Elettronica
EVS Broadcast Equipment reports 2014 results
"Our performance in 2014 indicates that we have clearly maintained our leadership position in high end video live production, but we have to cope with the slowdown of the live production server market", said Muriel De Lathouwer, Managing Director & CEO of EVS. "Over the last four months, we have set up a new organization and launched many initiatives relating to the refocus on our core business, such as the dcinex disposal, the acquisition of SVS/DYVI or in terms of product prioritization. They will help us to be even better armed for the future, to tackle new opportunities. I am really happy to pursue, as CEO, what has been initiated with the executive committee over the last months."
Commenting on the results and prospects, Magdalena Baron, CFO, said: "2014 revenue is in line with our low single digit growth guidance compared to 2013 and reflect the continuing challenging market situation. We keep our focus on the costs management. Our efforts, combined with the deliberately postponed move to the new building given the recent organizational change, resulted in 6.7% operating expenses growth versus last year compared to the guidance of "around 10% growth". The 6.7% increase is driven by controlled investments in internal resources (+6.8% average FTE increase, which represents a substantial reduction versus the initial plan) and the SVS/Dyvi contribution, partially offset by opex control programs. For 2015, we have low visibility on the top line, observe the order book at -24.3% compared to 2014 excl big events, and guide for high single digit operating expenses growth vs 2014. The 2015 opex growth is the combination of the full year effect of 2014 hiring and investments decisions, and additional investments in the organization, partially offset by the savings programs and stringent expense control."
EVS revenue amounted to , a decrease of 20.8% (-22.4% at constant currency and excluding the big event rentals) compared to 4Q13, but an increase of 19.4% compared to 4Q12. 4Q13 very strong revenue had been positively impacted by the recovery in the US after a weak 1H2013, and a large contract in APAC. 4Q14 sales in represented 65.2% of total group sales, and (Entertainment, News and Media) sales 34.8%.
EVS revenue amounted to , an increase by 1.8% (-8.9% at constant currency and excluding the big event rentals) compared to FY13. Sales of solutions in decreased by 6.6 (-6.6% at constant currency) to EUR 81.9 million, representing 62.3% of total group sales in FY14. sales decreased by 14.0% in FY14 to EUR 35.2 million (-14.0% at constant currency). ENM sales represented 26.8% of total sales in FY14. amounted to EUR 14.3 million in FY14 (relating to the Sochi Winter Olympics, the Soccer World Cup in Brazil, the Commonwealth games, the Asian games and the Youth Olympic games), compared to EUR 0.5 million in FY13. They represented 10.9% of total sales in FY14.
(1) Refer to the geographical segmentation in annex 5.4.
Geographically, sales (excl. big event rentals) have evolved in FY14 as follows:
, stable compared to 4Q13 thanks to a better product and project mix, and despite lower sales. Operating expenses grew by 11.7%, mainly due to the full effect of the new hires from the first 9 months of 2014, one-time exceptional costs (departure of Joop Janssen), IS/IT investments in the group. This leads to a , compared to 41.3% last year. The disposal of dcinex on October 20 resulted in a one-time capital gain of EUR 2.0 million. Tax rate was lower in 4Q14, as a result of changes in the structure of some subsidiaries to better reflect their operational functions and tax exempt capital gain on the disposal of dcinex. Group net profit amounted to EUR 8.3 million in 4Q14, compared to EUR 10.7 million in 4Q13. , compared to EUR 0.80 for 4Q13.
, compared to 75.5% in FY13 due to product and project mix, some reclassification between R&D and cost of goods sold and higher write-offs . Operating expenses grew by 6.7%, mainly due to some extra hires and additional costs in 2014 that include the investment in SVS/DYVI . This is below the previous guidance of approximately 10% opex growth, driven by lower than expected new building opex cost (postponed move due to some changes needed in the building to reflect the new organization and a more optimal reuse of some existing equipment in the building), an immediate adoption of cost initiatives by the new organization and a lower than expected cost relating to the CEO recruitment. This leads to a , compared to 37.5% in 2013. dcinex contributed EUR -0.2 million to EVS results in FY14 until the date of its disposal, which, in addition, resulted in a one-time capital gain of EUR 2.0 million . Tax rate was lower in FY14, as a result of changes in the structure of some subsidiaries to better reflect their operational functions and tax exempt capital gain on the disposal of dcinex. Group net profit amounted to EUR 35.5 million in FY14, compared to EUR 34.0 million in FY13. , +4.2% compared to EUR 2.52 for FY13.
At the end of December 2014, EVS employed 512 people (FTE), +5.3% compared to December 2013 (486) . On average, EVS employed 503 FTE in FY14, compared to 471 in FY13, a 6.8% increase.
Total equity represented 52.6% of total balance sheet at the end of December 2014. Inventories amounted to EUR 15.4 million, including around EUR 4.0 million value of own equipment used for R&D and demos of EVS products. Inventories were down compared to September 2014 and the end of 2013, as the level of equipment used during the different big sporting events has decreased. In the liabilities, provisions include mainly the provision for technical warranty on EVS products for labor and parts.
At the end of 2011, EVS started the construction of a new integrated building in the proximity of its current location in Liège, in order to gather all employees of EVS headquarters in one location, currently split in 6 different buildings. EUR 50.8 million have been invested by the end of December 2014 (less EUR 5.6 million of subsidies booked at the same date). The total budget for the project (including some higher investments in future-proof equipment) is estimated around EUR 58.5 million. In November 2013, EVS secured the financing of the new building through senior debt of EUR 24 million with EIB (50%), ING (25%) and BNPPF (25%) over 7 years. In May 2014, EVS has added EUR 12 million of available loan facilities (50% ING and 50% BNPPF). At the end of December 2014, a total of EUR 30.0 million has been drawn on these available facilities.
The net cash from operating activities amounted to EUR 40.3 million in FY14. On December 31, 2014, the group balance sheet showed , and EUR 31.9 million in financial long-term debts (including short term portion of it).
At the end of December 2014, there were 13,625,000 EVS outstanding shares, of which 140,498 were owned by the company. At the same date, 372,050 warrants were outstanding with an average strike price of EUR 39.85 and an average maturity in November 2016.
Muriel De Lathouwer, currently President of the Executive Committee of EVS (after the departure of Joop Janssen in October 2014), is appointed as Managing Director & CEO of the company. She has been a member of the Board of Directors of EVS since November 2013, and she also chairs the Strategic Committee. This appointment is effective immediately.
Following the change in the internal organization, EVS will change its segment reporting as from 1Q15. The company will publish revenue data for "Outside broadcast vans", "studios and others" and "big event rentals", which will be very close to the disclosure used by the company until 2012. The disclosure by region and by nature will remain unchanged. Comparative quarterly figures for 2014 will be provided before May 12, 2015, when the first quarter results will be released.
The (to be invoiced in 2015) on February 15, 2015 amounts to , which is -38.3% compared to EUR 48.2 million on February 15, 2014 (-24.3% excl. the EUR 9.3 million for big event rentals that were in the order book last year). The order book does not include any big events rentals.
In addition to this order book to be invoiced in 2015, EVS already has EUR 2.6 million of orders to be invoiced in 2016 and beyond.
The slowdown witnessed in the broadcast industry (and more specifically the live production server market) persists. The EVS management explains this slowdown by macro-economic headwinds and longer investment cycles. With very limited visibility at the moment, the EVS management remains prudent for 2015, an uneven year which, as usual, should only include a limited amount of rentals for big sporting events (compared to a record EUR 14.3 million in 2014). While numerous actions have been taken for tighter opex management, the investments made and the people hired in 2014 will mechanically add opex in 2015 (including higher depreciation relating to the new building). This will lead to an expected high single digit opex growth in 2015.
The Statutory Auditor BDO Réviseurs d'Entreprises Soc. Civ. SCRL confirmed that its controls which are substantially finished did not reveal material misstatement that should be brought to accounting information mentioned in the press release.
EVS will hold a conference call in English today at 3:00 pm CET for financial analysts and institutional investors. Other interested parties may join the call in a listen-only mode. The presentation used during the conference call will be available shortly before the call on the EVS website.
Dial-in numbers: +44 (0)207 1620 077 (United Kingdom), +32 (0)2 290 14 07 (Belgium), +1 334 323 6201 (United States)
Conference call ID: 951496
Tuesday May 12, 2015: 1Q15 results
Tuesday May 19, 2015: Ordinary General Meeting
Thursday August 27, 2015: 2Q15 results
Friday November 13, 2015: 3Q15 results
Copyright GlobeNewswire
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