (19) of the personnel, consulting and customer service 42% (39), product development 31% (31) and administration 9% (10).

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 mainly on net sales performance.

SHARES AND SHAREHOLDERS        
         
Trading of shares Jan-Sep, 2017 Jan-Sep, 2016 Change, % Jan-Dec, 2016
         
Shares traded, pcs 1,272,665 640,416 99 901,526
Volume, EUR 1,981,481 671,386 195 970,905
% of shares 10.6 5.3   7.5
Average trading price, EUR 1.56 1.05 49 1.08
         
Shares and market capitalization Sep 30, 2017 Sep 30, 2016 Change, % Dec 31, 2016
         
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 1,249 1,197 4 1,171
Closing price, EUR 1.88 1.04 81 1.20
Market capitalization, EUR 22,537,166 12,467,368 81 14,385,425
Book counter value of all treasury shares, EUR 50,271 50,271 - 50,271
Total purchase value of all treasury shares, EUR 439,307 439,307 - 439,307
Treasury shares, % of all shares 3.7 3.7 - 3.7

 

The Annual General Meeting held on March 28, 2017 approved the Board's proposal to pay a per-share dividend of EUR 0.03 (0.02), a total of EUR 360 thousand (240) for the financial year 2016. Dividends were paid to all shareholders registered in the Company's shareholder register, maintained by Euroclear Finland Oy, on the record date of March 30, 2017. Dividends were paid on April 7, 2017.
 

OTHER EVENTS DURING THE REPORTING PERIOD

In the beginning of 2017 the Company´s international channel sales, customer care and marketing were merged into process mining business. Matti Erkheikki was appointed to lead the new Process Mining and Strategy Management business unit.

Tero Aspinen, responsible for Middle East business and offering development in Strategy Management, joined the Executive Management Team as of 1st January 2017. 
 

EVENTS AFTER THE REPORTING PERIOD

There were no significant events after the reporting period.
 

GOVERNANCE

The Annual General Meeting on March 28, 2017 resolved that the number of Board Members is five (5).

The Annual General Meeting re-elected Kirsi Eräkangas, Vesa-Pekka Leskinen and Topi Piela as members of the Company´s Board of Directors. In addition, the Annual General Meeting elected Juha Häkämies and Taina Sipilä as new members of the Board of Directors.

Juha Häkämies is Vice President, Strategy, and a member of the management team of Gasum. Prior to this, he has worked as Head of M&A and Business Development at Basware and, among other things, in managerial and business development positions at Digia and Sonera. Taina Sipilä is the CEO and Founder of the software company Dear Lucy. She is also a member of the board in the software company Sympa. Prior to this, she worked as the chairman of the board in Sympa and earlier as the CEO.

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 28, 2017 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 10% (10) of total trade receivables at the end of the reporting period.

At the end of the reporting period, approximately 63% (71) of Group’s trade receivables were in euro. At the end of the reporting period, the Company had not hedged its non-euro trade receivables.

QPR has earlier reported that it initiated an arbitration process in summer 2016, due to a customer's decision to dissolve a contract, which decision QPR regarded unjustified. This arbitration process was completed in May 2017. The arbitration court resolved to sentence the defendant to compensate the entire value of the violated contract to QPR. The arbitration court dismissed the customer's counterclaim.

During the first quarter, the Company identified an increased credit risk with regards to receivables from one customer. Approximately EUR 100 thousand revenue has been recognized from these receivables. A payment plan has been made together with the customer, and its implementation continues to be closely monitored.

Risks and risk management related to the Company’s business are further described in the Annual Report 2016, pages 13-15 (https://www.qpr.com/investors/financial-information/annual-reports).
 

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 otherwise indicated Jul-Sep, 2017 Jul-Sep, 2016 Change, % Jan-Sep, 2017 Jan-Sep, 2016 Change, % Jan-Dec, 2016
               
Net sales 1,733 2,104 -18 6,102 6,319 -3 8,634
Other operating income 6 -   13 18 -29 18
               
Materials and services 9 68 -86 143 321 -56 419
Employee benefit expenses 1,304 1,108 18 4,176 4,025 4 5,362
Other operating expenses 226 321 -30 888 842 5 1,243
EBITDA 199 607 -67 908 1,149 -21 1,628
               
Depreciation and amortization 235 222 6 664 639 4 866
Operating profit -36 385 -109 244 509 -52 761
               
Financial income and expenses -7 -11 -36 -31 -41 -23 -51
Profit before tax -43 374 -111 213 469 -55 710
               
Income taxes 9 -93 -110 -76 -117 -35 -142
Profit for the period -34 281 -112 137 352 -61 568
               
               
Earnings per share, EUR
(basic and diluted)
-0.003 0.023 -112 0.011 0.029 -61 0.047
               
Consolidated statement of
comprehensive income:
             
 Profit for the period -34 281 -112 137 352 -61 568
Other items in comprehensive income that may be reclassified subsequently to profit or loss:              
 Exchange differences on
 translating foreign operations
-2 -2 17 -10 -1 747 9
Total comprehensive income -36 280 -113 127 350 -64 577

 

CONSOLIDATED BALANCE SHEET        
         
EUR in thousands Sep 30,
2017
Sep 30,
2016
Change,
%
Dec 31,
2016
         
Assets        
         
Non-current assets:        
 Intangible assets 2,020 1,966 3 1,955
 Goodwill 513 513 - 513
 Tangible assets 177 206 -14 193
 Other non-current assets 156 27 478 27
Total non-current assets 2,866 2,712 6 2,687
         
Current assets:        
 Trade and other receivables 2,356 2,710 -13 4,619
 Cash and cash equivalents 719 567 27 565
Total current assets 3,075 3,277 -6 5,184
         
Total assets 5,941 5,990 -1 7,871
         
Equity and liabilities        
         
Equity:        
 Share capital 1,359 1,359 - 1,359
 Other funds 21 21 - 21
 Treasury shares -439 -439 - -439
 Translation differences -243 -243 - -233
 Invested non-restricted equity fund 5 5 - 5
 Retained earnings 2,315 2,322 0 2,538
Equity attributable to shareholders of the parent company 3,019 3,025 0 3,252
         
Current liabilities:        
 Advances received 1,554 1,758 -12 852
 Accrued expenses and prepaid income 1,111 938 18 3,033
 Trade and other payables 256 269 -5 735
Total current liabilities 2,922 2,965 -1 4,619
         
Total liabilities 2,922 2,965 -1 4,619
         
Total equity and liabilities 5,941 5,990 -1 7,871

 

CONSOLIDATED CASH FLOW STATEMENT          
               
EUR in thousands Jul-Sep, 2017 Jul-Sep, 2016 Change, % Jan-Sep, 2017 Jan-Sep, 2016 Change, % Jan-Dec, 2016
               
Cash flow from operating activities:              
 Profit for the period -34 281 -112 137 352 -61 568
 Adjustments to the profit 228 324 -30 761 798 -5 1,070
 Working capital changes -601 -774 -22 484 174 179 -110
 Interest and other financial
 expenses paid
-7 -11 -31 -33 -41 -19 -47
 Interest and other financial
 income received
1 0 444 13 3 303 5
 Income taxes paid -13 -22 -43 -138 -65 111 -66
Net cash from operating activities -426 -201 -111 1,223 1,221 0 1,419
               
Cash flow from investing activities:              
 Purchases of tangible and
 intangible assets
-194 -130 49 -710 -496 43 -698
Net cash used in investing activities -194 -130 49 -710 -496 43 -698
               
Cash flow from financing activities:              
 Repayments of short term
 borrowings
- -   - -500   -500
 Dividends paid - -   -360 -240 50 -240
Net cash used in financing activities - -   -360 -740 -51 -740
               
Net change in cash and cash
equivalents
-619 -332 87 154 -15 -1,109 -19
Cash and cash equivalents at the beginning of the period 1,336 900 48 565 585 -3 585
Effects of exchange rate changes on cash and cash equivalents 3 -1   0 -2   -1
Cash and cash equivalents at the end of the period 719 567 27 719 567 27 565

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY    
               
EUR in thousands Share capital Other funds Translation differences Treasury shares Invested non-restricted equity fund Retained earnings Total
Equity Jan 1, 2016 1,359 21 -242 -439 5 2,210 2,914
Dividends paid           -240 -240
Comprehensive income     -1     352 350
Equity Sep 30, 2016 1,359 21 -243 -439 5 2,322 3,025
Comprehensive income     10     216 226
Equity Dec 31, 2016 1,359 21 -233 -439 5 2,538 3,252
Dividends paid           -360 -360
Comprehensive income     -10     137 127
Equity Sep 30, 2017 1,359 21 -243 -439 5 2,315 3,019

   

NOTES TO INTERIM FINANCIAL STATEMENTS

ACCOUNTING PRICIPLES

This report complies with requirements of IAS 34 ”Interim Financial Reporting”. Starting from the beginning of 2017, the Group has applied certain new or revised IFRS standards and IFRIC interpretations as described in the Consolidated Financial Statements 2016. 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 2016 financial statements.

The Group has made a preliminary assessment of the impacts of IFRS 15 during the year 2016. The Group continues to review the revenue streams and customer contracts during 2017 to clarify the impact of the needed changes. Further analysis have identified the following major changes:

  • The Group interprets that the IFRS 15 principal versus agent consideration requires, that the Group in the future includes the resales commission in the reported revenue derived from resellers, and includes the resales commission, respectively, in reported costs. Currently the resales revenue and costs have been reported without the resales commission. This change is estimated to increase net sales revenue and resales commission costs. The change lowers relative profitability, but does not affect absolute profitability.
  • License part deriving from long-term software rental agreements, which are included in the recurring revenue, will in the future be recognized at one point instead of the current recognition over time. License revenue will be recognized in the beginning of each invoicing period. This will lead to an earlier recognition of revenue within the year, because invoicing periods for the long-term rental agreements mostly start during the first quarter of each year. This change is estimated to transfer net sales to the first quarter of the year, and respectively increase profit. The effect of the change in the annual net sales and profit is estimated to be marginal, as corresponding net sales and effect on profit will be decreased during the other quarters of the year.
  • Numerical estimates of the effects will be given, as soon as the reliability of the estimates has been assured.

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-Sep, 2017 Jan-Sep, 2016 Jan-Dec, 2016
       
Increase in intangible assets:      
 Acquisition cost Jan 1 8,521 7,862 7,862
 Increase 643 471 659
       
Increase in tangible assets:      
 Acquisition cost Jan 1 1,746 1,707 1,707
 Increase 70 25 39
       
       
CHANGE IN INTEREST-BEARING LIABILITIES    
       
EUR in thousands Jan-Sep, 2017 Jan-Sep, 2016 Jan-Dec, 2016
       
Interest-bearing liabilities Jan 1 - 500 500
Proceeds from short term borrowings - - -
Repayments - 500 500
Interest-bearing liabilities Sep 30 - - -

   

PLEDGES AND COMMITMENTS        
         
EUR in thousands Sep 30,  2017 Sep 30,  2016 Dec 31,  2016 Change, %
         
Business mortgages (held by the Company) 1,389 1,389 1,390 0
         
Minimum lease payments based on lease agreements:        
 Maturing in less than one year 280 236 289 -3
 Maturing in 1-5 years 161 344 345 -53
Total 441 581 635 -31
         
Total pledges and commitments 1,830 1,970 2,024 -10

   

CONSOLIDATED INCOME STATEMENT BY QUARTER    
               
EUR in thousands Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016
               
Net sales 1,733 2,062 2,307 2,315 2,104 2,173 2,042
Other operating income 6 7 0 - - 12 6
               
Materials and services 9 57 76 98 68 112 141
Employee benefit expenses 1,304 1,473 1,399 1,337 1,108 1,361 1,557
Other operating expenses 226 311 351 401 321 257 264
EBITDA 199 227 482 479 607 456 86
               
Depreciation and amortization 235 223 206 227 222 226 191
Operating profit -36 4 276 252 385 230 -105
               
Financial income and expenses -7 -14 -11 -10 -11 -12 -18
Profit before tax -43 -9 265 242 374 217 -123
               
Income taxes 9 27 -112 -25 -93 -42 18
Profit for the period -34 18 153 217 281 175 -105

 

GROUP KEY FIGURES      
       
EUR in thousands, unless otherwise indicated Jan-Sep or Sep 30, 2017 Jan-Sep or Sep 30, 2016 Jan-Dec or Dec 31, 2016
       
Net sales 6,102 6,319 8,634
Net sales growth, % -3.4 -8.6 -8.5
EBITDA 908 1,149 1,628
 % of net sales 14.9 18.2 18.9
Operating profit 244 509 761
 % of net sales 4.0 8.1 8.8
Profit before tax 213 469 710
 % of net sales 3.5 7.4 8.2
Profit for the period 137 352 568
 % of net sales 2.2 5.6 6.6
       
Return on equity (per annum), % 5.8 15.8 18.4
Return on investment (per annum), % 10.9 22.9 24.6
Cash and cash equivalents 719 567 565
Net borrowings -719 -567 -565
Equity 3,019 3,025 3,252
Gearing, % -23.8 -18.8 -17.4
Equity ratio, % 68.8 71.5 46.3
Total balance sheet 5,941 5,990 7,871
       
Investments in non-current assets 713 496 698
 % of net sales 11.7 7.9 8.1
Product development expenses 1,729 1,250 1,818
 % of net sales 28.3 19.8 21.1
       
Average number of personnel 76 73 71
Personnel at the beginning of period 63 83 83
Personnel at the end of period 78 68 63
       
Earnings per share, EUR 0.011 0.029 0.047
Equity per share, EUR 0.243 0.243 0.261