EVS Broadcast Equipment reports third quarter 2...

Publication on November 15, 2018, before market opening
Regulated information – Press release quarterly results
EVS Broadcast Equipment S.A.: Euronext Brussels (EVS.BR), Bloomberg (EVS BB), Reuters (EVSB.BR)

EVS reports third quarter 2018 results

>Q3 performance
o   Acceleration of the business in 3Q18, resulting in a EUR 29.6 million revenue for 3Q18 (+12.9% compared to 3Q17), supported by the shipping of the XT-Via platform since this summer
o   Strong actions taken to reduce operating expenses (-1.9% in 3Q18 compared with 3Q17)
o   EBIT margin of 25.4% in 3Q18 due to somewhat lower gross margin offset by improved operating expenses
o   Net profit amounted to EUR 7.4 million in 3Q18

>YTD Performance
     Revenue still behind 2017 (-6,7% compared to 9M17)
     Net profit of EUR 18.0 million (+39.6% compared to 9M17) thanks to one-time tax deductions in relation with the innovation box regime

>Interim gross dividend of EUR 0.50 per share

>Outlook
o   Record order book of EUR 34.7 million on October 31, 2018 (to be recognized in revenue in 2018)
      >+37.7% vs last year (+32.9%, excl. big event rentals)
o   Additional EUR 10.6 million orders to be invoiced in 2019 and beyond
o   Revenue is expected to be in the EUR 115 million to EUR 130 million range in 2018
o   Opex are now expected to increase slightly compared to last year, an improvement compared to the previous guidance thanks to cost reduction initiatives

KEY FIGURES

Unaudited						EUR millions, except earnings per share expressed in EUR	Unaudited
3Q18		3Q17		3Q18/3Q17			9M18		9M17		9M18/9M17
29.6		26.3		+12.9	%	Revenue	73.7		79.0		-6.7	%
20.4		18.5		+10.2	%	Gross profit	49.9		56.8		-12.2	%
68.8	%	70.5	%	-		Gross margin %	67.7	%	71.9	%	-
7.5		5.6		+35.3	%	Operating profit – EBIT	9.9		18.4		-46.4	%
25.4	%	21.2	%	-		Operating margin – EBIT %	13.4	%	23.3	%	-
7.4		3.8		+95.8	%	Net profit (Group share)	18.0		12.9		+39.6	%
0.54		0.28		+95.7	%	Basic earnings per share (Group share)	1.33		0.95		+39.5	%

COMMENTS

Dr. Pierre De Muelenaere, Chairman of the Board and interim CEO said: “After a very weak 1H18, I’m very pleased with the progress realized by the company over the last months. A strong commitment and support of the EVS teams has allowed to decrease the costs and win important commercial deals for the core products and the new products. The release and the availability of the new XT-Via platform and a successful IBC show, have greatly helped accelerating our activities. As suggested by our order book, we expect a good finish of the year”

“The recent decline in the share price has made the EVS share price attractive and the EVS Board has decided to initiate a share buyback program. It is also a sign of the Board’s strong confidence in the company.”

Regarding a recent transparency notification received by EVS, Dr. Pierre De Muelenaere added: “Three weeks ago, Evertz Technologies (TSX:ET),a global company in media and entertainment technology solutions, notified us that they had crossed the 3% threshold in our capital. As with every new declared shareholder, there have been contacts between Evertz and EVS and the Board will continue to actively monitor the situation.”

Commenting on the results and prospects, Yvan Absil, CFO, said: “Our third quarter fully reflects the expected acceleration of the business after a weak first half. The environment remains challenging in this second part of the year and this has called for special efforts of our teams. Even though the gross margin is slightly under pressure because of the product mix and inventory write-offs, we are particularly pleased with the results of our cost reduction initiatives, which resulted in a decrease of the operating expenses by 2% in 3Q18 yoy. Thanks to the strong order book and our existing pipeline, we confirm our revenue guidance for 2018. Thanks to higher cost discipline, we improve our opex guidance and now expect a slight increase (less than 2%) of our operating expenses in 2018 compared to 2017, an improvement from our prior guidance of moderate increase on top of the structural salary increases in Belgium”.

2018 outlook

The order book (to be recognized in revenue in 2018) on October 31, 2018 amounts to EUR 34.7 million, which is +37.7% compared to EUR 25.2 million last year (or +32.9% excl. big event rentals). In addition to this order book to be invoiced in 2018, EVS already has EUR 10.6 million of orders to be invoiced in 2019 and beyond.

The expected acceleration of the business in the second half, the record order book at October 31, and the current business momentum allow us to confirm that revenue in 2018 is expected to be in the EUR 115 million to EUR 130 million range. While we expect the gross margin to end up around 70%  following less favorable product mix and inventory write-offs, we now expect our operating expenses to increase only slightly compared to 2017 following successful cost reductions initiatives.

Conference call

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: [phone] (United Kingdom), [phone] (Belgium), [phone] (United States)
Conference call ID: 5874637

Corporate Calendar:

February 21, 2019: FY18 results
May 9, 2019: 1Q19 results
May 21, 2019: Ordinary General Meeting
August 29, 2019: 2Q19 results
November 14, 2019: 3Q19 results

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