TIDMSSH1V
SSH COMMUNICATIONS SECURITY CORPORATION STOCK EXCHANGE RELEASE
July 17, 2019 AT 9:00 A.M
OVER 8 % SALES GROWTH, POSITIVE OPERATING PROFIT IN SECOND QUARTER
April-June 2019: Net sales increased by 8.5 % compared to the previous
year. Quarter-end cash position was strong.
-- Net sales totaled EUR 4.0 million (EUR 4--6/2018: 3.7 million)
-- Operating profit was EUR 0.4 million (EUR -0.1 million)
-- Profit for the period was EUR 0.2 million (EUR 0.0 million)
-- Earnings per share was EUR 0.00 (EUR -0.01)
January--June 2019: Net sales decreased by 21.9 % compared to the
previous year. Operating cash flow was slightly negative and cash
position remained strong at the end of the period.
-- Net sales totaled EUR 6.6 million (EUR 1--6/2018: 8.5 million)
-- Operating loss was EUR -0.9 million (EUR 0.0 million)
-- Loss for the period was EUR -1.0 million (EUR 0.0 million)
-- Earnings per share was EUR -0.04 (EUR -0.01)
Equity ratio remained good at 81.5 % (June 30, 2018: 89.0 %) and liquid
assets were EUR 11.2 million (EUR 11.7 million).
KEY FIGURES
EUR million 4--6/2019 4--6/2018 1--6/2019 1--6/2018 Change % 1--12/2018
-------------- --------- --------- --------- --------- --------- ----------
Net sales 4.0 3.7 6.6 8.5 -21.9 18.3
Operating
profit/loss 0.4 -0.1 -0.9 0.0 -4 536.1 0.5
% of net
sales 9.3 -2.5 -13.4 0.2 -5 779.0 3.0
Profit/loss
before taxes 0.3 0.0 -1.0 0.0 -2 376.6 0.6
Profit/loss 0.2 0.0 -1.0 0.0 -13 679.5 0.5
Return on
equity, % -7.1 0.1 -12 537.0 3.8
Return on
investment,
% -6.8 0.3 -2 153.7 4.1
Liquid assets 11.2 11.7 -4.5 13.5
Gearing (%) -81.6 -95.7 14.7 -93.5
Equity ratio
(%) 81.5 89.0 -8.5 81.6
Earnings per
share, EUR 0.00 -0.01 -0.04 -0.01 -213.7 -0.01
Shareholders'
equity per
share, EUR 0.32 0.32 0.32 0.32 1.1 0.37
CEO'S REVIEW
Valued shareholders customers, partners, and co-workers,
We had a positive second quarter with growing sales and a return to
profitability.
Financial Performance
Q2 sales were EUR 4.0 million with 8.5 % year-on-year growth and 48.0 %
growth over the previous quarter. While the performance was a clear
improvement, the strong quarterly variation is a reminder of the
volatility we will keep experiencing during our ongoing transition
period from perpetual licensing to a subscription-based sales model.
Continuous cost-control measures help stabilize this volatility and we
remain well-positioned to go into the second half of the year, which
typically represents a stronger sales cycle in our business.
Operating profit for the quarter was EUR 0.4 million, showing a clear
improvement both year-on-year (EUR -0.1 million) and quarter-on-quarter
(EUR -1.3 million). We continued the careful management of
administrative costs during the quarter and also achieved savings in our
IPR asset management.
Due to the successful savings in administration and IPR asset management,
we were able to increase our operational R&D spending while keeping the
overall costs on a lower level than earlier.
Our profit for the quarter was EUR 0.2 million, compared to EUR 0.0
million in Q2/2018 and EUR -1.2 million in Q1/2019. Quarterly cash flow
from operations was supported by the strong performance of maintenance
renewals but was slightly negative due to growth in receivables as
several large deals we closed towards the end of the quarter. Our
balance sheet and cash position remain strong and allow us to proceed
with the execution of our strategy.
Sales performance
In regional terms, sales in the APAC region grew by over 70 % compared
to the same quarter in 2018. The EMEA region sales were up by 4 % and
Americas sales were down by 5 %. Americas remained the largest region
with a 49 % share of the total revenue. EMEA accounted for 29 % and APAC
for 22 % of the total revenue.
Recurring revenue invoicing grew noticeably from the comparison period
indicating that our recurring revenue is on solid ground. The healthy
renewal rate and our ability to increase recurring revenue from several
key customers show the continued faith of our customers and our
importance to their mission-critical infrastructure. This also maintains
our source of investment capability to realize our SSH200 growth vision.
During the quarter, we entered into several new partnerships including a
global partnership with Tech Mahindra that covers both PrivX(R) and
Universal SSH Key Manager(R) (UKM). We also made deliveries of both UKM
and PrivX with partners that we signed in late 2018 and early 2019 and
continued supporting our new partners in several opportunities active in
their pipelines.
We increasingly emphasize partnerships in our go-to-market planning, and
we have shifted our focus from simply signing up partners to building
successful and value-creating long-lasting partnerships. Tech Mahindra
is a perfect example of the direction we want to go in with our
partnering efforts: a value-added relationship with a trusted partner
for enterprise customers.
We received several significant orders for the UKM product from Fortune
500 companies and continued to see increasing interest in the product,
especially in the US market. A major technology company also started
their step-by-step deployment of UKM during the quarter.
Our Tectia(R) product line continued to perform well in both license
sales and maintenance renewals. We received a large Tectia enterprise
license order from a major Asian bank during the quarter.
PrivX Business
PrivX customer base grew during the quarter and we started seeing
increasing traction from large enterprises during the quarter. We signed
several new deals, including a delivery to Western Union, the global
leader in cross-border, cross-currency money movement. PrivX was also
taken into use for example by a large manufacturing company in Europe,
by several digital growth companies in Europe and the US, and by
mid-sized financing sector players globally. These customers are
forward-looking innovators who are starting to embrace SSH.COM's new
Zero Trust driven Privileged Access Management paradigm and are among
the first to take advantage of the improved security, faster deployment,
and increased productivity offered by PrivX.
We launched a free version of PrivX aimed primarily at start-ups in
early June. The strong demand for the free version during the first four
weeks after the launch demonstrates growing interest and demand for a
modern cloud access management tool such as PrivX.
Due to our strategic decision to focus on the subscription-based sales
model, the revenue impact of PrivX was still relatively modest, but
these sales build a growing base of stable recurring revenue.
NQX(R) Business
We produced new versions of the NQX appliance with major new features,
including certificate support, centralized management, high availability,
and support for new hardware platforms. We also expanded the product
selection with a smaller and more affordable appliance meant for less
demanding use cases.
The Finnish Transport and Communications Agency (Traficom) certified
version 1.1.0 of NQX firewall and VPN appliance with several of the new
features as a cryptographic product for protecting classified
information according to Finnish national (FI) confidential security
requirements.
Operational milestones
During Q2 we continued the roll-out of the new customer-focused
organization we announced in December 2018. We increased both
organizational ability and worked systematically to increase our
customer intimacy and understanding.
Operationally, we reached several milestones during the second quarter:
-- Release of the free version of PrivX in early June
-- Releases of new versions of NQX, UKM, Tectia, and PrivX products
-- Start of NPS (Net Promoter Score) measurements of our customers with good
to excellent scores and no detractors
-- We continued to refine our lead generation and inside sales models to
boost lead generation and speed up sales in future quarters
We continued adopting faster, more agile R&D processes developed at the
PrivX business program in other areas of R&D. The first results are
encouraging as we have been able to shorten the development cycles for
e.g. UKM.
The SSH200 Growth Vision and Our Mission and Purpose
As announced on June 4(th) , SSH's Board of Directors has approved a new
growth vision called SSH200. The vision describes our long-term growth
ambition to grow to over 200 million euro in annual revenue in the
identity and access management market during the 2020s.
The vision is based on deep, research-based insight into technology and
market developments and consequent customer needs. We believe
Intelligent Access Control will be a key focus area in enterprise
security in the coming years. This is the segment where we concentrate
on and where we aim to grow with new generations of our key products
such as PrivX.
During the formulation of the growth vision, we also examined and
updated our company purpose and company mission statement. These
statements stem from our corporate DNA, our capabilities, values, and
where we want to take the company.
SSH's updated company purpose is "We make digital safer". This purpose
reflects both our historical roots and future ambition and is a direct
extension of the original spirit SSH was founded upon in 1995.
SSH's updated mission statement is "We craft proactive, foundational
security solutions that power intelligent access". This statement
reflects our pride in our work, the foundational nature of SSH's
products past, present, and future, and our belief that intelligent
access will be a crucially and increasingly important segment of the
growing cybersecurity market in the cloud era.
Outlook for the Year
The outlook in the cybersecurity segment remains good. We are seeing
increased awareness of SSH Key Management related risks especially in
the US which heightens our prospects' and customers' interest in UKM and
related services.
The business fundamentals for PrivX also keep improving. Analysts such
as Gartner and IDC have identified Privileged Access Management as a key
priority in enterprise cybersecurity and the fast-growing Zero Trust
security trend supports our PrivX messaging.
While our ambition level is high and the market situation is positive
for us, we are still expecting significant quarterly volatility due to
the timing of large deals and our ongoing transition towards
subscription-based sales. As we announced in connection with the SSH200
Growth Vision, the vision does not affect our published guidance, which
remains unchanged:
For the year 2019, we expect double-digit percentage growth from our
software business (software fees, professional services, and recurring
revenue) at comparable exchange rates, exceeding the projected annual
cybersecurity market growth of approximately 10 %. In the medium term,
we expect similar or faster growth and will also explore avenues for
accelerated growth through inorganic growth opportunities. Possible
significant quarterly variation in revenue growth is still to be
expected due to the timing of larger deals over the financial year.
Kaisa Olkkonen
CEO
NET SALES
Consolidated net sales for April--June totaled EUR 4.0 million (EUR 3.7
million).
Consolidated net sales for January--June totaled EUR 6.6 million (EUR
8.5 million), down by 21.9 %, year on year.
The Americas accounted for 53.2 % (45.0 %), the Europe, Middle East and
Africa region (EMEA) 26.3 % (29.8 %), and the Asia Pacific region 20.5 %
(13.5 %) of reported consolidated net sales. Global royalty income
accounted for 0.0 % (11.8 %) of reported net sales.
CONSOLIDATED
NET SALES
EUR million 4--6/2019 4--6/2018 1--6/2019 1--6/2018 Change % 1--12/2018
-------------- --------- --------- --------- --------- -------- ----------
BY
GEOGRAPHICAL
AREA
AMERICAS 2.0 2.1 3.5 3.8 -7.7 9.0
APAC 0.9 0.5 1.4 1.1 18.7 2.4
EMEA 1.1 1.1 1.7 2.5 -30.8 4.2
Global
royalty
income 0.0 0.0 0.0 1.0 -100.0 2.7
Total 4.0 3.7 6.6 8.5 -21.9 18.3
-------------- --------- --------- --------- --------- -------- ----------
BY OPERATION
Software fees 1.7 0.7 2.2 2.5 -12.4 5.6
Professional
services &
other 0.1 0.9 0.2 1.9 -89.0 4.3
Recurring
revenue 2.2 2.1 4.3 4.1 3.3 8.5
Total 4.0 3.7 6.6 8.5 -21.9 18.3
-------------- --------- --------- --------- --------- -------- ----------
The majority of the company's invoicing is U.S. dollar based. With
comparable exchange rates, net sales reduction would have been -25.7 %
compared with 2018 corresponding period.
RESULTS AND EXPENSES
Operating profit for April--June was EUR 0.4 million (EUR -0.1 million),
with net profit totaling EUR 0.2 million (EUR 0.0 million).
Operating loss for January-June was EUR -0.9 million (EUR 0.0 million),
with net profit totaling EUR -1.0 million (EUR 0.0 million).
Sales, marketing and customer support expenses for April--June amounted
to EUR -1.7 million (EUR -2.0 million), while research and development
expenses totaled EUR -1.1 million (EUR -1.1 million) and administrative
expenses EUR -0.6 million (EUR -0.5 million). Compared to April-June
2018 operating expenses decreased by 1 %.
Sales, marketing and customer support expenses for January--June
amounted to EUR -3.7 million (EUR -4.1 million), while research and
development expenses totaled EUR -2.3 million (EUR -2.4 million) and
administrative expenses EUR -1.3 million (EUR -1.4 million). Operating
expenses decreased by 8 % compared to the previous year.
BALANCE SHEET AND FINANCIAL POSITION
The financial position of SSH Communications Security was good during
the reporting period. The consolidated balance sheet total on June 30,
2019 stood at EUR 20.6 million (June 30, 2018 EUR 19.4 million; December
31, 2018 EUR 24.2 million), of which liquid assets accounted for EUR
11.2 million (June 30, 2018 EUR 11.7 million; December 31, 2018 EUR 13.5
million), or 54.3 % of the balance sheet total. Interest-bearing
liabilities were EUR 1.0 million (June 30, 2018 EUR 0.0 million,
December 31, 2018 EUR 0.2 million). Interest-bearing liabilities
increased by EUR 0.4 million from December 31, 2018 due to the
application of IFRS 16 Leases -standard and increase in lease liability.
In June 2019 subordinated loan which Kyberleijona Oy has taken out from
the non-controlling interest holder, State Security Networks Group
Finland was increased by EUR 0.4 million from EUR 0.2 million to EUR 0.6
million. On June 30, 2019, gearing, or the ratio of net liabilities to
shareholders' equity, was -81.6 % (June 30, 2018 -95.7 %; December 31,
2018 -93.5 %) and the equity ratio stood at 81.5 % (June 30, 2018 89.0
%; December 31, 2018 81.6 %).
The reported gross capital expenditure for January-June totaled EUR 1.0
million (EUR 0.9 million). The reported financial income and expenses
amounting in total to EUR -0.1 million (EUR 0.0 million) consisted of
exchange rate gains and losses, interest expenses on advances from
customers with a significant financing component and interest expenses
on lease liability.
During January--June, SSH Communications Security reported a cash flow
of EUR -0.7 million (EUR -0.2 million) from business operations, and
investments showed a cash flow of EUR -1.0 million (EUR -0.9 million).
Cash flow from financing totaled EUR -0.6 million (EUR -0.7 million).
Total cash flow from operations, investments and financing was negative
EUR -2.3 million (EUR -1.9 million).
There were no short-term investments at the end of the reporting period.
RESEARCH AND DEVELOPMENT
Research and development expenses for April--June totaled EUR -1.1
million (EUR -1.1 million), the equivalent of 28.8 % of net sales (31.4
%). During April--June, the company has capitalized R&D costs EUR 0.5
million (EUR 0.4 million).
Research and development expenses for January--June totaled EUR -2.3
million (EUR -2.4 million), the equivalent of 34.5 % of net sales (28.5
%). During January--June, the company has capitalized new product R&D
costs EUR 1.0 million (EUR 0.9 million). Depreciation from R&D
capitalization assets was EUR -0.7 million (EUR -0.9 million).
HUMAN RESOURCES AND ORGANIZATION
At the end of June, the Group had 86 employees on its payroll (June 30,
2018: 85; December 31, 2018: 85). The number of employees increased by
one person from the previous year and from the year-end (1.2 %).
At the end of the period, 36.0 % (40.0 %) of the employees worked in
sales, marketing and customer services, 50.0 % (43.5 %) in R&D, and 14.0
% (16.5 %) in corporate administration.
BOARD AND AUDITORS
The Annual General Meeting of SSH Communications Oyj was held on March
26, 2019. The Annual General Meeting unanimously adopted the financial
statement and consolidated financial statement and granted discharge
from liability to the Board members and CEO who have been active during
the accounting period between January 1, 2018 and December 31, 2018. In
the meeting, it was decided that the Board of Directors would consist of
six members. Petri Kuivala, Tatu Ylönen, Timo Syrjälä,
Anne Marie Zettlemoyer and Sam Curry were re-elected and Sauli Kiuru was
elected as a new member of the Board of Directors. Petri Kuivala was
elected as the Chairman of the Board of Directors at the Board's
organizing meeting and Sauli Kiuru was elected as the Vice Chairman of
the Board of Directors.
The Authorized Public Accountants Ernst & Young Oy was re-elected as the
auditor of the company. Ernst & Young Oy has informed that Erkka
Talvinko, Authorized Public Accountant, will continue to act as the
principle auditor.
SHARES, SHAREHOLDING, AND CHANGES IN GROUP STRUCTURE
The reported trading volume of SSH Communications Security shares
totaled 2,220,063 shares (valued at EUR 3,289,064). The highest
quotation was EUR 1.97 and the lowest EUR 1.11. The trade-weighted
average share price for the period was EUR 1.48 and the share closed at
EUR 1.46 (June 28, 2019).
The company's principal owner Tatu Ylönen holds directly 47.2 %,
Timo Syrjälä holds directly and through his company Acme
Investments SPF S.a.r.l. 9.2 % and Juha Mikkonen holds directly 5.2 % of
the company's shares. More information about the shareholding can be
obtained from the company's web site www.ssh.com.
No dividend or return of capital has been distributed during the
reporting period.
SHARE CAPITAL AND BOARD AUTHORIZATIONS
The company's registered share capital on June 30, 2019 was EUR
1,164,066.99 consisting of 38,802,233 shares.
The Annual General Meeting approved the Board of Directors' proposal to
authorize the Board of Directors to decide upon the issuing of a maximum
of 6,000,000 shares as a share issue against payment or by giving stock
options or other special rights entitling to shares, in accordance with
Chapter 10 Section 1 of the Finnish Companies Act, either according to
the shareholders' pre-emptive right to share subscription or deviating
from this right, in one or more tranches. Based on the authorization, it
can be either issuing of new shares or transfer of own shares, which the
company possibly has in its possession.
Based on the authorization, the Board of Directors shall have the same
rights as the Annual General Meeting to decide upon the issuing of
shares against payment and special rights (including stock options) in
accordance with Chapter 10 Section 1 of the Finnish Companies Act.
Thereby, the authorization to be given to the Board of Directors
includes, inter alia, the right to deviate from the shareholders'
pre-emptive rights with directed issues providing that the company has a
weighty financial reason for the deviation in respect of the share issue
against payment.
Furthermore, the authorization includes the Board of Directors' right to
decide upon who are entitled to the shares and/or stock options or
special rights in accordance with Chapter 10 Section 1 of the Finnish
Companies Act as well as upon the related compensation, subscription and
payment periods and upon the registering of the subscription price into
the share capital or invested non-restricted equity fund within the
limits of the Finnish Companies Act.
The authorization will be valid until the next Annual General Meeting,
but will however expire at the latest on June 30, 2020.
The Annual General Meeting approved the Board of Directors' proposal to
authorize the Board of Directors to decide upon acquisition of a maximum
of 2,000,000 own shares of the company with assets belonging to the
company's non-restricted equity, which amounts to approximately 5.2
percent of the company's total shares. The shares can also be acquired
otherwise than in proportion to the holdings of the existing
shareholders. The maximum compensation to be paid for the acquired
shares shall be the market price at the time of purchase, which is
determined in the public trading.
The Board of Directors proposes that the authorization for the acquiring
of the company's own shares would be used, inter alia, in order to
strengthen the company's capital structure, to finance and realize
corporate acquisitions and other arrangements, to realize the
share-based incentive programs of the company or otherwise to be kept by
the company, to be transferred for other purposes or to be cancelled.
The acquisition of shares reduces the company's distributable
non-restricted equity.
A decision concerning the acquiring of own shares cannot be made so that
the combined amount of the own shares, which are in the possession of or
held as pledges by, the company or its subsidiaries exceeds one-tenth of
all shares. The Board of Directors shall decide upon all other matters
related to the acquisition of shares.
The authorization will be valid until the next Annual General Meeting
but will however expire at the latest on June 30, 2020.
RISKS AND UNCERTAINTIES
Largest risks that might impact the profitability of the company have
remained by and large the same than in the previous reporting period and
are listed below. Other risks, which are currently either unknown or
considered immaterial to SSH Communications Security may, however,
become material in the future.
Largest risks:
- uncertainty of the macroeconomic environment
- cybercrime, including e.g. ransomware
- delays in product development and closing new business as well as
phasing of new business cases
- ability to execute the strategy
- ability to retain and recruit key personnel
- maintaining the ability to innovate and develop the product portfolio
including intellectual property rights (IPR)
- IPR litigation and utilization of the patent portfolio
- a large portion of the company revenue is invoiced in USD currency so
possible large fluctuation in USD currency rates during 2019 could have
unpredictable effects for profitability that are at the time difficult
to estimate. The company decides on hedging of USD based contracts case
by case.
Principles and organization of risk management of SSH Communications
Security can be read from the company's webpage: www.ssh.com.
RELATED PARTY TRANSACTIONS
During the reporting period, there have not been any significant
transactions with related parties.
EVENTS AFTER THE BALANCE SHEET DATE
After the balance sheet date, there have not been any significant
transactions.
REPORTING
The interim report for the six months reporting period ended June 30,
2019 has been prepared in accordance with IAS 34 Interim Financial
Reporting. This interim report does not include all the information and
disclosures required in the annual financial statements and should be
read in conjunction with the consolidated financial statements for the
year ended December 31, 2018. The information presented in this interim
report is unaudited.
The accounting policies adopted for this interim report are consistent
with those applied in 2018 consolidated financial statements except for
the adoption of new standards effective as of January 1, 2019. The Group
has not early adopted any other standard, interpretation or amendment
that has been issued but is not yet effective.
New and amended standards adopted
A few new standards and amendments to standards are effective for the
annual period beginning on January 1, 2019 and the Group had to change
its accounting policies and make retrospective adjustments as a result
of adopting IFRS 16 Leases.
The impact of the adoption of the leasing standard and the new
accounting policies are disclosed below. The other changes in standards
did not have any impact on the group's accounting policies and did not
require retrospective adjustments.
Changes in accounting policies
The Group has adopted the new IFRS 16 standard using the modified
retrospective approach and the comparative information has not been
restated. The reclassifications and adjustments arising from the new
accounting rules have been recognized in the opening balance sheet on
January 1, 2019.
The Group leases mainly offices. Rental contracts are typically made for
fixed periods from two to three years but may have extension options.
The Group continues to treat leases of 12 months or less and leases of
low-value assets as other leases.
Until the year 2018 leases of property, plant, and equipment were
classified as operating leases. Payments made under operating leases
were recognized in the income statement on a straight-line basis over
the period of the lease.
From January 1, 2019, according to the new IFRS 16 Leases standard,
leases are recognized in the balance sheet as a right-of-use asset and a
corresponding financial liability at the date at which the leased asset
is available for the use by the Group. Each lease payment is allocated
between the liability and finance cost. The finance cost is recognized
in the income statement over the lease period. The right-of-use asset is
depreciated over the shorter of the asset's useful life and the lease
term on a straight-line basis. The lease liabilities were discounted at
the borrowing rate as of January 1, 2019. The weighted average discount
rate was 7.5 %.
The change in accounting policy affected the following items in the
balance sheet on January 1, 2019:
-- right-of-use asset -- increase by EUR 0.5 million
-- non-current liabilities -- increase by EUR 0.2 million
-- current liabilities - increase by EUR 0.3 million
The recognized leases in the balance sheet as of June 30, 2019 and in
the income statement for the first two quarters of the year are as
follows:
LEASES IN THE BALANCE SHEET
EUR million 30 June 2019
----------------------------------- ------------
ASSETS
Non-current assets
Right-of-use assets - property 0.4
----------------------------------- ------------
Total 0.4
EQUITY AND LIABILITIES
Lease liabilities, non-current 0.1
Lease liabilities, current 0.3
----------------------------------- ------------
Total 0.4
LEASES IN THE INCOME STATEMENT
EUR million 4-6/2019 1-6/2019
------------------------------------------------- -------- --------
Other lease expenses -0.0 -0.0
Depreciation of right-of-use assets -0.1 -0.2
Interest expense on lease liabilities -0.0 -0.0
------------------------------------------------- -------- --------
Total amounts recognized in the income statement -0.1 -0.2
TABLES
CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
EUR million 4--6/2019 4--6/2018 1--6/2019 1--6/2018 1--12/2018
---------------------------------------------------- --------- --------- --------- --------- ----------
Net sales 4.0 3.7 6.6 8.5 18.3
Cost of sales -0.1 -0.2 -0.3 -0.6 -1.4
Gross margin 3.9 3.5 6.4 7.9 16.9
Other operating income 0.0 0.0 0.0 0.0 0.0
Selling, marketing, and customer support expenses -1.7 -2.0 -3.7 -4.1 -8.5
Research and development expenses -1.1 -1.1 -2.3 -2.4 -5.1
Administrative expenses -0.6 -0.5 -1.3 -1.4 -2.7
---------------------------------------------------- --------- --------- --------- --------- ----------
Operating profit/loss 0.4 -0.1 -0.9 0.0 0.5
Financial income and expenses -0.1 0.1 -0.1 0.0 0.0
---------------------------------------------------- --------- --------- --------- --------- ----------
Profit/loss before taxes 0.3 0,0 -1.0 0.0 0.6
Taxes -0.0 -0.0 -0.0 -0.0 -0.0
Profit/loss for the period 0.2 0.0 -1.0 0.0 0.5
---------------------------------------------------- --------- --------- --------- --------- ----------
Attributable to:
Owners of the parent company 0.3 0.0 -0.9 0.0 0.8
Non-controlling interests -0.1 0.0 -0.1 0.0 -0.3
0.2 0.0 -1.0 0.0 0.5
--------- --------- --------- --------- ----------
Other comprehensive income
Items which might be later transferred to profit or
loss:
Foreign subsidiary translation differences 0.0 -0.1 -0.0 -0.1 -0.1
Total comprehensive income 0.3 -0.1 -1.0 -0.1 0.4
---------------------------------------------------- --------- --------- --------- --------- ----------
Attributable to:
Owners of the parent company 0.3 -0.1 -0.9 -0.1 0.7
Non-controlling interest -0.1 0.0 -0.1 0.0 -0.3
0.3 -0.1 -1.0 -0.1 0.4
--------- --------- --------- --------- ----------
Earnings per share
Earnings per share (EUR) 0.00 -0.01 -0.04 -0.01 -0.01
Diluted earnings per share (EUR) 0.00 -0.01 -0.04 -0.01 -0.01
CONDENSED CONSOLIDATED BALANCE
SHEET
EUR million June 30, 2019 June 30, 2018 Dec 31, 2018
---------------------------------- ------------- ------------- ------------
ASSETS
Non-current assets
Property, plant, and equipment 0.1 0.1 0.2
Right-of-use assets 0.4 - -
Intangible assets 5.4 4.8 5.2
Investments 0.0 0.0 0.0
---------------------------------- ------------- ------------- ------------
Total non-current assets 6.0 4.9 5.4
Current assets
Inventories 0.0 0.0 0.0
Trade and other receivables 3.4 2.8 5.4
Financial assets 0.0 0.0 0.0
Cash and cash equivalents 11.2 11.7 13.5
---------------------------------- ------------- ------------- ------------
Total current assets 14.6 14.5 18.9
Total assets 20.6 19.4 24.2
---------------------------------- ------------- ------------- ------------
EQUITY AND LIABILITIES
Equity
Attributable to parent company's
shareholders 11.7 12.2 13.4
Non-controlling interest 0.7 0.0 0.8
---------------------------------- ------------- ------------- ------------
Total equity 12.4 12.2 14.2
Non-current liabilities
Borrowings 0.6 0.0 0.2
Other non-current liabilities 0.1 - -
---------------------------------- ------------- ------------- ------------
Total non-current liabilities 0.7 0.0 0.2
Current liabilities
Current liabilities 7.4 7.2 9.8
---------------------------------- ------------- ------------- ------------
Total current liabilities 7.4 7.2 9.8
Total equity and liabilities 20.6 19.4 24.2
---------------------------------- ------------- ------------- ------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the owners of the Company
Hybrid Unrestricted
EUR Share capital Translation invested Retained Non-controlling Total
million capital securities difference equity fund earnings Total interests equity
-------- ------- ---------- ----------- ------------ -------- ----- --------------- ------
Equity
Jan 1,
2018 1.2 12.0 -1.3 22.1 -21.2 12.8 - 12.8
Change 0.0 -0.1 0.2 -0.8 -0.6 - -0.6
Net
profit 0.0 0.0 - 0.0
-------- ------- ---------- ----------- ------------ -------- -----
Equity
June
30,
2018 1.2 12.0 -1.4 22.3 -21.9 12.2 0.0 12.2
Change 0.0 0.0 0.0 0.4 0.2 0.5 0.5
Change in Group
structure(1) -0.1 -0.1 1.1 1.0
Net
profit 0.8 0.8 -0.3 0.5
-------- ------- ---------- ----------- ------------ -------- -----
Equity
Dec 31,
2018 1.2 12.0 -1.4 22.7 -21.1 13.4 0.8 14.2
Change 0.0 -0.8 -0.8 -0.8
Net
profit -0.9 -0.9 -0.1 -1.0
-------- ------- ---------- ----------- ------------ -------- -----
Equity
June
30,
2019 1.2 12.0 -1.4 22.7 -22.7 11.7 0.7 12.4
(1) State Security Networks Group Finland became a
non-controlling interest holder of Kyberleijona Oy
with 35 % ownership. The amount of investment
was EUR 1.0 million and additionally, State Security
Networks Group Finland has issued a subordinated loan
of EUR 0.2 million to Kyberleijona Oy.
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
EUR million 1--6/2019 1--6/2018 1--12/2018
-------------------------------------------- --------- --------- ----------
Cash flow from operations -0.7 -0.2 1.2
whereof change in working capital -0.8 -1.2 -1.2
Cash flow from investing activities -1.0 -0.9 -2.3
Cash flow from financing activities -0.6 -0.7 0.9
Increase(+) / decrease(-) in cash -2.3 -1.9 -0.2
Cash at period start 13.5 13.5 13.5
Effect of exchange rate 0.0 0.1 0.2
Cash at period end 11.2 11.7 13.5
CONTINGENT LIABILITIES
EUR million 30 June 2019 30 June 2018 31 Dec 2018
------------------------------------- ------------ ------------ -----------
Interest on hybrid capital securities 0.2 0.2 0.7
Rent security deposits 0.1 0.1 0.1
Leasing commitments outside the
balance sheet
Maturing within 1 year 0.0 0.3 0.3
Maturing between 1 and 5 years 0.0 0.4 0.2
KEY FIGURES AND RATIOS
EUR million 1--6/2019 1--6/2018 1--12/2018
--------------------------------- --------- --------- ----------
Net sales 6.6 8.5 18.3
Operating profit/loss -0.9 0.0 0.5
% of net sales -13.4 0.2 3.0
Profit/loss before taxes -1.0 0.0 0.6
% of net sales -14.3 0.5 3.0
Return on equity (%) -7.1 0.1 3.8
Return on investment (%) -6.6 0.3 4.1
Interest-bearing net liabilities -10.2 -11.7 -13.3
Equity ratio (%) 81.5 89.0 81.6
Gearing (%) -81.6 -95.7 -93.5
Gross capital expenditure 1.0 0.9 2.3
% of net sales 15.7 11.1 12.3
R&D expenses -2.3 -2.4 -5.1
% of net sales 34.5 28.5 27.9
Personnel, period average 87 83 82
Personnel, period end 86 85 85
PER SHARE DATA
EUR 1--6/2019 1--6/2018 1--12/2018
-------------------------------------------- --------- --------- ----------
Earnings per share undiluted(2) -0.04 -0.01 -0.01
Earnings per share diluted(2) -0.04 -0.01 -0.01
Equity per share 0.32 0.32 0.37
No. of shares at period average (thousand) 38 802 38 467 38 578
No. of shares at period end (thousand) 38 802 38 510 38 802
Share performance
Average price 1.48 2.04 2.00
Low 1.11 1.72 1.60
High 1.97 2.27 2.27
Share price period end 1.46 2.15 1.68
Market capitalization period end (EUR
million) 56.5 82.8 65.2
Volume of shares traded (million) 2.2 6.2 7.8
Volume of shares traded as % of total 5.7 16.2 20.2
Value of shares traded (EUR million) 3.3 12.7 15.6
Price per earnings ratio (P/E) neg. neg. neg.
Dividend per share 0.00 0.00 0.00
Dividend per earnings, % 0.00 0.00 0.00
Effective return on dividend, % 0.00 0.00 0.00
(2) Earnings per share is impacted by the unpaid interest
of hybrid capital securities
DISCLAIMER
The content in this report is provided by SSH Communications Security
and its third-party content providers for your personal information
only. And does not constitute an offer or invitation to purchase any
securities. Nor does it provide any form of advice (investment. tax.
legal) amounting to investment advice. Or make any recommendations
regarding particular investments or products. SSH Communications
Security does not provide investment advice or recommendations to buy or
sell its shares or the shares of others. If you are interested in
investing in SSH Communications Security, please contact your financial
advisor for further details and information. Past performance of SSH
Communications Security shares is not indicative of future results.
EXCEPT AS PROVIDED BY APPLICABLE COMPULSORY LAW SSH COMMUNICATIONS
SECURITY EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESSED OR IMPLIED. AS TO
THE AVAILABILITY, ACCURACY OR RELIABILITY OF ANY OF THE CONTENT PROVIDED,
OR AS TO THE FITNESS OF THE INFORMATION FOR ANY PURPOSE.
SSH Communications Security will release its next interim report for the
period January 1 -- September 30, 2019 on October 23, 2019.
Helsinki, July 17, 2019
SSH COMMUNICATIONS SECURITY
Board of Directors
Kaisa Olkkonen
CEO
For further information, please contact:
Kaisa Olkkonen, CEO tel. +358 40 579 5216
Niklas Nordström, CFO tel. +358 50 541 0543
Distribution:
NASDAQ Helsinki Ltd.
Major media
www.SSH.com
(END) Dow Jones Newswires
July 17, 2019 02:00 ET (06:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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