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QPR Software Plc Interim Report January-March 2023

QPR Software Oyj
QPR Software Oyj






QPR SOFTWARE PLC             STOCK EXCHANGE RELEASE          3 May 2023, AT 9.00 AM EET





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)

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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 45% (37) 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 unavoidable. 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.