Presentation of financial results of QUMAK S.A. for 1Q2016. Warsaw, 18 May 2016

Transcription

1 Presentation of financial results of QUMAK S.A. for 1Q2016 Warsaw, 18 May 2016

2 Agenda Financial results in 1Q2016 Sales and orders portfolio 1Q2016 Growth potential of backlog Perspectives in selected business lines Summary Appendix Explanation of corrections Y2015 1Q results table

3 Financial results 1Q 2016

4 Results under pressure of decreased revenue mln PLN Income -29% Q2015 1Q2016 mln PLN 7.3 1Q % 1.8 1Q2016 Gross result from sales mln PLN Operating result Q2015 1Q High base - one-off in 1Q million Profitability: decreased revenue with fixed costs of retaining staff Stagnation in the public sector mln PLN -7.2 Net result 1Q2015 1Q2016

5 G&A and SG&A in relation to revenue G&A to revenue SG&A to revenue 100,0 50,0 mln PLN / % 0, % 1Q % Q2016 8,0% 7,0% 100 6,0% 5,0% 4,0% 50 3,0% 2,0% 1,0% mln PLN / % 0,0% % 1Q % Q % 12% 10% 8% 6% 4% 2% 0% Increased costs/revenue mainly because of the lower sales and the necessity to retain key employees in slowdown periods. Costs of severance and recruitment exceeds the cost of retention Planned outsourcing of a part of staff

6 Cash flow 1Q 2016 and financing structure Cash flow Cash Cash used for working capital mln PLN Q2015 2Q2015 3Q2015 4Q2015 1Q2016 Increased leverage in 2H with planned growth of backlog CF Op. CF Inv. CF Fin. CF net mln PLN As at Non-interest bearing financing or with preferential interest 10.3 Lack of net debt Financing working capital with own means and affordable debt Interest-bearing financing 0

7 Sales and orders portfolio 1Q 2016

8 Stagnation on the market of public tenders Waiting for the activation of a new financial Perspective of the European Union Construction and assembly production by 13.3% lower than a year ago. Infrastructure investments significantly slowed down in the 1st quarter much smaller GDP dynamics than expected Waiting for the amendment of the Public Procurement Law Staff rotation in key functions at ordering parties and slowdown of a decision-making process in the area of tenders and purchases The lowest number of public tenders since 3 years. Dynamics - 50% vs * Value -48% vs Value of public tenders -48% More strict savings policy at ordering parties in a group of state treasury companies (with regard to a tight public budget) mln PLN Q2015 1Q2016 *By PPO data

9 Sales 1Q 2015/1Q 2016 Significant decrease in sales in lines of a large exposure to the public market mln PLN Change in sales in specific business lines y/y Airport Automation Building Automation Delivery of hardware Data Center DMS Sales structure in 1Q16 3% 2% 11% 14% 7% 29% Q2015 AirAuto BuildAuto DataCen LicSales SofDev Multim DMS Other 1Q2016 Software Development Multimedia Other segments 11% 23% The biggest influence on decreased sales y/y finishing of large airport projects

10 Backlog 1Q in next years mln PLN * * As at 5 May Total backlog PLN 290 million Over a year of delay in allocating projects in a perspective % key projects in BL financed by EU in At present it is 18% Expected growth of portfolio in 2H2016

11 Backlog for Airport Automation 8% Software Development 9% Management and service of computer systems 10% Outsourcing of IT services 2% IT security 5% Data Center 17% Backlog by business lines Other 8% Building Automation 22% Multimedia exhibitions 19%

12 Growth potential of backlog submitted offers

13 Greater exposure to the commercial market Value of submitted offers in the commercial sector 61% Value of submitted offers in the public sector -46% mln PLN mln PLN Growth of exposure to projects performed in the commercial sector 1Q2015 1Q2016 1Q2015 1Q2016 Value of submitted offers by client sectors 1Q2015 1Q % 35% 85% 15% Public Commercial Public Commercial

14 Pipeline of the value of PLN 341 million Pipeline by business lines Building Automation IT security Delivery of hardware DMS Data Center Outsourcing Airport Automation Software Deveploment Smart City Other 19% 18% 17% 10% 8% 7% 5% 5% 4% 6% % 15% 11% 11% 10% 10% 6% 6% 6% 4% Pipeline by industries Gov. entities and LRU Uniformed services Financial Specialized publ. institu. Telecommunication Construction Utilities Industry Education Other

15 Selected top offers 70 mln Value of offers at the 1st place Outsourcing of specialists PLN 10 million Delivery of hardware for one of telecoms PLN 30 million Works in IT Security segment for a financial institution PLN 14 million Contract in the area of DMS for one of the energy companies PLN 10 million Agreement within the scope of BMS for one of the largest IT companies in Poland - PLN 6.7 million *Net amounts

16 Perspectives in selected business lines

17 Airport Automation rozwojowy rynek To 2025 air traffic in Poland will grow by 71% - the necessity to expand airports and supporting infrastructure (e.g. radars, security). Modlin will allocate several tens of million PLN for expanding to 2018, Balice - over PLN 200 million Airports reach for financing from outside of EU means among others bonds Compulsory installation of EDS - scanner Explosives Detection Systems Standard 3 at all civil airports to 20 (EU funds reserved in the new perspective) Until 2020 PANSA will allocate over PLN 1 billion for investments increasing safety of flights 97 % Modernization of military airports currently only 2 out of 16 military airports were comprehensively adapted. 8 planned military AWOS. Large budgets funded by Alliance At least PLN 140 million for building medical landing areas (target share in this market %) Potential abroad (EDS, BHS): 800 large airports in EU. First tender procedures: Croatia, Serbia 420 mln 10 % Estimated annual value of market of aviation infrastructure to 2020 Increase of air traffic 16 vs 15 Source: report PwC Areas with potential Security Military airports Civil and medical heliports Installation for IMGW

18 Airport Automation Value of offers to submit in 2016 min. 86 mln Civil Airports Polish Air Navigation Services Agency Institute of Meteorology and Water Manag. Airports and landing areas for military Civil and medical heliports Other (obstruction lighting systems) Potential projects for 2017 min. 175 mln

19 Desktop Management Services large savings??? Around PLN 2 million savings thanks to centralization of resources in two locations, and in one as a target ability to achieve a subsidy from the city Better use of field service technicians achieving the effect of an operating leverage (ca % of margin more) Enterprises with extensive network of offices is an interesting market to the section Field Support Large potential on the energetics market ŁÓDŹ SKIERNIEWICE KRAKÓW Potential contracts Priorytetowe industries rynki Ca. 5 mln PLN/y energetics tourism telco industry administration

20 Smart City ITS and software products 450 mln EUR 150 mln from OPI&E for energy efficiency and to be used RES in public infrastructure value of ITS projects that QMK will take part until planned sales of smart city mln products until 2017 Smart city solutions are preferred by EU 25 billion in subsidies for urban regeneration (extensive IT and infrastructure projects) Wide range of activities: e-services for citizens, intelligent transport, energy efficiency, communication platforms Qumak offers applications in the area of e-services planned sales during is around PLN 2 million (30-40 implementations dedicated reproducible products) In 2016/2017 the company will take part in at least 3 tender proceedings concerning the implementation of ITS solutions Large part of solutions is built on the basis of already created in the company low CAPEX Offered solutions e-services platforms City media management systems Intelligent transport systems Infrastructure maintenance

21 Data Center stability of revenue Constant increase in IT power the need of bigger space for servers Large part of companies does not allow transferring their data to colocation server rooms the need to build own centers We enter the era when first large server rooms (of years) will require a complete modernization Large need on the side of the national defense segment money from outside of EU means Other tender procedures in the public sector on hold 100 mln maximum value of planned sales in the next quarters Markets of priority defense banking 3% projected dynamics of market growth y/y health service local governments

22 Locomotive simulator end of the project Project is in the final stage of its performance premiere August/September 2016 Author software can be an engine of any simulation in augmented reality (AR) Interested in the simulator are PKP, PR, KM, SKM, as well as producers of rolling stocks Since 2018 the laws will enforce the requirement of annual trainings of all drivers (19 thousand persons) Qumak can deliver equipment as well as trainings there are conducted analyses concerning final model of commercialization of the project There are analyzed capabilities of using the project in other industries and abroad 60 mln 20 per year the market of trainings for drivers is worth simulators needed in around a year Potential markets transport military security

23 Summary

24 Summary Deepened seasonality of quarterly results caused by the stagnation on the public market Increased exposure to the commercial market Expected improvement of sales and result in 2H2016 High cash position and lack of net debt PLN 290 million in backlog, PLN 70 million top offers Good long-term perspectives in the segments of Airport Automation and Smart City, planned 2 million of savings in DMS, stable situation in a key line Data Center Simulator of rail vehicles at the finish line process of commercialization launched Ability to go abroad with selected solutions

25 Appendix

26 Explanation of corrections Y2015 separate (mln PLN) Y2015 before correction New circumstances vs. Q4 Valuation of longterm contracts Changes in presentation Agent/Principal, penalties, writedowns Various correctio ns Correction s of auditor s valuation Correcti on in total Y2015 after correction Income from sales Own cost of sales Gross income (loss) from sales Cost of sales Cost of administration Other operating income Other operating costs Profit (loss) from operations Financial costs Profit (loss) before taxes Income tax Net profit (loss) from continued operations Net profit (loss)

27 Explanation of corrections Y2015 separate Income from sales Gross income from sales Income from sales'15 before correction New circumstances vs.q4 Valuation of longterm contracts Change in presentation agent/princip., penalties, writedowns Various corrections Corections of auditor's valuation Income from sales'15 after correction Gross income from sales'15 before correction New events vs. Q4 Valuation of longterm contracts Various corrections Corrections of auditor's valuation Gross income from sales'15 after correction

28 Explanation of corrections Y2015 separate Operating result Net profit Profit (loss) from New circumstances Valuation of longterm operations before vs.q4 contracts correction Various corections Corrections of auditor's valuation -9.7 Profit (loss) from operations after correction -9.8 Net profit'15 before correction New circumstances vs.q4 Valuation of longterm contracts Various corrections Corrections of auditor's valuation Net profit'15 after correction

29 Correction with no influence on cash flow Y2015 (thousand PLN) Y2015 before correction Y2015 after correction Change Net cash flows from operations Net cash flows from investments Net cash flows from financial activity Net increase of cash and cash equivalents Cash and cash equivalents at the end of the period

30 Results 1Q2016 thousand PLN 1Q2016 1Q2015 Change (% / p.p.) Revenue % Gross income from sales % Gross margin from sales (%) 2.34% 6.89% Operating result (EBIT) Operating margin (%) -9.03% 3.26% Net profit Net margin (%) -9.61% 2.43% EBITDA Margin EBITDA (%) -7.58% 3.85%

31 Aleje Jerozolimskie 134 PL Warszawa T: F:

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