Interim statement January 1–September 30, 2018
Qt Group Plc Stock Exchange Release, November 1, 2018, at 8:00 a.m.
Third quarter: Very strong growth in net sales continued (up 23.3 percent)
• Net sales increased by 23.3 percent year-on-year to EUR 10,748 thousand (8,718)*. At comparable exchange rates, net sales increased by 22.1 percent.
• The operating result was EUR -1,045 thousand (-1,302).
• The operating margin (EBIT %) was -9.7 percent (-14.9%).
• Earnings per share were EUR -0.05 (-0.05).
• Net sales increased by 31.7 percent to EUR 34,452 thousand (26,152). At comparable exchange rates, net sales increased by 36.5 percent.
• The operating result was EUR -670 thousand (-2,505).
• The operating margin (EBIT %) was -1.9 percent (-9.6%).
• Earnings per share were EUR -0.04 (-0.10).
* the figures in brackets refer to the comparison period, i.e. the corresponding period in the previous year.
Juha Varelius, President and CEO:
Qt Group’s net sales in the third quarter amounted to EUR 10.7 million. Net sales increased by 23.3 percent year-on-year. License sales and consulting grew by 28.5 percent and support and maintenance by 14.9 percent. At comparable exchange rates, net sales increased by 22.1 percent.
Net sales for the review period amounted to EUR 34.5 million, up 31.7 percent year-on-year. License sales and consulting grew by 44.6 percent and support and maintenance by 10.4 percent. At comparable exchange rates, net sales increased by 36.5 percent. The Group’s performance during the review period was boosted by very strong growth in net sales in the second quarter, when the Group recorded an exceptionally large number of significant licensing deals.
We are continuing to make investments in growth and recruiting new personnel in line with our strategy, with a particular focus on growing our global sales and consulting network. Due to these investments, the operating result for the third quarter and the review period as a whole showed a loss, as expected. Our growth strategy relies heavily on the market for embedded systems, where the sales cycles are long and require a local presence. We have made long-term investments in our biggest market areas, which are the United States, Germany, Japan, South Korea and China, and our newest target markets, France, the United Kingdom, Italy and India.
In the third quarter, we announced two partnerships aimed at accelerating our customers’ software development. One of the new partnerships is with Toradex, an international provider of computing solutions for limited operating environments, and the other is with MedAcuity, a US-based company focused on accelerating time-to-market for medical devices.
Earlier this year, we released Qt Safe Renderer 1.0, a tool that significantly improves the software development process of automotive, medical devices, industrial automation and other safety-critical industries. We also released Qt Design Studio, a tool that significantly reduces time spent on UI design by improving cooperation between designers and developers. In addition, we released Qt version 5.11 and Qt for Python, a collection of tools that gives users of the Python programming language access to Qt technologies. During the first half of the year, we also released Qt Automotive Suite 2.0, a solution for creating new kinds of digital driving experiences, as well as Qt 3D Studio 2.0, a tool that makes it easy to utilize 3D graphics in applications.
We see very promising growth prospects for the company’s business in the next few years. The company’s financial goals are to achieve, in 2021, annual net sales of EUR 100 million and an operating margin (EBIT %) of more than 15 percent.
We estimate that our net sales in 2018 will increase by more than 20 percent year-on-year at comparable exchange rates. Due to investments in line with its growth strategy, the company’s operating result will show a loss also in 2018, as was expected based on prior forecasts.
Events after the review period
The company had no other significant events deviating from normal business operations after the end of the review period.
Operating environment and market outlook
The company estimates the growth prospects for its business in the next few years as very promising.
The Group’s business development efforts will particularly focus on embedded systems in the automotive, medical and industrial automation sectors. Areas targeted in product development include value-added features and tools required for building embedded systems.
Sales growth associated with embedded systems will also reflect on the earnings logic. Volume-based license revenue from these sales accumulates over the long term. Consequently, the company anticipates no major impact from embedded systems sales growth on consolidated net sales in 2018.
We estimate that our net sales in 2018 will increase by more than 20 percent year-on-year at comparable exchange rates.
Due to investments in line with its growth strategy, the company’s operating result will show a loss also in 2018, as was expected based on prior forecasts.
Helsinki, November 1, 2018
Qt Group Plc
Board of Directors
The company does not hold briefings on interim statements. The interim statement will be available in the Investors section at www.qt.io from 8:00 am on November 1, 2018.
Juha Varelius, CEO, tel. +358 9 8861 8040