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Correction to the stock exchange release: QPR Software Plc Interim Report January-March 2023

QPR SOFTWARE PLC             STOCK EXCHANGE RELEASE          4 May 2023, AT 10.00 AM EET

Correction to the stock exchange release published by QPR Software Plc on May 3, 2023, at 9 am EET


QPR Software Plc corrects the stock exchange release published on May 3, 2023, at 9 a.m. EET, which announced the company’s January-March 2023 interim report.

In the stock exchange release, it was also stated in the section “Net sales development, January-March” that the company’s net sales for January-March was 2,237 thousand euros (2,201) and it grew by 2%. The release also stated that the share of net sales from continuous income was 45% (37) of the total net sales.  The share of net sales of continuous income as a percentage was incorrect. The correct share of continuous income net sales from the total net sales was 58% (55). 

In addition, in the stock exchange release’s part “Finance and investments” it was stated that “The financial situation of the group is unavoidable”. The company corrects this point as follows: The financial situation of the group is fair. 

QPR Software Plc Interim Report January-March 2023 

QPR Software Plc interim report January-March: SaaS net sales increased by 64% and net sales by 2%. The EBITDA became positive, but the operating result was a loss. QPR Software Named Visionary in 2023 in Gartner® Magic Quadrant™ for Process Mining Tools -report



FINANCIAL DEVELOPMENT BRIEFLY

JANUARY-MARCH 2023

  • SaaS software business grew +64%
  • Net sales amounted to EUR 2,237 thousand, an increase of 2% (January-March 2022: 2,201)
  • EBITDA was EUR 26 thousand (-201)
  • Operating result (EBIT) amounted to EUR -225 thousand (-472)
  • Result before taxes was EUR -264 thousand (-483) 
  • Result was EUR -269 thousand (-380)
  • Earnings per share was EUR -0,017 (-0,032)


OUTLOOK FOR 2023 

The exceptional circumstances caused by increased interest rate, inflation, and a market downturn in Europe continue to affect new customer acquisition, companies’ investments, and prolong decision-making in early 2023.  

Supported by the current contract base and the projected growth of SaaS (Software as a Service) net sales, QPR expects the growth of SaaS net sales to be more than 35% and estimates that the entire net sales increase in 2023 (2022: 7,823 thousand euros).

The company expects the EBITDA to improve considerably and reach the break-even point in the financial year 2023. The EBITDA in 2022 was – 1,753 thousand euros.

CEO HEIKKI VEIJOLA’S REVIEW

“The year 2023 has generally started in an uncertain market situation. Regarding acquiring new customers, the general economic uncertainty has clearly postponed customers’ decisions and the launch of new tenders. At the beginning of the year, we succeeded in expanding individual contracts with our existing customers. This indicates high customer satisfaction and our ability to respond quickly to our customers’ needs with our high-quality solutions and services.

The company’s first quarter net sales increased slightly (2%) from the comparison period after a longer period of decline. SaaS (Software as a Service) net sales grew by 64%, mainly boosted by the significant agreement announced at the end of December 2022. The company’s operating result was negative but improved significantly from the comparison period. The net sales of renewable software licenses decreased (-22%), which is, however, in line with the company’s current SaaS business model. The company’s recurring net sales increased by 22%.

The consulting net sales continued to decrease from the comparison period. The most significant factor is the difficulties in the Middle East software delivery projects sold in previous years. At the end of 2022, the company had to reassess the profitability of several software delivery projects concluded during 2020–2021, as well as the realization of related contract revenues and invoicing. The projects in question are fixed-price implementations of software solutions in the application area of strategy and performance management for public administration customers in the Middle East.

Previously, it was estimated that the projects in question would be completed at the beginning of the second quarter of 2023. There have been delays in the projects, but our goal is to finish them by the end of the second quarter of the year. These projects continue to strain the company’s profitability until they are completed. The discussion with the client about the continuation of the project has been started.

I started as CEO of the company at the beginning of March 2023. In the first quarter of the year, we adapted the company’s operations and enhanced the implementation of the strategy. The organizational structure has been condensed so that it enables even more efficient performance of growth-oriented investments.

QPR Software has been a pioneer of process mining technology since 2010, having a solid forerunner and vision of customers’ changing needs in the highly competitive process mining market. I am incredibly proud of our achievement of being named a visionary in Gartner’s March 2023 Magic Quadrant™ for Process Mining Tools. According to Gartner, “visionaries” are innovators who move the market forward by responding to new, growing demands of high-end customers and providing them with new opportunities for success. Typically, these players appeal to leading customers in their industries.

According to the report, the latest development in process mining comes from QPR ProcessAnalyzer, which runs natively on the Snowflake Data Cloud. This means solving performance, scalability, and security issues. With QPR’s process mining solution, users can use Snowflake’s virtually limitless scalability, finding process inefficiencies in even billions of data rows in the blink of an eye. The solution comes with direct and real-time access to the data in the Snowflake Data Cloud. Data management, authentication, and access rights are perfectly synchronized with Snowflake. QPR is the first and only Process Mining Powered by Snowflake software partner worldwide.

Process mining using Snowflake Data Cloud technology has shown interest among new and existing customers, and we currently have several POC (Proof Of Concept) projects underway. The general market situation is also reflected here, and customers’ decision-making is slow.

More than 80% of Snowflake’s customers are in the US market, where QPR is not present. The company plans to explore the possibility of building a partner ecosystem to take this unique process mining solution to the US market.

I am particularly pleased to report that we have also promoted several strategic partnerships during the first quarter. The partnership agreement with Solution BI, which specializes in data analysis and performance management, is an excellent example of how innovations and the value produced for our customers are strategically created together. Solution BI has included process mining and QPR ProcessAnalyzer as part of its offering, enabling them to help their customers understand their operations with the help of data and support organizations’ investment decisions and transformations in all business areas. Our solutions and services complement each other and speed up the utilization of new innovations to benefit our current and new customers’ business.

Despite the current challenging operating environment, QPR has a solid core business, which is backed by growth opportunities and a growing market. Our technological capabilities, our innovation, and the strategic partnerships that support it offer us the opportunity to help many new customers in achieving their business goals. We are pleased that the first quarter shows a clear improvement compared to the comparison period. After a challenging last year, in the current market situation, the company’s business space is tight in terms of cash resources and equity ratio, while operations are still loss-making. The company is actively taking measures to reach the guidance given for the financial year 2023.

I warmly thank our customers and stakeholders for their trust in QPR at the beginning of this year. I would also like to thank all our employees for their dedication and hard work for the company’s future and success.”

Heikki Veijola

Chief Executive Officer

KEY FIGURES

EUR in thousands,
unless otherwise indicated
Jan-Mar,
2023
Jan-Mar,
2022
Change,
%
Jan-Dec,
2022
         
Net sales 2,237 2,201 2 7,823
EBITDA 26 -201 113 -1,753
 % of net sales 1.2 -9.1   -22.4
Operating result -225 -472 52 -2,770
 % of net sales -10.1 -21.5   -35.4
Result before tax -264 -483 45 -2,864
Result for the period -269 -380 29 -2,868
 % of net sales -12.0 -17.3   -36.7
         
Earnings per share, EUR
(basic and diluted)
-0.017 -0.032 47 -0.202
Equity per share, EUR 0.010 0.004 141 0.030
         
Cash flow from operating
activities
475 42 1,032 -1,798
Cash and cash equivalents 172 61 182 17
Net borrowings 2,041 1,542 32 2,262
Gearing, % 1285.1 2998.9 -57 464.9
Equity ratio, % 3.6 1.4 150 7.4
Return on equity, % -333.0 -631.4 47 -625.7
Return on investment, % -47.9 -104.7 54 -120.3

                                                                       

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, SaaS (Software-as-a-service,) and Consulting.

Recurring revenue reported by the Company consists of SaaS revenue, Renewable software licenses, and Software maintenance services. 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 for an indefinite duration. These contracts are automatically renewed at the end of the agreed period, usually one year, unless the agreement is terminated within the notice period. Renewable license revenue is recognized at one point in time, at 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 headquarters location. The company has closed its business and partnerships in Russia for the time being.

BUSINESS OPERATIONS

QPR’s purpose is to help customers achieve more with less. We help our customers drive process and business transparency, ensure that their operations are run as required and designed, and create actionable intelligence where modern AI meets thought leadership.

We do so by innovating, developing, and delivering software for analyzing, monitoring, and modelling organizations’ operations. To ensure maximum customer value, we also offer a wide range of complementary consulting services. By providing organizations with the technologies and methods to transform the invisible into visible and the unknown into manageable, they are empowered to reach long-lasting, continuous results.

NET SALES DEVELOPMENT


NET SALES BY PRODUCT GROUP

EUR in thousands Jan-Mar,
2023
Jan-Mar,
2022
Change,
%
Jan-Dec,
2022
         
Software licenses 179 133 35 560
Renewable software licenses 302 388 -22 583
Software maintenance services 422 463 -9 1,803
SaaS 575 350 64 1,738
Consulting 759 868 -13 3,139
Total 2,237 2,201 2 7,823

             

NET SALES BY GEOGRAPHIC AREA

EUR in thousands Jan-Mar,
2023
Jan-Mar,
2022
Change,
%
Jan-Dec,
2022
         
Finland 1,078 1,161 -7 4,126
Europe incl. Turkey 940 677 39 2,745
Rest of the world 220 363 -39 953
Total 2,237 2,201 2 7,823


JANUARY-MARCH 2023

The net sales for January-March was 2,237 thousand euros (2,201) and it grew by 2%. The share of net sales from continuous income was 58% (55) of the total net sales. The net sales of new software licenses was 179 thousand euros (133) and it grew by 35%, mainly due to the significant contract concluded in the last quarter of last year with a leading global pharmaceutical company, one batch of which was signed in January-March 2023. During the beginning of the year, we also succeeded in expanding individual contracts with existing customers.

The net sales of renewable software licenses decreased to 302 thousand euros (388), which was mainly due to the company’s strategic focus shifting to the SaaS business model.

The net sales of software maintenance services was 422 thousand euros (463) and decreased by 9% due to international channel sales and current customers switching to SaaS services.

SaaS revenue grew by 64%, to 575 thousand euros (350). SaaS growth accelerated partly due to a major deal announced in the last quarter of 2022 with a pharmaceutical company, along with other undisclosed deals, and less due to the transition from licenses to a SaaS model.

The entire offer backlog at the end of the quarter was 7,000 thousand euros (Q4; more than 7,300 thousand euros) and the annual estimate of the SaaS offer base for the next 12 months was more than 1,200 thousand euros (Q4; more than 1,200 thousand euros).

QPR is developing its Lead-to-Cash process, and the bidding phase will have strict qualitative evaluation requirements. During the fourth quarter, the first parts of the process related to the Lead-to-Deal process were implemented. The development of the process may lead to a reduction in the offer pool, albeit with a proportionality and a higher success rate.

The net sales of consulting was 759 thousand euros (868) and it decreased by 13% due to the higher net sales of the Middle East project recorded during the first quarter of the reference year 2022.

48% (53) of the group’s net sales came from Finland, 42% (31) from the rest of Europe (including Turkey) and 10% (16) from the rest of the world.


FINANCIAL DEVELOPMENT 

January-March 2023

The group’s EBITDA in January-March was 26 thousand euros (-201) and the operating result was -225 thousand euros (-472). The result of the period was -269 thousand euros (-380) and was higher than in the comparison period of 2022, although the January-March 2022 operating result included tax receivables of 103 thousand euros. The tax receivables in question were written off in the second quarter of the reference year 2022.

The group’s fixed expenses were 2,068 thousand euros (2,345), 11% lower than the comparison period due to the personnel reductions and savings implemented in the last quarter of 2022, the effect of which was partially reduced by investments in product development and higher subcontracting costs of projects in the Middle East.

The credit losses, which are included in the fixed expenses were three (1) thousand euros (32).

The result before taxes was -264 thousand euros (-483) and the result for the review period was -269 thousand euros (-380). Earnings per share were EUR -0.017 (-0.032) per share.

FINANCE AND INVESTMENTS 

Cash flow from operations in the review period January-March was 475 thousand euros (42). The change in operating cash flow compared to the first quarter of the comparison period 2022 was due to operating profit and changes in working capital. Accounts receivables were lower compared to the comparison period due to the advance of the invoicing cycle in the end of the year. Additionally, the contract with the pharmaceutical company published earlier brought a significant change in operating cash flow, which was partly reduced by the Middle East project, as well as higher costs related to product development.

The net financial expenses were 39 thousand euros (10) and they included exchange losses of 4 thousand euros (4).

The investments were 275 thousand euros (344), and they were mainly product development investments.

The net cash flow from financing was -45 thousand euros, consisting mainly of interest expenses.

The financial situation of the group is fair. At the end of the review period, the group’s cash and cash equivalents were 172 thousand euros (61) and short-term receivables were 1,685 thousand euros (2,200). The company has changed its billing cycle and made its collection more efficient. In addition, the group has available other short-term cash resources of 500 thousand euros. At the end of the review period, the group had bank loans, of which long-term 1.0 million euros and short-term 500 thousand euros. Covenants are attached to the loan, which are based on the company’s EBITDA and equity ratio. The EBITDA of the covenants is tested every six months, and the equity ratio is tested annually according to the situation on the last day of the year.

The company renewed the financing agreement with its main financing bank on January 24, 2023, according to which the previous short-term loan of EUR 1.5 million will be converted into a long-term loan. According to the financing agreement, the first installment of 0.5 million euros is due on January 31, 2024. After this, installments of 0.5 million euros are due annually in January. The last loan repayment date is January 24, 2026. The company withdraw the loan during the first quarter of the year.

Net debt in relation to equity (gearing) was 1285% (3026) and the equity ratio at the end of the review period was 3.6% (1.4). The net debt ratio and the equity ratio were affected by the decrease in equity and cash resources, as well as the 5.5-year lease agreement made in the last quarter of 2022, which is related to the head office premises, where the monthly rental costs are significantly lower.


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 the first quarter of the year, product development expenses were EUR 510 thousand (604). Product development expenses worth EUR 270 thousand (344) were capitalized. The amortization of capitalized product development expenses was EUR 171 thousand (167).

The amortization period for capitalized product development expenses is four years.


PERSONNEL

At the end of the financial year, the Group employed a total of 65 people (79). The average number of personnel during January-March was 67 (75). The number of personnel has decreased due to change negotiations that ended in the last quarter of 2022.

The average age of employees was 45,5 (43,7) years. Women account for 26% (25) of employees, and men for 74% (75). Of all the personnel, 16% (18) work in sales and marketing, 43% (42) in consulting and customer service, 29% (31) in product development and 12% (9) in administration.

For incentive purposes, the company has a bonus program covering the entire personnel. The top management’s short-term remuneration consists of monetary salary, fringe benefits and a possible annual bonus, mainly determined by the net sales development of the group and profit units. In addition, the company has an option program for key personnel.

SHARES AND SHAREHOLDER

Trading of shares Jan-Mar,
2023
Jan-Mar,
2022
Change,
%
Jan-Dec,
2022
         
Shares traded, pcs 483,326 755,902 -36 2,263,135
Volume, EUR 304,257 1,120,862 -73 2,315,155
% of shares 3.0 6.3 -52 14.1
Average trading price, EUR 0.63 1.48 -58 1.02
Average trading value per day, EUR 1207 4448 -73 9187
Treasury shares acquired during the year, pcs 0 0 0 0
Shares and market capitalization Mar 31,
2023
Mar 31,
2022
Change,
%
Dec 31,
2021
         
Total number of shares, pcs 16,455,321 12,444,863 32 16,455,321
Treasury shares, pcs 413,487 457,009 -10 413,487
Book counter value, EUR 0.11 0.11 0.11
Outstanding shares, pcs 16,041,834 11,987,854 34 16,041,834
Number of shareholders 1,794 1,577 14 1,747
Closing price, EUR 0.69 1.34 -48 0.56
Market capitalization, EUR 11,036,782 16,003,785 -31 8,983,427
Book counter value of all treasury
shares, EUR
45,484 50,271 -10 45,484
Total purchase value of all treasury
shares, EUR
405,726 439,307 -8 405,726
Treasury shares, % of all shares 2.5 3.7 -31.6 2.5

The number of shares in the company increased (4,010,458 new shares) compared to the comparison period due to the rights issue organized by the company in the second quarter of 2022.

All the related stock exchange releases can be found in the Investors section of the Company’s website.

GOVERNANCE 

In March 2022, the Board of Directors gave notice to the shareholders of QPR Software Plc that the Annual General Meeting will be held on Wednesday, April 6, 2022. The Board of Directors of the Company resolved on extraordinary measures pursuant to the temporary legislation approved by the Finnish Parliament. In order to prevent the spread of the Covid-19 pandemic, the Annual General Meeting was held without shareholders’ presence at the Meeting venue. Participation and exercise of shareholder rights in the Meeting was possible only by way of proxy representation, by submitting counterproposals, and by asking questions in advance.

The Annual General Meeting approved the Board’s proposal that no dividend be paid for the financial year 2021. The Annual General Meeting made an advisory decision on the Remuneration Report and decided to approve the presented Remuneration Report.

The Annual General Meeting resolved that the number of Board Members is four (4) and elected Pertti Ervi, Matti Heikkonen, Antti Koskela, and Jukka Tapaninen 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 Pertti Ervi as its Chairman.

The Annual General Meeting elected Authorized Public Accountants KPMG Oy Ab as QPR Software ́s auditor with Miika Karkulahti, Authorized Public Accountant, acting as principal auditor.  The term of office of the auditor expires at the end of the next Annual General Meeting 3 May 2023.

The Annual General Meeting decided to authorize the Board of Directors to decide on the conveyance of the own shares held by the Company (share issue) either on one or on 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.

The Annual General Meeting decided also on the establishment of the shareholders’ nomination committee. According to the situation in October 2022, the company’s three largest shareholders were each entitled to nominate one member. If the shareholder does not use naming right, the right is transferred to the next largest owner.

Roger Kempe, Erkki Myllärniemi, and Eero Leskinen were appointed to the nomination committee of QPR’s shareholders.

The nomination committee of QPR Software’s shareholders prepares and presents to the general meeting the proposals regarding the remuneration of the board members, the number, and the members to be elected to the board. The now-elected nomination committee will submit its proposal to the company’s board for the 2023 annual general meeting at the latest on the fourth Monday of January preceding the next Annual General Meeting.

The Shareholders’ Nomination Committee submitted the proposals to the Annual General Meeting 2023, to re-elect Pertti Ervi as Chairman of Board and Matti Heikkonen, Antti Koskela, and Jukka Tapaninen as Board members. All the nominees have given their consent to the position, and they are independent of the company and of the company’s significant shareholders. The Board’s Nomination Committee proposes that the remuneration of the Board members be kept unchanged.

The Annual General Meeting is planned to be held on May 3, 2023. The proposals will be also included in the annual general meeting invitation, which will be announced later.

All relevant stock exchange releases and the company’s annual report 2022 can be found on the company’s website in the Investors section.


SHORT-TERM RISKS AND UNCERTAINTIES 

Internal control and risk management at QPR Software aim 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 that business continuity is secured considering the financial position.

The Company 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 privacy and security), and risks related to financing and liquidity (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 of any international business. QPR seeks to limit this credit risk by continuously monitoring standard payment terms, receivables, and credit limits.

Approximately 70% of the Group’s trade receivables were in euros at the end of the quarter (73%). At the end of the quarter, the Company had not hedged its non-euro trade receivables.

EVENTS AFTER THE REVIEW PERIOD

The company has no reportable events after the review period.


FINANCIAL INFORMATION AND ANNUAL GENERAL MEETING

During 2023, QPR will publish financial announcements in Finnish and English as follows:

  • Half-year report January-June 2023 on Friday 21 July 2023
  • Interim report January-September 2023 on Friday 20 October 2023

QPR’s annual report 2022 was published on 20 March 2023 and QPR’s 2023 annual general meeting will be held on Wednesday 3 May 2023. The board of directors has convened the general meeting with a separately published invitation.

The annual report can be found on the company’s website in the Investors section.




QPR SOFTWARE PLC 

BOARD OF DIRECTORS





For further information:

Heikki Veijola

Chief Executive Officer

QPR Software Plc

Tel. +358 40 922 6029

About QPR Software

QPR Software Plc (Nasdaq Helsinki) provides process mining, performance management, and enterprise architecture solutions for digital transformation, strategy execution, and business process improvement in over 50 countries. QPR software allows customers to gain valuable insights for informed decisions that make a difference.

Dare to improve. www.qpr.com

DISTRIBUTION

Nasdaq Helsinki

Key medias

www.qpr.com

FINANCIAL STATEMENT INFORMATION


CONSOLIDATED COMPREHENSIVE INCOME STATEMENT

EUR in thousands, unless
otherwise indicated
Jan-Mar,
2023
Jan-Mar,
2022
Change,
%
Jan-Dec,
2022
         
Net sales 2,237 2,201 2 7,823
Other operating income 4
         
Materials and services 394 328 20 1,552
Employee benefit expenses 1,599 1,811 -12 7,214
Other operating expenses 218 263 -17 814
EBITDA 26 -201 113 -1,753
         
Depreciation and amortization 251 271 -7 1,017
Operating result -225 -472 52 -2,770
         
Financial income and expenses -39 -10 -278 -62
Provisions -33
Result before tax -264 -483 45 -2,864
         
Income taxes -5 103 -105 -3
Result for the period -269 -380 29 -2,868
         
         
Earnings per share, EUR
(basic and diluted)
-0.017 -0.032 47 -0.202
         
Consolidated statement of
comprehensive income:
       
 Result for the period -269 -380 29 -2,868
Other items in comprehensive
income that may be reclassified
subsequently to profit or loss:
       
 Exchange differences on
 translating foreign operations
1 0 -2
Total comprehensive income -268 -380 29 -2,870

                                                                                     

CONDENSED CONSOLIDATED BALANCE SHEET     

EUR in thousands Mar 31,
2023
Mar 31,
2022
Change,
%
Dec 31,
2022
         
Assets        
         
Non-current assets:        
 Intangible assets 2,513 1,847 36 2,411
 Goodwill 358 358 0 358
 Tangible assets 141 186 -24 171
 Right-of-use assets 707 70 910 756
 Other non-current assets 277 280 -1 277
Total non-current assets 3,997 2,741 46 3,973
         
Current assets:        
 Trade and other receivables 1,685 2,200 -23 3,452
 Cash and cash equivalents 172 61 182 17
Total current assets 1,857 2,261 -18 3,469
         
Total assets 5,853 5,002 17 7,442
         
Equity and liabilities        
         
Equity:        
 Share capital 1,359 1,359 0 1,359
 Other funds 21 21 0 21
 Treasury shares -406 -439 -8 -406
 Translation differences -67 -67 0 -66
 Invested non-restricted equity fund 2,943 5 54932 2,943
 Retained earnings -3,691 -828 -346 -3,364
Equity attributable to shareholders of
the parent company
159 51 212 487
         
Non-current liabilities:        
 Interest-bearing liabilities 1,000
 Interest-bearing lease liabilities 609 609
Total non-current liabilities 1,609 609
         
Current liabilities:        
 Provisions 8
 Interest-bearing liabilities 500 1,500 -67 1,521
 Interest-bearing lease liabilities 104 105 -1 149
 Advances received 1,438 1,432 0 885
 Accrued expenses and prepaid income 1,438 1,277 13 2,598
 Trade and other payables 597 637 -6 1,161
Total current liabilities 4,085 4,951 -17 6,346
         
Total liabilities 5,694 4,951 15 6,955
         
Total equity and liabilities 5,853 5,002 17 7,442

               

CONSOLIDATED CONDENSED CASH FLOW STATEMENT

EUR in thousands Jan-Mar,
2023
Jan-Mar,
2022
Change,
%
Jan-Dec,
2022
         
Cash flow from operating activities:        
 Result for the period -269 -380   29 -2,868
 Adjustments to the result 192 270  -29 840
 Working capital changes* 583 161 262 307
 Interest and other financial
 expenses paid
-27 -9 195 -58
 Interest and other financial
 income received
0 0 0
 Income taxes paid -5 0 -21
Net cash from operating activities 475 42 1,032 -1,798
         
Cash flow from investing activities:        
 Purchases of tangible and
 intangible assets
-275 -344 -20 -1,353
Net cash used in investing activities -275 -344 -20 -1,355
         
Cash flow from financing activities:        
 Proceeds from short term
 borrowings
1,500 1,521
 Repayments of short term
 borrowings
-1,500 -1,500
 Payment of lease liabilities -45 -77 -42 -266
 Sales of own shares 34
  Share issue net 2,937
Net cash used in financing activities -45 -77 -42 2,692
         
Net change in cash and cash
equivalents
156 -379 141 -425
Cash and cash equivalents
at the beginning of the period
17 441 -96 441
Effects of exchange rate changes
on cash and cash equivalents
0 -1 63 1
Cash and cash equivalents
at the end of the period
172 61 182 17


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, 2021 1,359 21 -68 -439 5 -448 430
Comprehensive income     1     -380 -379
Equity March 31, 2022 1,359 21 -67 -439 5 -829 51
Stock option scheme           -47 -47
Disposal of own shares       34     34
Share issue ,net         2,937   2,937
Comprehensive income     1     -2,488 -2,487
Equity Dec 31, 2022 1,359 21 -66 -406 2,943 -3,364 487
Stock option scheme           -59 -59
Comprehensive income     -1     -268 -269
Equity March 31, 2023 1,359 21 -67 -406 2,943 -3,691 159

                                                                                                   

NOTES TO INTERIM FINANCIAL STATEMENTS


ACCOUNTING PRINCIPLES

This report complies with the requirements of IAS 34” Interim Financial Reporting”.

In preparation of the consolidated interim report, company’s 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.

INTANGIBLE AND TANGIBLE ASSETS

EUR in thousands Jan-Mar,
2023
Jan-Mar,
2022
Jan-Dec,
2022
       
Increase in intangible assets:      
 Acquisition cost Jan 1 14,217 12,846 12,846
 Increase 275 304 1,371
       
Increase in tangible assets:      
 Acquisition cost Jan 1 2,816 2,705 2,705
 Increase 0 40 111


CHANGE IN INTEREST-BEARING LIABILITIES

EUR in thousands Jan-Mar,
2023
Jan-Mar,
2022
Jan-Dec,
2022
       
Interest-bearing liabilities Jan 1 2,279 1,682 1,682
Proceeds from borrowings 1,500 800 597
Repayments 1,566 878 0
Interest-bearing liabilities Dec 31 2,213 1,604 2,279


PLEDGES AND COMMITMENTS

EUR in thousands Jan-Mar,
2023
Jan-Mar,
2022
Dec 31,
2022
Change,
%
         
Business mortgages (held by the Company) 2,382 2,386 2,382 0
         
Minimum lease payments based on lease agreements:        
 Maturing in less than one year 42 22 47 -11
 Maturing in 1-5 years 69 19 80 -13
Total 111 41 127 -13
         
Total pledges and commitments 2,493 2,426 2,509 -1

                                           

CONSOLIDATED INCOME STATEMENT BY QUARTER

EUR in thousands Jan-Mar,
2023
Oct-Dec,
2022
Jul-Sep,
2022
Apr-Jun,
2022
Jan-Mar,
2022
           
Net sales 2,237 2,142 1,468 2,012 2,201
Other operating income 0 4 0 0 0
           
Materials and services 394 411 406 407 328
Employee benefit expenses 1,599 1,951 1,711 1,740 1,811
Other operating expenses 218 214 204 135 263
EBITDA 26 -430 -853 -270 -201
           
Depreciation and amortization 251 251 249 245 271
Operating result -225 -681 -1,102 -515 -472
           
Financial income and expenses -39 -32 -9 -11 -10
Provisions -33
Result before tax -264 -745 -1,111 -526 -483
           
Income taxes -5 -3 -103 103
Result for the period -269 -748 -1,111 -629 -380


GROUP KEY FIGURES

EUR in thousands, unless
otherwise indicated
Jan-Mar or
Mar 31, 2023
Jan-Mar or
Mar 31, 2022
Jan-Dec or
Dec 31, 2022
       
Net sales 2,237 2,201 7,823
Net sales growth, % 1.6 -24.2 -14.4
EBITDA 26 -201 -1,753
 % of net sales 1.2 -9.1 -22.4
Operating result -225 -472 -2,770
 % of net sales -10.1 -21.5 -35.4
Result before tax -264 -483 -2,864
 % of net sales -11.8 -21.9 -36.6
Result for the period -269 -380 -2,868
 % of net sales -12.0 -17.3 -36.7
       
Return on equity (per annum), % -333.0 -631.4 -625.7
Return on investment (per annum), % -47.9 -104.7 -120.3
Cash and cash equivalents 172 61 17
Net borrowings 2,041 1,542 2,262
Equity 159 51 487
Gearing, % 1285.1 3026.4 464.9
Equity ratio, % 3.6 1.4 7.4
Total balance sheet 5,853 5,002 7,442
       
Investments in non-current assets 270 344 2,324
 % of net sales 12.1 16 29.7
Product development expenses 510 604 2,674
 % of net sales 22.8 27 34.2
       
Average number of personnel 67 75 81
Personnel at the beginning of period 85 80 80
Personnel at the end of period 65 79 85
       
Earnings per share, EUR
(basic and diluted)
-0.017 -0.032 -0.202
Equity per share, EUR 0.010 0.004 0.030

The formulas for calculating key figures can be found on the company’s website in the investors section.

                             

Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. TheTechOutlook.com takes no editorial responsibility for the same.

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