EVS Broadcast Equipment reports 2019 results

Publication on February 20, 2020, 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 2019 results

Strong profitability despite lower revenues

• FY19 performance
  • Revenue of EUR 103.4 million, within the range of the guidance (-10.9% YoY or -2.3% YoY excluding big events rentals and at constant currency)
  • Operating expense declining 5.3% YoY
  • Net profit of EUR 19.6 million (-44.2% compared to FY18 mainly due to exceptional tax deductions in relation with the innovation box regime in 2018)
  • Slow APAC region due to political and trade relations resulting in delayed investment decision
     
• H2 performance
  • Strong 2H19, with EUR 62.4 million revenue (-13.3% or -8.8% excluding big event rentals and currency impact vs. 2H18)
  • Strong gross margin thanks to favorable product mix and lower inventory write-offs
  • Decrease of the operating expenses (-3.6% in 2H19 compared with 2H18)
  • EBIT margin of 31.4%, net profit of EUR 15.9 million
     
     
• Guidance
   
  • 2020 financial outlook
    • Order book of EUR 33.4 million on December 31, 2019 (to be recognized in revenue in 2020), +87.3% vs last year (+18.3%, excl. big event rentals)
    • Additional EUR 4.4 million orders to be invoiced in 2021 and beyond
    • Revenue is expected to be in the EUR 100 million to EUR 120 million range in 2020, taking into account a shift from a capex model to a multi year recurring revenue stream
    • Opex is expected to be flat compared to prior year

• Maintain dividend policy established in 2018
  • Deliver a total gross dividend of EUR 1.00 for 2020 and 2021, subject to market condition.
  • Deliver a total gross dividend of EUR 1.00 for 2019 (incl. EUR 0.50 interim dividend paid in November 2019) proposed to the Ordinary General Meeting of May 2020
     
• Change in information given by revenue destination
  • From 2020 onwards, in order to clarify and better reflect market transformation and EVS evolutions, EVS will change the structure of the revenue pillars from “OB vs Studio” to distinguish “LAB” (Live Audience Business) revenues and “LSP” (Live Service Providers) revenues while maintaining “Big Events Rentals” pillar to reflect the non-yearly revenues linked to the calendar of certain big sport events.

KEY FIGURES

COMMENTS

Serge Van Heck, CEO said: “Since I joined EVS in early September, I had the opportunity to meet team members, customers and business partners all over the world. I saw passion, commitment and strong recognition of EVS expertise and reliability. I am really happy of the transition support I did get from Pierre De Muelenaere who has finished his mission as CEO ad interim as planned end December.

We finished the year with a good second half and a strong order book as we enter 2020 even if transition to UHD (4K) is slower than anticipated.

We have won key references, including a large contract with Game Creek, an important US based production company that has made significant investment in our new XT-Via and Multicam 16 products to expand their HDR capabilities. We have also won a key reference with a football league in APAC where our unified production solution around X-One will be used for their productions.
For 2020, we expect core business to remain under pressure as we don’t expect to see major improvements in the industry dynamics. We also expect APAC to continue to be impacted by a slowdown of the market. We have been revising and improving our plans for the future - PLAYForward project - for which we expect financial impact as of 2021”

Commenting on the results and prospects, Yvan Absil, CFO, said: “Our second half reflects the continued volatility of the business. The environment remained challenging in this second part of the year as we continued our actions to keep our costs under control. We are particularly pleased with the results of our cost control initiatives, which allowed us to reduce our operating expenses by more than 5% in 2019 YoY. These cost management efforts will continue this year, allowing us to forecast a stable opex in 2020 vs 2019. Our strong order book of EUR 33.4 million (including big event rentals) does not hide the slow business as customers remains under cost pressure. Taking also into account that an increasing part of our sales will be shifting from a capex model to a multi year recurring revenue stream, we announce a revenue guidance for 2020 of EUR 100-120 million.”

Conference call

EVS will hold a conference call in English today at 4.00 pm CET (Attention change of timing) 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) 20 7192 8501 (United Kingdom), +32 (0)2 401 70 35 (Belgium), +1 917 720 0181 (United States)
Conference call ID: 8387739

Attachment

• Press release in PDF Format