Global Graphics publishes 2020 annual report and financial statements

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Cambridge (UK) March 18, 2021 (8:00 a.m.CET): Global Graphics PLC (Euronext: GLOG) announces that it has published its annual report and financial statements for the year ended December 31, 2020.

The full document can be downloaded from the investor section of the company’s website at: https://investor.globalgraphics.com/investors/financial-reports.

For hard copy copies please email [email protected] or send your request in writing to the company’s Chief Financial Officer at 2030 Cambourne Business Park, Cambourne, Cambridge, CB23 6DW, UK.

Mike Rottenborn, CEO of Global Graphics, commented, “On behalf of the Board of Directors and the management team, I am excited to announce our 2020 results publicly. I started the year as the new CEO just before the world was hit by the global pandemic, and this presented significant challenges, but every Global Graphics employee has come together to deliver uninterrupted innovation and very strong results for our shareholders on behalf of our customers to achieve.

“Four events deserve special mention. First, sales in our Printhead Solutions segment grew 43% over the same period in 2019 as Meteor’s industrial inkjet customers continued to build larger and larger printers. On the other hand, we were able to complete the sale of our URW Type Foundry business to Monotype in May, a positive result for everyone. Third, Global Graphics Software received a prestigious Queen’s Award for Enterprise for our innovative inkjet screening and quality products. Finally, we ended the year by announcing the purchase of HYBRID software, which will open up many new opportunities for Global Graphics in the high-growth label and packaging segments.

“While the pandemic is far from over, we are seeing the recovery begin for many of our OEM customers and Global Graphics is on a very strong footing to support them in 2021 and beyond.”

Guido Van der Schueren, Chairman of Global Graphics added, “The pandemic has changed a lot of things, but it has not slowed the pace of innovation for either Global Graphics or HYBRID Software, and it is exciting to see how the integration will take place after the acquisition HYBRID software takes place. This is critical for Global Graphics as it nearly doubles the group’s workforce and revenue, placing them in a much stronger position to lead the digital transformation in labels and packaging and other industrial inkjet segments. This is now a new and improved Global Graphics, and I and the rest of the board are determined to share this vision with the investing community for the benefit of all shareholders over the coming months. “

Financial highlights

In May 2020, the Group sold its entire Fonts segment following a strategic decision to focus on the industrial printing market and focus on the Group’s core competencies, printing software and device electronics. As a result, the 2019 comparative figures have been restated to differentiate financial results between continuing and discontinued operations.

For the year ending December 31st
In thousands of euros 2020 2019
Ongoing activities
revenue 22,494 18,478
Operating profit / (loss) 1,387 (131)
Profit / (loss) before tax 1,693 (515)
VAT 58 144
Profit / (loss) from continuing operations 1,751 (371)
Discontinued operation
Income from discontinued operations, after tax 4.167 823
Annual profit attributable to shareholders 5,918 452
EBITDA – continuing operations 4,711 2,592
Adjusted profit from operations – continuing operations 2,355 1,090
Adjusted net income – continuing operations 2,522 671
Basic earnings / (loss) per share (euros) – continuing operations 0.15 (0.03)
Adjusted earnings per share (euros) – continuing operations 0.22 0.06
Available cash 6,855 4,995

The pre-tax group result from continuing operations was € 1.69 million compared to a loss of € 0.52 million in 2019. The increase in profitability of € 2.21 million is due to

  • an increase in sales of € 4.02 million;
  • an increase in the cost of sales by € 1.80 million;
  • an increase in selling, general and administrative expenses by € 0.88 million;
  • a decrease in research and development costs by € 0.22 million;
  • an increase in other operating expenses by € 0.04 million;
  • an increase in the financial result of € 0.02 million; and
  • an increase in currency gains of € 0.71 million.

Revenue in the Software segment included a full year of revenue from Xitron and amounted to € 12.67 million for the year (2019: € ​​11.61 million). The segment benefited from a contract change with an existing customer, which led to revenue recognition of € 2.30 million, which is not expected to be recurring. In 2019, another customer exercised an option in their contract, which resulted in sales of € 2.0 million being realized this year.

The annual sales of the Printhead Solutions segment amounted to € 9.82 million (2019: € ​​6.87 million). The three largest customers, which had declined significantly in 2019, rebounded over the course of the year, carrying 2.75 million

Gross profit for the reporting period declined to 76.7% of sales (2019: 81.3%), mainly due to the higher portion of driver electronics sales generating a lower profit margin than software sales.

Selling, general and administrative expenses include amortization of € 1.48 million (2019: € ​​0.77 million) in connection with intangible assets that were recognized for continuing operations due to acquisitions. The increase in the year is due to a year-round amortization of the intangible assets acquired as part of the Xitron acquisition. Due to the reduction in share-based payments in previous years, the expense for share-based payments fell significantly from € 152,262 in 2019 to € 2,595 in 2020.

Research and development costs (“R&D”) include the capitalization and amortization of internally generated intangible assets. During the reporting period, there was a net capitalization of € 0.72 million (2019: € ​​0.13 million net depreciation) related to these assets which helped reduce R&D expenses for the year. The net capitalization (2019: expenses) consisted of € 0.65 million (2019: € ​​1.44 million) depreciation expenses and € 1.37 million (2019: € ​​1.31 million) capitalization of development costs.

The exchange rate losses result mainly from the revaluation of the currency balances held on the balance sheet date and the change in exchange rates over the course of the year.

The Group presents EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and Adjusted Earnings when reporting its financial results to provide investors with an additional tool to evaluate the Group’s results in a manner that affects what the Group believes Group’s underlying business focuses operations. The management of the group believes that the inclusion of adjusted financial results ensures consistency and comparability with previous reports.

Additional comments and analysis on the Group’s consolidated results for the year ended December 31, 2020 can be found in the annual report and financial statements.

Annual general meeting

The company is expected to hold its annual general meeting on Thursday, May 6, 2021. The official invitation to the meeting will be published promptly in accordance with the applicable legal and regulatory requirements.

Via Global Graphics PLC

Through its operational subsidiaries, Global graphics PLC (Euronext Brussels: GLOG) is a leading developer of integrated hardware and software solutions for graphics and industrial inkjet printing. Customers include printing press manufacturers such as HP, Canon, Durst, Roland, Hymmen and Mark Andy. Global Graphics PLC is headquartered in Cambridge, UK. Its subsidiaries are print software developers Global graphics software; the specialists for industrial print head driver solutions, Meteor inkjet; Prepress workflow developer Xitron and enterprise software developer HYBRID software.

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