TIDMSSH1V
SSH COMMUNICATIONS SECURITY CORPORATION STOCK EXCHANGE RELEASE
July 21, 2020, AT 9:00 A.M
SSH COMMUNICATIONS SECURITY CORPORATION INTERIM REPORT JANUARY 1 -- JUNE
30, 2020
SALES DECREASED BUT EBITDA REMAINED POSITIVE FOR THE QUARTER AND THE
FULL PERIOD THANKS TO STRONG COST CONTROL MEASURES
April -- June 2020: Net sales decreased 33.5 % compared to previous
year. EBITDA remained positive and quarter-end cash position remained
strong.
-- Net sales totaled EUR 2.6 million (4-6/2019: EUR 4.0 million)
-- EBITDA was EUR 0.2 million (EUR 0.9 million)
-- Operating loss was EUR -0.4 million (EUR 0.4 million)
-- Loss for the period was EUR -0.5 million (EUR 0.2 million)
-- Earnings per share was EUR -0.02 (EUR 0.00)
January--June 2020: Net sales decreased 13.6 % compared to the previous
year. EBITDA remained on the same level as the previous year and the
loss narrowed compared to the previous period.
-- Net sales totaled EUR 5.7 million (1-6/2019: EUR 6.6 million).
-- EBITDA was EUR 0.1 million (EUR 0.1 million).
-- Operating loss was EUR -0.9 million (EUR -0.9 million).
-- Loss for the period was EUR -0.9 million (EUR -1.0 million).
-- Earnings per share was EUR -0.04 (EUR -0.04).
Operating cash flow was EUR 0.0 million (EUR -0.7 million), and our cash
position remained strong. Equity ratio remained good 74.2 % (81.5 %).
Liquid assets were EUR 10.2 million (EUR 11.2 million).
KEY FIGURES
Change Change
EUR million 4--6/2020 4--6/2019 % 1--6/2020 1--6/2019 % 1--12/2019
Net sales 2.6 4.0 -33.5 5.7 6.6 -13.6 14.4
EBITDA 0.2 0.9 -78.1 0.1 0.1 15.8 0.9
% of net sales 7.3 22.1 -67.1 2.3 1.8 34.0 6.0
Operating profit/loss -0.4 0.4 -196.3 -0.9 -0.9 4.4 -1.2
% of net sales -13.5 9.3 -244.8 -16.2 -13.4 20.8 -8.4
Profit/loss before
taxes -0.5 0.3 -299.3 -1.0 -1.0 0.4 -1.3
Profit/loss -0.5 0.2 -323.2 -0.9 -1.0 -3.7 -1.5
Return on equity,
% -8.5 -7.1 -18.7 -11.3
Return on investment,
% -7.8 -6.8 -14.8 -9.8
Liquid assets 10.2 11.2 -8.7 12.0
Gearing (%) -87.8 -81.6 -7.5 -92.3
Equity ratio (%) 74.2 81.5 -8.9 78.0
Earnings per share,
EUR -0.02 0.00 3 008.4 -0.04 -0.04 -7.9 -0.06
Shareholders' equity
per share, EUR 0.26 0.32 -18.2 0.26 0.32 -18.2 0.31
SSH Communications Security provides alternative performance measures,
which are not defined by IFRS standards. Alternative performance
measures should not be considered as substitutes for performance
measures in accordance with the IFRS. From the first quarter of 2020
onwards, SSH Communications Security has introduced the following new
alternative performance measures:
EBITDA = Operating profit/loss + depreciation and amortization
CEO REVIEW
Valued shareholders, customers, partners, and co-workers,
The COVID-19 pandemic impacted our business significantly in Q2 2020.
Our sales decreased by 34% compared to Q2 2019. However, our employees'
well-being was successfully secured: in our offices across four
countries, we did not have any confirmed cases.
We stayed in a remote work mode during most of the quarter; in some
locations, we started returning to office work towards the end of June.
Even with most of the whole organization working remotely, our
efficiency and spirits remained high. I would like to thank the entire
SSH team for their tenacity during these challenging times.
Despite declined sales, our financial performance remained solid: we
successfully controlled our operating expenses and achieved positive
EBITDA for Q2 and the full first half-year. Operating cash flow was
positive, improving significantly compared to last year.
Financial Performance
Net sales for the second quarter were EUR 2.6 million (EUR 4.0 million),
down 34 % compared to Q2 2019. Most of this decrease was due to a
decline in license sales as large customers postponed or phased their
large investments due to their savings initiatives.
The maintenance renewals business decreased slightly, mainly due to some
decreases in UKM maintenance renewals and the continuing end-of-life
process of the CryptoAuditor product.
Thanks to our continued careful cost management, the company's operating
expenses decreased by 2% compared to Q2 of 2019 and by 8% compared to
the previous quarter. Despite the decline in revenue, our EBITDA for Q2
2020 remained positive at EUR 0.2 million (EUR 0.9 million). The EBITDA
for the full six-month period was also positive.
Our operating loss for the period was EUR -0.4 million (EUR 0.4 million),
and loss for the period was EUR -0.5 million (EUR 0.2 million). The
losses included EUR -0.3 million in restructuring costs affecting
comparability.
We received limited COVID-19 support funding in the US and Hong Kong and
applied for such funding in Finland. We also received a EUR 1.3 million
grant for developing quantum-safe crypto technology from Business
Finland.
The operating cash flow for the quarter was slightly positive at EUR 0.0
million (-0.7 million). Our balance sheet and cash position remain
strong and allow SSH to proceed with the execution of its strategy.
Sales Performance
From a regional perspective, sales in the AMER and EMEA regions
decreased roughly 25% compared to Q2 2019, while the APAC region was hit
especially hard by the COVID-19 crisis, and sales decreased by 66%
compared to Q2 2019.
Sales of all our products except PrivX(R) declined. The decline was
steepest for our SSH key management product, UKM. A large travel
technology company did start a UKM phased deployment during the quarter.
Still, several other large deals were moved forward, as especially large
financial institutions systematically started to postpone their
technology investments and difficulties in launching an on-site
deployment project due to travel restrictions.
Tectia SSH Client/Server sales were also affected but to a significantly
smaller degree. Tectia maintenance renewals remained solid, and the
sales decline came mainly from the APAC area, where large banks
curtailed their technology investments.
PrivX sales grew significantly compared to the previous year. Large
enterprises and mid-market companies increasingly recognize PrivX as a
compelling, modern alternative to traditional Privileged Access
Management solutions. During the quarter, PrivX was named an "Overall
Leader" in the latest iteration of KuppingerCole's prestigious
Leadership Compass for Privileged Access Management (PAM) report
During the quarter, we won several significant new customers for PrivX
(that had not been previous SSH customers) in the financial, industrial,
and government sectors. With these new customers, we recorded a
significant milestone in PrivX sales and booked our 50(th) PrivX
customer.
Reshaping the organization
During the quarter, we reshaped the organization and decreased our
executive management team's size from seven people to three people. The
purpose of this change was to accelerate and clarify our decision-making
and improve our management performance. In concert with this change, we
also streamlined and flattened our organization and took steps to
increase our organization's customer-centricity. The organization
changes will improve decision-making and accountability throughout the
organization.
Major ownership change and a change in our Board of Directors
During Q2 2020, the investment fund Accendo Capital acquired 29.2% of
SSH shares from the company founder Tatu Ylönen. As a result of
these transactions, Accendo became the largest shareholder of SSH during
the quarter. Tatu Ylönen is now the second-largest shareholder of
SSH after the sale with 18.0% of the company.
An extraordinary general meeting was held on June 26, and Accendo
representatives Henri Österlund and Kai Tavakka were elected to the
Board of Directors of SSH. The new Board elected Mr. Österlund as
the Chairman of the Board.
Looking forward and new guidance
While the COVID-19 crisis has stabilized in Finland and parts of Europe
and Asia, the situation is still critical globally, with the number of
daily new cases growing rapidly. The situation is especially challenging
in our largest market, the US. While it is challenging to predict the
pandemic's course, it looks inevitable that we will have to deal with
adverse effects caused by the pandemic at least for the remainder of
2020.
Our new guidance is:
We expect our revenue to decrease compared to 2019. During the second
half of the year we will invest increasingly towards future growth and
expect our EBITDA for the full year to be negative.
Our earlier guidance, issued in the Financial Statement Release on 14
February 2020 and withdrawn on 23 March 2020, was:
For the year 2020, we expect revenue growth of 10-15 percent and an
improving operating result. The growth rates and profitability vary
significantly between our product lines as the products are in different
stages of maturity and investment phases. We expect clearly faster
growth rates for PrivX(R) and NQX(R), steady growth for UKM(R) matching
the industry growth rate, and modest growth for Tectia(R), which is our
most mature product. The combined effect of these growth rates will
result in moderate short-term growth, which we expect to accelerate over
the next several years.
Teemu Tunkelo
Chief Executive Officer
CONSOLIDATED NET SALES
Consolidated net sales for April -- June totaled EUR 2.6 million (EUR
4.0 million).
Consolidated net sales for January--June totaled EUR 5.7 million (EUR
6.6 million), decreased by 13.6 %, year on year.
The Americas region accounted for 53.6 % (53.2 %); the Europe, Middle
East, and Africa region 25.5 % (26.3 %); and the Asia Pacific region
20.9 % (20.5 %) of reported net sales.
Change Change
EUR million 4--6/2020 4--6/2019 % 1--6/2020 1--6/2019 % 1--12/2019
BY SEGMENT
AMERICAS 1.5 2.0 -24.6 3.1 3.5 -12.9 7.8
APAC 0.3 0.9 -66.1 1.2 1.4 -12.1 2.9
EMEA 0.9 1.1 -23.6 1.5 1.7 -16.2 3.6
Total 2.6 4.0 -33.5 5.7 6.6 -13.6 14.4
----------------------- --------- --------- ------ --------- --------- ------ ----------
BY OPERATION
Software fees 0.6 1.7 -63.1 1.6 2.2 -27.0 5.2
Professional services
& other 0.0 0.1 -95.5 0.0 0.2 -81.5 0.6
Recurring revenue 2.0 2.2 -8.0 4.1 4.3 -3.4 8.6
Total 2.6 4.0 -33.5 5.7 6.6 -13.6 14.4
----------------------- --------- --------- ------ --------- --------- ------ ----------
Most of the company's invoicing is U.S. dollar based. With comparable
exchange rates, net sales reduction would have been 15.4 % compared with
the corresponding period in 2019.
RESULTS AND EXPENSES
Operating loss for April -- June was EUR -0.4 million (EUR 0.4 million),
with net profit totaling EUR -0.5 million (EUR 0.2 million).
Operating loss for January -- June was EUR -0.9 million (EUR -0.9
million), with net loss totaling EUR -0.9 million (EUR -1.0 million).
Selling, marketing, and customer support expenses for the April -- June
reporting period amounted to EUR -1.5 million (EUR -1.7 million), while
research and development expenses totaled EUR -1.4 million (EUR -1.1
million) and administrative expenses EUR -0.6 million (EUR -0.6
million).
Selling, marketing, and customer support expenses for the January --
June reporting period amounted to EUR -3.3 million (EUR -3.7 million),
while research and development expenses totaled EUR -2.6 million (EUR
-2.3 million) and administrative expenses EUR -1.2 million (EUR -1.3
million). Operating expenses decreased by 1 % compared to 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,
2020, stood at EUR 19.8 million (June 30, 2019: EUR 20.6 million;
December 31, 2019: EUR 23.8 million), of which liquid assets accounted
for EUR 10.2 million (June 30, 2019: EUR 11.2 million; December 31,
2019: EUR 12.0 million), or 51.6 % of the balance sheet total).
Interest-bearing liabilities were EUR 1.3 million (June 30, 2019 EUR 1.0
million, December 31, 2019 EUR 0.9 million). On June 30, 2020, gearing,
or the ratio of net liabilities to shareholders' equity, was -87.8 %
(June 30, 2019 -81.6 %; December 31, 2019 -92.3 %) and the equity ratio
stood at 74.2 % (June 30, 2019 81.5 %; December 31, 2019 78.0 %).
The reported gross capital expenditure for the period totaled EUR 1.1
million (EUR 1.0 million). The reported financial income and expenses
amounting in total to EUR -0.0 million (EUR -0.1 million) consisted
mainly of exchange rate gains or losses and interest expenses from sales
and leasing contracts.
During January -- June, SSH Communications Security reported a cash flow
of EUR 0.0 million (EUR -0.7 million) from business operations, and
investments showed a cash flow of EUR -0.7 million (EUR -1.0 million).
Cash flow from investments includes receipt of government grants with
EUR 0.3 million. Cash flow from financing totaled EUR --1.1 million (EUR
-0.6 million). Cash flow from financing includes the payment of hybrid
instrument interest of EUR 0.9 million and the cash payment for the
principal portion of the lease liability of EUR 0.2 million. Total cash
flow from operations, investments, and financing was negative EUR -1.8
million (EUR -2.3 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 -1.4
million (EUR -1.1 million), the equivalent of 52.2 % of net sales (28.8
%). During April -- June, the company has capitalized new product R&D
costs EUR 0.3 million (EUR 0.5 million). Capitalized product development
expenses were reduced by the amount of EUR 0.2 million received as
funding from the EU in 2019 (EUR 0.0 million).
Research and development expenses for January -- June totaled EUR -2.6
million (EUR -2.3 million), the equivalent of 45.9 % of net sales (34.5
%). During January -- June, the company has capitalized new product R&D
costs EUR 0.7 million (EUR 1.0 million). Capitalized product development
expenses were reduced by the amount of EUR 0.3 million received as
funding from the EU in 2019 (EUR 0.0 million). Depreciation from R&D
capitalization assets was EUR -0.7 million (EUR -0.7 million).
HUMAN RESOURCES AND ORGANIZATION
At the end of June, the Group had 92 employees on its payroll (June 30,
2019: 86; December 31, 2019: 90). The number of employees increased by
six persons from the previous year and by two persons from the year-end
(2.2 %).
At the end of the period, 33.7 % (36.0 %) of the employees worked in
sales, marketing and customer services, 48.9 % (50.0 %) in R&D, and 17.4
% (14.0 %) in corporate administration.
BOARD AND AUDITORS
The Annual General Meeting of SSH Communications Security Oyj was held
on March 26, 2020. 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, 2019, and
December 31, 2019. Tatu Ylönen was re-elected, and Aino-Mari
Kiianmies and Sampo Kellomäki were elected as new members of the
Board of Directors. Tatu Ylönen was elected as the Chairman of the
Board of Directors at the Board's organizing meeting.
The Authorized Public Accountants Ernst & Young Oy was re-elected as the
auditor of the company. Ernst & Young Oy have informed that Erkka
Talvinko, Authorized Public Accountant, will continue to act as the
principal auditor.
The Extraordinary General Meeting of SSH Communications Security Oyj was
held on June 26, 2020. The Extraordinary General Meeting approved that
the members of the Board of Directors is five (5) and elected Tatu
Ylönen, Aino-Mari Kiianmies, Sampo Kellomäki, Henri
Österlund (new member) and Kai Tavakka (new member) as members of
the Board of Directors. Henri Österlund was elected as the Chairman
of the Board of Directors at the Board's organizing meeting.
SHARES, SHAREHOLDING, AND CHANGES IN GROUP STRUCTURE
The reported trading volume of SSH Communications Security shares
totaled 16,374,431 shares (valued at EUR 20,520,562). The highest
quotation was EUR 1.90 and the lowest EUR 0.65. The trade-weighted
average share price for the period was EUR 1.25, and the share closed at
EUR 1.60 (June 30, 2020).
Tatu Ylönen sold 6.4 million shares in SSH to investment fund
Accendo Capital SICAV, SIF on May 22, 2020 and further 4.93 million
shares on June 3, 2020. Accendo Capital became the largest shareholder
of SSH, with 29.2 % of the company. Tatu Ylönen is the
second-largest shareholder of SSH after the sale with 18.0 %. 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, 2020, 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 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, 2021.
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 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 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, 2021.
CHANGES IN GROUP MANAGEMENT TEAM
On May 28, 2020 SSH Communications Security announced new Executive
Management Team. The new Executive Management Team is:
Teemu Tunkelo, Chief Executive Officer
Niklas Nordström, Chief Financial Officer
Jussi Mononen, Chief Commercial Officer
RISKS AND UNCERTAINTIES
The ongoing COVID-19 pandemic is a major new macro-level risk that may
affect SSH Communications Security. Otherwise, the most substantial
risks that might impact the profitability of the company have remained
by and large the same as in the previous reporting period and are listed
below.
Largest risks:
- uncertainty of the macroeconomic environment, such as the impact of
coronavirus disease
- 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,
and possible significant fluctuation in USD currency rates during 2020
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.
CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
EUR million 4--6/2020 4--6/2019 1--6/2020 1--6/2019 1--12/2019
Net sales 2.6 4.0 5.7 6,6 14.4
Cost of sales -0.1 -0.1 -0.1 -0.3 -0.5
Gross margin 2.6 3.9 5.6 6.4 13.9
Other operating income 0.5 0.0 0.7 0.0 0.1
Selling, marketing and customer support
expenses -1.5 -1.7 -3.3 -3.7 -7.5
Research and development expenses -1.4 -1.1 -2.6 -2.3 -4.9
Administrative expenses -0.6 -0.6 -1.2 -1.3 -2.9
Operating profit/loss -0.4 0.4 -0.9 -0.9 -1.2
Financial income and expenses -0.2 -0.1 -0.0 -0.1 -0.1
Profit/loss before taxes -0.5 0.3 -1.0 -1.0 -1.3
Taxes -0.0 -0.0 0.0 -0.0 -0.1
Profit/loss for the period -0.5 0.2 -0.9 -1.0 -1.5
------------------------------------------- --------- --------- --------- --------- ----------
Attributable to:
Owners of the parent company -0.5 0.3 -0.8 -0.9 -1.3
Non-controlling interests -0.1 -0.1 -0.1 -0.1 -0.2
-0.5 0.2 -0.9 -1.0 -1.5
--------- --------- --------- --------- ----------
Other comprehensive income
Items which might be later transferred
to profit or loss:
Foreign subsidiary translation
differences 0.1 0.0 -0.0 -0.0 -0.0
Total comprehensive income -0.5 0.3 -1.0 -1.0 -1.5
------------------------------------------- --------- --------- --------- --------- ----------
Attributable to:
Owners of the parent company -0.4 0.3 -0.9 -0.9 -1.3
Non-controlling interest -0.1 -0.1 -0.1 -0.1 -0.2
-0.5 0.3 -1.0 -1.0 -1.5
--------- --------- --------- --------- ----------
Earnings per share
Earnings per share (EUR) -0.02 0.00 -0.04 -0.04 -0.06
Diluted earnings per share (EUR) -0.02 0.00 -0.04 -0.04 -0.06
CONDENSED CONSOLIDATED BALANCE SHEET
June 30, June 30, Dec 31,
EUR million 2020 2019 2019
ASSETS
Non-current assets
Property, plant and equipment 0.1 0.1 0.1
Right-of-use assets 0.7 0.4 0.3
Intangible assets 5.4 5.4 5.5
Investments 0.0 0.0 0.0
Total non-current assets 6.2 6.0 5.9
Current assets
Inventories 0.0 0.0 0.0
Trade and other receivables 3.4 3.4 5.9
Financial assets 0.0 0.0 0.0
Cash and cash equivalents 10.2 11.2 12.0
Total current assets 13.6 14.6 17.9
Total assets 19.8 20.6 23.8
----------------------------------------------- -------- -------- -------
EQUITY AND LIABILITIES
Equity
Attributable to parent company's shareholders 9.7 11.7 11.4
Non-controlling interest 0.5 0.7 0.6
Total equity 10.2 12.4 12.0
Non-current liabilities
Borrowings 0.6 0.6 0.6
Lease liabilities 0.4 0.1 0.1
Advances received and deferred revenue 1.2 0.7 2.4
-----------------------------------------------
Total non-current liabilities 2.2 1.4 3.0
Current liabilities
Trade and other payables 2.3 1.8 2.5
Lease liabilities 0.3 0.3 0.2
Advances received and deferred revenue 4.8 4.6 6.0
-----------------------------------------------
Total current liabilities 7.4 6.7 8.7
Total equity and liabilities 19.8 20.6 23.8
----------------------------------------------- -------- -------- -------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
Attributable to the owners of the Company
Hybrid Unrestricted
Share capital Translation invested Retained Non-controlling Total
EUR million capital securities difference equity fund earnings Total interests equity
----------- ----------- ------------ --------- -----
Equity Jan 1,
2019 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
Change - - -0.0 - 0.1 0.1 - 0.1
Net profit -0.4 -0.4 -0.1 -0.5
Equity Dec 31,
2019 1.2 12.0 -1.4 22.7 -23.0 11.4 0.6 12.0
Change - - -0.0 - -0.9 -0.9 - -0.9
Net profit -0.8 -0.8 -0.1 -0.9
Equity June 30,
2020 1.2 12.0 -1.5 22.7 -24.7 9.7 0.5 10.2
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
EUR million 1--6/2020 1--6/2019 1--12/2019
Cash flow from operations 0.0 -0.7 0.3
whereof change in working capital 0.6 -0.8 -0.6
Cash flow from investing activities -0.7 -1.0 -1.1
Cash flow from financing activities -1.1 -0.6 -0.8
Increase (+) / decrease (-) in cash -1.8 -2.3 -1.6
Cash at period start 12.0 13.5 13.5
Effect of exchange rate 0.1 0.0 0.1
Cash at period end 10.2 11.2 12.0
NOTES TO THE INTERIM REPORT
The interim report for the six months reporting period ended June 30,
2020, 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, 2019. The information presented in this interim
report is unaudited.
The accounting policies adopted for this interim report are consistent
with those applied in 2019 consolidated financial statements except for
the adoption of new standards effective as of January 1, 2020. The Group
has not early adopted any standard, interpretation or amendment that has
been issued but is not yet effective.
Several amendments and interpretations apply for the first time in 2020,
but do not have an impact on the interim condensed consolidated
financial statements of the SSH Group.
CHANGES IN PROPERTY, PLANT, AND
EQUIPMENT
EUR million 30 June 2020 30 June 2019 31 Dec 2019
Carrying amount in the beginning of
the period 0.1 0.2 0.2
Increase 0.0 0.0 0.0
Depreciation and impairment -0.0 -0.0 -0.1
Foreign exchange rate differences -0.0 0.0 0.0
Carrying amount at the end of the
period 0.1 0.1 0.1
------------------------------------- ------------ ------------ -----------
CHANGES IN RIGHT-OF-USE ASSETS
EUR million 30 June 2020 30 June 2019 31 Dec 2019
Carrying amount in the beginning of
the period 0.3 0.5 0.5
Increase 0.6 0.1 0.1
Decrease - -0.0 0.0
Depreciation and impairment -0.2 -0.2 -0.3
Foreign exchange rate differences 0.0 0.0 0.0
Carrying amount at the end of the
period 0.7 0.4 0.3
------------------------------------- ------------ ------------ -----------
Right-of-use assets include leased offices. The Helsinki office moved to
new premises in April 2020. The new lease contract is for the period of
three years and added right-of-use assets and lease liabilities with EUR
0.6 million in April 2020.
CHANGES IN INTANGIBLE ASSETS
EUR million 30 June 2020 30 June 2019 31 Dec 2019
Carrying amount in the beginning of
the period 5.5 5.2 5.2
Increase 0.7 1.0 2.0
Amortization and impairment -0.8 -0.8 -1.7
Foreign exchange rate differences 0.0 0.0 0.0
Carrying amount at the end of the
period 5.4 5.4 5.5
------------------------------------- ------------ ------------ -----------
CONTINGENT LIABILITIES
EUR million 30 June 2020 30 June 2019 31 Dec 2019
Interest on hybrid capital securities 0.3 0.2 0.7
Rent security deposits 0.2 0.1 0.1
KEY FIGURES AND RATIOS
SSH Communications Security provides alternative performance measures,
which are not defined by IFRS-standards. Alternative performance
measures should not be considered as substitutes for performance
measures in accordance with the IFRS. From the first quarter of 2020
onwards, SSH Communications Security has introduced the following new
alternative performance measures:
EBITDA = Operating profit/loss + depreciation and amortization
EUR million 1--6/2020 1--6/2019 1--12/2019
Net sales 5.7 6.6 14.4
EBITDA 0.1 0.1 0.9
% of net sales 2.3 1.8 6.0
Operating profit/loss -0.9 -0.9 -1.2
% of net sales -16.2 -13.4 -8.4
Profit/loss before taxes -1.0 -1.0 -1.3
% of net sales -16.7 -14.3 -9.3
Return on equity (%) -8.5 -7.1 -11.3
Return on investment (%) -7.8 -6.8 -9.8
Interest-bearing net liabilities -8.9 -10.2 -11.1
Equity ratio (%) 74.2 81.5 78.0
Gearing (%) -87.8 -81.6 -92.3
Gross capital expenditure 1.1 1.0 2.0
% of net sales 19.1 15.7 13.9
R&D expenses -2.6 -2.3 -4.9
% of net sales 45.9 34.5 34.0
Personnel, period average 89 87 88
Personnel, period end 92 86 90
PER SHARE DATA
EUR 1--6/2020 1--6/2019 1--12/2019
Earnings per share undiluted(1) -0.04 -0.04 -0.06
Earnings per share diluted(1) -0.04 -0.04 -0.06
Equity per share 0.26 0.32 0.31
No. of shares at period average (thousand) 38 802 38 802 38 802
No. of shares at period end (thousand) 38 802 38 802 38 802
Share performance
Average price 1.25 1.48 1.34
Low 0.65 1.11 0.97
High 1.90 1.97 1.97
Share price period end 1.60 1.46 1.04
Market capitalization period end (EUR
million) 61.9 56.5 40.2
Volume of shares traded (million) 16.4 2.2 5.3
Volume of shares traded as % of total 42.2 5.7 10.2
Value of shares traded (EUR million) 20.5 3.3 4.0
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
(1) Earnings per share is impacted by the unpaid
interest of hybrid capital securities
RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES
The following table presents the reconciliation of EBITDA to the
operating profit/loss.
EUR million 1--6/2020 1--6/2019 1--12/2019
EBITDA 0.1 0.1 0.9
Depreciations and amortizations -1.1 -1.0 -2.1
Operating profit/loss -0.9 -0.9 -1.2
-------------------------------- --------- --------- ----------
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
adviser 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, 2020, on October 22, 2020.
Helsinki, July 21, 2020
SSH COMMUNICATIONS SECURITY
Board of Directors
Teemu Tunkelo
CEO
For further information, please contact:
Teemu Tunkelo, CEO tel. +41 79 227 8362
Niklas Nordström, CFO tel. +358 50 541 0543
Distribution:
NASDAQ Helsinki Ltd.
Major media
www.SSH.com
(END) Dow Jones Newswires
July 21, 2020 02:00 ET (06:00 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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