QPR SOFTWARE STOCK EXCHANGE RELEASE, OCTOBER 25, 2018 AT 9.15 AM
Net sales and operating profit increased from previous year
July – September 2018
January – September 2018
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
In recent years, QPR Software has invested heavily in developing the company's new process mining software, as well as renewing all user interfaces of its software products. The company estimates that the demand for process mining software and related services will continue to grow in 2018. Due to the current early market stage, country specific differences in demand will continue to be significant.
In developed markets, competition in software business for process and enterprise architecture modeling and performance management is expected to remain tight. The company still sees growth potential for these products in emerging markets.
Outlook for 2018
Outlook for 2018 remains unchanged. QPR estimates that its net sales will grow in 2018 (2017: EUR 9,084 million). In the second half of the year net sales growth accelerates from growth level achieved in January – June.
The growth in net sales will be driven by software business, and especially by the process mining software QPR ProcessAnalyzer. Consulting net sales are also expected to grow from previous year.
In 2018, QPR increases investments in its growing business segments and is planning to increase resources, especially in international sales and marketing. Despite the increase in costs, the company estimates that its operating result will improve from previous year and will exceed 5% of net sales (2017: 0.4% of net sales).
KEY FIGURES
EUR in thousands, unless otherwise indicated | Jul-Sep, 2018 | Jul-Sep, 2017 | Change, % | Jan-Sep, 2018 | Jan-Sep, 2017 | Change, % | Jan-Dec, 2017 |
Net sales | 2,222 | 1,966 | 13 | 7,376 | 6,977 | 6 | 9,084 |
EBITDA | 348 | 201 | 74 | 1,109 | 1,018 | 9 | 946 |
% of net sales | 15.7 | 10.2 | 15.0 | 14.6 | 10.4 | ||
Operating result | 109 | -34 | 418 | 391 | 354 | 11 | 32 |
% of net sales | 4.9 | -1.7 | 5.3 | 5.1 | 0.4 | ||
Result before tax | 113 | -41 | 374 | 207 | 323 | -36 | -6 |
Result for the period | 91 | -32 | 381 | 131 | 246 | -47 | -152 |
% of net sales | 4.1 | -1.6 | 1.8 | 3.5 | -1.7 | ||
Earnings per share, EUR | 0.008 | -0.003 | 381 | 0.011 | 0.021 | -47 | -0.013 |
Equity per share, EUR | 0.227 | 0.263 | -14 | 0.227 | 0.263 | -14 | 0.231 |
Cash flow from operating activities | -563 | -426 | -32 | 1,176 | 1,223 | -4 | 984 |
Cash and cash equivalents | 534 | 719 | -26 | 534 | 719 | -26 | 318 |
Net borrowings | -534 | -719 | -26 | -534 | -719 | -26 | -318 |
Gearing, % | -18.9 | -22.0 | -14 | -18.9 | -22.0 | -14 | -11.0 |
Equity ratio, % | 59.3 | 69.8 | -15 | 59.3 | 69.8 | -15 | 49.5 |
Return on equity, % | 12.1 | -3.9 | 408 | 6.1 | 9.9 | -38 | -4.8 |
Return on investment, % | 14.2 | -4.1 | 445 | 18.7 | 14.7 | 27 | 1.4 |
REPORTING
The figures in this interim report are reported according to IFRS 15 accounting principles, effective from 1 January 2018. The IFRS 15 restated comparable Group key figures have been published as a stock exchange release on 25 April 2018.
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 licenses, Software maintenance services, Cloud services and Consulting. New accounting principles do not have an impact on Consulting sales revenue recognition, but there are changes in software sales revenue recognition. QPR has not earlier reported the share of Cloud services in its software sales.
Recurring revenue reported by the Company consists of Software maintenance services and Cloud services. In addition, recurring revenue includes that part of software license sales, where user rights have been sold to customers with a long-term contract, continuing for the time being, and invoiced in the beginning of the invoicing period. The license part of revenue is recognized at one point in time, in the beginning of the invoicing period. These contracts continuing for the time being are automatically renewed after the end of the agreed period (usually 1 year), unless the agreement is terminated within notice period.
Geographical areas reported are Finland, the rest of Europe (including Russia and Turkey), and the rest of the world. Net sales are reported according to the customer's location.
REVIEW BY THE CEO
QPR's business is developing favorably, and net sales growth accelerated to 13% in the previous quarter. Our investments in product development have significantly increased competitiveness of our software products, and the new software versions have had an excellent reception in the markets.
International net sales increased 15% in January – September due to increased software sales. Especially grew process mining and analytics software QPR ProcessAnalyzer sales to European customers and performance management software sales to Middle East.
In the reporting period we delivered process mining and analytics software, among others, to Fennovoima (a company constructing and operating a new nuclear power plant in Finland), Piraeus Bank in Greece, a global high technology company with over 100,000 employees, a government owned European forestry and property management company, a major financial services company operating in over 30 countries and to a global medical device company's European Business unit. New performance management software customers were, among others, many large organizations in the Middle East.
Our target is to grow international software sales, as well as our consulting business in Finland. Sales in operational development consulting and digital business optimization consulting developed positively in July – September, and outlook for this business is good.
Jari Jaakkola
CEO
NET SALES DEVELOPMENT
July – September 2018
Third quarter net sales were EUR 2,222 thousand (1,966) and increased by 13% compared to the corresponding period last year. Share of recurring revenue was 58% of net sales (60).
Software license net sales increased by 20%. The increase was due to the favorable net sales development of QPR ProcessAnalyzer.
Software maintenance net sales decreased by 4% from the previous year. Cloud service net sales grew by 63% from the previous year. In line with general industry development, customers are increasingly electing to use software through cloud service. Especially our process mining and analytics customers using QPR ProcessAnalyzer, opt for this choice.
Consulting net sales increased by 12%, which was mainly due to increase in operational development consulting as well as digitalization and change management consulting sales to Finnish customers. In addition, new deliveries of performance management software QPR Metrics to customers in Middle East had a positive impact on consulting net sales.
Net sales in international markets increased by 9% and in Finland by 16%. Of the Group net sales, 59% (58) derived from Finland, 18% (26) from the rest of Europe (including Russia and Turkey) and 23% (16) from the rest of the world.
January – September 2018
Net sales in the January – September reporting period were EUR 7,376 thousand (6,977) and grew by 6%. Share of recurring revenue was 56% (55) of net sales. International software sales and operational development consulting in Finland developed favorably.
International net sales grew 15%, driven by increased software sales. QPR ProcessAnalyzer deliveries to European customers and QPR Metrics deliveries to Middle Eastern customers increased. Net sales in Finland was on the same level as in the previous year.
Of the Group net sales, 57% (60) derived from Finland, 24% (25) from the rest of Europe (including Russia and Turkey) and 19% (14) from the rest of the world.
NET SALES BY PRODUCT GROUP
EUR in thousands | Jul-Sep, 2018 | Jul-Sep, 2017 | Change, % | Jan-Sep, 2018 | Jan-Sep, 2017 | Change, % | Jan-Dec, 2017 |
Software licenses | 533 | 443 | 20 | 2,059 | 1,937 | 6 | 2,326 |
Software maintenance services | 768 | 798 | -4 | 2,250 | 2,488 | -10 | 3,260 |
Cloud services | 338 | 207 | 63 | 968 | 608 | 59 | 819 |
Consulting | 583 | 519 | 12 | 2,098 | 1,943 | 8 | 2,680 |
Total | 2,222 | 1,966 | 13 | 7,376 | 6,977 | 6 | 9,084 |
NET SALES BY GEOGRAPHIC AREA
EUR in thousands | Jul-Sep, 2018 | Jul-Sep, 2017 | Change, % | Jan-Sep, 2018 | Jan-Sep, 2017 | Change, % | Jan-Dec, 2017 |
Finland | 1,314 | 1,135 | 16 | 4,211 | 4,214 | 0 | 5,459 |
Europe incl. Russia and Turkey | 389 | 512 | -24 | 1,773 | 1,753 | 1 | 2,288 |
Rest of the world | 519 | 319 | 63 | 1,392 | 1,009 | 38 | 1,337 |
Total | 2,222 | 1,966 | 13 | 7,376 | 6,977 | 6 | 9,084 |
FINANCIAL PERFORMANCE
July – September 2018
The July – September Group net sales growth outpaced cost growth and operating result rose to EUR 109 thousand (-34). Costs grew mainly in marketing, sales and delivery.
The Group's July – September fixed costs were EUR 1,895 thousand (1,765) and increased by 7% compared to the prior year's corresponding period. Personnel expenses represented 69.7% (73.9) of the fixed costs and amounted to EUR 1,321 thousand (1,304).
The Group's July - September result before tax was EUR 113 thousand (-41) and result for the period was EUR 91 thousand (-32). Earnings per share were EUR 0.008 (-0.003).
January – September 2018
In the January – September reporting period, the Group operating result was EUR 391 thousand (354), or 5.3% (5.1) of net sales. Strategic investments in growth businesses continued, which increased personnel, sales and marketing costs.
The Group's January – September fixed costs were EUR 6,114 (5,728) and increased by 7% compared to prior year. Personnel costs represented 73.2% (72.9) of fixed costs and were EUR 4,475 thousand (4,176).
Result before tax was EUR 207 thousand (323) and result for the period was EUR 131 thousand (246). Earnings per share were EUR 0.011 (0.021).
FINANCE AND INVESTMENTS
January – September cash flow from operating activities was EUR 1,176 thousand (1,223). Cash and cash equivalents at the end of the reporting period were EUR 534 thousand (719). International software business grew its share of our total business, and this influenced cash flow from operating activities. Payment terms in the international business are typically longer than payment terms in the Finnish business.
Net financial items in the reporting period January - September were EUR 184 thousand (31). Net financial expenses included net foreign exchange losses of EUR 190 thousand (36). Exceptionally large currency exchange losses are due to liquidation of the Group's subsidiary in Russia. The currency exchange losses arise from the subsidiary's working capital and were initiated when Russian ruble weakened significantly in years 2009 – 2018. Currency differences related to this have been reported in previous years in other comprehensive income, and after liquidation of the subsidiary as financial expenses in the Group's profit and loss statement. Thus, these currency losses do not have any impact on retained earnings or cash flow from operating activities.
January – September investments totaled EUR 601 thousand (713) and were mainly product development expenditure.
The Group's financial position is strong, and it had no interest-bearing liabilities at the end of the reporting period. The gearing ratio was -19% (-22). Equity ratio at the end of the reporting period was 59% (70).
PRODUCT DEVELOPMENT
QPR innovates and develops software products that analyze, measure and model operations in organizations. The Company develops the following software products: QPR EnterpriseArchitect, QPR Metrics, QPR ProcessDesigner, and QPR ProcessAnalyzer
In the January – September reporting period, product development expenses were EUR 1,438 thousand (1,729), equal to 20% of net sales (25). In January - September product development expenses were capitalized for EUR 565 thousand (639). The amortization period for capitalized product development expenses is four years. The amortization of capitalized product development expenses in January - September was EUR 571 thousand (498).
PERSONNEL
At the end of the reporting period, the Group employed a total of 82 persons (78). The average number of personnel during the January – September reporting period was 80 (76).
At the end of the reporting period the average age of employees was 40.1 (39.4) years. Women accounted for 21 % (24) of the employees, and men for 79% (76). Sales and marketing employed 18% (15) of the personnel, consulting and customer service 43% (42), product development 30% (31) and administration 8% (9).
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 Group and business unit net sales performance.
Strategy
Our target is to reach in average 15 – 20% annual growth in the next three years. The target is mainly based on growth in international software sales and growth in consulting services in our home market Finland. We see significant growth potential especially in process mining business, where we aim at over 50% annual growth.
We innovate, develop and sell software and related services aimed at analyzing, measuring and modeling operations in organizations. Furthermore, we offer customers consulting services in operational development and digital business optimization.
We accelerate product development by increasing our resources in a controlled manner. In software development, we place special focus on excellent user experience.
We focus our product development to meet the challenges organizations face, especially in leading and developing their operations in a digitalizing world. A special focus area for development is process mining, and our target is to gain a significant share in the rapidly growing process mining and analytics market.
In the next few years, we seek growth especially in our international software sales. To reach this target, we will continue increasing our resources and investments in international marketing and sales.
SHARES AND SHAREHOLDERS
Trading of shares | Jan-Sep, 2018 | Jan-Sep, 2017 | Change, % | Jan-Dec, 2017 |
Shares traded, pcs | 841,756 | 1,272,665 | -34 | 1,552,104 |
Volume, EUR | 1,391,470 | 1,981,481 | -30 | 2,463,215 |
% of shares | 7.0 | 10.6 | 12.9 | |
Average trading price, EUR | 1.65 | 1.56 | 6 | 1.59 |
Shares and market capitalization | Sep 30, 2018 | Sep 30, 2017 | Change, % | Dec 31, 2017 |
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 | 1,169 | 1,249 | -6 | 1,246 |
Closing price, EUR | 1.75 | 1.88 | -7 | 1.71 |
Market capitalization, EUR | 20,978,745 | 22,537,166 | -7 | 20,499,230 |
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 |
GOVERNANCE
The Annual General Meeting held on April 12, 2018 approved the Board's proposal to pay a per-share dividend of EUR 0.03 (0.03), a total of EUR 360 thousand (360) for the financial year 2017. Dividends were paid to all shareholders registered in the Company's shareholder register, maintained by Euroclear Finland Oy, on the record date of April 16, 2017. Dividends were paid on April 23, 2018.
The Annual General Meeting resolved that the number of Board Members is four (4) and re-elected Juha Häkämies, Vesa-Pekka Leskinen, Topi Piela and Taina Sipilä as members of the Company's Board of Directors. The term of office of the members of the Board of Directors expires at the end of the next Annual General Meeting. At its organizing meeting, the Board of Directors elected Vesa-Pekka Leskinen as its Chairman.
The Annual General Meeting re-elected Authorized Public Accountants KPMG Oy Ab as QPR Software's auditor with Kirsi Jantunen, Authorized Public Accountant, acting as principal auditor. The term of office of the auditor expires at the end of the next Annual General Meeting.
The Annual General Meeting decided to authorize the Board of Directors to decide on an issue of new shares and conveyance of the own shares held by the Company (share issue) either in one or in several occasions. The share issue can be carried out as a share issue against payment or without consideration on terms to be determined by the Board of Directors.
All authorizations of the Board and other decisions made by the Annual General Meeting are available in their entirety on the stock exchange release published by the Company on April 12, 2018 and available on the investors section of the Company's web site, http://www.qpr.com/investors/stock-exchange-releases.htm.
EVENTS AFTER THE REPORTING PERIOD
There were no significant events after the reporting period.
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 16% (10) of total trade receivables at the end of the quarter.
Approximately 54% of Group’s trade receivables were in euro at the end of the quarter (63). At the end of the quarter, the Company had not hedged its non-euro trade receivables.
Risks and risk management related to the Company’s business are further described in the Annual Report 2017, pages 21-23 (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, 2018 | Jul-Sep, 2017 | Change, % | Jan-Sep, 2018 | Jan-Sep, 2017 | Change, % | Jan-Dec, 2017 |
Net sales | 2,222 | 1,966 | 13 | 7,376 | 6,977 | 6 | 9,084 |
Other operating income | - | 6 | -100 | -10 | 13 | -174 | 18 |
Materials and services | 218 | 241 | -10 | 861 | 908 | -5 | 1,154 |
Employee benefit expenses | 1,321 | 1,304 | 1 | 4,475 | 4,176 | 7 | 5,682 |
Other operating expenses | 336 | 226 | 48 | 921 | 888 | 4 | 1,320 |
EBITDA | 348 | 201 | 74 | 1,109 | 1,018 | 9 | 946 |
Depreciation and amortization | 239 | 235 | 2 | 717 | 664 | 8 | 913 |
Operating result | 109 | -34 | 418 | 391 | 354 | 11 | 32 |
Financial income and expenses | 4 | -7 | 157 | -184 | -31 | -487 | -38 |
Result before tax | 113 | -41 | 374 | 207 | 323 | -36 | -6 |
Income taxes | -22 | 9 | -347 | -76 | -76 | 0 | -146 |
Result for the period | 91 | -32 | 381 | 131 | 246 | -47 | -152 |
Earnings per share, EUR (basic and diluted) | 0.008 | -0.003 | 381 | 0.011 | 0.021 | -47 | -0.013 |
Consolidated statement of comprehensive income: | |||||||
Result for the period | 91 | -32 | 381 | 131 | 246 | -47 | -152 |
Other items in comprehensive income that may be reclassified subsequently to profit or loss: | |||||||
Exchange differences on translating foreign operations | 0 | -2 | 89 | 179 | -10 | 1,933 | -7 |
Total comprehensive income | 91 | -34 | 363 | 310 | 237 | 31 | -159 |
CONSOLIDATED BALANCE SHEET
EUR in thousands | Sep 30, 2018 | Sep 30, 2017 | Change, % | Dec 31, 2017 |
Assets | ||||
Non-current assets: | ||||
Intangible assets | 1,870 | 2,020 | -7 | 1,952 |
Goodwill | 513 | 513 | 0 | 513 |
Tangible assets | 120 | 177 | -32 | 153 |
Other non-current assets | 62 | 156 | -60 | 127 |
Total non-current assets | 2,564 | 2,866 | -11 | 2,745 |
Current assets: | ||||
Trade and other receivables | 2,352 | 2,356 | 0 | 3,744 |
Cash and cash equivalents | 534 | 719 | -26 | 318 |
Total current assets | 2,886 | 3,075 | -6 | 4,061 |
Total assets | 5,450 | 5,941 | -8 | 6,807 |
Equity and liabilities | ||||
Equity: | ||||
Share capital | 1,359 | 1,359 | 0 | 1,359 |
Other funds | 21 | 21 | 0 | 21 |
Treasury shares | -439 | -439 | 0 | -439 |
Translation differences | -61 | -243 | -75 | -240 |
Invested non-restricted equity fund | 5 | 5 | 0 | 5 |
Retained earnings | 1,940 | 2,567 | -24 | 2,169 |
Equity attributable to shareholders of the parent company | 2,826 | 3,271 | -14 | 2,875 |
Current liabilities: | ||||
Advances received | 681 | 1,253 | -46 | 997 |
Accrued expenses and prepaid income | 1,612 | 1,160 | 39 | 2,314 |
Trade and other payables | 331 | 256 | 29 | 620 |
Total current liabilities | 2,624 | 2,670 | -2 | 3,932 |
Total liabilities | 2,624 | 2,670 | -2 | 3,932 |
Total equity and liabilities | 5,450 | 5,941 | -8 | 6,807 |
CONSOLIDATED CASH FLOW STATEMENT
EUR in thousands | Jul-Sep, 2018 | Jul-Sep, 2017 | Change, % | Jan-Sep, 2018 | Jan-Sep, 2017 | Change, % | Jan-Dec, 2017 |
Cash flow from operating activities: | |||||||
Result for the period | 91 | -32 | 381 | 131 | 246 | -47 | -152 |
Adjustments to the result | 251 | 228 | 10 | 1,156 | 761 | 52 | 1,091 |
Working capital changes | -889 | -602 | -48 | -76 | 374 | -120 | 200 |
Interest and other financial expenses paid | -8 | -7 | 4 | -22 | -33 | -35 | -37 |
Interest and other financial income received | -1 | 1 | -172 | 7 | 13 | -42 | 10 |
Income taxes paid | -7 | -13 | -43 | -21 | -138 | -85 | -128 |
Net cash from operating activities | -563 | -426 | -32 | 1,176 | 1,223 | -4 | 984 |
Cash flow from investing activities: | |||||||
Purchases of tangible and intangible assets | -148 | -194 | -24 | -601 | -710 | -15 | -872 |
Net cash used in investing activities | -148 | -194 | -24 | -601 | -710 | -15 | -872 |
Cash flow from financing activities: | |||||||
Dividends paid | 0 | - | -360 | -360 | 0 | -360 | |
Net cash used in financing activities | 0 | - | -360 | -360 | 0 | -360 | |
Net change in cash and cash equivalents | -710 | -619 | -15 | 215 | 154 | 40 | -247 |
Cash and cash equivalents at the beginning of the period | 1,238 | 1,336 | -7 | 318 | 565 | -44 | 565 |
Effects of exchange rate changes on cash and cash equivalents | 6 | 3 | 103 | 1 | 0 | 249 | 0 |
Cash and cash equivalents at the end of the period | 534 | 719 | -26 | 534 | 719 | -26 | 318 |
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 Dec 31, 2016 | 1,359 | 21 | -233 | -439 | 5 | 2,538 | 3,252 |
Equity IFRS changes | 142 | 142 | |||||
Equity Jan 1, 2017 | 1,359 | 21 | -233 | -439 | 5 | 2,681 | 3,394 |
Dividends paid | -360 | -360 | |||||
Comprehensive income | -10 | 246 | 237 | ||||
Equity Sep 30, 2017 | 1,359 | 21 | -243 | -439 | 5 | 2,567 | 3,271 |
Comprehensive income | 2 | -398 | -396 | ||||
Equity Dec 31, 2017 | 1,359 | 21 | -240 | -439 | 5 | 2,169 | 2,875 |
Dividends paid | -360 | -360 | |||||
Comprehensive income | 179 | 131 | 310 | ||||
Equity Sep 30, 2018 | 1,359 | 21 | -61 | -439 | 5 | 1,940 | 2,826 |
NOTES TO INTERIM FINANCIAL STATEMENTS
ACCOUNTING PRINCIPLES
This report complies with requirements of IAS 34 ”Interim Financial Reporting”. Starting from the beginning of 2018, the Group has applied certain new or revised IFRS standards and IFRIC interpretations as described in the Consolidated Financial Statements 2017.
Implementation of IFRS 15 Revenue from Contracts with Customers –standard has changed revenue recognition, generation of operating profit and key figures as described in the Reporting section of this report. The implementation of other new and revised requirements has not impacted the reported figures. For all other parts, the accounting principles and methods are the same as they were in the 2017 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-Sep, 2018 | Jan-Sep, 2017 | Jan-Dec, 2017 |
Increase in intangible assets: | |||
Acquisition cost Jan 1 | 9,318 | 8,521 | 8,521 |
Increase | 566 | 643 | 797 |
Increase in tangible assets: | |||
Acquisition cost Jan 1 | 1,821 | 1,746 | 1,746 |
Increase | 35 | 70 | 75 |
PLEDGES AND COMMITMENTS
EUR in thousands | Sep 30, 2018 | Sep 30, 2017 | Dec 31, 2017 | Change, % |
Business mortgages (held by the Company) | 1,386 | 1,389 | 1,388 | 0 |
Minimum lease payments based on lease agreements: | ||||
Maturing in less than one year | 166 | 280 | 278 | -40 |
Maturing in 1-5 years | 0 | 161 | 88 | -100 |
Total | 166 | 441 | 365 | -55 |
Total pledges and commitments | 1,552 | 1,830 | 1,754 | -11 |
CONSOLIDATED INCOME STATEMENT BY QUARTER
EUR in thousands | Q3 2018 | Q2 2018 | Q1 2018 | Q4 2017 | Q3 2017 | Q2 2017 | Q1 2017 |
Net sales | 2,222 | 2,272 | 2,882 | 2,107 | 1,966 | 2,198 | 2,813 |
Other operating income | 0 | -5 | -5 | 5 | 6 | 7 | 0 |
Materials and services | 218 | 255 | 388 | 246 | 241 | 297 | 370 |
Employee benefit expenses | 1,321 | 1,603 | 1,551 | 1,506 | 1,304 | 1,473 | 1,399 |
Other operating expenses | 336 | 288 | 297 | 432 | 226 | 311 | 351 |
EBITDA | 348 | 120 | 640 | -72 | 201 | 123 | 694 |
Depreciation and amortization | 239 | 238 | 240 | 250 | 235 | 223 | 206 |
Operating result | 109 | -118 | 400 | -322 | -34 | -99 | 488 |
Financial income and expenses | 4 | 1 | -189 | -7 | -7 | -14 | -11 |
Result before tax | 113 | -117 | 211 | -329 | -41 | -113 | 477 |
Income taxes | -22 | 32 | -86 | -70 | 9 | 27 | -112 |
Result for the period | 91 | -85 | 124 | -398 | -32 | -86 | 365 |
GROUP KEY FIGURES
EUR in thousands, unless otherwise indicated | Jan-Sep or Sep 30, 2018 | Jan-Sep or Sep 30, 2017 | Jan-Dec or Dec 31, 2017 |
Net sales | 7,376 | 6,977 | 9,084 |
Net sales growth, % | 5.7 | ||
EBITDA | 1,109 | 1,018 | 946 |
% of net sales | 15.0 | 14.6 | 10.4 |
Operating result | 391 | 354 | 32 |
% of net sales | 5.3 | 5.1 | 0.4 |
Result before tax | 207 | 323 | -6 |
% of net sales | 2.8 | 4.6 | -0.1 |
Result for the period | 131 | 246 | -152 |
% of net sales | 1.8 | 3.5 | -1.7 |
Return on equity (per annum), % | 6.1 | 9.9 | -4.8 |
Return on investment (per annum), % | 18.7 | 14.7 | 1.4 |
Cash and cash equivalents | 534 | 719 | 318 |
Net borrowings | -534 | -719 | -318 |
Equity | 2,826 | 3,271 | 2,875 |
Gearing, % | -18.9 | -22.0 | -11.0 |
Equity ratio, % | 59.3 | 69.8 | 49.5 |
Total balance sheet | 5,450 | 5,941 | 6,807 |
Investments in non-current assets | 601 | 713 | 872 |
% of net sales | 8.2 | 10.2 | 9.6 |
Product development expenses | 1,438 | 1,729 | 2,274 |
% of net sales | 19.5 | 24.8 | 25.0 |
Average number of personnel | 80 | 76 | 76 |
Personnel at the beginning of period | 76 | 63 | 63 |
Personnel at the end of period | 82 | 78 | 76 |
Earnings per share, EUR | 0.011 | 0.021 | -0.013 |
Equity per share, EUR | 0.227 | 0.263 | 0.231 |