EVS Broadcast Equipment reports 2018 results

Publication on February 21, 2019, before market opening
Regulated information – Press release annual results
EVS Broadcast Equipment S.A.: Euronext Brussels (EVS.BR), Bloomberg (EVS BB), Reuters (EVSB.BR)

EVS reports 2018 results

Record second half 2018, after a weak first half

• FY18 performance
  • Revenue of EUR 116.1 million, within the range of the guidance (-2.3% compared to FY17)
  • Operating expense slightly up versus last year (+0.5%)
  • Net profit of EUR 35.2 million (+47.1% compared to FY17 mainly thanks to tax deductions in relation with the innovation box regime)
     
• Q4 performance
  • Strong 4Q18, with EUR 42.3 million revenue (+6.6% compared to 4Q17), supported by the shipping of the XT-Via platform and intense sales activities.
  • High gross margin thanks to favorable product mix and lower inventory write-offs
  • Decrease of the operating expenses (-0.9% in 4Q18 compared with 4Q17)
  • EBIT margin of 42.9%, net profit of EUR 17.2 million
     
• Governance
  • Tom Bamelis (AvH) is appointed as Director of EVS (under the cooptation procedure)
  • Dirk Vanderschrik (Belfius Insurance) to be proposed as new Board member at the next Ordinary General Meeting
  • Extension of Interim CEO mandate until the end of 2019
     
• Guidance
  • 2019 financial outlook
    • Change in publication as from 2019: management will already give a revenue and opex guidance in February to improve transparency
    • Order book of EUR 26.7 million on February 15, 2019 (to be recognized in revenue in 2019), -28.8% vs last year
      (-0.7%, excl. big event rentals)
    • Additional EUR 5.4 million orders to be invoiced in 2020 and beyond
    • Revenue is expected to be in the EUR 100 million to EUR 120 million range in 2019 (with 2H stronger than 1H)
    • Opex are expected to increase by less than 2% compared to last year, thanks to disciplined cost management
       
  • Change in dividend policy
    • New dividend policy with a stable dividend of EUR 1.00 per share for 2018, 2019, 2020, 2021 subject to reasonable market conditions
    • Hence, total gross dividend of EUR 1.00 for 2018 (incl. EUR 0.50 interim dividend paid in November 2018) proposed to the Ordinary General Meeting of May 2019
       
  • Change in quarterly financial reporting
    • Given the high quarterly volatility of the business of EVS, the company has decided to limit, as from 1Q19 its quarterly publications (Q1 and Q3) to a trading update

KEY FIGURES

Unaudited						EUR millions, except earnings per share expressed in EUR	Audited
4Q18		4Q17		4Q18/4Q17			FY18		FY17		FY18/FY17
42.3		39.7		+6.6	%	Revenue	116.1		118.8		-2.3	%
32.6		30.8		+6.1	%	Gross profit	82.5		87.6		-5.8	%
77.1	%	77.4	%	-		Gross margin %	71.1	%	73.7	%	-
18.2		16.5		+10.1	%	Operating profit – EBIT	28.1		34.9		-19.7	%
42.9	%	41.6	%	-		Operating margin – EBIT %	24.2	%	29.4	%	-
17.2		11.0		+55.9	%	Net profit (Group share)	35.2		23.9		+47.1	%
1.27		0.82		+55.6	%	Basic earnings per share (Group share)	2.60		1.77		+46.9	%

COMMENTS

Dr. Pierre De Muelenaere, Chairman of the Board and Interim CEO said: “People, revenue, costs management and product development: this has been our main focus in the second half of 2018. I’m very happy with the progresses achieved in these different areas during the second half of 2018, and I want to thank all the employees of the company for their strong commitment and support to our Fight-Back Plan. We have actually booked a record second half in term of revenue and profit and this makes me proud of the EVS teams. We have been helped by our new product introductions and, thanks to our commercial actions, we have won key references, including a EUR 4 million contract with Gravity Media Group, an important production company that has made significant investment in our new XT-Via and Multicam 16 products. For 2019, we expect that core business to remain under pressure as we don’t expect to see major improvements in the industry dynamics. In this context, our new products and new developments strategies will be very important to reach our targets.”

Regarding the different important corporate developments, Dr. Pierre De Muelenaere added: “We launched a share buyback program in October to support the share price after the weakness experienced in the preceding weeks. We also announced at the end of December 2018, the arrival of two new renowned Belgian shareholders: Ackermans & van Haaren and Belfius). They will reinforce the shareholding structure of the company and through their participation in the EVS board, they will actively help the company to strengthen its strategic vision. In addition, with our new dividend policy, which aims at paying a stable dividend over the upcoming 3 years, we believe that we are giving more visibility to our shareholders. Finally, our move from the quarterly reporting to bi-annual reporting (while keeping quarterly trading updates) will mitigate the volatility of the quarterly results of EVS and will simplify the analysis of the analysts and investors.”

Commenting on the results and prospects, Yvan Absil, CFO, said: “Our fourth quarter and second half reflect the expected acceleration of the business after a weak first half. The environment remained challenging in this second part of the year and this has called for special efforts of our teams in the frame of the Fight-Back plan designed by the EVS Management Team. Gross margin also improved in Q4 thanks to higher revenues and better product mix. We are also particularly pleased with the results of our cost reduction initiatives, which allowed us to limit the operating expenses increase to 0.5% in 2018 yoy (a very big improvement compared to the yearly guidance communicated in February 2018). These costs management efforts will continue this year, allowing us to forecast an opex increase below 2% in 2019. Based on our Order Book and pipeline analysis, we are in a position to announce a revenue guidance for 2019 of EUR 100-120 million.”

Conference call

EVS will hold a conference call in English today at 4.00 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: [phone] (United Kingdom), [phone] (Belgium), [phone] (United States)
Conference call ID: 9999 736

Corporate Calendar:

May 9, 2019: 1Q19 trading update
May 21, 2019: Ordinary General Meeting
August 29, 2019: 2Q19 results
November 14, 2019: 3Q19 trading update

For more information, please contact:   Yvan ABSIL, CFO Geoffroy d’OULTREMONT, Vice President  Investor Relations & Corporate Communication EVS Broadcast Equipment S.A., Liege Science Park, 13 rue du Bois Saint-Jean, B-4102 Seraing, Belgium Tel: [phone].  E-mail:[e-mail]; www.evs.com

Forward Looking Statements This press release contains forward-looking statements with respect to the business, financial condition, and results of operations of EVS and its affiliates. These statements are based on the current expectations or beliefs of EVS's management and are subject to a number of risks and uncertainties that could cause actual results or performance of the Company to differ materially from those contemplated in such forward-looking statements. These risks and uncertainties relate to changes in technology and market requirements, the company’s concentration on one industry, decline in demand for the company’s products and those of its affiliates, inability to timely develop and introduce new technologies, products and applications, and loss of market share and pressure on pricing resulting from competition which could cause the actual results or performance of the company to differ materially from those contemplated in such forward-looking statements. EVS undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

About EVS EVS is globally recognized as the leader in live video technology for broadcast and new media productions. Our passion and purpose are to help our clients craft immersive stories that trigger the best return on emotion. Through a wide range of products and solutions, we deliver the most gripping live sports images, buzzing entertainment shows and breaking news content to billions of viewers every day – and in real-time. The company is headquartered in Belgium with offices in Europe, the Middle East, Asia and North America, and provides sales and technical support to more than 100 countries. EVS is a public company traded on Euronext Brussels: EVS, ISIN: BE0003820371. For more information, please visit www.evs.com.

Attachment

• Press release in pdf format