Results for second quarter and first semester 2008

Transcription

1 Immediate publicatin Results fr secnd quarter and first semester 2008 Brussels, Belgium - 21 August 2008 Keyware (EURONEXT Brussels: KEYW), a leading supplier f slutins fr e-payment, lyalty systems, identity applicatins and related transactin management, tday annunced the financial results fr the secnd quarter and the first semester f 2008, clsing n 30 June Fr the first semester f 2008 the Grup has realised a turnver f EUR 2,101k cmpared with EUR 1,938k fr the same perid in 2007, which amunts t an increase f 8.41%. This increase in turnver is nearly entirely attributable t the payment terminal divisin. In this divisin the number f new signed cntracts has increased cmpared with the same perid f The net lss f the perid amunts t EUR (613k) cmpared t a lss f EUR (712k) as f 31 March The net cash flw has increased frm EUR (527k) as f 30 June 2007 t EUR (243k) as f 30 June Bth turnver and net result are in line with the expectatins pstulated in the Strategic Plan. Fr 2008 the fcus within the terminal divisin lies n the further expansin f the existing installed base regarding payment terminal cntracts. On the ne hand the fcus will lie n the retentin plicy carried ut by Keyware, thrugh which almst all clients pted fr a 48- r 60-mnth extensin at the end f their cntract. On the ther hand the realisatin f the assumed expansin f the existing range f fixed and prtable units t GPRS and IP units is essential within the Strategic Plan. A turnver cntributin can be expected by the end f the third quarter f Fr 2008 the fcus within the authrisatin divisin lies n the ffering f authrisatin services fr EMV transactins. During the secnd quarter f 2008 a number f capital expenditures have already been executed and additinal capital expenditures will be executed during the third quarter f Cntrary t what has been mentined befre, the services will be ffered as f the furth quarter f 2008, instead f the third quarter. Keyware will then be able t ffer credit card authrisatin services t merchants, catering and distributin fr amng thers Visa and Master Card. This will be available t bth existing Keyware clients and clients with a terminal frm Banksys, Cardfn, Thales r BTG using their existing terminals. The realisatin f the Grup s Strategic Plan will depend n additinal financing. Within this framewrk the Extrardinary Sharehlders Meeting held n August 18 has apprved the issuing f a cnvertible bnd fr an amunt between EUR 4 and 6 millin.

2 Interim management reprt Key figures as per The cnslidated prfit and lss accunt can be summarised as fllws: Cnslidated prfit and lss accunt Figures in EUR thusand First half First half Operating revenues 2,132 1,176 2, Operating expenses befre extrardinary prvisins and expenses (2,667) (1,408) (2,738) (1,412) Operating result after extrardinary expenses & revenues (535) (232) (690) (552) Result after taxes (613) (292) (712) (592) EBITDA (165) 3 (505) (420) Net cash flw (243) (57) (527) (443) Prfit/(lss) per share (0.1845) (0.2327) Prfit/(lss) per diluted share (0.1845) (0.2327) Weighted average utstanding share (1) 3,323,164 3,060,093 Weighted average diluted share (1) 3,937,064 4,083,872 (1) Number f shares after reverse split A detailed cnslidated prfit and lss accunt can be fund under the header interim cnslidated financial statements. The turnver and grss margin fr the first semester can be presented as fllws: Grss margin (in EUR thusand) Variatin Turnver 2,101 1, % Gds fr resale (413) (663) (37.71)% Grss margin 1,688 1, % Percentage grss margin 80.34% 65.79% The turnver and grss margin fr the secnd quarter can be presented as fllws: Grss margin (in EUR thusand) Variatin Turnver 1, % Gds fr resale (197) (178) 10.67% Grss margin % Percentage grss margin 83.02% 77.92% The business segment infrmatin fr the first semester can be presented as fllws:

3 Business segment infrmatin (in EUR thusand) Variatin Turnver terminal divisin 1,980 1, % Turnver authrisatin divisin (69.52)% Ttal 2,101 1, % The business segment infrmatin fr the secnd quarter can be presented as fllws: Business segment infrmatin (in EUR thusand) 2nd Quarter Variatin Turnver terminal divisin 1, % Turnver authrisatin divisin (74.89)% Ttal 1, % Management discussin and analysis f the results The key figures f the secnd quarter f 2008 and the first semester f 2008 can be summarised as fllws: - the net lss fr the first semester amunts t EUR (613k) cmpared with a net lss f EUR (712k) as f 30 June The increase in the result is a cnsequence f an increase in turnver as well as a decrease in expenses; - the net cash flw has increased frm EUR (527k) as f 30 June 2007 t EUR (243k) as f 30 June 2008; - the cnslidated turnver fr the first semester f 2008 amunts t EUR 2,101k cmpared t EUR 1,938k fr the same perid in 2007, which is equal t a increase f 8.41%. Within the payment terminal divisin an increase f 28.49% is realised, amngst ther things due t an increase in the number f new signed cntracts cmpared with the same perid f Within the credit card authrisatin divisin a decrease f 69.52% has been recrded. The decrease is integrally attributable t the terminatin f tw main cntracts within this divisin as f 31 December The increase in turnver within the terminal divisin has been slwed dwn by the fact that the market demand fr GPRS and IP terminals is grwing and that Keyware will nt be able t supply these terminals any sner than the end f the third quarter f 2008; - an increase in the grss margin frm 65.79% t 80.34%. This increase is the result f the fact that: the cst price was n lnger charged with cmmissins paid t the indirect sales team, which was the case during the first quarter f 2007; the fact that the purchase price f terminals, due t negtiatins with the supplier, as f April 2008 has decrease with 30%. This cncerns a temprary measure, which shall nrmally as f the furth quarter f 2008 n lnger be applicable; the fact that as f March 2008 cntracts have been cncluded fr a perid f 60 mnths instead f 48 mnths; - the services and ther gds have as f June 30, 2008 have decreased by 20.03%, due t better management f expenses; - the persnnel csts fr the first semester have increased by 54.25%. This is a cnsequence f the mve in early April 2007 frm an indirect sales team t a direct sales team. The csts are n lnger recrded under the cst f gds sld (gds fr resale) but under persnnel expenses.

4 - the net lss fr the secnd quarter amunts t EUR (292k) cmpared with a net lss f EUR (592k) fr the secnd quarter f The increase in the result is a cnsequence f an increase in turnver as well as a decrease in expenses; - the net cash flw fr the secnd quarter has increased frm EUR (443k) as f 30 June 2007 t EUR (57k) in 2008; - the cnslidated turnver fr the secnd quarter f 2008 amunts t EUR 1,160k cmpared t EUR 806k fr the same perid in 2007, which is equal t a increase f 43.92%. Within the payment terminal divisin an increase f 90.50% is realised, amngst ther things due t an increase in the number f new signed cntracts cmpared with the same perid f Within the credit card authrisatin divisin a decrease f 74.89% was been recrded. The decrease is integrally attributable t the terminatin f tw main cntracts within this divisin as f 31 December an increase in the grss margin frm 77.92% t 83.02%. This increase is the result f the fact that: the fact that the purchase price f terminals, due t negtiatins with the supplier, as f April 2008 has decrease with 30%. This cncerns a temprary measure, which shall nrmally as f the furth quarter f 2008 n lnger be applicable; the fact that as f March 2008 cntracts have been cncluded fr a perid f 60 mnths instead f 48 mnths; - the services and ther gds fr the secnd quarter have decreased by 23.32%, due t better management f expenses; - the persnnel csts fr the secnd quarter have increased by 20.32%. This is a cnsequence f the mve in early April 2007 frm an indirect sales team t a direct sales team. The csts are n lnger recrded under the cst f gds sld (gds fr resale) but under persnnel expenses. In relatin t the balance sheet psitins it is vital t emphasise that: - the lng term trade receivables include the lng-term prtin f receivables relating t financial leases in accrdance with IAS 17 Lease cntracts f the payment terminals. As per 31 December 2007 this crrespnds t EUR 1,994k as per 30 June 2008 this crrespnds t EUR 2,958k. Finally this item als includes lng-term trade receivables relating t the financing agreement with Parfip Benelux NV. In accrdance with this cntract, hwever, the debtr risk lies with Keyware. In cncrete terms this means that in the case f inslvency f a debtr, Parfip Benelux NV reserves the right t re-invice this cntract t the Grup. In that case, the Grup will n the ne hand have t repay the utstanding capital with regard t the discunted amunt received in advance frm Parfip Benelux NV, but n the ther hand the Grup itself will be able t invice the remaining duratin f the cntract t the custmer. As a result, the Grup has, n the ne hand, a ptential payable and n the ther hand a ptential receivable. At the end f June 2008 the Grup had a ptential receivable crrespnding t the ttal sum f utstanding capital fr cntracts sld in 2005, 2006, 2007 and This is a ttal sum f EUR 4,135k f which EUR 2,555k relates t the lng term and EUR 1,580k t the shrt term; As f May 2008 the Grup n lnger call upn this financing agreement with Parfip Benelux NV. Frm nw n the already used financing agreement, financing f rental agreements r the sale and lease-back financing fr payment terminals, will be called upn (see belw); - n 28 May 2008 the Grup entered int a financing agreement - financing f rental agreement - with Parfip Benelux NV, which cncerns financing fr an amunt f EUR 151k with duratin f 50 mnths and a mnthly repayment f EUR 3k. The applicable interest base is 11.48%. - n 30 June 2008 the Grup entered int a financing agreement - financing f rental agreement - with Parfip Benelux NV, which cncerns financing fr an amunt f EUR 260k with duratin f 53 mnths and a mnthly repayment f EUR 6k. The applicable interest base is 11.91%. - the lng-term trade payables include the sum f ptential debts (EUR 2,555k), which crrespnd t the lng-term part f the ttal sum relating t the utstanding capital fr the cntracts sld in 2005, 2006, 2007 and 2008 (thse stated abve);

5 - the ttal utstanding amunt f trade payables includes EUR 2,376k in verdue amunts. As f December 2007 this amunted t EUR 2,178k. This includes suppliers with repayment plans, suppliers with whm a dispute is pending, a supplier wh is currently unable t claim his debts, internal cnsultants r suppliers wh are als clients. The details f the trade payables can be presented as fllws: Number f Number f in EUR thusand Suppliers suppliers Pending disputes Repayment plans Unclaimed amunts Internal cnsultants 8 1, ,161 Supplier as well as client Expected invices Deferred liability Parfip - 1, Current suppliers Ttal - 4,888-4,488 - at end June 2008 the utstanding scial and fiscal debts amunt t EUR 746k as cmpared t EUR 701k n 31 December At the end f March 2008 and the end f December 2007 the relatinship between verdue and nt verdue debts was as fllws: in EUR thusand per Nt verdue Overdue Ttal Outstanding VAT Withhlding tax Scial security Crprate incme tax Salaries Ttal in EUR thusand per Nt verdue Overdue Ttal Outstanding VAT Withhlding tax Scial security Crprate incme tax Salaries Ttal As per 30 June 2008 the fllwing payments have been executed: EUR 98k was paid regarding the scial security; EUR 25k was paid regarding withhlding taxes; EUR 14k was paid regarding VAT.

6 On 30 January 2008, Keyware Smart Card Div NV received a summns frm the Natinal Office f Scial Security relating t its utstanding debt fr the third quarter f This case was brught befre the curt n 15 February 2008 and a repayment plan fr a perid f 6 mnths was granted. The first instalment was paid at the beginning f April On 15 April 2008, Keyware Smart Card Div NV received a summns frm the Natinal Office f Scial Security relating t its utstanding debt fr the furth quarter f This case was brught befre the curt n 9 May 2008 and a repayment plan fr a perid f 6 mnths was granted. The first instalment was paid at the beginning f July On 25 July 2008, Keyware Smart Card Div NV received a summns frm the Natinal Office f Scial Security relating t its utstanding debt fr the first quarter f This case will be brught befre the curt n 26 September The balance f the utstanding debt amunts t EUR 29k. This amunt shall nrmally be paid befre the curt sessin takes place. Imprtant events f 2008 ISSUE CONVERTIBLE BOND The realisatin f the Grup s Strategic Plan will depend n additinal financing. Therefre the Bard f Directrs has decided t issue a cnvertible bnd fr an amunt between EUR 4 and 6 millin. The main characteristics f this cnvertible bnd can be summarised as fllws: - the cnversin price per share fr the bnds shall be the lesser f (i) EUR 1 r (ii) 60% f the lwest clsing price n Eurnext Brussels fr the previus six (6) trading days prir t the signing date fr the cnfirmatin f the cnversin f the bnds r (iii) the issue price f any ther securities issued by the cmpany after the subscriptin date f the bnds and that are exchangeable, exercisable r cnvertible int shares in the cmpany. - the bnds have a cnversin perid f frty-eight (48) mnths; - the bnds bear interest as f the subscriptin date at an annual interest rate f eight percent (8%); - fr each subscriptin t a bnd f EUR 50,000 (withut prejudice t the fact that each subscriber must subscribe t a minimum f EUR 250,000 in bnds), the subscriber will receive 25,000 warrants; - the warrants may be exercised at any time during a perid f fur (4) years as f their issue date. The subscriptin price per share upn exercising the warrants shall be the lesser f (i) EUR 1.25 per share r (ii), the issue price f any ther securities issued by the cmpany after the issuance f the warrants and that are exchangeable, exercisable r cnvertible int shares in the cmpany. The first Extrardinary Sharehlders meeting tk place n 17 July During this meeting the required qurum f presence was nt btained, s n deliberatin tk place. A secnd Extrardinary Sharehlders meeting was held n 18 August This meeting has apprved the issuing f a cnvertible bnd fr an amunt between EUR 4 and 6 millin. The subscriptin perid fr the cnvertible bnd runs frm 19 August 2008 until 2 September SHAREHOLDER ADVANCES It is bvius that the Grup will need additinal financing during In rder t cntinue t grw and t realise the Strategic Plan, the Grup will need additinal financing t further finance and expansin activities regarding payment terminals as well as t realise investments required fr the authrisatin f payment transactins. In additin, the Grup has verdue debts (trade payables, scial and fiscal debts) that must be repaid. In rder t tide ver the perid until the issue f the cnvertible bnd is settled, the Grup is able t benefit frm advances prvided by a sharehlder. As frm the beginning f February until 31 July, advances were prvided t an amunt f EUR 1,600k by ne f the sharehlders, namely Parana Management BVBA. These advances have allwed the Grup t pay ff a number f verdue debts. These advances will be repaid with the cash incme derived frm the pstulated issue f the cnvertible bnd.

7 Outlk THE NEAR FUTURE: SEPA In the near future, Keyware expects a number f additinal market stimuli. After all, it is clear that with the implementatin f SEPA the natinal debit card scheme Bancntact/Mister Cash will lse its current mnply psitin by switching t Maestr r ther card schemes. Maestr is a card scheme wned by MasterCard whereby Keyware, in additin t Visa and MasterCard credit cards, will be able t authrise the Maestr debit cards. In Belgium, this market has an annual turnver value f mre than EUR 32 billin. In additin, Keyware wants t ffer a number f specific transactin slutins that meet the needs f whlesale distributin. T this end, the cmpany is invlved in a number f strategic prjects. Finally, the wrld f e-shps and Internet auctins will als be actively apprached. The csts f prcessing transactins can clearly be ptimised here, which will lead t a win-win situatin fr traders, sftware suppliers and Keyware itself. FOCUS ON MULTIFUNCTIONAL PAYMENT TERMINALS AND CREDIT CARD AUTHORISATIONS FOR VISA AND MASTERCARD As a pure player, Keyware cncentrates n the rental f multifunctinal payment terminals and ffering merchants authrisatins fr electrnic payment. As already mentined earlier, the existing prduct ffering fr the rental f payment terminals will be extended with GPRS and IP terminals. The current assumptin is that these prducts will generate a turnver by the end f the third quarter f The authrisatin services fr, amng thers, Visa, MasterCard r Maestr debit cards can be executed fr payments via fixed r prtable payment terminals, GPRS, GSM, ATM r Ethernet devices r even cmmercial websites: e-shps, websites and auctin sites. Regarding the supply f authrisatin services fr EMV transactins, a number f capital expenditures were already executed during the secnd quarter f 2008 and additinal capital expenditures will be executed during the third quarter f Cntrary t what has been mentined befre, the services will be ffered as f the furth quarter f 2008, instead f the third quarter. The required capital expenditures will be executed during the secnd quarter f 2008, therefre making these services mst likely available frm the third quarter f Keyware will ffer credit card authrisatin services in Belgium fr, amng thers, Visa and MasterCard in Belgium t merchants, htels, restaurants and cafes as well as the distributin sectr bth fr existing Keyware clients and clients with a terminal frm Banksys, Cardfn, Thales r BTG, and this withut changing terminals. EXPLANATORY NOTES BASIS OF PREPARATION The interim financial statements fr the perid frm 1 January t 30 June 2008 were prepared in accrdance with IAS 34 Interim Financial Reprting. The interim cnslidated financial statements shuld be read in cnjunctin with the cnslidated financial statements as f 31 December ACCOUNTING POLICIES The results are presented in eurs and have been prepared in accrdance with the Internatinal Financial Reprting Standards (IFRS), cntaining the standards and interpretatins as adpted by the Eurpean Unin. The accunting plicies and methds f calculatin fllwed in the attached financial statements are the same as thse fllwed in the mst recent annual financial statements.

8 RELATED PARTY DISCLOSURES Please refer t what is mentined under the header Sharehlder Advances. Additinally we refer t the Annual Reprt 2007 sectin (44) Transactins with related parties. EVENTS AFTER THE BALANCE SHEET DATE Apart frm thse mentined belw, there are n significant events after the balance sheet date that have an impact n the presentatin f the presented interim financial statements. Infrmatin regarding events which tk place after the balance sheet date mentined belw has been taken int cnsideratin up until 18 August On 25 July 2008, Keyware Smart Card Div NV received a summns frm the Natinal Office f Scial Security relating t its utstanding debt fr the first quarter f This case will be brught befre the curt n 26 September The balance f the utstanding debt amunts t EUR 29k. This amunt shall nrmally be paid befre the curt sessin takes place. - During the mnth f July 2008, advances f EUR 250k were made by ne f the sharehlders, namely Parana Management BVBA. These advances have allwed the Grup t repay a number f utstanding verdue debts. These advances will be repaid with the cash incme derived frm the pstulated issue f the cnvertible bnd. - As per 30 June 2008 the fllwing payments have been executed: EUR 98k was paid regarding scial security; EUR 25k was paid regarding withhlding taxes; EUR 14k was paid regarding VAT. CAPITAL STRUCTURE As f 31 December 2007, the Grup s capital amunts t EUR 19,785k, represented by 3,323,164 nrmal shares withut nminal value. PENDING DISPUTES The cmpany is invlved in a number f legal prceedings that can be regarded as deferred liabilities. Fr mre infrmatin see (18) Prvisins and (52) Pending disputes in the Cnslidated Annual Reprt which can be fund n the Cmpany s website ( Financial calendar Quarterly financial reprt Q3 20 Nvember 2008 Press release figures March 2009

9 Interim cnslidated financial statements Nn-audited cnslidated prfit and lss accunt drawn up in accrdance with the Internatinal Financial Reprting Standards (IFRS) The detailed cnslidated prfit and lss accunts can be presented as fllws: Cnslidated prfit and lss accunt Figures in EUR thusand First half First half Turnver 2,101 1,160 1, Other perating revenues Operating revenues 2,132 1,176 2, Gds fr resale (413) (197) (663) (178) Services and ther gds (1,070) (592) (1,338) (772) Persnnel expenses (799) (379) (518) (315) Depreciatin (152) (77) (108) (57) Prvisins and amrtisatin (166) (132) (53) (55) Other perating expenses (67) (31) (58) (35) Operating expenses befre extrardinary prvisins & expenses (2,667) (1,408) (2,738) (1,412) Operating results befre extrardinary expenses & revenues (535) (232) (690) (552) Extrardinary prvisins/ expenses Impairment Operating result after extrardinary expenses & revenues (535) (232) (690) (552) Financial expenses (354) (194) (307) (170) Financial revenues Results befre taxatin (613) (292) (711) (578) Deferred taxes - - (4) (17) Tax ver result Results after taxatin (613) (292) (712) (592) EBITDA (165) 3 (505) (420) Net cash flw (243) (57) (527) (443) Prfit/(lss) per share (0.1845) (0.2327) Prfit/(lss) per diluted share (0.1845) (0.2327) Weighted average utstanding share (1) 3,323,164 3,060,093 Weighted average diluted share (1) 3,937,064 4,083,873 (1) Number f shares as f after reverse split

10 Nn-audited cnslidated balance sheet drawn up in accrdance with the Internatinal Financial Reprting Standards (IFRS) Balance sheet Figures in EUR thusand Assets Cnslidatin differences 5,248 5,248 9,198 Intangible fixed assets Tangible fixed assets Financial fixed assets Deferred tax assets 1,823 1,823 2,101 Lng-term trade receivables 5,513 5,069 6,215 Lng-term ther receivables Fixed assets 13,963 13,551 18,583 Inventries Trade receivables 1,850 1,393 1,345 Other receivables Investments and cash Accruals Current assets 2,722 2,344 2,509 Ttal assets 16,685 15,895 21,092 Liabilities and Sharehlder Equity Share capital 13,831 13,831 34,296 Share premium 4,522 4,522 4,522 Reserve warrants Results carried frward (12,819) (5,148) (27,426) Result f the financial year (613) (7,671) (712) Sharehlder Equity 4,928 5,541 10,853 Deferred tax liability Prvisins Deferred taxes and prvisins Financial debts due after ne year Leasing debts due after ne year Trade payables due after ne year 2,555 3,075 3,133 Ttal liabilities due after ne year 3,435 3,694 3,665 Financial debts due within ne year Leasing debts due within ne year Sharehlder advances 1, Trade payables 4,888 4,488 4,005 Scial and fiscal liabilities Other payables Accruals Liabilities due within ne year 8,322 6,650 6,499 Ttal liabilities and sharehlder equity 16,685 15,895 21,092

11 Nn-audited cash flw statement Cash flw statement Figures in EUR thusand Cash flw frm perating activities Result f the perid (613) (712) Depreciatin Prvisins (10) (9) Amrtisatin n inventries - 87 Amrtisatin n trade receivables 176 (25) Valuatin f warrants - 21 Deferred tax assets and liabilities - 3 Operating cash flw befre changes in wrking capital (295) (527) Decrease/ (increase) in inventry 72 (18) Decrease/ (increase) in lng and shrt term trade receivables (1,077) (589) Decrease/ (increase) in ther receivables and accruals 1 98 Increase/ (decrease) in lng and shrt trade payables (120) 1,044 Increase/ (decrease) in fiscal and scial liabilities Increase/ (decrease) in ther liabilities and accruals (59) 81 Changes in wrking capital (1,138) 791 Cash flw frm perating activities (1,433) 264 Cash flw frm investing activities Acquisitin in tangible and intangible fixed assets (115) (113) Dispsals f in tangible and intangible fixed assets - 4 Acquisitin f subsidiaries, net withut cash - (522) Increase/ (decrease) in guarantees prvided - 33 Cash flw frm investing activities (115) (598) Cash flw frm financing activities Capital - 39 (Repayment)/ receipts f lng term and shrt term financial debts (Repayment)/ receipts f lng term and shrt term leasing 170 (226) (Repayment)/ receipts f sharehlder advances 1, Cash flw frm financing activities 1, Net (decrease)/ increase in cash (1) 1 Cash at the beginning f the perid Cash at the end f the perid Mvement Cash and cash equivalents (1) 1 Net (decrease)/ increase in cash (1) 1

12 Nn-audited changes t the sharehlder equity in EUR thusand Capital Share premium Result carried frward Other reserves Ttal Sharehlder equity as per ,831 4,522 (12,819) 7 5,541 Net lss - - (613) - (613) Transfer reserve Sharehlder equity as per ,831 4,522 (13,432) 7 4,928 in EUR thusand Capital Share premium Result carried frward Other reserves Ttal Sharehlder equity as per ,957 4,522 (27,436) ,205 Exercise f warrants Exercise f ACB Net lss - - (712) - (712) Valuatin warrants Transfer reserve (10) - Sharehlder equity as per ,296 4,522 (28,138) ,853 Abut Keyware Keyware (EURONEXT Brussels: KEYW) is a leading supplier f slutins in e-payment, lyalty systems, identity applicatins and transactin related management. Keyware is lcated in Zaventem, Belgium. Mre infrmatin is available at Fr additinal infrmatin, please cntact: Mr Stéphane Vandervelde President & CEO Keyware Technlgies Tel: +32 (0) ir@keyware.cm