TIDMSSH1V
SSH COMMUNICATIONS SECURITY CORPORATION STOCK EXCHANGE RELEASE
FEBRUARY 18, 2021, AT 9:00 A.M
SSH COMMUNICATIONS SECURITY CORPORATION FINANCIAL STATEMENT RELEASE
JANUARY 1 -- DECEMBER 31, 2020
ANNUAL SALES DECREASED, QUARTERLY OPERATING CASH FLOW NEUTRAL
October--December 2020: Net sales decreased 28.4 % compared to the
previous year. Planned growth investments impacted the EBITDA
negatively. The loss for the period was also impacted by exchange rate
fluctuations and write-downs of bad debts.
-- Net sales totaled EUR 3.0 million (10--12/2019: EUR 4.1 million)
-- EBITDA was EUR -0.8 million (EUR 0.4 million)
-- Operating loss was EUR -1.3 million (EUR -0.1 million)
-- Loss for the period was EUR -1.6 million (EUR -0.5 million)
-- Earnings per share was EUR -0.05 (EUR -0.02)
January--December 2020: Net sales decreased 21.7 % compared to the
previous year.
-- Net sales totaled EUR 11.3 million (1--12/2019: EUR 14.4 million)
-- EBITDA was EUR -0.4 million (EUR 0.9 million).
-- Operating loss was EUR -2.5 million (EUR -1.2 million)
-- Loss for the year was EUR -3.1 million (EUR -1.5 million)
-- Earnings per share was EUR -0.11 (EUR -0.06)
Operating cash flow was EUR -0.2 million (EUR 0.3 million), and our cash
position remained strong. Equity ratio remained good at 69.7 % (78.0 %).
Liquid assets at year-end were EUR 8.5 million (EUR 12.0 million).
Operating loss included EUR -0.3 million of restructuring expenses.
BUSINESS OUTLOOK FOR 2021
We expect our net sales to increase significantly during 2021. We are
accelerating our transition from license and support services sales to a
recurring-revenue business model, which we expect will provide more
stable revenue in the long term.
Even though the growth strategy will require operational investments, we
estimate EBITDA and cash flow from operations to be positive for 2021.
KEY FIGURES
EUR million 10--12/2020 10--12/2019 Change % 1--12/2020 1--12/2019 Change %
Net sales 3.0 4.1 -28.4 11.3 14.4 -21.7
EBITDA -0.8 0.4 -276.4 -0.4 0.9 -145.5
% of net sales -25.5 10.4 -346.4 -3.5 6.0 -158.2
Operating profit/loss -1.3 -0.1 885.6 -2.5 -1.2 105.9
% of net sales -44.2 -3.2 1 276.4 -22.1 -8.4 163.1
Profit/loss before
taxes -1.6 -0.4 327.0 -3.1 -1.3 130.8
Profit/loss -1.6 -0.5 223.8 -3.1 -1.5 107.2
Return on equity,
% -30.0 -11.3 -165.3
Return on investment,
% -27.3 -9.8 -177.8
Liquid assets 8.5 12.0 -28.8
Gearing (%) -85.3 -92.3 7.5
Equity ratio (%) 69.7 78.0 -10.6
Earnings per share,
EUR -0.05 -0.02 -170.9 -0.11 -0.06 -81.8
Shareholders' equity
per share, EUR 0.22 0.31 -29.7 0.22 0.31 -29.7
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 year 2020 was an exceptional one due to the prevailing economic
uncertainty. This had a negative effect on our license sales and our net
sales decreased compared to last year. However, during the fourth
quarter, we started to see positive developments and revenue growth
compared to the previous quarter.
2020 was very much about re-setting and re-thinking our short-term
strategy as well as working closer with our key customers and improving
our processes. Our focus was on making investments and taking actions to
drive growth going ahead.
Our strategy gained traction during the fourth quarter resulting in
several business highlights:
-- Won a major multi-year deal for supplying cryptographic products
and services with a value of up to EUR 20 million
-- Signed our 70(th) PrivX customer
-- Made our first NQX deployment to a private sector customer
-- Secured several renewal and new Tectia z/OS deals
-- Received a large follow-on UKM license order from a Fortune 200
financial institution
Q4 net sales were EUR 3.0 million (EUR 4.1 million), down 28 %. The
decline was mainly due to a decrease in license and professional service
sales. Subscription sales grew both quarter-on-quarter and year-on-year.
While the overall growth of the subscription revenue category was
relatively small due to expired UKM subscriptions, we saw PrivX
subscription sales triple compared to 2019.
We were able to restructure our US operations effectively and without
disruption to operations making it possible to start 2021 with a ready
and able organization. We continued recruitment and our investment
program in inbound and outbound marketing during the quarter.
Operating loss for the quarter was EUR -1.3 million (EUR -0.1 million)
and the loss for the quarter was EUR -1.6 million (EUR -0.5 million).
The loss was impacted by nearly EUR -0.8 million in bad debts and
exchange rate losses.
Quarterly cash flow from operations was EUR -0.0 million (EUR 0.2
million). Our balance sheet and cash position remain strong and allow us
to proceed with the execution of our strategy.
In regional terms, software sales in the APAC region grew 4.5%
year-on-year, showing signs of recovery. The EMEA region declined by
17.1%, and the AMER region sales were down by 40.5%. AMER remained our
largest region with 49% of sales. EMEA grew to 35% and APAC was third at
16% of total sales.
Deltagon acquisition
We announced the acquisition of Deltagon Oy, a leading provider of
secure messaging and transaction solutions. With the acquisition, SSH
gains a new, profitably growing subscription-based business, a strong
position in the Nordic security messaging market, and a solid customer
base.
The acquisition strengthens our position as a provider of secure
networking and messaging solutions that safeguard our customers' key
cybersecurity interests and offer security-critical networking,
encryption, and other solutions to the private and public sector in a
coordinated manner. The acquisition also supports our aim to build a
core national cybersecurity and cryptography competence center around
our NQX business.
The acquisition of Deltagon delivers on our strategy of moving towards a
subscription-based business model. This makes the business more
predictable as the relative importance of the more volatile license
sales decreases. After the transaction, approximately 70 percent of our
sales will come from recurring maintenance and subscription revenue.
We will fully consolidate Deltagon after the expected closing of the
transaction during the first half of 2021. The acquisition is estimated
to accelerate our revenue growth and improve our operating profit and
cashflow from operations.
A fresh restart
During my first nine months steering SSH, all hands of our
hundred-strong global team have been on deck building a strong
foundation for sustainable growth.
We have clarified and focused our strategy for 2021-2022. We have
flattened and streamlined our organization for faster execution and
improved accountability. We have moved our focus closer to our customers
and improved our response to their changing needs driven by the
underlying technology changes like introduction of cloud applications.
Today we operate through three regions with increased agility. We have
recruited more sales personnel, product managers and engineers. We are
strengthening our professional services business to better support
license and subscription sales at our key customers. We have increased
our investment into our traditional products Tectia and UKM.
We have a new board and a new largest owner who are supporting our
growth strategy.
Looking ahead
At the center of our plan are new and scalable in-house products PrivX
and NQX, which will expand their roles in our portfolio, and we welcome
the additions to the portfolio from the Deltagon acquisition. This
enables us to offer comprehensive cybersafety solutions to our customers
globally. We will continue selectively to develop our patent portfolio.
Our focus is on growth during 2021 and 2022 both organically and
inorganically. The large cryptography contract announced in December and
the Deltagon acquisition announced in January are the first steps on our
journey forward. We are strengthening our position with key customers
through a wider portfolio of SSH products and related professional
services.
Teemu Tunkelo
CEO
CONSOLIDATED NET SALES
Consolidated net sales for October--December totaled EUR 3.0 million
(EUR 4.1 million).
Consolidated net sales for January--December totaled EUR 11.3 million
(EUR 14.4 million), a decrease of 21.7 %, year on year.
The Americas region accounted for 52.8 % (54.3 %); the Europe, Middle
East, and Africa region 28.3 % (25.3 %); and the Asia Pacific region
18.9 % (20.4 %) of reported net sales.
EUR million 10--12/2020 10--12/2019 Change % 1--12/2020 1--12/2019 Change %
BY SEGMENT
AMERICAS 1.4 2.4 -40.5 5,9 7.8 -23.9
APAC 0.5 0.5 4.5 2.1 2.9 -27.4
EMEA 1.0 1.2 -17.1 3.2 3.6 -12.6
Total 3.0 4.1 -28.4 11.3 14.4 -21.7
-------------------------- ----------- ----------- -------- ---------- ---------- --------
BY OPERATION
Subscription sales 0.2 0.2 15.2 0.8 0.7 8.1
License sales 0.6 1.5 -62.3 2.2 4.5 -49.7
Maintenance sales 1.7 2.1 -17.2 7.8 8.6 -9.6
Professional services
& others 0.4 0.3 47.8 0.4 0.6 -24.2
Total 3.0 4.1 -28.4 11.3 14.4 -21.7
-------------------------- ----------- ----------- -------- ---------- ---------- --------
The majority of SSH Communications Security's invoicing is US dollar
denominated. During the financial year, the average exchange rate of the
US dollar against the euro declined by 1.9 % compared to 2019. With
comparable exchange rates, the net sales reduction in 2020 would have
been 20.8 % compared to 2019.
RESULTS AND EXPENSES
Operating loss for October--December was EUR -1.3 million (EUR -0.1
million), with net loss totaling EUR --1.6 million (EUR -0.5 million).
Operating loss for January--December was EUR -2.5 million (EUR -1.2
million), with net loss totaling EUR -3.1 million (EUR -1.5 million).
Sales, marketing, and customer support expenses for October--December
amounted to EUR -2.2 million (EUR -2.1 million), while research and
development expenses totaled EUR -1.3 million (EUR -1.4 million) and
administrative expenses EUR -0.8 million (EUR -0.8 million).
Sales, marketing, and customer support expenses for January--December
amounted to EUR -6.7 million (EUR -7.5 million), while research and
development expenses totaled EUR -5.0 million (EUR -4.9 million) and
administrative expenses EUR -2.7 million (EUR -2.9 million). Operating
expenses decreased by 5.1 % compared to the previous year.
BALANCE SHEET AND FINANCIAL POSITION
The financial position of SSH Communications Security was stable during
the financial year. The consolidated balance sheet total on December 31,
2020, was EUR 18.6 million (December 31, 2019: EUR 23.8 million), of
which liquid assets accounted for EUR 8.5 million (December 31, 2019:
EUR 12.0 million), or 45.7 % of the balance sheet total.
Interest-bearing liabilities increased to EUR 1.3 million (December 31,
2019: EUR 0.9 million) due to new rental contracts. Interest-bearing
liabilities include a subordinated loan of EUR 0.6 million (December 31,
2019: 0.6 million) taken out from the non-controlling interest holder
State Security Networks Group Finland. On December 31, 2020, gearing, or
the ratio of net liabilities to shareholders' equity, was -85.3 %
(December 31, 2019: -92.3 %) and the equity ratio stood at 69.7 %
(December 31, 2019: 78.0 %).
The reported gross capital expenditure for January--December totaled EUR
2.1 million (EUR 2.0 million). The reported financial income and
expenses in total to EUR -0.6 million (EUR -0.1 million) consisted
mainly of exchange rate gains or losses and interest expenses sales and
leasing contracts.
During January--December, SSH Communications Security generated a cash
flow of EUR -0.2 million (EUR 0.3 million) from business operations, and
investments showed a cash flow of EUR -1.5 million (EUR -1.1 million).
Cash flow from investments includes government grants of EUR 0.6 million
(EUR 0.9 million). Cash flow from financing totaled EUR -1.3 million
(EUR -0.8 million).
There were no short-term investments at the end of the reporting period.
RESEARCH AND DEVELOPMENT
Research and development expenses for October--December totaled EUR -1.3
million (EUR -1.4 million), the equivalent of 44.3 % of net sales (33.1
%). During October--December, the company capitalized development costs
in the amount of EUR 0.4 million (EUR 0.4 million).
Research and development expenses for January--December totaled EUR -5.0
million (EUR -4.9 million), the equivalent of 44.9 % of net sales (34.0
%). During January--December, the company capitalized development costs
in the amount of EUR 1.3 million (EUR 1.6 million). Capitalized product
development costs were reduced by the amount of EUR 0.4 million received
as funding from the EU (2019: EUR 0.1 million). The depreciation of R&D
capitalization assets was EUR -1.3 million (EUR -1.3 million).
HUMAN RESOURCES AND ORGANIZATION
At the end of December, the Group had 94 employees on its payroll
(December 31, 2019: 90). The number of employees increased by four
persons from the previous year (4.4 %).
At the end of the period, 33.0 % (35.6 %) of the employees worked in
sales, marketing, and customer services, 51.1 % (51.1 %) in R&D, and
16.0 % (13.3 %) 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
consolidated financial statements and discharged from liability 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 were re-elected as
the auditor of the company. Ernst & Young Oy informed that Erkka
Talvinko, Authorized Public Accountant, will continue to act as the
principal auditor.
An Extraordinary General Meeting of SSH Communications Security Oyj was
held on June 26, 2020. The Extraordinary General Meeting approved that
number of 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 19,431,318 shares (valued at EUR 24,937,080) during the year.
The highest quotation was EUR 1.97 and the lowest EUR 0.65. The
trade-weighted average share price for the period was EUR 1.28, and the
share closed at EUR 1.70 (December 31, 2020).
Tatu Ylönen sold 6.4 million shares in SSH to the investment fund
Accendo Capital on May 22, 2020, and a further 4.93 million shares on
June 3, 2020. Accendo Capital became the largest shareholder of SSH,
with 29.2 % of the company shares and votes. Tatu Ylönen is the
second-largest shareholder of SSH after the sale with 18.0 % 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 December 31, 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 may have 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
compelling financial reason for the deviation with respect to the share
issue against payment.
Furthermore, the authorization includes the Board of Directors' right to
decide upon who is 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 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
other 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 by 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 acquisition of own shares must 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 does not exceed
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 expire at the latest on June 30, 2021.
RISKS AND UNCERTAINTIES
The ongoing COVID-19 pandemic is a major new macro-level risk that may
affect SSH Communications Security through challenges it poses to new
license sales. The most substantial risks that might otherwise affect
the profitability of the company have remained the same as in the
previous reporting period and are listed below.
Largest risks:
- Uncertainty of the macroeconomic environment, such as the impact of
COVID-19
- 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 2021
could have unpredictable effects on profitability. The company decides
on hedging of USD-based contracts case by case.
Principles and organization of risk management of SSH Communications
Security are available on the company's web page: 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
On January 29, 2021, SSH Communications Security Corporation's
subsidiary, Kyberleijona Oy agreed to acquire all shares of Deltagon Oy
from Leijonaverkot Oy, a subsidiary of Suomen Erillisverkot Oy.
Deltagon Oy develops and sells secure messaging and transaction
solutions to various industries, including finance and the public
sector. The acquisition strengthens SSH's position as a provider of
secure networking and messaging solutions that safeguard key national
cybersecurity interests and offer security-critical networking,
encryption, and other solutions to the public sector in a coordinated
manner. After closing, Deltagon becomes a subsidiary of Kyberleijona and
part of the SSH group. The acquisition is expected to close during the
first half of 2021, subject to regulatory approvals and fulfillment of
customary closing conditions.
The total acquisition price is approximately EUR 15.4 million. The cash
flow impact of the acquisition price to SSH is EUR 10 million over the
next four years. The parties have also agreed on an earnout payment of
no more than EUR 1.3 million, subject to certain conditions being
fulfilled in the three-year period after the acquisition.
CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
EUR million 10--12/2020 10--12/2019 1--12/2020 1--12/2019
Net sales 3.0 4.1 11.3 14.4
Cost of sales -0.1 -0.1 -0.3 -0.5
Gross margin 2.9 4.1 11.0 13.9
Other operating income 0.1 0.1 1.0 0.1
Selling, marketing, and customer support
expenses -2.2 -2.1 -6.7 -7.5
Research and development expenses -1.3 -1.4 -5.0 -4.9
Administrative expenses -0.8 -0.8 -2.7 -2.9
Operating profit/loss -1.3 -0.1 -2.5 -1.2
Financial income and expenses -0.3 -0.2 -0.6 -0.1
Profit/loss before taxes -1.6 -0.4 -3.1 -1.3
Taxes 0.0 -0.1 0.0 -0.1
Profit/loss for the period -1.6 -0.5 -3.1 -1.5
------------------------------------------- ----------- ----------- ---------- ----------
Attributable to:
Owners of the parent company -1.5 -0.4 -2.8 -1.3
Non-controlling interests -0.1 -0.1 -0.2 -0.2
-1.6 -0.5 -3.1 -1.5
----------- ----------- ---------- ----------
Other comprehensive income
Items which might be later transferred
to profit or loss:
Foreign subsidiary translation
differences 0.2 0.1 0.3 -0.0
Total comprehensive income -1.5 -0.4 -2.8 -1.5
------------------------------------------- ----------- ----------- ---------- ----------
Attributable to:
Owners of the parent company -1.4 -0.3 -2.6 -1.3
Non-controlling interest -0.1 -0.1 -0.2 -0.2
-1.5 -0.4 -2.8 -1.5
----------- ----------- ---------- ----------
Earnings per share
Earnings per share (EUR) -0.05 -0.02 -0.11 -0.06
Diluted earnings per share (EUR) -0.05 -0.02 -0.11 -0.06
CONDENSED CONSOLIDATED BALANCE SHEET
December December
EUR million 31, 2020 31, 2019
ASSETS
Non-current assets
Property, plant, and equipment 0.1 0.1
Right-of-use assets 0.7 0.3
Intangible assets 5.4 5.5
Investments 0.0 0.0
Total non-current assets 6.3 5.9
Current assets
Inventories 0.0 0.0
Trade and other receivables 3.8 5.9
Financial assets 0.0 0.0
Cash and cash equivalents 8.5 12.0
Total current assets 12.3 17.9
Total assets 18.6 23.8
------------------------------------------------ --------- ---------
EQUITY AND LIABILITIES
Equity
Attributable to parent company's shareholders 8.1 11.4
Non-controlling interest 0.4 0.6
Total equity 8.5 12.0
Non-current liabilities
Borrowings 0.6 0.6
Lease liabilities 0.4 0.1
Advances received and deferred revenue 0.8 2.4
------------------------------------------------
Total non-current liabilities 1.7 3.0
Current liabilities
Trade and other payables 2.4 2.5
Lease liabilities 0.3 0.2
Advances received and deferred revenue 5.7 6.0
------------------------------------------------
Total current liabilities 8.4 8.7
Total equity and liabilities 18.6 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 - -0.7 -0.7 - -0.7
Net profit -1.3 -1.3 -0.2 -1.5
Equity December
31, 2019 1.2 12.0 -1.4 22.7 -23.0 11.4 0.6 12.0
Change - - 0.3 - -0.8 -0.5 - -0.5
Net profit -2.8 -2.8 -0.2 -3.1
Equity December
31, 2020 1.2 12.0 -1.2 22.7 -26.6 8.1 0.4 8.5
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
EUR million 1--12/2020 1--12/2019
Cash flow from operations -0.2 0.3
whereof change in working capital 1.1 -0.6
Cash flow from investing activities -1.5 -1.1
Cash flow from financing activities -1.3 -0.8
Increase (+) / decrease (-) in cash -3.0 -1.6
Cash at period start 12.0 13.5
Effect of exchange rate -0.4 0.1
Cash at period end 8.5 12.0
NOTES TO THE FINANCIAL STATEMENT RELEASE
This Financial Statement Release has been prepared in accordance with
IAS 34 Interim Financial Reporting. The Financial Statement Release does
not include all the information and disclosures required in the Annual
Financial Statements. This Financial Statement Release has not been
audited.
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
December December
EUR million 31, 2020 31, 2019
Carrying amount in the beginning of
the period 0.1 0.2
Increase 0.1 0.0
Depreciation and impairment -0.1 -0.1
Foreign exchange rate differences -0.0 0.0
Carrying amount at the end of the period 0.1 0.1
------------------------------------------ --------- ---------
CHANGES IN RIGHT-OF-USE ASSETS
December December
EUR million 31, 2020 31, 2019
Carrying amount in the beginning of
the period 0.3 0.5
Increase 0.8 0.1
Decrease - -0.0
Depreciation and impairment -0.4 -0.3
Foreign exchange rate differences -0.0 0.0
Carrying amount at the end of the period 0.7 0.3
----------------------------------------- --------- ---------
Right-of-use assets include leased offices and software. 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 2020. The subsidiary in the United
States moved to New York City at the end of 2020. Right-of-use assets
and lease liabilities of EUR 0.1 million have been recognized for the
new office. The lease agreement of the old office expires in September
2021 and an impairment loss of EUR 29.2 thousand was recognized in the
financial statements.
CHANGES IN INTANGIBLE ASSETS
December December
EUR million 31, 2020 31, 2019
Carrying amount in the beginning of
the period 5.5 5.2
Increase 1.6 2.0
Amortization and impairment -1.6 -1.7
Foreign exchange rate differences 0.0 0.0
Carrying amount at the end of the period 5.4 5.5
----------------------------------------- --------- ---------
CONTINGENT LIABILITIES
December December
EUR million 31, 2020 31, 2019
Interest on hybrid capital securities 1.0 0.7
Rent security deposits 0.2 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 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 impairment
KEY FIGURES AND RATIOS
EUR million 1--12/2020 1--12/2019
Net sales 11.3 14.4
EBITDA -0.4 0.9
% of net sales -3.5 6.0
Operating profit/loss -2.5 -1.2
% of net sales -22.1 -8.4
Profit/loss before taxes -3.1 -1.3
% of net sales -27.5 -9.3
Return on equity (%) -30.0 -11.3
Return on investment (%) -27.3 -9.8
Interest-bearing net liabilities -7.2 -11.1
Equity ratio (%) 69.7 78.0
Gearing (%) -85.3 -92.3
Gross capital expenditure 2.1 2.0
% of net sales 18.8 13.9
R&D expenses -5.0 -4.9
% of net sales 44.9 34.0
Personnel, period average 88 88
Personnel, period end 94 90
PER SHARE DATA
EUR 1--12/2020 1--12/2019
Earnings per share undiluted(1) -0.11 -0.06
Earnings per share diluted(1) -0.11 -0.06
Equity per share 0.22 0.31
No. of shares at period average (thousand) 38 802 38 802
No. of shares at period end (thousand) 38 802 38 802
Share performance
Average price 1.28 1.34
Low 0.65 0.97
High 1.97 1.97
Share price period end 1.70 1.04
Market capitalization period end (EUR
million) 65.8 40.2
Volume of shares traded (million) 19.4 5.3
Volume of shares traded as % of total 50.1 10.2
Value of shares traded (EUR million) 24.9 4.0
Price per earnings ratio (P/E) neg. neg.
Dividend per share 0.00 0.00
Dividend per earnings, % 0.00 0.00
Effective return on dividend, % 0.00 0.00
(1) Earnings per share is affected by 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--12/2020 1--12/2019
EBITDA -0.4 0.9
Depreciation and impairment -2.1 -2.1
Operating profit/loss -2.5 -1.2
---------------------------- ---------- ----------
DISCLAIMER
The contents of this report are provided by SSH Communications Security
and its third-party content providers for your personal information only
and do not constitute an offer or invitation to purchase any securities
nor does this report provide any form of advice (investment, tax, legal)
amounting to investment advice nor 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 Interim Report for the
first quarter of the year on April 27, 2021.
Helsinki, February 18, 2021
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
February 18, 2021 02:00 ET (07:00 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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