QPR SOFTWARE STOCK EXCHANGE RELEASE, August 1, 2019 AT 9.00 AM


Strong growth in process mining net sales continued


April - June 2019

  • Net sales amounted to EUR 2,285 thousand (Q2 2018: 2,272), growing by 1%.
  • International net sales grew by 12%.
  • Process mining software QPR ProcessAnalyzer´s net sales growth was strong, but group net sales growth remained small due to decline in modeling and performance management software net sales.
  • Operating result EUR -158 thousand (-118). The decrease in operating result was due to outlays in growth business areas.
  • Operating result -7% of net sales (-5%).
  • Result before taxes EUR -164 thousand (-117).
  • Result for the quarter EUR -98 thousand (-85).

January - June 2019

  • Net sales amounted to EUR 5,033 thousand (H1 2018: 5,154).
  • Process mining software QPR ProcessAnalyzer´s net sales grew by 45%, but group net sales decreased by 2% due to decline in modeling and performance management software net sales.
  • Operating result EUR 29 thousand (282). The decrease in operating result was due to outlays in growth business areas, as well as due to decrease in net sales.
  • Operating result 1% of net sales (5%).
  • Result before taxes EUR 3 thousand (94).
  • Result for the reporting period EUR 43 thousand (40).
  • Earnings per share EUR 0.004 (0.003).


Outlook for the year 2019 remains unchanged.


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 process mining software, as well as renewing all user interfaces of its software products. We estimate that the demand for process mining software and related services will continue to grow rapidly over the course of 2019.

In developed markets, we expect the competition for process and enterprise architecture modeling and performance management software to remain tight.

Outlook for 2019

QPR expects net sales to grow in 2019 (2018: EUR 10,047 thousand). The most significant sources of growth are the international process mining software sales of QPR ProcessAnalyzer, and the consulting services supporting QPR´s software business in Finland. Growth in quarterly reports is estimated to have significant variance, and it is impacted especially by the closing times of large software deals.

In 2019, QPR will increase investments in its growing business segments. Due to these investments, the Company estimates that its operating result will be lower than in the previous year, while remaining still positive (2018: 5.2% of net sales).


KEY FIGURES   

        
EUR in thousands,
unless otherwise indicated
Apr-Jun,
2019
Apr-Jun,
2018
Change,
%
Jan-Jun,
2019
Jan-Jun,
2018
Change,
%
Jan-Dec,
2018
        
Net sales2,2852,27215,0335,154-210,047
EBITDA15312027650760-151,470
 % of net sales6.75.3 12.914.8 14.6
Operating result-158-118-3429282-90521
 % of net sales-6.9-5.2 0.65.5 5.2
Result before tax-164-117-40394-97335
Result for the period-98-85-1543408320
 % of net sales-4.3-3.7 0.90.8 3.2
        
Earnings per share, EUR-0.008-0.007-150.0040.00380.027
Equity per share, EUR0.2340.208120.2340.208120.231
        
Cash flow from operating
activities
-84142-1598571,739-511,335
Cash and cash equivalents8711,238-308711,238-30505
Net borrowings-447-1,238-64-447-1,238-64-505
Gearing, %-15.3-47.7-68-15.3-47.7-68-17.6
Equity ratio, %51.856.6-951.856.6-948.6
Return on equity, %-13.2-12.0-103.02.9-211.4
Return on investment, %-19.0-15.9-192.521.98918.9


REPORTING

QPR Software innovates, develops, sells and delivers software and services in international markets aimed at facilitating 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, Renewable software licenses, Software maintenance services, Cloud services and Consulting.

Recurring revenue reported by the Company consists of Software maintenance services and Cloud services. In addition, recurring revenue includes Renewable software licenses.

Software licenses are sold to customers for perpetual use or for an agreed, limited period. Renewable software licenses are sold to customers as a user right with an indefinite duration. These contracts are automatically renewed at the end of the agreed period, usually one year, unless the agreement is terminated within notice period. Renewable license revenue is recognized at one point in time, in the beginning of the invoicing 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 headquarter location.

The figures in this half year report have been reported in accordance with the IFRS 16 Lease agreement standard, effective from January 1, 2019. Detailed description is included in Accounting Principles section of this half year financial report.


REVIEW BY THE CEO

In the first half of the year, QPR Software´s business developed as planned in our strategy. The investments into our process mining software QPR ProcessAnalyzer were paying off as its net sales grew by 45%. International software net sales to European customers in this business area recorded strong growth.

Process mining software is globally strengthening its position as an operational analytics tool, especially in large organizations segment. Analysis results are used, among others, for improving existing operations, process optimization and automatization as well as digital transformation.

In our strategy, we have defined consulting services supporting our software business as another significant source for growth. Net sales from these services grew by 10% in the first half of the year, in line with our expectations.

The competition in process and enterprise architecture modeling software and performance management software markets remained tight, as expected. Our net sales were smaller than in the equivalent period last year, when net sales included several significant performance management software deals in developing markets. Net sales of our modeling software were negatively affected by the pricing change we implemented in the Finnish public sector modeling software cloud services. With this new pricing, we aim at significant increase in users of this software in the long term.

Demand for our products and services developed positively, and the sum of offers made to customers was significantly higher at the end of quarter than in the previous year. The outlook for 2019 remains unchanged, and we estimate our net sales to grow this year (2018: EUR 10,047 thousand), driven by international process mining software net sales, as well as net sales from consulting services supporting our software business.

Jari Jaakkola

CEO


NET SALES DEVELOPMENT    


April - June 2019

Net sales in the second quarter were EUR 2,285 thousand (2,272). The share of recurring revenue was 47% of net sales (54).

Software license net sales amounted to EUR 530 thousand (389) and increased by 36%, driven by the growth in international software license sales. Software maintenance net sales were EUR 639 thousand (771). The relatively large decrease in software maintenance net sales was mainly due to contract terminations of a few large customers at the end of last year. Compared to Q1 2019, there was little change in maintenance net sales.

Cloud services net sales amounted to EUR 254 thousand (324). The decrease was due to a pricing change we implemented in the Finnish public sector modeling software cloud services. With this new pricing, we aim at significant increase in users of this software in the long term. Consulting net sales amounted to EUR 861 thousand (787) and increased by 9%.

Net sales in Finland decreased by 8%, which was due to the pricing change in the Finnish public sector, described earlier in this report. On the other hand, international net sales increased by 12%, driven by the strong growth in software license sales.

Of the Group net sales, 52% (57) derived from Finland, 33% (23) from the rest of Europe (including Russia and Turkey) and 15% (19) from the rest of the world.

Demand for our products and services, especially in process mining, developed positively and the sum of offers made to customers was significantly higher at the end of quarter than in the previous year.


NET SALES BY PRODUCT GROUP

        
EUR in thousandsApr-Jun,
2019
Apr-Jun,
2018
Change,
%
Jan-Jun,
2019
Jan-Jun,
2018
Change,
%
Jan-Dec,
2018
        
Software licenses3412632983277081,559
Renewable software licenses19012650733756-31,126
Software maintenance services639771-171,2831,482-132,989
Cloud services254324-22518630-181,316
Consulting86178791,6671,515103,057
Total2,2852,27215,0335,154-210,047


NET SALES BY GEOGRAPHIC AREA

        
EUR in thousandsApr-Jun,
2019
Apr-Jun,
2018
Change,
%
Jan-Jun,
2019
Jan-Jun,
2018
Change,
%
Jan-Dec,
2018
        
Finland1,1991,305-82,7052,897-75,444
Europe incl. Russia and Turkey744529411,6501,384192,817
Rest of the world342437-22678873-221,786
Total2,2852,27215,0335,154-210,047


January - June 2019

Net sales in January – June were EUR 5,033 thousand (5,154) and decreased by 2%. The share of recurring revenue was 50% of net sales (56).

Net sales in Finland decreased by 7%, which was due to the pricing change we implemented in the Finnish public sector modeling software cloud services. International net sales increased by 3%, thanks to growth in international software license sales.

Of the Group net sales, 54% (56) derived from Finland, 33% (27) from the rest of Europe (including Russia and Turkey) and 13% (17) from the rest of the world.


FINANCIAL PERFORMANCE


April - June 2019

The Group´s operating result was EUR -158 thousand (-118). The decrease in operating result was due to outlays in growth business areas.

The Group´s fixed costs were EUR 2,183 thousand (2,129) and increased by 3 % compared to the corresponding period in the previous year. Personnel expenses represented 75% (75) of the fixed costs. Credit losses, included in fixed costs, were EUR 33 thousand (12).

Result before taxes was EUR -164 thousand (-117) and result for the period was EUR -98 thousand (-85). Earnings per share (fully diluted) were EUR -0.008 (-0.007).


January - June 2019

The Group´s operating result was EUR 29 thousand (282). The decrease in operating result was due to outlays in growth business areas, as well as due to a small decrease in net sales. Depreciation grew by 30% compared to the corresponding period in the previous year, which was mainly due to the adoption of the new IFRS 16 accounting standard.

The Group´s fixed costs were EUR 4,482 thousand (4,218) and increased by 6% compared to the corresponding period in the previous year. Personnel expenses represented 74% (75) of the fixed costs. Credit losses, included in fixed costs, were EUR 51 thousand (18).

Result before taxes was EUR 3 thousand (94) and result for the period was EUR 43 thousand (40). Earnings per share (fully diluted) were EUR 0.004 (0.003).


FINANCE AND INVESTMENTS

Cash flow from operating activities was EUR 857 thousand (1,739) in January - June. The decreased cash flow from operating activities resulted mainly from increased working capital, required by growth in our international business. Cash and cash equivalents at the end of the reporting period were EUR 871 thousand (1,238).

Net financial expenses in January – June were EUR 26 thousand (188) and included currency exchange losses of EUR 22 thousand (190). Exceptionally large currency exchange losses in the previous year were due to liquidation of the Group´s subsidiary in Russia.

Investments in January - June totaled EUR 489 thousand (454). Investments were mainly related to product development expenditure.

The Group´s financial position is strong. At the end of the quarter, the Company had no interest-bearing bank loans. The gearing ratio was -15% (-48). The change in gearing ratio is due to the adoption of the new IFRS 16 accounting standard in the beginning of this year. At the end of the quarter, the equity ratio was 52% (57).


PRODUCT DEVELOPMENT

QPR innovates and develops software products that analyze, measure and model operations in organizations. The Company develops the following software products: QPR ProcessAnalyzer, QPR EnterpriseArchitect, QPR ProcessDesigner, and QPR Metrics.

In January - June, product development expenses were EUR 1,131 thousand (1,039), or 22% of net sales (20). Product development expenses worth EUR 349 thousand (421) were capitalized. The amortization of capitalized product development expenses was EUR 409 thousand (377). The amortization period for capitalized product development expenses is four years.


PERSONNEL

At the end of the quarter, the Group employed a total of 78 persons (82). The average number of personnel during the quarter was 82 (80).

The average age of employees is 41.8 (40.2) years. Women account for 23% (20) of employees, men for 77% (80). 17% (18) work in sales and marketing, 42% (41) in consulting and customer care, 32% (32) in product development, and 10% (9) in administration.

For incentive purposes, the Company has a bonus program that covers all employees. Short term remuneration of the top management consists of salary, fringe benefits, and a possible annual bonus based mainly on the Group and business unit net sales performance.

The Board of Directors of QPR Software Plc resolved in its meeting on January 29, 2019 to launch a new key employee stock option plan, based on an authorization granted by the Annual General Meeting. The purpose of the stock options is to encourage the key employees to work on a long-term basis to increase the shareholder value and to retain the key employees at the Company.

The maximum total number of stock options issued is 910,000 and they entitle their owners to subscribe for a maximum total of 910,000 new shares in the Company or existing shares held by the Company. The stock options are issued gratuitously. Of the stock options, 437,000 are marked with the symbol 2019A and 473,000 are marked with the symbol 2019B. The share subscription period, for stock options 2019A, will be January 1, 2022 – January 31, 2023, and for stock options 2019B, January 1, 2023 – January 31, 2024.

The number of shares subscribed by exercising stock options issued corresponds to a maximum total of 6.81% of all shares and votes of the shares in the Company after the potential share subscriptions, if new shares are issued in the share subscription. After the share subscriptions with stock options, the number of the Company’s shares may be increased by a maximum total of 910,000 shares, if new shares are issued in the share subscription. The share subscription price for stock options 2019A is EUR 1.70 per share, which corresponded to the market price of the Company’s share at the time of launching the option plan. The share subscription price for stock options 2019B is EUR 2.55 per share, which corresponds to the market price of the Company’s share with an addition of 50%.


STRATEGY

Our target is to grow our net sales by an average of 15 – 20% per annum over the next three years. The target is mainly based on growth in international software sales and consulting services supporting our software business in Finland. We foresee significant growth potential especially in the process mining business, where we aim for an annual growth of more than 50%.

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 will further 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 our client organizations face, especially in leading and developing their operations in a digitalizing world. A special focus area for development is process mining, where 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 to increase our resources and investments in international marketing and sales.

We also actively seek strategic partnerships to strengthen our international software sales and product development.


SHARES AND SHAREHOLDERS

     
Trading of sharesJan-Jun,
2019
Jan-Jun,
2018
Change,
%
Jan-Dec,
2018
     
Shares traded, pcs721,744407,435771,026,097
Volume, EUR1,391,819669,9791081,694,088
% of shares6.03.4 8.6
Average trading price, EUR1.931.64171.65
     
Shares and market capitalizationJun 30,
2019
Jun 30,
2018
Change,
%
Dec 31,
2018
     
Total number of shares, pcs12,444,86312,444,863-12,444,863
Treasury shares, pcs457,009457,009-457,009
Book counter value, EUR0.110.11-0.11
Outstanding shares, pcs11,987,85411,987,854-11,987,854
Number of shareholders1,1211,177-51,151
Closing price, EUR2.081.62281.63
Market capitalization, EUR24,934,73619,420,3232819,540,202
Book counter value of all treasury
shares, EUR
50,27150,271-50,271
Total purchase value of all treasury
shares, EUR
439,307439,307-439,307
Treasury shares, % of all shares3.73.7-3.7


GOVERNANCE

The Annual General Meeting held on April 4, 2019 approved the Board's proposal that no dividend be paid for the financial year 2018.

The Annual General Meeting resolved that the number of Board Members is four (4) and re-elected Vesa-Pekka Leskinen and Topi Piela. as members of the Company´s Board of Directors. As new member of the Board of Directors, Jarmo Rajala and Salla Vainio were elected. 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 4, 2019 and available on the investors section of the Company's web site, http://www.qpr.com/investors/stock-exchange-releases.


EVENTS AFTER THE REVIEW PERIOD

The Company has no significant events after the review period to be reported.


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 covering 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.

Approximately 61% of Group’s trade receivables were in euro at the end of the quarter (55). 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 2018, pages 21-22 (https://www.qpr.com/investors/financial-information/annual-reports).


FINANCIAL INFORMATION

In 2019, QPR Software will publish an interim report in English and Finnish on the following dates:

  • Interim Report 1-9/2019: Thursday, October 24, 2019



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.



HALF YEAR FINANCIAL STATEMENTS


CONSOLIDATED COMPREHENSIVE INCOME STATEMENT

        
EUR in thousands, unless
otherwise indicated
Apr-Jun,
2019
Apr-Jun,
2018
Change,
%
Jan-Jun,
2019
Jan-Jun,
2018
Change,
%
Jan-Dec,
2018
        
Net sales2,2852,27215,0335,154-210,047
Other operating income0-51030-10102-10
        
Materials and services2602552522643-191,196
Employee benefit expenses1,6441,60333,3373,15466,142
Other operating expenses228288-21525586-101,229
EBITDA15312027650760-151,470
        
Depreciation and amortization3102383062147830949
Operating result-158-118-3429282-90521
        
Financial income and expenses-61-731-26-18886-187
Result before tax-164-117-40394-97335
        
Income taxes663210540-54174-15
Result for the period-98-85-1543408320
        
        
Earnings per share, EUR
(basic and diluted)
-0.008-0.007-150.0040.00380.027
        
Consolidated statement of
comprehensive income:
       
 Result for the period-98-85-1543408320
Other items in comprehensive
income that may be reclassified
subsequently to profit or loss:
       
 Exchange differences on
 translating foreign operations
-11-2090180-100179
Total comprehensive income-98-84-1743219-80499


CONDENSED CONSOLIDATED BALANCE SHEET

     
EUR in thousandsJun 30,
2019
Jun 30,
2018
Change,
%
Dec 31,
2018
     
Assets    
     
Non-current assets:    
 Intangible assets1,8501,945-51,831
 Goodwill5135130513
 Tangible assets528136287116
 Other non-current assets87624162
Total non-current assets2,9782,656122,521
     
Current assets:    
 Trade and other receivables2,8212,020403,409
 Cash and cash equivalents8711,238-30505
Total current assets3,6923,258133,915
     
Total assets6,6695,914136,436
     
Equity and liabilities    
     
Equity:    
 Share capital1,3591,35901,359
 Other funds2121021
 Treasury shares-439-4390-439
 Translation differences-61-610-61
 Invested non-restricted equity fund5505
 Retained earnings2,0301,707191,987
Equity attributable to shareholders of
the parent company
2,9162,593122,873
     
Non-current liabilities:    
 Interest-bearing liabilities143- -
Total non-current liabilities143- -
     
Current liabilities:    
 Interest-bearing liabilities281- -
 Advances received1,0371,336-22523
 Accrued expenses and prepaid income1,6991,64332,489
 Trade and other payables59334273551
Total current liabilities3,6113,32293,563
     
Total liabilities3,7533,322133,563
     
Total equity and liabilities6,6695,914136,436


CONSOLIDATED CASH FLOW STATEMENT

        
EUR in thousandsApr-Jun,
2019
Apr-Jun,
2018
Change,
%
Jan-Jun,
2019
Jan-Jun,
2018
Change,
%
Jan-Dec,
2018
        
Cash flow from operating activities:       
 Result for the period-98-85-1543408320
 Adjustments to the result181209-13471906-481,327
 Working capital changes-14824-723398813-51-267
 Interest and other financial
 expenses paid
-5-54-29-14-112-28
 Interest and other financial
 income received
25-5788-49
 Income taxes paid-17-6-165-34-14-145-27
Net cash from operating activities-84142-1598571,739-511,335
        
Cash flow from investing activities:       
 Purchases of tangible and
 intangible assets
-249-2442-489-4548-790
Net cash used in investing activities-249-2442-489-4548-790
        
Cash flow from financing activities:       
 Dividends paid--360 --360 -360
Net cash used in financing activities--360 --360 -360
        
Net change in cash and cash
equivalents
-333-462-28368926-60185
Cash and cash equivalents
at the beginning of the period
1,2041,704-2950531859318
Effects of exchange rate changes
on cash and cash equivalents
-1-481-2-5592
Cash and cash equivalents
at the end of the period
8711,238-308711,238-30505


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

        
EUR in thousandsShare
capital
Other
funds
Translation
differences
Treasury
shares
Invested
non-restricted
equity fund
Retained
earnings
Total
Equity Jan 1, 20181,35921-240-43952,0272,733
Dividends paid     -360-360
Comprehensive income  180  40219
Equity Jun 30, 20181,35921-61-43951,7072,593
Comprehensive income  0  281280
Equity Dec 31, 20181,35921-61-43951,9872,873
Comprehensive income  0  4343
Equity Jun 30, 20191,35921-61-43952,0302,916


NOTES TO INTERIM FINANCIAL STATEMENTS

ACCOUNTING PRINCIPLES

This report complies with requirements of IAS 34 ”Interim Financial Reporting”. Starting from the beginning of 2019, the Group has applied certain new or revised IFRS standards and IFRIC interpretations, as described in the Consolidated Financial Statements 2018.

As of beginning of 2019, in accordance with the new IFRS 16 Leases -standard, leases are recognized in the balance sheet as a right-of-use asset and a corresponding financial liability at the date at which the lease asset is available for the use by the Group. Lease payments are allocated in liabilities and financial expenses. The financial expense is recognized in the income statement over the lease period. The right-of-use asset is depreciated on a straight-line basis over the asset’s useful life or the shorter lease term. The lease liabilities are discounted at the borrowing average rate of 2% as of January 1, 2019. The Group has adopted the new IFRS 16 standard using modified retrospective approach and the comparative information has not been restated.

The Group leases mainly offices to be used as working premises. Rental contracts are typically made for fixed periods with possible extension options, or for an indefinite period with a notice period of typically less than a year. The Group continues to treat leases of 12 months or less and leases of low-value assets as other leases. Until end of the year 2018 leases of property, plant and equipment were classified as operating leases. Payments made under operating leases were recognized in the income statement on a straight-line basis over the period of the lease.

The change in the accounting policy affected the balance sheet items of January 1, 2019, as follows:
- material assets increased with the right-of-use asset by approximately EUR 560 thousand
- non-current liabilities increased by approximately EUR 280 thousand
- current liabilities increased by approximately EUR 280 thousand

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 2018 financial statements.

When preparing the consolidated financial statements, the 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.  

Definitions for key indicators can be found at the end of the latest annual report, on page 55: https://www.qpr.com/investors/financial-information/annual-reports


INTANGIBLE AND TANGIBLE ASSETS

    
EUR in thousandsJan-Jun,
2019
Jan-Jun,
2018
Jan-Dec,
2018
    
Increase in intangible assets:   
 Acquisition cost Jan 110,0579,3189,318
 Increase460422739
    
Increase in tangible assets:   
 Acquisition cost Jan 12,4331,8211,821
 Increase293250


PLEDGES AND COMMITMENTS

     
EUR in thousandsJun 30,
2019
Jun 30,
2018
Dec 31,
2018
Change,
%
     
Business mortgages (held by the Company)1,3851,3851,3860
     
Minimum lease payments based on lease agreements:    
 Maturing in less than one year21238267-92
 Maturing in 1-5 years91254-96
Total30239521-94
     
Total pledges and commitments1,4151,6241,907-26


CHANGE IN INTEREST-BEARING LIABILITIES

    
EUR in thousandsJan-Jun,
2019
Jan-Jun,
2018
Jan-Dec,
2018
    
Interest-bearing liabilities Jan 1562--
Repayments138--
Interest-bearing liabilities Jun 30424--


RECONCILIATION OF LEASE LIABILITY

  
EUR in thousands 
Minimum lease payments based on lease agreements as of Dec 31, 2018521
Relief option for short- term leases-6
Other incl. treatment of extension options59
Effect of discounting*-12
Lease liability as of Jan 1, 2019562


LEASES

Due to the adoption of the new IFRS 16 Leases -standard, the balance sheet as at June 30, 2019 and the income statement of the reporting period January-June include the following items in right-of-use assets of material assets, lease liabilities, depreciation and interest expense:


LEASES IN THE BALANCE SHEET

  
EUR in thousandsJun 30, 2019
Asset  
Non-current assets 
Tangible assets422
Total422
  
Equity and liabilities 
Lease liabilities, non-current143
Lease liabilities, current281
Total424


LEASES IN THE INCOME STATEMENT

  
EUR in thousandsJan-Jun, 2019
Other lease expenses0
Depreciation of right-of-use assets-141
Interest expenses-5
Total-146


CONSOLIDATED INCOME STATEMENT BY QUARTER

       
EUR in thousandsQ2
2019
Q1
2019
Q4
2018
Q3
2018
Q2
2018
Q1
2018
       
Net sales2,2852,7482,6712,2222,2722,882
Other operating income0-00-5-5
       
Materials and services260263335218255388
Employee benefit expenses1,6441,6931,6671,3211,6031,551
Other operating expenses228296308336288297
EBITDA153497362348120640
       
Depreciation and amortization310310231239238240
Operating result-158187130109-118400
       
Financial income and expenses-6-20-241-189
Result before tax-164167128113-117211
       
Income taxes66-2662-2232-86
Result for the period-9814118991-85124


GROUP KEY FIGURES

    
EUR in thousands, unless
otherwise indicated
Jan-Jun or
Jun 30, 2019
Jan-Jun or
Jun 30, 2018
Jan-Dec or
Dec 31, 2018
    
Net sales5,0335,15410,047
Net sales growth, %-2.32.912.4
EBITDA6507601,470
 % of net sales12.914.814.6
Operating result29282521
 % of net sales0.65.55.2
Result before tax394335
 % of net sales0.11.83.3
Result for the period4340320
 % of net sales0.90.83.2
    
Return on equity (per annum), %3.02.911.4
Return on investment (per annum), %2.521.918.9
Cash and cash equivalents8711,238505
Net borrowings-447-1,238-505
Equity2,9162,5932,873
Gearing, %-15.3-47.7-17.6
Equity ratio, %51.856.648.6
Total balance sheet6,6695,9146,436
    
Investments in non-current assets1,051454790
 % of net sales20.98.87.9
Product development expenses1,1311,0391,989
 % of net sales22.520.219.8
    
Average number of personnel828081
Personnel at the beginning of period827976
Personnel at the end of period788284
    
Earnings per share, EUR0.0040.0030.027
Equity per share, EUR0.2340.2080.231