OUTLOOK FOR THE FULL YEAR 2020
The increasing number of Covid-19 infections in many countries in Europe is again causing uncertainty resulting in an economic slowdown . The partial lockdown in many of our target markets such as the Netherlands, Germany and the USA is unfavorably impacting our high end outlook. In spite of this adverse impact, AND is pleased to confirm the lower end of the revenue guidance provided in August. For the full year 2020, we expect to generate a revenue within the range of €1,550 K to €1,700 K, which represents a YOY growth in the range of 46% to 60% compared to 2019 . This is expected to result in an operating loss in the range of €1,450 K to €1,300 K, a net loss in the range of €1,200 K to €1,100 K and a cash outflow in the range of €1,400K to €1,300 K. The high end of the revenue range has reduced as a result of slower decision making processes particularly within our data sales prospects. Our revenue mix shows an increase in the service revenue, which requires additional resources to meet this demand. Service projects also have a longer cycle to convert into cash, which explains the higher cash outflow guidance.
FINANCIAL POSITION
AND is making significant progress in turning its business around from an automotive map supplier focused on one off large deals to a location-aware content service provider. This transition requires investment in product development and sales and marketing. The convertible loan closed in February 2020 has provided the required funding to develop an interesting set of new products. Additional funding is required to enable AND to grow with its new business model into a cash generating and profitable organization. AND expects to complete the funding in Q4 2020.
REPLACEMENT OF EXTERNAL AUDITOR
We continue to explore the options to replace our previous OOB-licensed auditor, Grant Thornton. However, to date no available alternative auditor has yet been identified. To allow more time in resolving this issue, AND has decided to call an Extraordinary General Shareholders Meeting in December. Part of the agenda will be a request to shareholders to approve the extension of the accounting year until 30 June 2021. For the full agenda, please refer to a separate press release. issued on 29 October 2020
RISK MANAGEMENT
Risk management is an integral managerial task. Our risk management and control procedures take into consideration the size of the company and the character of the business in order to identify the most significant risks which the company is exposed to. The risks identified are discussed on a periodical basis and mitigated where possible. Such a system cannot provide absolute certainty that objectives will be realized. Neither can it guarantee prevention of potential cases of material mistakes, damage, fraud or breaches of statutory laws.
The 2019 annual report describes the principal strategic, operational and financial risks. The risks and uncertainties described in the annual report are still relevant and are deemed incorporated and repeated by reference in this report. There were no cases of material damage, fraud or breaches of law detected in the first half year. However, the Covid-19 outbreak and the associated pandemic controls have had a disruptive effect on the economy and an adverse effect on our business. Most noticeably in our data sales business and associated revenues. In spite of the fact that we have taken mitigating actions and we can see signs of economic recovery, there is no guarantee that the pandemic and its associated control measures will not have a further negative impact on our business, financial position and results.
BOARD OF MANAGEMENT STATEMENT
The Board of Management hereby declares that, to the best of its knowledge, the summarized consolidated September 2020 YTD financial statements, drawn up in accordance with IAS 34 “Interim financial reporting”, represents a faithful rendering of the assets, liabilities, financial position, profit and cash flow of AND International Publishers NV and its subsidiaries as stated in the consolidated financial report, and that the Board report as included in this September 2020 YTD report represents a faithful rendering of the information required in relation to item 5:25d subs 8 and 9 of the Dutch Financial Supervision Act.
GROUP STRUCTURE SIMPLIFICATION
During Q3 2020 the dissolution of AND International Publishers PLC (UK) and AND North America LLC (USA) was completed. The voluntary liquidation of AND Data India Pvt, LTD, has made significant progress: the legal steps to appoint a liquidator have been completed; the GST (Indian VAT) receivable has been refunded; the liquidator is progressing through the step plan. As a result of ongoing Covid-19 related lockdowns and unavailability of Indian government institutions, it remains difficult to predict the exact completion date. We expect the repatriation of a significant portion of the funds during Q4 2020 and the completion of the voluntary liquidation in subsequent months.