SEPARATE ANNUAL REPORT OF SUMMA LINGUAE S.A. FOR 2017

Transcription

1 SEPARATE ANNUAL REPORT OF SUMMA LINGUAE S.A. FOR 2017

2 TABLE OF CONTENTS I. LETTER OF THE PRESIDENT OF THE MANAGEMENT BOARD... 3 II. INTRODUCTION... 4 III. KEY INFORMATION ABOUT THE ISSUER... 5 IV. FINANCIAL HIGHLIGHTS... 6 V. REPRESENTATION OF THE MANAGEMENT BOARD ON THE ACCURACY OF THE FINANCIAL STATEMENTS... 8 VI. REPRESENTATION OF THE MANAGEMENT BOARD AS REGARDS THE ENTITY AUDITING THE FINANCIAL STATEMENTS... 8 VII. REPORT OF THE ISSUER S MANAGEMENT BOARD FOR VIII. INFORMATION ON CORPORATE GOVERNANCE PRINCIPLES COMPLIED WITH BY THE COMPANY... 9 IX. FINANCIAL STATEMENTS OF THE ISSUER FOR X. REPORT ON AUDIT OF THE FINANIAL STATEMENTS BY AN AUDITOR

3 I. LETTER OF THE PRESIDENT OF THE MANAGEMENT BOARD Dear Sirs, I have a pleasure to present to you on behalf of the Management Board of Summa Linguae S.A. the annual report for It is a summary of the Company s business achievements and the most important events which affected the Company s growth in the past year, including its financial performance. Summing up the Company s operations in 2017 it needs to be concluded that it was a year of consistent implementation of our growth strategy providing for building a strong international Group which is gradually becoming one of the leading LSPs worldwide. Concentration of our efforts on markets selected by us coupled with the right selection of a sales strategy, along with increasingly more noticeable effects of synergies between the companies making up our Group, resulted in a dynamic increase in revenue with high direct margins. It should be noticed that this was the best year in the history of both our Company and the entire Summa Linguae S.A. Group - both in terms of sales and business and strategic accomplishments. At a separate level, Summa Linguae S.A. achieved a 19% increase in revenue. The greatest increase was achieved with respect to outsourcing services (over a five-fold one), but we were also working hard on increasing the scale of sales to prospective large corporate customers, which is one of the key objectives provided for in our growth strategy. These efforts began to bring measurable effects, particularly in Q (+26% YoY). Although the increase in the sales scale is significant, it is not yet markedly reflected in the Company s financial performance. We incurred a separate EBITDA loss of PLN 928 thousand (PLN 530 thousand after eliminating one-off costs), but the previous year was a period of increased investment in the area of sales and production, which was necessary to increase our competitiveness and considerably rescale our business in subsequent years, mainly based on business relations with prestigious corporate customers operating in prospective sectors. Our objective for 2018 is to further enhance our global brand to be permanently present among the leading LSPs worldwide. More information can be found in the Management Board s report and the remaining parts of our annual report. I would like to thank you for your trust and cooperation to date, hoping that the current year will bring positive developments for our Company s that will be satisfactory to you and our other stakeholders. With kind regards, Krzysztof Zdanowski President of the Management Board of Summa Linguae S.A. 3

4 II. INTRODUCTION The Summa Linguae Group ( Company, Issuer ) is one of the leading language service providers worldwide. The Issuer provides translation and interpreting services for virtually all industries, in more than 190 languages. The Summa Linguae Group provides services to global brands such as Mercedes-Benz, Accenture, Capgemini, TATA, Adobe Systems, ArcelorMittal, Volvo, Michelin, KPMG, Skanska, Orange, Deloitte, UniCredit, Generali, HERE Technologies, Linkedln, as well as the largest Polish companies operating in the industry and financial sectors and to public institutions. The translation and interpreting services offered by the Issuer include: a. standard and certified translations and standard and sworn interpreting, b. localization of applications, games, e-learning platforms, websites and videos, c. text reviewing, edition and proofreading, d. organization of simultaneous interpreting with the provision of relevant equipment, e. organization of conferences, f. accompanying interpreting, also away, g. machine translation, post-edition of machine translations (MT/PEMT), h. voice-over, i. staffing of multilingual resources, j. outsourcing of processes and resources for the LSP sector. The Company s strategy provides for dynamic growth through, among others, acquisitions and the consolidation of the translation services market Merger of Busy B Translations Sp. z o.o. and Spectraling Sp. z o.o. Summa Linguae S.A. is founded 2013 Acquisition of the infrastructure and ongoing projects of Contact Language Services Sp. j. (the formal acquisition took place in 2014) 2014 Acquisition of International Translators Group s.c Acquisition of Transmart Business Services Sp. z o.o. Sp. k. (with access to Transmart.System) 2016 Signing of an investment agreement providing for exchanging shares (25% of shares in the share capital) in Mayflower Language Services Pvt Ltd, based in Bangalore (India), for shares in Summa Linguae S.A Signing of an investment agreement providing for the acquisition of 59.99% of shares in Certitude Eurologos S.r.l., based in Bucharest (Romania), and change of the company s name into Summa Linguae Romania S.r.l Conclusion of an agreement aimed at setting out terms and conditions of taking full operational control (which took place in January 2018) and ultimately reaching capital commitment at the level of 100% of the share capital of Mayflower Language Services Pvt. Ltd by Summa Linguae S.A. 4

5 III. KEY INFORMATION ABOUT THE ISSUER Name Registered office Governing bodies Summa Linguae S.A. ul. Josepha Conrada Kraków, Polska Management Board composed of: Krzysztof Zdanowski President of the Management Board Foundation date 26 October 2011 National Court Register The Company is entered in the register of companies kept by the District Court for Krakow Śródmieście in Krakow, 11 th Economic Division of the National Court Register under KRS number VAT identification number REGON statistical number Core business Z (PKD 2007): Translation and interpreting services Share capital PLN 297, Phone number Tel FAX number Fax Website Page 5

6 IV. FINANCIAL HIGHLIGHTS Income statement data in PLN thousand data in EUR* thousand A. Net revenue and equivalent revenue 6, , , ,306.8 B. Operating expenses 8, , , ,260.9 C. Profit/(loss) on sales -1, D. Other operating income E. Other operating expenses of which: amortization of goodwill F. EBITDA G. Operating profit/(loss) -1, H. Financial income I. Financial expenses J. Profit/(loss) before tax -1, K. Income tax L. Net profit/(loss) -1, , Balance sheet ASSETS December 2017 December 2016 data in PLN thousand December 2017 December 2016 data in EUR* thousand A. NON-CURRENT ASSETS 6, , , ,307.0 I. Intangible assets 4, , , ,071.9 II. Property, plant and equipment III. Non-current receivables IV. Long-term investments 1, V. Non-current prepayments and accrued income B. CURRENT ASSETS 2, , I. Inventory II. Current receivables 1, , III. Short-term investments IV. Current prepayments and accrued income C. CALLED UP SHARE CAPITAL D. TREASURY SHARES TOTAL ASSETS 8, , , ,920.7 EQUITY AND LIABILITIES A. EQUITY 4, , , ,144.8 I. Share capital Page 6

7 II. Reserve capital 5, , , III. Revaluation reserve IV. Other capital reserves V. Profit/(loss) carried forward VI. Net profit/(loss) -1, VII. Net profit write-offs during the financial year B. LIABILITIES AND PROVISIONS FOR LIABILITIES 3, , I. Provisions for liabilities II. Non-current liabilities 1, III. Current liabilities 1, , IV. Accruals TOTAL LIABILITIES AND EQUITY 8, , , ,920.7 Cash flow statement data in PLN thousand data in EUR* thousand A. OPERATING CASH FLOWS I. NET PROFIT/(LOSS) -1, II. Adjustments (total) 1, III. Net operating cash flows (I±II) B. CASH FLOWS FROM INVESTING ACTIVITIES I. Inflows II. Outflows III. Net cash flows from investing activities (I-II) C. CASH FLOWS FROM FINANCING ACTIVITIES I. Inflows 2, , II. Outflows 1, III. Net cash flows from financing activities (I-II) , D. TOTAL NET CASH FLOWS (A.III±B.III±C.III) E. BALANCE SHEET MOVEMENT IN CASH F. OPENING BALANCE OF CASH G. CLOSING BALANCE OF CASH (F±D) *The above balance sheet figures as at 31 December 2016 and 31 December 2017 were translated into EUR at the average exchange rate of the National Bank of Poland, prevailing as at, respectively: 30 December 2016: PLN/EUR and 29 December 2017: PLN/EUR The selected income statement items and cash flow statement items were translated into EUR at the average annual exchange rates announced by the National Bank of Poland for, respectively: 1 January December 2016 (PLN/EUR ) and 1 January December 2017 (PLN/EUR ). Page 7

8 V. REPRESENTATION OF THE MANAGEMENT BOARD ON THE ACCURACY OF THE FINANCIAL STATEMENTS The Management Board of Summa Linguae S.A. represents that to the best of its knowledge, the annual financial statements and comparative data have been prepared in accordance with accounting policies applicable in Poland and give a true and fair view of the financial position of Summa Linguae S.A. and its financial performance, and that the report on the Company's operations presents a true picture of its position, including a description of the key threats and risk factors. Krzysztof Zdanowski President of the Management Board Krakow, 28 May 2018 VI. REPRESENTATION OF THE MANAGEMENT BOARD AS REGARDS THE ENTITY AUDITING THE FINANCIAL STATEMENTS The Management Board of Summa Linguae S.A. represents that Premium Audyt Sp. z o. o., an audit firm based in Poznań, entered on the list of audit firms under number 3992, kept by the National Chamber of Statutory Auditors, which audited the financial statements of the Company for 2017, was selected compliant with applicable regulations; this entity and auditors examining these statements fulfilled the conditions for an impartial and independent audit opinion, in accordance with the relevant provisions of national law. Krzysztof Zdanowski President of the Management Board Page 8

9 Krakow, 28 May 2018 VII. REPORT OF THE ISSUER S MANAGEMENT BOARD FOR 2017 The Management Board s report for 2017 is attached hereto. VIII. INFORMATION ON CORPORATE GOVERNANCE PRINCIPLES COMPLIED WITH BY THE COMPANY In 2017, the Company was required to comply with the corporate governance principles referred to in Code of Best Practice of Companies Listed on the NewConnect Market. The Management Board of Summa Linguae S.A represents that it complies with the aforementioned principles. The only derogations from the specific principles are as follows: 1) Principle: A company should pursue a transparent and effective disclosure policy, using both traditional methods and modern technologies which ensure fast, secure and broad access to information. Using those methods to the greatest extent possible, a company should ensure adequate communication with investors and analysts, enable broadcast of general meetings over the Internet, record general meetings and post the recording on its website. Derogation: The Company does not foresee complying in the near future with the principle which assumes broadcasting General Meetings and recording them, thus it will not post this type of material on its website, which is due to considerable cost of ensuring technical infrastructure necessary to do so. 2) Principle: An issuer shall publish monthly reports within 14 days of the end of the month. Derogation: The Company does not foresee publishing monthly reports. Page 9

10 3) Principle: Semi-annual reports published by issuers shall include at least the following: balance sheet, income statement, comparative data for the relevant half of the previous year, commentary by the management board on the factors and events that affected profit/(loss) generated (incurred) by the issuer, information on the issuer s activity in the area of research and development, including obtaining licenses and patents. Derogation: The Company does not foresee publishing semi-annual reports. IX. FINANCIAL STATEMENTS OF THE ISSUER FOR 2017 The financial statements for 2017 are attached hereto. X. REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS BY AN AUDITOR The report on the audit of the financial statements by an auditor is attached hereto. Page 10

11 Krakow, 28 May 2018 Management Board of Summa Linguae S.A. Krzysztof Zdanowski, CEO Office in Krakow (Registered office) ul. Josepha Conrada Kraków, Polska Tel. +48 (12) Office in Bangalore (India) No. 104,2nd Floor, Infantry Techno Park, Infantry Road, Tasker Town Shivajinagar, Bangalore Tel Office in Bucharest (Romania) 20 Plevnei street, Division B Office 28 (interphone 28) Sector 1, Bukareszt Tel Administration Department office@summalinguae.com Tel Marketing and PR Department marketing@summalinguae.com Tel Sales Department sales@summalinguae.com Tel Tel Contact for the media paulina.macuga@summalinguae.com Tel Page 11