Paris, September 24, 2020 – 17.45 CET
- 4% RISE IN GROSS MARGIN DESPITE REVENUES DOWN 3%
- OPERATING LOSS CONTAINED AT €2.2 MILLION
- RECORD LEVEL OF CASH
- 2020 SET TO DELIVER MODERATE GROWTH AND PROFITABILITY
|Consolidated data (in € million)||H1 2019||H1 2020||%|
Paris, September 24, 2020 - ATEME (ISIN: FR0011992700), world specialist in video compression, has published its results for the Half Year to 30th June 2020.
Robust revenues performance
First half revenues amounted to €29.0 million, down 3% year-on-year and by 5% at constant exchange rates.
EMEA and Latin America suffered in the COVID-19 context, with the cancellation of sports events related orders and more broadly, the delay in operations, contributing to a decline in revenues of 20% and 45% respectively. On the other hand, North America and Asia Pacific demonstrated strong resilience with revenue growth of 19% and 34% respectively.
Overall, ATEME continued to gain new customers thereby increasing its market share.
Rise in software sales driving gross margin improvement
As previously announced, the 3% decline in total revenues reflected a decline in the resale of third party products (notably servers sold with TITAN software), while software sales increased, thereby leading to an improvement in Gross Profit from €14.1 to €14.6 million, with a margin up from 46.7% to 50.2% (+3.5 points).
The rise in operating costs was limited to 10% (€15.3 to €16.8 million) with a strong focus on strategic investment in future software solutions (TITAN playout, transition to cloud, etc). Hence R&D expenses rose by 25%; on the other hand Sales & Marketing costs grew by only 4% on the back of savings in travel and trade fairs due to the pandemic.
In spite of the Covid-19 environment, the operating result for the First Half was contained to a deficit of €2.2 million, representing 7.6% of sales, i.e. much closer to the 4.3% achieved in H1 2019 than to the 14.2% of 2018.
Habitual H2 revenue acceleration expected to lead to growth and operational profitability for the year as a whole
In the six years since the 2014 IPO, Second Half revenues have accounted for an average of 57% of Full Year revenues, exceeding the First Half by some 30%. This established seasonality is not expected to be altered by the Covid-19 context. Moreover, the rise in monthly recurring revenues (MRR), which have doubled over the past 18 months, from €570K in January 2019 to €1.1 million in July 2020, lends further revenue security.
The increase in R&D investment will continue, but additional savings in travel and trade shows will continue to benefit sales & marketing spend. Overall, the seasonal acceleration in Second Half revenues is expected to compensate for the First Half, and ATEME should deliver moderate growth and operational profitability in FY 2020. Net result will include exceptional costs related to the acquisition of Anevia.
Record level of cash
Cash amounted to €20.6 million at 30 June 2020, compared with €10.3 million at 31 December 2019. The increase mostly reflects the high level of invoicing in Q4 2019, as well as bank and government-backed loans to the tune of €8 million under Covid-19 aid measures to industry.
ATEME Chairman and Chief Executive Officer, Michel Artières, said: " First Half 2020 demonstrated ATEME's remarkable ability to continue to increase both software sales and recurring revenues in spite of the Covid-19 environment. In this context, we are confident in being able to deliver a further year of profitable growth. Our visibility and strong cash position have enabled us to enter exclusive negotiations for the acquisition of Anevia, thereby expanding our portfolio of software solutions for the OTT delivery and preparing for an exciting 2021.”
Post-closing event: On July 31st 2020, ATEME and Anevia entered into exclusive negotiations for the acquisition by ATEME of 87% of the share capital and 90% of the voting rights of Anevia. The combination of the two companies would create a major player in video delivery, with combined revenues of more than €80 million (pro forma 2019).
November 5, 2020: Q3 2020 revenues
About ATEME: ATEME is the emerging leader of video delivery infrastructure, servicing the world's largest content and service providers. Listed on Euronext Paris since 2014, ATEME has a history of transforming video delivery, being the first to market with a 10-bit 4:2:2 solution, the first production-ready HEVC & HDR, and recently, the first genuine video delivery NFV software solution designed to lead service providers' transition to video datacenter. To complement its cutting-edge technology, ATEME has partnered with leaders such as Intel, Apple and Microsoft to create best-in-class video delivery solutions. ATEME is a leading member of industry forums and organizations, such as the DVB and SMPTE, actively participated in the ITU in the standardization of HEVC in 2013 and joined the Alliance for Open Media to help develop the AV1 open and royalty-free video codec in June 2014. ATEME is headquartered in Vélizy near Paris, with worldwide support and R&D offices in Rennes, Denver, Sao-Paulo, Singapore and Sydney. With a commercial presence in 24 countries, ATEME counts 319 employees, including some 150 of the world's leading R&D video experts. In 2019 ATEME served close to 400 customers worldwide with revenues of €66.3 million, of which 93% outside its home market.
Name: ATEME - ISIN Code: FR0011992700 - Ticker: ATEME - Compartment: C
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All statements other than historical facts included in this presentation, including without limitations, those regarding ATEMEs' position, business strategy, plans and objectives are forward-looking statements.
The forward-looking statements included herein are for illustrative purposes only and are based on management's current views and assumptions. Such forward-looking statements involve known and unknown risks. For illustrative purposes only, such risks include but are not limited to impact of external events on customers and suppliers; the effects of competing technologies competition generally in main markets; profitability of the expansion strategy; litigation; ability to establish and maintain strategic relationships in major businesses; and the effect of future acquisitions and investments.
ATEME expressly disclaims any obligation or undertaking to update or revise any projections, forecasts or estimates contained in this presentation to reflect any change in events, conditions, assumptions or circumstances on which any such statements are based, unless so required by applicable law. These materials are supplied to you solely for your information and may not be copied or distributed to any other person (whether in or outside your organization) or published, in whole or in part, for any purpose.
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