DGAP-News: ifa systems AG

 
After special effects, restructuring should bring profitability back

• Sales 2016 and the first half-year 2017 in the plan
• Result burdened by depreciation and provisions
• Strategic reorientation on the core business

Frechen, 31/08/2017
The ifa systems AG, a listed specialist for Health-IT applications in ophthalmology, has increased in the fiscal year 2016 sales by 7.2% to EUR 8.9 million (previous year: EUR 8.3 million). On the results page, the objectives could not be achieved, affected by special effects: first, by means of value adjustments to intangible assets, specifically capitalized development expenses in the amount of approx. EUR 3.2 million, and, secondly, by provisions for restructuring measures (approx. EUR 0.9 million). The depreciation is due to changes in the market expectations for individual products of the ifa group and the change in the market strategy of the cooperation partner and majority shareholder Topcon. These effects are the main reason for the fact that the operating result (EBITDA) of EUR 1.0 million is still positive, but the Group's net profit for the year is a loss of EUR 2.2 million. In addition, there was a change in the value of financial assets (company value) in the amount of 2.1 million.
"In view of the earnings situation, we have proposed to the Supervisory Board that there will be no dividend be distributed for the fiscal year 2016," says Jörg Polis, Chairman of the Management Board of ifa systems AG. "Our goal, however, is to secure future profitability, among other things through the planned restructuring measures and thus create the conditions for further dividend distributions."
The revised framework conditions have also affected the figures for the first 6 month of the year 2017. Although sales rose by 15.4 percent to EUR 3,3 million (previous year: EUR 2.9 million), of which EUR 0.9 million was attributable to Topcon as a cooperation partner and majority shareholder. Whereas last year's other income contributed EUR 0.8 million, mainly from the reversal of provisions, the amount in the first half-year of 2017 fell to EUR 108 thousand. Own work capitalized also decreased, falling from EUR 1.2 million to EUR 0.7 million. Overall, a total performance of just under EUR 4.5 million was generated, which is a decrease of approx. 17.7 percent.
As in the years before, self-produced development work was activated to a lesser extent in the first haft year of 2017, at the same time scheduled depreciation increases due to the assumption of shorter useful lives of some products.
As a result, the operating result (EBITDA) at mid-2017 was EUR -0.6 million (previous year: EUR 1.1 million) and EBIT, after depreciation and amortization, was EUR -1.6 million (previous year: EUR 0.8 million). "Costs that are not activated, of course, burden the earnings situation. For this reason, the current profitability is unsatisfactory, "says Jörg Polis. "The figures for the first half of the year also show that the restructuring program must be implemented quickly and comprehensively so that we can present more gratifying figures here again." In the second half of the year, support for projects that are not marketable in the short term will not be regenerated and thus automatically reduce costs. In the second half of the year, the Management board also expects slightly higher sales, which will help to change the relations to positive. Much of the runtime license sales are billed to the customer in the last 4 months. At present, revenues from runtime licenses cover more than 70% of fixed costs.
The Management Board stresses that it is important to focus forces on the right goals. This also means that markets which do not allow us to realize the expected potential are temporarily out of focus. For example, most recently in the USA, where a large number of new market attendants compete with products that are priced favorably but still have to prove themselves in practice. Jörg Polis "It is therefore only consistent that we concentrate our resources on more promising projects, among others in Latin America, South Africa and various other European countries."
 
For the remaining time of the year, the Management Board is therefore confident. "The ifa group has an excellent market position. This is a good basis to be successful with the concentration on our core competencies of the electronic patient record and in the connectivity business, "says Jörg Polis. In order for profitability to return to the appropriate path, the turnouts were set and a restructuring programme was implemented. The Board of Management expects that, with a turnover volume of EUR 8.5 to EUR 9 million, successes will be visible at the end of the year. The target is a black zero at the level of EBIT.
Detailed information can be found in the full Annual Report 2016 and the Interim Financial Report as of 30/06/2017. The reports are available for download at www.ifasystems.com, Investor Relations.

Dates:
DVFA Autumn Conference - 5 - 6/09/2017, presentation 06/09/2017, 12:45 pm
Annual General Meeting - 24/10/2017, [Cologne]
 
Key figures table for 06/30/217
ifa systems Group, in accordance with IFRS

In EUR '000, unless otherwise stated	2013	2014	2015	2016	H1 2017
Sales	7,771	8,077	8,267	8,864	3,330
Capitalized development costs	2,335	2,341	2,395	1,596	694
Overall performance	10,473	10,806	11,676	11,894	4,482
EBITDA	2,648	3,297	3,414	1,030	-614
EBITDA margin (%) based on total performance	26.2	31.6	32.0	8.7	-13,7
EBIT	1,601	2,419	2,686	-2,216	-1,604
EBIT margin (%) based on total performance	15.8	23.2	25.2	-18.6	-35,8
Group result	1,043	1,538	2,062	-2,224	-1,259
Result per share (EUR)	0.42	0.56	0.75	-0.81	-0.46
Operating cash flow	3,267	2,502	1,708	1,222	-1,687
Free cash flow	679	-384	-1,108	-474	-2,381
Balance sheet total	18,774	23,446	26,446	22,965	26,367
Equity capital	14,138	17,875	20,271	15,806	14,282
Equity ratio (%)	75.3	76.2	76.7	68.8	54.2%
Employees (period average)	72	82	87	91	86
Performance per employee in TEUR	140	127	123	131	52
Number of shares in thousand	2,500	2,750	2,750	2,750	2,750

 
Contact for questions:
Robin Booth
ifa systems AG
Augustinusstr. 11b
50226 Frechen, Germany
robin.booth@ifasystems.de
+49 2234 933 670

The Company:
The ifa systems AG is listed on the open market at the German Stock Exchange under ISIN: DE 007830788. The Topcon Corp., Japanese Technology company, holds 50,1 % of shares through the subsidiary Topcon Europe and is also noted (Japanese Stock Exchange Tokyo 7732 TYO).
The ifa Group develops, distributes and installs software solutions and components especially targeted at ophthalmologists and eye clinics in the fast-growing health IT industry. The focus of these solutions is to ensure that the patients receive the best treatment. The core principle is that specialized electronic patient files include all the details of examinations and treatments in ophthalmology. Data from more than 480 ophthalmological devices from various manufacturers can be gathered by the software. Doctors can gain knowledge on the respective guidelines, treatment methods and possible risks based on the captured data. Various specialized database solutions additionally archive and assess images, documents and data. These are frequently used in quality management and for research. Experts expect that this niche market will grow to total sales of over USD 6.2 billion by 2020.
The company maintains users in over 30 countries world-wide, using a total of 15.000 workstation licenses and processing and managing more than 200.000 clinical patient cases.