QPR Software for Investors
We innovate, develop and sell software aimed at analyzing, monitoring and modeling operations in organizations. Furthermore, we offer customers a variety of solutions and consulting services.
We focus our product development to meet the increasing challenges organizations face in leading their operations in digitalizing world. Our focus areas are process mining, process analytics and operational performance monitoring. We believe that the relevant market for these focus areas will grow significantly, as organizations collect more and more transaction and other event data from their operations.
In the next few years, we seek to grow especially our international software sales and are increasing our resources in marketing and sales. We accelerate our product development by increasing our resources in a controlled manner. Our target is to gain a significant share of the rapidly growing process mining market. In the mid-term, we target on average 15% annual net sales growth.
Why invest in QPR Software?
1. We have strongly renewed our software product portfolio in recent years and target international sales growth for our new products.
2. Our business model is highly scalable.
3. Despite investments into new products we have consistently been profitable, have had strong cashflow and have distributed dividends to our shareholders. According to our dividend policy, the Board of Directors propose to the Annual General Meetings dividends of approximately 30-50% of annual cash flow from operating activities.
4. Approximately half of our revenue is recurring.
5. Our customer churn is low. Software rental and maintenance contracts have an average lifecycle of approximately 10 years.
Operating environment and market outlook
In recent years, QPR Software has invested heavily in developing the company's new process mining software, as well as renewing all user interfaces of its software products. The company estimates that the demand for process mining software and related services will continue to grow in 2018. Growth focus is on Europe, even though the demand for process mining software, especially in large organizations, is also growing strongly outside Europe. Due to the current early market stage, country specific differences in demand will continue to be significant.
In developed markets, competition in software business for process and enterprise architecture modeling and performance management is expected to remain tight. The company still sees growth potential for these products in emerging markets.
Outlook for 2018
The Company estimates that its net sales will grow in 2018 (2017: EUR 9,084 million). In July - December 2018, net sales growth is expected to accelerate from growth level achieved in January - June (+3%). The growth in net sales will be driven by software business, in particular the process mining software QPR ProcessAnalyzer. Consulting net sales are also expected to grow from previous year.
In 2018, QPR will invest more in its growing business segments and is planning to increase its resources, especially in international sales and marketing. Despite the increase in costs, the company estimates that its operating result will improve from previous year and will exceed 5% of net sales (2017: 0.4% of net sales).