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QPR Software Interim Report January – September 2020

QPR Software Oyj
·27-min read

QPR SOFTWARE STOCK EXCHANGE RELEASE, October 27, 2020 AT 9.00 AM


Software license and maintenance net sales decreased, cloud services and consulting net sales increased


July - September 2020

  • Net sales amounted to EUR 1,801 thousand (July-September 2019: 1,981).

  • Net sales decreased 9 % due to a decline in software license and maintenance services sales. During the coronavirus pandemic, sales cycles for new software deals have been significantly longer than usually and have not yet been normalized.

  • Cloud services and consulting net sales increased.

  • EBITDA was EUR -109 thousand (188).

  • Operating result (EBIT) amounted to EUR -413 thousand (-119). The decrease in operating result was due to decrease in net sales, as well as outlays in growth business areas.

  • Result for the quarter EUR -345 thousand (-85).


January - September 2020

  • Net sales amounted to EUR 6,630 thousand (January-September 2019: 7,015).

  • Net sales decreased 5 % due to a decline in software license and maintenance services sales.

  • Cloud services and consulting net sales increased.

  • EBITDA was EUR 221 thousand (838).

  • Operating result (EBIT) amounted to EUR -752 thousand (-90). The decrease in operating result was due to decrease in net sales, as well as outlays in growth business areas.

  • Result for the quarter EUR -665 thousand (-42).

  • Earnings per share EUR -0.055 (-0.004).

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 made significant investments in developing the Company´s process mining software, as well as in renewing the user interfaces of its software products. The Company estimates that the demand for process mining software and related services will continue to grow rapidly over the course of 2020.

In developed markets, we expect the competition for process and enterprise architecture modeling software, as well as for performance management software to remain tight. However, there is still growth potential for these products in emerging markets, especially for performance management software.

Outlook for 2020

QPR issued a profit warning on October 14th and revised its net sales forecast, which was issued in February 2020. After the update of outlook, the Company estimates its net sales to decrease compared to last year, when it earlier estimated net sales growth (2019: EUR 9,513 thousand).

Profit forecast remained intact and as previously published. Operating result (EBIT) is estimated to be negative (2019: -213 thousand) and EBITDA is expected to be positive (2019: EUR 1,036 thousand).

Mid-term financial targets

The Company´s mid-term target in 2020 – 2022 is to grow net sales by an average of 15 – 20% per annum. The target is mainly based on international net sales growth in process mining, where we target an annual growth of over 50%.

KEY FIGURES

EUR in thousands,
unless otherwise indicated

Jul-Sep,
2020

Jul-Sep,
2019

Change,
%

Jan-Sep,
2020

Jan-Sep,
2019

Change,
%

Jan-Dec,
2019

Net sales

1,801

1,981

-9

6,630

7,015

-5

9,513

EBITDA

-109

188

-158

221

838

-74

1,036

% of net sales

-6.1

9.5

3.3

11.9

10.9

Operating result

-413

-119

-246

-752

-90

-733

-213

% of net sales

-22.9

-6.0

-11.3

-1.3

-2.2

Result before tax

-419

-116

-260

-761

-113

-571

-240

Result for the period

-345

-85

-304

-655

-42

-1,445

-161

% of net sales

-19.1

-4.3

-9.9

-0.6

-1.7

Earnings per share, EUR
(basic and diluted)

-0.029

-0.007

-304

-0.055

-0.004

-1,445

-0.013

Equity per share, EUR

0.173

0.227

-24

0.173

0.227

-24

0.222

Cash flow from operating
activities

-890

-59

-1,410

101

937

-89

1,349

Cash and cash equivalents

317

470

-33

317

470

-33

1,035

Net borrowings

459

-116

-495

459

-116

-495

-251

Gearing, %

21.4

-4.1

-619

21.4

-4.1

-619

-9.1

Equity ratio, %

47.0

58.4

-19

47.0

58.4

-19

44.5

Return on equity, %

-59.5

-11.9

-401

-35.5

-2.0

-1,692

-5.7

Return on investment, %

-59.3

-13.9

-326

-30.0

-3.1

-852

-5.9


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.


REVIEW BY THE CEO

In July-September, the coronavirus pandemic continued to have a negative impact especially in our international software business. Net sales in Finland increased by 3%, but international net sales decreased by 20%. The value of offers to customers was in September clearly higher than in the previous year, but purchase processes are much longer than previously, due to uncertainties related to the coronavirus pandemic.

We have started to adjust costs to the current challenging market situation and are conducting co-determination negotiations regarding part-time lay-offs with our personnel in Finland. Since the business impact of the Covid 19 -situation is estimated to be temporary, redundancies are not considered in the negotiations.

To ensure long term growth we have during the spring and summer recruited new sales resources to our European key markets United Kingdom and France. We have also entered in several new partnerships in our process mining software sales. The functionality of the visual reporting tool in QPR ProcessAnalyzer software has been significantly enhanced in the two latest releases, and we now believe it to be one of the best and most versatile in visual reporting. Also performance in processing large amounts of data has been significantly improved, and the software is now localized in seven languages.

Jari Jaakkola
CEO


NET SALES DEVELOPMENT

July - September 2020

Net sales in the third quarter were EUR 1,801 thousand (1,981). The share of recurring revenue was 52% of net sales (61).

Software license net sales amounted to EUR 396 thousand (436) and decreased by 9 %, mainly due to a decrease in renewable software license net sales in Finland.

Software maintenance net sales decreased by 32% and were EUR 519 thousand (761). Part of existing customers moved to using our Cloud services and furthermore, currency exchange rates had a negative impact on maintenance net sales. In addition to reasons mentioned above, exceptionally strong decrease in maintenance net sales is explained by the high figure in the previous year. The previous year figure includes income from former periods, as a significant customer at that point returned to use maintenance services.

Cloud services net sales increased to EUR 284 thousand (269), despite temporary service pauses that were agreed with some customers that had to cope with the hardest negative impacts from the coronavirus pandemic.

Consulting net sales, including software deliveries, amounted to EUR 602 thousand (515). Net sales growth was achieved In Finland and Middle East market area. Consulting projects and agreed software deliveries proceeded also in the third quarter mainly as planned, despite the pandemic.

Net sales in Finland increased by 3% due to increase in consulting net sales. International net sales decreased by 20%, which was mainly due to a decrease in maintenance net sales in our international reseller channel.

Of the Group net sales, 54% (47) derived from Finland, 27% (30) from the rest of Europe (including Russia and Turkey) and 20% (23) from the rest of the world.

NET SALES BY PRODUCT GROUP

EUR in thousands

Jul-Sep,
2020

Jul-Sep,
2019

Change,
%

Jan-Sep,
2020

Jan-Sep,
2019

Change,
%

Jan-Dec,
2019

Software licenses

271

261

4

937

1,093

-14

1,552

Renewable software licenses

125

175

-29

733

908

-19

1,102

Software maintenance services

519

761

-32

1,677

2,044

-18

2,731

Cloud services

284

269

5

820

788

4

1,068

Consulting

602

515

17

2,463

2,182

13

3,061

Total

1,801

1,981

-9

6,630

7,015

-5

9,513


NET SALES BY GEOGRAPHIC AREA

EUR in thousands

Jul-Sep,
2020

Jul-Sep,
2019

Change,
%

Jan-Sep,
2020

Jan-Sep,
2019

Change,
%

Jan-Dec,
2019

Finland

965

933

3

3,524

3,638

-3

4,863

Europe incl. Russia and Turkey

480

598

-20

1,758

2,248

-22

2,965

Rest of the world

355

450

-21

1,348

1,128

19

1,686

Total

1,801

1,981

-9

6,630

7,015

-5

9,513


January-September 2020

Net sales in January – September were EUR 6,630 thousand (7,015) and decreased by 5%. The share of recurring revenue was 49% of net sales (53).

Net sales in Finland decreased by 3%, which was mainly due to lower software net sales in process and enterprise architecture modeling. International net sales decreased by 8%, which was mostly due to a decline in maintenance net sales in international reseller channel.

Of the Group net sales, 53% (52) derived from Finland, 27% (32) from the rest of Europe (including Russia and Turkey) and 20% (16) from the rest of the world.


FINANCIAL PERFORMANCE

July - September 2020

The Group´s earnings before interest, tax, depreciation and amortization (EBITDA) were EUR -109 thousand (188) and operating result (EBIT) was EUR -413 thousand (-119). The decrease in operating result was due to a decrease in net sales, as well as outlays in growth business areas.

The Group´s fixed costs in July-September were EUR 2,009 thousand (1,858) and increased by 8% from the previous year. Employee expenses were 73% (74) of fixed costs. To adjust our costs to current market situation, we decided upon nine either part-time or full-time lay-offs, as a result from co-determination negotiations in our Operational Development Consulting unit.

Result before taxes was EUR -419 thousand (-116) and result for the period was EUR -345 thousand (-85). Earnings per share (basic and diluted) were EUR -0.029 (-0.007).


January - September 2020

The Group´s EBITDA was EUR 221 thousand (838) and operating result (EBIT) amounted to EUR -752 thousand (-90). The decrease in operating result was due to a decrease in net sales, as well as outlays in growth business areas.

The Group´s fixed costs were EUR 6,503 thousand (6,340) in the reporting period. Employee expenses were 76% (74) of fixed costs. Credit losses, included in fixed costs, were EUR 47 thousand (66).

Result before taxes was EUR -761 thousand (-113) and result for the period was EUR -655 thousand (-42). Earnings per share (basic and diluted) were EUR -0.055 (-0.004).


FINANCE AND INVESTMENTS

Cash flow from operating activities was EUR 101 thousand (937) in January - September. Lower cashflow from operating activities was due to weaker result and increase in operative working capital, originating mainly from longer payment times in international business.

The Group´s financial position is good. Cash and cash equivalents at the end of the reporting period were EUR 317 thousand (470), and in addition the Group has access to EUR 1.3 million other short-term financial instruments. At the end of the reporting period, the Group had a short-term bank loan of EUR 700 thousand and no long-term interest-bearing bank loans.

Net financial expenses in January – September were EUR 9 thousand (23) and included net currency exchange gains of EUR 1 thousand (currency exchange losses 18).

Investments in January - September totaled EUR 798 thousand (763). Investments were mainly related to product development expenditure.

The gearing ratio was 21% (-4). At the end of the quarter, the equity ratio was 47% (58).


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 - September, product development expenses were EUR 1,587 thousand (1,653). Product development expenses worth EUR 627 thousand (544) were capitalized. The amortization of capitalized product development expenses was EUR 629 thousand (613). The amortization period for capitalized product development expenses is four years.

QPR decided to start in June a new Digital delivery project that focuses on planning and developing a new digital business model. In this project, we are researching new models to fully deliver and deploy on-premise software digitally and remotely. This new digital business model is developed in the Middle Eastern market by creating a strategy monitoring software pilot. The pilot will include, among other things, digital workflows and approvals of strategy and performance management measures. Business Finland decided to grant this project EUR 100 thousand direct funding from their Covid-19 related program for business development in disruptive circumstances.


PERSONNEL

At the end of the reporting period, the Group employed a total of 85 persons (83). The average number of personnel during January - September was 86 (82).

The average age of employees is 42.0 (42.0) years. Women account for 20% (21) of employees, men for 80% (79). 19% (18) work in sales and marketing, 42% (42) in consulting and customer care, 31% (31) in product development, and 9% (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. Furthermore, the Company launched a key employee stock option plan in 2019.


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. 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.

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 shares

Jan-Sep,
2020

Jan-Sep,
2019

Change,
%

Jan-Dec,
2019

Shares traded, pcs

714,500

902,160

-21

1,091,153

Volume, EUR

1,462,356

1,797,056

-19

2,229,163

% of shares

6.0

7.5

9.1

Average trading price, EUR

2.05

1.99

3

2.04

Shares and market capitalization

Sep 30,
2020

Sep 30,
2019

Change,
%

Dec 31,
2019

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

1,179

1,147

3

1,146

Closing price, EUR

1.96

2.40

-18

2.34

Market capitalization, EUR

23,496,194

28,770,850

-18

28,051,578

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

A notice was given in February 2020 to the shareholders of QPR Software Plc that the Annual General Meeting will be held on Tuesday 7 April, 2020 starting at 1:00 p.m. at the Company's headquarters. Due to the coronavirus pandemic, the Board of Directors resolved in March to cancel this meeting and convene the Annual General Meeting at a later stage as soon as it is practically possible to organize the meeting.

In May 2020, the Board of Directors gave a notice to the shareholders of QPR Software Plc that the Annual General Meeting will be held on Monday June 8, 2020. The Board of Directors of the Company resolved on extraordinary measures pursuant to the temporary legislation approved by the Finnish Parliament on April 24, 2020. 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 asking questions in advance.

The Annual General Meeting held on June 8, 2020 approved the Board's proposal that no dividend be paid for the financial year 2019. The Annual General Meeting made an advisory decision on the Remuneration Policy and decided to support the proposed Remuneration Policy.

The Annual General Meeting resolved that the number of Board Members is four (4) and re-elected Vesa-Pekka Leskinen, Topi Piela, Jarmo Rajala and Salla Vainio 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 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.

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 June 8, 2020 on the investors section of the Company's web site, https://www.qpr.com/investors/stock-exchange-and-press-releases


EVENTS AFTER THE REVIEW PERIOD

After the end of the review period, on October 14th, QPR issued a profit warning and revised its net sales forecast for 2020. At the same time, the Company published preliminary financial information about its January – September 2020 results. According to revised net sales forecast, net sales are expected to be lower than in the previous year (2019: EUR 9,513 thousand).

Profit forecast remained intact and as previously published. Operating result (EBIT) is estimated to be negative (2019: -213 thousand) and EBITDA is expected to be positive (2019: EUR 1,036 thousand).

QPR also informed about the initiation of co-determination negotiations with part of our personnel in Finland. Approximately 65 employees are subject to the negotiations. Operational Development Consulting personnel is not part of the negotiations.

The aim of the negotiations is to adjust operations to the market situation, where COVID -19 is causing uncertainty among customers and prospects. The negotiations may lead to temporary part-time layoffs and reorganizing of work tasks for financial and production-related reasons.

Since the business impact of the Covid-19 -situation is estimated to be temporary, redundancies are not considered in the negotiations. Preliminary estimate of the amount of lay-offs is 65, at maximum. Negotiations commenced on October 20, 2020.


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 44% of Group’s trade receivables were in euro at the end of the reporting period (48). At the end of the reporting period, 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 2019, pages 24-25 (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.


INTERIM FINANCIAL STATEMENTS


CONSOLIDATED COMPREHENSIVE INCOME STATEMENT

EUR in thousands, unless
otherwise indicated

Jul-Sep,
2020

Jul-Sep,
2019

Change,
%

Jan-Sep,
2020

Jan-Sep,
2019

Change,
%

Jan-Dec,
2019

Net sales

1,801

1,981

-9

6,630

7,015

-5

9,513

Other operating income

75

100

0

0

Materials and services

279

243

15

979

765

28

1,143

Employee benefit expenses

1,474

1,375

7

4,970

4,712

5

6,455

Other operating expenses

232

175

32

560

700

-20

878

EBITDA

-109

188

-158

221

838

-74

1,036

Depreciation and amortization

304

307

-1

972

928

5

1,250

Operating result

-413

-119

-246

-752

-90

-733

-213

Financial income and expenses

-6

3

-287

-9

-23

61

-26

Result before tax

-419

-116

-260

-761

-113

-571

-240

Income taxes

74

31

140

106

71

49

78

Result for the period

-345

-85

-304

-655

-42

-1,445

-161

Earnings per share, EUR
(basic and diluted)

-0.029

-0.007

-304

-0.055

-0.004

-1,445

-0.013

Consolidated statement of
comprehensive income:

Result for the period

-345

-85

-304

-655

-42

-1,445

-161

Other items in comprehensive
income that may be reclassified
subsequently to profit or loss:

Exchange differences on
translating foreign operations

-1

-4

-62

-1

-4

-65

-5

Total comprehensive income

-346

-89

-289

-656

-46

-1329

-166


CONDENSED CONSOLIDATED BALANCE SHEET

EUR in thousands

Sep 30,
2020

Sep 30,
2019

Change,
%

Dec 31,
2019

Assets

Non-current assets:

Intangible assets

1,975

1,904

4

2,044

Goodwill

513

513

0

513

Tangible assets

265

440

-40

371

Other non-current assets

263

87

201

141

Total non-current assets

3,016

2,944

2

3,068

Current assets:

Trade and other receivables

1,949

2,272

-14

2,904

Cash and cash equivalents

317

470

-33

1,035

Total current assets

2,266

2,743

-17

3,939

Total assets

5,282

5,687

-7

7,007

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

-67

-64

4

-66

Invested non-restricted equity fund

5

5

0

5

Retained earnings

1,270

1,945

-35

1,882

Equity attributable to shareholders of
the parent company

2,149

2,827

-24

2,762

Non-current liabilities:

Interest-bearing liabilities

-

71

-

Total non-current liabilities

-

71

-

Current liabilities:

Interest-bearing liabilities

777

282

175

784

Advances received

708

844

-16

800

Accrued expenses and prepaid income

1,267

1,237

2

2,083

Trade and other payables

381

426

-10

579

Total current liabilities

3,133

2,788

12

4,245

Total liabilities

3,133

2,860

10

4,245

Total equity and liabilities

5,282

5,687

-7

7,007


CONSOLIDATED CONDENCED CASH FLOW STATEMENT

EUR in thousands

Jul-Sep,
2020

Jul-Sep,
2019

Change,
%

Jan-Sep,
2020

Jan-Sep,
2019

Change,
%

Jan-Dec,
2019

Cash flow from operating activities:

Result for the period

-345

-85

-304

-655

-42

-1,445

-161

Adjustments to the result

263

268

-2

930

877

6

1,250

Working capital changes

-796

-231

-244

-149

172

-187

306

Interest and other financial
expenses paid

-7

-8

-12

-34

-42

-19

-51

Interest and other financial
income received

1

11

-91

25

19

32

25

Income taxes paid

-6

-14

-57

-16

-47

-67

-18

Net cash from operating activities

-890

-59

-1,410

101

937

-89

1,349

Cash flow from investing activities:

Purchases of tangible and
intangible assets

-124

-274

-55

-777

-763

2

-1,041

Net cash used in investing activities

-124

-274

-55

-777

-763

2

-1,041

Cash flow from financing activities:

Proceeds from short term
borrowings

700

-

700

-

500

Repayments of short term
borrowings

-76

-70

10

-728

-208

250

-278

Dividends paid

-

-

0

0

0

Net cash used in financing activities

624

-70

994

-28

-208

-87

222

Net change in cash and cash
equivalents

-390

-403

-3

-704

-35

-1,927

530

Cash and cash equivalents
at the beginning of the period

722

871

-17

1,035

505

105

505

Effects of exchange rate changes
on cash and cash equivalents

-14

2

-913

-14

0

-3,171

0

Cash and cash equivalents
at the end of the period

317

470

-33

317

470

-33

1,035


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

EUR in thousands

Share
capital

Other
funds

Translation
differences

Treasury
shares

Invested non-
restricted
equity fund

Retained
earnings

Total

Equity Jan 1, 2019

1,359

21

-61

-439

5

1,987

2,873

Comprehensive income

-4

-42

-46

Equity Sep 30, 2019

1,359

21

-64

-439

5

1,945

2,827

Stock option scheme

56

56

Comprehensive income

-1

-119

-121

Equity Dec 31, 2019

1,359

21

-66

-439

5

1,882

2,762

Stock option scheme

42

42

Comprehensive income

-1

-655

-656

Equity Sep 30, 2020

1,359

21

-67

-439

5

1,270

2,149


NOTES TO INTERIM FINANCIAL STATEMENTS

ACCOUNTING PRINCIPLES

This report complies with requirements of IAS 34 ”Interim Financial Reporting”. Starting from the beginning of 2020, the Group has applied certain new or revised IFRS standards and IFRIC interpretations, as described in the Consolidated Financial Statements 2019. The implementation of these 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 2019 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.

Definitions for key indicators can be found in the end of the latest annual report, on pages 64-65: https://www.qpr.com/investors/financial-information/annual-reports


INTANGIBLE AND TANGIBLE ASSETS

EUR in thousands

Jan-Sep,
2020

Jan-Sep,
2019

Jan-Dec,
2019

Increase in intangible assets:

Acquisition cost Jan 1

11,159

10,057

10,057

Increase

627

732

1,102

Increase in tangible assets:

Acquisition cost Jan 1

2,487

2,433

2,433

Increase

171

31

54


CHANGE IN INTEREST-BEARING LIABILITIES

EUR in thousands

Jan-Sep,
2020

Jan-Sep,
2019

Jan-Dec,
2019

Interest-bearing liabilities Jan 1

784

562

562

Proceeds from short term borrowings

721

-

500

Repayments

728

208

278

Interest-bearing liabilities Sep 30

777

354

784


PLEDGES AND COMMITMENTS

EUR in thousands

Sep 30,
2020

Sep 30,
2019

Dec 31,
2019

Change,
%

Business mortgages (held by the Company)

2,385

1,384

1,385

72

Minimum lease payments based on lease agreements:

Maturing in less than one year

7

19

17

-56

Maturing in 1-5 years

8

2

0

Total

16

21

17

-5

Total pledges and commitments

2,401

1,406

1,402

71


CONSOLIDATED INCOME STATEMENT BY QUARTER

EUR in thousands

Q3
2020

Q2
2020

Q1
2020

Q4
2019

Q3
2019

Q2
2019

Q1
2019

Net sales

1,801

2,041

2,789

2,499

1,981

2,285

2,748

Other operating income

75

25

-

0

-

0

-

Materials and services

279

260

440

379

243

260

263

Employee benefit expenses

1,474

1,757

1,739

1,743

1,375

1,644

1,693

Other operating expenses

232

109

220

178

175

228

296

EBITDA

-109

-60

390

199

188

153

497

Depreciation and amortization

304

324

345

322

307

310

310

Operating result

-413

-384

45

-123

-119

-158

187

Financial income and expenses

-6

6

-9

-3

3

-6

-20

Result before tax

-419

-378

36

-126

-116

-164

167

Income taxes

74

57

-25

7

31

66

-26

Result for the period

-345

-321

11

-119

-85

-98

141


GROUP KEY FIGURES

EUR in thousands, unless
otherwise indicated

Jan-Sep or
Sep 30, 2020

Jan-Sep or
Sep 30, 2019

Jan-Dec or
Dec 31, 2019

Net sales

6,630

7,015

9,513

Net sales growth, %

-5.5

-4.9

-5.3

EBITDA

221

838

1,036

% of net sales

3.3

11.9

10.9

Operating result

-752

-90

-213

% of net sales

-11.3

-1.3

-2.2

Result before tax

-761

-113

-240

% of net sales

-11.5

-1.6

-2.5

Result for the period

-655

-42

-161

% of net sales

-9.9

-0.6

-1.7

Return on equity (per annum), %

-35.5

-2.0

-5.7

Return on investment (per annum), %

-30.0

-3.1

-5.9

Cash and cash equivalents

317

470

1,035

Net borrowings

459

-116

-251

Equity

2,149

2,827

2,762

Gearing, %

21.4

-4.1

-9.1

Equity ratio, %

47.0

58.4

44.5

Total balance sheet

5,282

5,687

7,007

Investments in non-current assets

798

763

1,156

% of net sales

12.0

10.9

12.2

Product development expenses

1,587

1,653

2,293

% of net sales

23.9

23.6

24.1

Average number of personnel

86

82

82

Personnel at the beginning of period

83

84

84

Personnel at the end of period

85

83

83

Earnings per share, EUR
(basic and diluted)

-0.055

-0.004

-0.013

Equity per share, EUR

0.173

0.227

0.222