Published: 2015-07-30 08:00:00 CEST
QPR Software
Interim report (Q1 and Q3)

JANUARY–JUNE NET SALES INCREASED 5%, INVESTMENTS IN GROWTH CONTINUED

QPR SOFTWARE PLC       STOCK EXCHANGE RELEASE, JULY 30, 2015 AT 9.00 AM
 

INTERIM REPORT JANUARY – JUNE 2015

JANUARY–JUNE NET SALES INCREASED 5%, INVESTMENTS IN GROWTH CONTINUED

Summary January - June 2015

  • Net sales EUR 4,926 thousand (2014: 4,689).
  • Net sales rose 5% due to increase in consulting and software license net sales.
  • Operating profit decreased to EUR 291 thousand (451), due to increased outlays in growth.
  • Operating margin was 5.9% (9.6)
  • Cash flow from operating activities EUR 1,066 thousand (828).
  • Profit before taxes EUR 289 thousand (435).
  • Profit for the period EUR 260 thousand (382).
  • Earnings per share EUR 0.022 (0.032).

Summary April – June 2015

  • Net sales EUR 2,402 thousand (2014: 2,465).
  • Net sales decreased slightly due to decrease in software maintenance and rental net sales. In the reporting period there were no large license sales closures.
  • Operating profit decreased to EUR 32 thousand (344). The decrease was mainly due to increases in outlays in new software products and international distribution.
  • Operating margin was 1.3% (14.0)
  • Cash flow from operating activities was negative EUR 380 thousand (311). The negative development was due to timing changes in invoicing compared to last year, growth in operative working capital and smaller profit than in previous year.
  • Profit before taxes EUR 16 thousand (332).
  • Profit for the quarter EUR 35 thousand (288).
  • Earnings per share EUR 0.003 (0.024).

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. The Company´s product portfolio has been strongly renewed in recent years. The new software products offer customers innovative and efficient tools for organizations to model their various operations, to model processes based on actual event data and to analyze causes for potential performance problems. 

OUTLOOK

Operating environment, market outlook and outlook for 2015

The leading market research companies estimate that global IT services market demand grows in 2015 by 2-3 %, compared to 2014. The Company estimates that in its relevant markets demand for enterprise architecture modeling, measurement and process analysis software as well as related services will develop faster than the global IT services market. 

In 2015, the Company increases its growth investments in international distribution of innovative software products developed by the Company. In international markets, the Company operates mainly through its resellers and continues to put effort in recruiting new resellers. In its home market Finland, the Company seeks growth especially from enterprise architecture and process modeling software sales, process analysis software sales and its consulting business.

The Company updated is outlook for 2015 on June 8th, and estimated that the weakened market on second quarter would remain weak over summer, but would improve gradually towards the end of the year. Despite the market situation, QPR estimates its net sales to grow this year compared to 2014 (EUR 9,541 million), but its profitability to remain lower than in the previous year due to higher expenses. The Company estimates its operating profit in 2015 to be 6 – 11 % of net sales (2014: 11.5%), depending on software license sales. Seasonality of large software deals can affect significantly net sales and profit of one individual quarter. 

KEY FIGURES              
               
EUR in thousands, unless otherwise indicated Apr-Jun 2015 Apr-Jun 2014 Change, % Jan-Jun 2015 Jan-Jun 2014 Change, % Jan-Dec 2014
               
Net sales 2,402 2,465 -2.5 4,926 4,689 5.1 9,541
EBITDA 243 522 -53.4 702 826 -15.0 1,857
 % of net sales 10.1 21.2   14.2 17.6   19.5
Operating profit 32 344 -90.7 291 451 -35.5 1,095
 % of net sales 1.3 14.0   5.9 9.6   11.5
Profit before tax 16 332 -95.1 289 435 -33.6 1,065
Profit for the period 35 288 -88.0 260 382 -32.0 890
 % of net sales 1.4 11.7   5.3 8.1   9.3
               
Earnings per share, EUR 0.003 0.024 -87.9 0.022 0.032 -32.2 0.074
Equity per share, EUR 0.229 0.220 4.2 0.229 0.220 4.2 0.257
               
Cash flow from operating
activities
-380 311 -222.2 1,066 828 28.7 1,617
Cash and cash equivalents 1,134 1,127 0.6 1,134 1,127 0.6 1,426
Free cash flow -694 110   312 391   702
Net borrowings -1,134 -1,127 0.6 -1,134 -1,127 0.6 -1,426
Gearing, % -39.7 -41.2   -39.7 -41.2   -44.6
Equity ratio, % 57.6 54.8   57.6 54.8   44.0
Return on equity, % 4.4 40.8   17.2 27.2   29.3
Return on investment, % 1.0 56.6   19.2 31.6   35.4

REPORTING

This report complies with requirements of IAS 34 Interim Financial Reporting. Starting from the beginning of 2015, the Group has applied certain new or revised IFRS standards and IFRIC interpretations as described in the Consolidated Financial Statements 2014. 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 2014 financial statements. This report is unaudited.

QPR Software innovates, develops, sells and delivers to international markets software and services 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 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.

As geographic information QPR Software reports geographical areas Finland, rest of Europe including Russia and Turkey, and rest of the world. Net sales are reported by the customer´s location.

REVIEW BY THE CEO

After a good first quarter, the market for the Company´s products and services weakened in April – July, which led into a slight decrease in net sales compared to previous year. The operating environment was impacted by weak economic growth in several markets, in some cases negative growth. The economic growth was weak especially in the Company’s largest market area Europe (including Finland). According to the Company´s update in outlook, published by QPR on June 8, 2015, we estimate the weakened market outlook to remain weak throughout the summer, but to improve gradually towards the end of the year.

In the reporting period there were no large license sales closures. The amount of offers made and their average size has increased this year, and thus based on activities in the market the Company expects improving performance towards the end of the year. New resellers have favourably contributed to the amount of offers. This year the company has signed 13 new reseller agreements.

In the second quarter 2015, the Company´s software license net sales reached 8% growth, mainly due to growth in sales of the Company´s new software products. Consulting net sales grew slightly (+2%) as well. However, software maintenance net sales (-10%) and software rental net sales (-7%) decreased, which was due to expiration of a few significant contracts last year or in the beginning of this year. 

Fixed costs increased 9% in the second quarter, due to outlays in software development and international distribution and sales. With these outlays, we seek good organic growth especially through our new software products, launched in the 2010s. These products are QPR ProcessAnalyzer (analyzes event data in IT systems) and modeling software QPR EnterpriseArchitect. In international business, the Company’s growth strategy is based on software sales through continued expansion of international reseller channel. The main target for the Company in its home market Finland is strengthening its software products´ leading position and to further expand its local consulting business.

Jari Jaakkola
CEO

NET SALES DEVELOPMENT

Net sales in the second quarter were EUR 2,402 thousand (2,465) and decreased 3% from the corresponding period of the previous year. 

NET SALES BY PRODUCT GROUP        
               
EUR in thousands Apr-Jun 2015 Apr-Jun 2014 Change, % Jan-Jun 2015 Jan-Jun 2014 Change, % Jan-Dec 2014
               
Software licenses 409 379 8 764 680 12 1,470
Software maintenance services 715 791 -10 1,451 1,554 -7 3,093
Software rentals 445 477 -7 884 920 -4 1,901
Consulting 833 818 2 1,828 1,535 19 3,077
Total 2,402 2,465 -3 4,926 4,689 5 9,541
               
NET SALES BY GEOGRAPHIC AREA          
               
EUR in thousands Apr-Jun 2015 Apr-Jun 2014 Change, % Jan-Jun 2015 Jan-Jun 2014 Change, % Jan-Dec 2014
               
Finland 1,575 1,614 -2 3,321 3,058 9 6,193
Europe incl. Russia and Turkey 446 523 -15 905 987 -8 2,035
Rest of the world 382 327 17 701 644 9 1,313
Total 2,402 2,465 -3 4,926 4,689 5 9,541

April – June 2015

Software license net sales grew 8% compared to previous year, and vast majority of license sales was derived from international markets. However, software maintenance services net sales and software rental net sales decreased (-10% and -7%). This was due to expiration of a few significant contracts, which was not fully compensated by maintenance services and rental new sales. Customer churn remained low measured by the number of expired contracts, but among them there were several economically significant ones. The share of recurring revenue (software maintenance services and software rentals) was 48% (51) of total net sales.

Consulting net sales in the first quarter grew slightly (+2%). The development compared to previous year was relatively evenly spread in various consulting business areas. 

Out of the Group net sales 65% (65) were derived from Finland, 19% (21) from the rest of Europe (including Russia and Turkey) and 16% (13) from the rest of the world.

January – June 2015

Software license net sales grew 12% compared to previous year, and vast majority of license sales was derived from international markets. Software maintenance services net sales and software rental net sales decreased (-7% and -4%). This was due to expiration of a few significant contracts, which was not fully compensated by maintenance services and rental new sales. Customer churn remained low measured by the number of expired contracts, but among them there were several economically significant ones. The share of recurring revenue was 47% (53) of total net sales.

Consulting net sales in the first quarter grew strongly, which led to 19% increase in consulting net sales in January – June.

Out of the Group net sales 67% (65) were derived from Finland, 18% (21) from rest of the Europe (including Russia and Turkey) and 14% (14) from the rest of the world.

 FINANCIAL PERFORMANCE

 April – June 2015

In the second quarter, the Group’s operating profit was EUR 32 thousand (344), or 1.3% of net sales (14.0). Operating profit decreased from the previous year mainly due to increased expenses arising on outlays made into new software products and international sales channel. The majority of these outlays are new recruitments and thus increased personnel costs.

The Group´s fixed costs were EUR 2,221 thousand (2,039), and grew 8.9% compared to the corresponding period in the previous year. Personnel expenses represented 77,6% (76,4) of the fixed costs and were EUR 1,723 thousand (1,557).

Profit before taxes in the quarter was EUR 16 thousand (332) and profit for the period was EUR 35 thousand (288). Taxes recorded for the period were EUR -18 thousand (43). Earnings per share (fully diluted) were EUR 0.003 (0.024).

January – June 2015

In January – June, the Group operating profit was EUR 291 thousand (451), or 5.9% of net sales (9.6). Operating profit decreased from the previous year mainly due to increased costs in the second quarter. The costs were increased mainly by growth in international sales channel personnel and other operating costs, as well as product development personnel costs.

The Group´s fixed costs were EUR 4,381 in the reporting period (4,086), and grew 7.2% compared to previous year. Personnel costs represented 76.4% (75.4) of fixed costs and were EUR 3,345 thousand (3,082). Credit losses, inclusive in fixed costs, totaled EUR 19 thousand (19).

Profit before taxes in the quarter was EUR 289 thousand (435) and profit for the period was EUR 260 thousand (382). Taxes recorded for the period were EUR 29 thousand (53). Earnings per share (fully diluted) were EUR 0.022 (0.032).

FINANCE AND INVESTMENTS

Cash flow from operating activities was EUR 1,066 thousand (828) in January - June. Cash and cash equivalents at the end of the quarter were EUR 1,134 thousand (1,127).

Investments in the first half of the year totaled EUR 754 thousand (437). Investments consisted mainly of product development and extension of the office facilities.

Net financial items in the review period were EUR -2 thousand (-16). Net financial expenses included net foreign exchange losses of EUR 2 thousand (16). In April – June net financial items were EUR -16 thousand (-12), and included net foreign exchange currency losses of EUR 16 thousand (13).

At the end of the quarter, the Company had no interest-bearing liabilities. The gearing ratio was -40% (-41). Current liabilities include deferred revenue in total of EUR 1,910 thousand (1,886). Annualized return on investment was 19% (32) in the reporting period January – June and 1% (57) in April - June.

At the end of the quarter, equity ratio was 58% (55) and the consolidated shareholders’ equity was EUR 2,854 thousand (2,736). Annualized return on equity was 17% (27) in the reporting period January – June and 4% (41) in April – June.

The Annual General Meeting on March 12, 2015 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

The Company develops software and consulting service products to be used by its customers. Software product development costs in the reporting period January – June were 90% of the total product development costs. By developing its consulting service products, the Company aims to grow its local business in Finland, and to accelerate its international software sales by offering complementary service concepts and solutions to its reseller partners.

In April - June, product development expenses were EUR 468 thousand (470), 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 193 thousand (173). The amortization of capitalized product development expenses in the quarter was EUR 114 thousand (92).

In the reporting period January – June, product development expenses were EUR 948 thousand (936), and represented 19% of net sales (20). Product development expenses do not include amortization of capitalized product development expenses. Product development expenses were capitalized for a total amount of EUR 360 thousand (320). The amortization of capitalized product development expenses in the reporting period was EUR 229 thousand (176).

PERSONNEL

At the end of the quarter, the Group employed a total of 86 persons (79). Average number of personnel during the quarter was 85 (81).

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 2015, the maximum annual bonus of executive management team, including the CEO, is 30% of the annual base salary. More information on incentive plans can be found in the Annual Report 2014 (http://www.qpr.com/sites/default/files/QPRSoftwareAnnualReport2014.pdf).

SHARES AND SHAREHOLDERS

         
Trading of shares Jan-Jun, 2015 Jan-Jun, 2014 Change, % Jan-Dec, 2014
         
Shares traded, pcs 3,358,905 1,213,420 177 2,828,001
Volume, EUR 4,811,303 1,140,398 322 2,751,903
% of shares 28.0 9.8   23.6
Average trading price, EUR 1.43 0.94 52 0.97
Treasury shares acquired during the year, pcs 0 37,400 -100 37,400
         
Shares and market capitalization Jun 30, 2015 Jun 30, 2014 Change, % Dec 31, 2014
         
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 1,219 708 72 820
Closing price, EUR 1.46 0.94 55 1.01
Market capitalization, EUR 17,502,267 11,268,583 55 12,107,733
Book counter value of all treasury shares, EUR 50,271 50,271 0 50,271
Total purchase value of all treasury shares, EUR 439,307 430,307 2 439,307
Treasury shares, % of all shares 3.7 3.7 - 3.7

The Annual General Meeting held on March 12, 2015 approved the Board's proposal that a per-share dividend of EUR 0.05 (0.04), a total of EUR 599 thousand (480), be paid for the financial year 2014. The dividend was paid to shareholders entered in the Company's shareholder register, maintained by Euroclear Finland Oy, on the record date of March 16, 2015. The dividend payment date was April 8, 2015.
 

OTHER EVENTS DURING THE REPORTING PERIOD

QPR Software´s sales and deliveries were organized from the beginning of 2015 into four units: Operational Development Software, Operational Development Consulting, Process Intelligence and Channel Business.

Miika Nurminen was appointed Senior Vice President, Operational Development Consulting, and member of the Executive Management Team as of January 1, 2015. Nurminen has previously held several leadership positions in QPR Software.

Sari Törmälä was appointed Senior Vice President, Operational Development Software, and member of the Executive Management Team as of February 23, 2015. Before QPR Törmälä worked in Kunnan Taitoa Oy, a service provider for the local government sector in Finland providing financial and personnel management services, where she as a member of the Executive Management Team was responsible for sales and customers. Sari Törmälä´s employment at QPR ended in June 2015. The business units Operational Development Consulting and Operational Development Software were combined as of July 1, and Miika Nurminen was appointed to lead the unit.

In February, QPR announced that it expands co-operation with a European public sector health care organization and delivers a project for the organization’s operational development purposes. The total value of the software and consulting services, delivered by QPR and thus recognizable during the first half of 2015, is around EUR 140 thousand. Target of the agreed project is to improve the customer’s operations, development and performance as well as project management. In addition, the project aims for better alignment between business and IT by linking the business area service layer with IT services.

In March, QPR announced that QPR Software is recognized in international research company Gartner Inc.´s Market Guide for Enterprise Business Process Analysis (EBPA) report. The Gartner EBPA Market Guide evaluated the Enterprise business process analysis marketplace and depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace. Gartner evaluated the EBPA vendors on the focus and importance of different use cases, as well as about the focus and importance of the different EBPA capabilities.

In April, QPR announced that The U.S. Patent and Trademark Office has granted a patent to a technology for analyzing and improving business processes with event instance date, developed by QPR Software. The patented technology utilizes event instance data obtained from information management systems, and helps organizations to analyze and develop their business processes. The patent supports the sale of QPR ProcessAnalyzer software and QPR process intelligence consulting as well as opens up new opportunities for OEM business.

In April, the Company also announced that the City of Helsinki, the capital of Finland, has decided to approve QPR Software’s offer for delivering process and enterprise architecture tool as a service. The value of the entire four year agreement period is EUR 1.5 million, out of which the share of revenue booked as software rentals is over 75%. QPR´s competitor appealed to the technical board of the City of Helsinki and to the Market Court and delivered a claim for correction against this purchase decision. The City decided to return the case for further preparation into its sourcing unit and made a new decision to approve QPR´s offer in July 2015. The terms and conditions of the new decision are the same to QPR as in the first decision in April. QPR´s competitor has appealed both to the technical board of the City of Helsinki and to the Market Court with a claim for correction against also this new purchase decision.

QPR Software´s Chief Financial Officer Päivi Martti´s employment ended at QPR in June 2015. Jaana Mattila, who has worked in the Company as Business Controller since March 2015, was selected as new Chief Financial Officer. Mattila has previously worked, among others, as Finance Director in Fazer Amica and as CFO in Biohit Oyj.

OTHER EVENTS AFTER THE REPORTING PERIOD

After the reporting period, except for the city of Helsinki decision that was described above, there were no other significant events.

GOVERNANCE

The Annual General Meeting on March 12, 2015 resolved that the Board of Directors consists of four (4) ordinary members. The AGM re-elected the following members to the Board of Directors: Kirsi Eräkangas, Vesa-Pekka Leskinen and Topi Piela. The AGM selected Juho Malmberg, as a new member, to join the Board of Directors. Juho Malmberg has previously held leadership positions, among others, in Accenture, KONE and Zenrobotics. In its meeting following the Annual General Meeting, the Board of Directors elected Vesa-Pekka Leskinen as Chairman of the Board.

The AGM elected KPMG Oy Ab, Authorized Public Accountants, to continue as QPR Software Plc's auditors, with Kirsi Jantunen, Authorized Public Accountant, acting as principal auditor.

The AGM authorized the Board to decide on issuing new shares, conveying own shares held by the Company, and repurchasing the Company’s own shares.

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 12, 2015 and available on the investors section of the Company's web site, http://www.qpr.com/annual-general-meeting/annual-general-meeting-2015

SHORT-TERM RISKS AND UNCERTAINTIES

Internal control and risk management in 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 four groups of risks related to its operations: risks related to business operations (country, customer, service delivery, personnel, legal and financial risks as well as risks related to the Company’s resellers), risks related to information and products (QPR products, IPR, data security), risks related to financing (foreign currency, bad debt), and risks related to new businesses (growth of new business, product development investments in new business). 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 11% (10) of total trade receivables at the end of the quarter.

Approximately 66% of Group’s trade receivables were in euro at the end of the quarter (70). At the end of the quarter, the Company had not hedged its non-euro trade receivables.

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 2014, pages 12-14. (http://www.qpr.com/sites/default/files/QPRSoftwareAnnualReport2014.pdf).

FINANCIAL INFORMATION

In 2015, QPR Software will publish interim reports in English and Finnish on the following dates:

  • Interim Report Q3/2015: Wednesday, October 22, 2015

 

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 Apr-Jun, 2015 Apr-Jun, 2014 Change, % Jan-Jun, 2015 Jan-Jun, 2014 Change, % Jan-Dec, 2014
               
Net sales 2,402 2,465 -3 4,926 4,689 5 9,541
Other operating income 1 10   1 25   26
               
Materials and services 149 92 62 254 177 44 337
Employee benefit expenses 1,723 1,557 11 3,345 3,082 9 6,092
Other operating expenses 287 304 -6 625 629 -1 1,281
EBITDA 243 522 -53 702 826 -15 1,857
               
Depreciation and amortization 211 178 19 411 375 10 761
Operating profit 32 344 -91 291 451 -35 1,095
               
Financial income and expenses -16 -12   -2 -16   -30
Profit before tax 16 332 -95 289 435 -34 1,065
               
Income taxes 18 -43 -142 -29 -53 -45 -175
Profit for the period 35 288 -88 260 382 -32 890
               
               
Earnings per share, EUR              
(basic and diluted) 0.003 0.024 -88 0.022 0.032 -32 0.074
               
Consolidated statement of
comprehensive income:
             
Profit for the period 35 288   260 382   890
Other items in comprehensive
income that may be reclassified subsequently to profit or loss:
             
             
 Exchange differences on
 translating foreign
 operations
7 7   -3 -1   -40
 Income tax relating to 
 components 
of other 
 comprehensive income
- -   - -   -
Total comprehensive income 42 295   257 381   850

 

CONSOLIDATED BALANCE SHEET      
         
EUR in thousands June 30,
2015
June 30,
2014
Change,
%
Dec 31,
2014
         
Assets        
         
Non-current assets:        
Intangible assets 1,996 1,704 17 1,815
Goodwill 513 513 0 513
Tangible assets 337 193 75 175
Other non-current assets 27 89 -69 27
Total non-current assets 2,873 2,499 15 2,529
         
Current assets:        
Trade and other receivables 2,856 3,256 -12 4,572
Cash and cash equivalents 1,134 1,127 1 1,426
Total current assets 3,990 4,383 -9 5,998
        0
Total assets 6,863 6,882 0 8,527
         
Equity and liabilities        
         
Equity:        
Share capital 1,359 1,359 0 1,359
Other funds 21 21 1 21
Treasury shares -439 -430 2 -439
Translation differences -224 -182 23 -221
Invested non-restricted equity fund 5 5 7 5
Retained earnings 2,131 1,963 9 2,471
Equity attributable to shareholders of the parent company 2,854 2,736 4 3,196
         
Non-current liabilities:        
Non-interest-bearing liabilities 17 33 -47 25
Total non-current liabilities 17 33 -47 25
         
Current liabilities:        
Advances received 1,910 1,886 1 1,261
Accrued expenses and prepaid income 1,633 1,828 -11 3,223
Trade and other payables 449 399 13 822
Total current liabilities 3,992 4,112 -3 5,305
         
Total liabilities 4,009 4,146 -3 5,331
         
Total equity and liabilities 6,863 6,882 0 8,527

 

CONSOLIDATED CASH FLOW STATEMENT          
               
EUR in thousands Apr-Jun 2015 Apr-Jun 2014 Change, % Jan-Jun 2015 Jan-Jun 2014 Change, % Jan-Dec 2014
               
Cash flow from operating activities:              
Profit for the period 35 288 -88 260 382 -32 887
Adjustments to the profit 259 184 41 448 374 20 725
Working capital changes -557 -117 376 499 162 208 25
Interest and other financial expenses paid -17 -3 467 -18 -7 157 -13
Interest and other financial income received 7 0   7 1 600 3
Income taxes paid -106 -42 152 -129 -84 54 -10
Net cash from operating activities -380 311 -222 1,066 828 29 1,617
               
Cash flow from investing activities:              
Purchases of tangible and intangible assets -314 -201 56 -754 -437 73 -915
Net cash used in investing activities -314 -201 56 -754 -437 73 -915
               
Cash flow from financing activities:              
Repayments of long-term
borrowings
- - -100 - -113 -100 -113
Repurchase of shares - - -100 - -35 -100 -44
Dividends paid -599 -480   -599 -480   -480
Net cash used in financing activities -599 -480 25 -599 -628 -5 -637
               
Net change in cash and cash
equivalents
-1,294 -370 250 -287 -237 21 65
Cash and cash equivalents at the beginning of the period 2,427 1,496 62 1,426 1,365 4 1,365
Effects of exchange rate changes on cash and cash equivalents 0 1   -5 0   -4
Cash and cash equivalents at the end of the period 1,134 1,127 1 1,134 1,127 1 1,426

 

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, 2014 1,359 21 -181 -395 5 2,061 2,871
Dividends paid           -480 -480
Repurchase of shares       -35     -35
Comprehensive income     -1     382 381
Equity Jun 30, 2014 1,359 21 -182 -430 5 1,963 2,736
Dividends paid              
Repurchase of shares       -9     -9
Comprehensive income     -39     508 469
Equity Dec 31, 2014 1,359 21 -221 -439 5 2,471 3,196
Dividends paid           -599 -599
Repurchase of shares              
Comprehensive income     -3     260 257
Equity Jun 30, 2015 1,359 21 -224 -439 5 2,131 2,854

NOTES TO INTERIM FINANCIAL STATEMENTS

ACCOUNTING PRICIPLES

This report complies with requirements of IAS 34 ”Interim Financial Reporting”. Starting from the beginning of 2015, the Group has applied certain new or revised IFRS standards and IFRIC interpretations as described in the Consolidated Financial Statements 2014. 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 2014 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 2015 Jan-Jun 2014 Jan-Dec 2014
       
Increase in intangible assets:      
Acquisition cost Jan 1 6,650 6,112 6,112
Increase 526 400 538
       
Increase in tangible assets:      
Acquisition cost Jan 1 1,425 1,351 1,351
Increase 228 37 74
       
       
CHANGE IN INTEREST-BEARING LIABILITIES  
       
EUR in thousands Jan-Jun 2015 Jan-Jun 2014 Jan-Dec 2014
       
Interest-bearing liabilities Jan 1 - 113 113
Repayments - -113 -113
Interest-bearing liabilities Mar 31/
Dec 31
- - -

 

PLEDGES AND COMMITMENTS        
         
EUR in thousands Jun 30,  2015 Jun 30,  2014 Dec 31,  2014 Change, %
         
Business mortgages (held by the Company) 1,392 1,392 1,391 0
         
Minimum lease payments based on lease        
agreements        
  Maturing in less than one year 353 159 304 16
  Maturing in 1-5 years 259 46 436 -41
  Total 611 205 740 -17
         
Total pledges and commitments 2,003 1,596 2,131 -6

 

CONSOLIDATED INCOME STATEMENT BY QUARTER  
                 
EUR in thousands Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014    
                 
Net sales 2 402 2 524 2 685 2 167 2 465 2 225    
Other operating income 1 - - 1 10 15    
                 
Materials and services 149 105 94 66 92 85    
Employee benefit expenses 1 723 1 622 1 640 1 370 1 557 1 525    
Other operating expenses 287 338 336 316 304 325    
EBITDA 243 459 615 416 522 305    
                 
Depreciation and amortization 211 200 198 189 178 197    
Operating profit 32 259 417 227 344 107    
                 
Financial income and expenses -16 14 -8 -5 -12 -4    
Profit before tax 16 272 409 222 332 103    
                 
Income taxes 18 -47 -68 -54 -43 -10    
Profit for the period 35 225 341 167 288 93    

 

GROUP KEY FIGURES      
       
EUR in thousands, unless otherwise indicated Jan-Jun or
Jun 30, 2015
Jan-Jun or
Jun 30, 2014
Jan-Dec or Dec 31, 2014
       
Net sales 4,926 4,689 9,541
Net sales growth, % 5.1 6.2 9.8
EBITDA 702 826 1,857
 % of net sales 14.3 17.6 19.5
Operating profit 291 451 1,095
 % of net sales 5.9 9.6 11.5
Profit before tax 289 435 1,065
 % of net sales 5.9 9.3 11.2
Profit for the period 260 382 890
 % of net sales 5.3 8.1 9.3
       
Return on equity (per annum), % 17.2 27.2 29.3
Return on investment (per annum), % 19.2 31.6 35.4
Cash and cash equivalents 1,134 1,127 1,426
Free cash flow 312 391 702
Net borrowings -1,134 -1,127 -1,426
Equity 2,854 2,736 3,196
Gearing, % -39.7 -41.2 -44.6
Equity ratio, % 57.6 54.8 44.0
Total balance sheet 6,863 6,882 8,527
       
Investments in non-current assets 754 437 915
 % of net sales 15.3 9.3 9.6
Product development expenses 948 936 1,847
 % of net sales 19.2 20.0 19.4
       
Average number of personnel 85 81 81
Personnel at the beginning of period 78 79 79
Personnel at the end of period 86 79 78
       
Earnings per share, EUR 0.022 0.032 0.074
Equity per share, EUR 0.229 0.220 0.257