EVS Q1 2023 business update
Publication on May 17, 2023, before market
openingRegulated and inside information – Business update 1Q23EVS
Broadcast Equipment S.A.: Euronext Brussels (EVS.BR), Bloomberg
(EVS BB), Reuters (EVSB.BR)
EVS Q1 2023 business update
Liège, Belgium, May 17th, 2023
Jump start into 2023
EVS takes a jump start in the new calendar year
with the strong results of the first quarter. The achievements of
the Q1 fully underpin EVS’ ambition to realize a profitable and
sustainable growth in 2023.
Highlights
- A strong revenue
for 1Q23 supporting our growth ambition for 2023.
- The secured
revenue* calls for an upgrade of the revenue guidance for 2023 from
an initial range of EUR 145-155 million to a range of EUR 150-160
million.
- Operational
expenses are under control, demonstrating our objective to realize
a profitable growth in 2023.
- Based on the
1Q23 results, an EBIT guidance of EUR 27,5 - 32,5 million is
announced.
- Net cash is
restoring to EUR 47 million, demonstrating our ability to collect
the cash from the large volume of invoices issued at the end of
4Q22.
*secured revenue includes the already recognized
revenue as well as open orders on hand that will be recognized as
revenue in 2023
Comments
Serge Van Herck, CEO
comments:
“ I am thrilled to report that we have had an
exceptionally strong start to the year with our Q1 results enabling
us to confirm our profitable growth ambitions. We are very pleased
to see our hard work paying off and our efforts to drive growth
across our business are being reflected in our commercial and
financial results.
In addition to our strong financial performance,
we also prove our ability to gain market share, while expanding our
portfolio.
We are also making substantial progress towards
making our vision of a strong ecosystem a reality with our VIA
Platform. We are moving from product sales to solution sales, which
will eventually result in a robust ecosystem designed for the most
demanding live production operations. This will allow us to offer
more value to our customers and position us as a leading player in
the industry.
The strong performance of our MediaInfra
solution division proves the success of the integration of Axon in
2020 and the acceleration of the EVS portfolio expansion. We are
committed to pursuing strategic acquisitions that will help us
drive growth and create value for our shareholders, customers and
channel partners.
Our sustainability efforts with our ESG program
continue to deliver the expected results, and we are proud to say
that we are now in the top 10% of all companies worldwide rated by
Sustainalytics. We believe that sustainability is an essential part
of our business strategy, and we will continue to work towards
reducing our environmental impact and contributing to a better
future for all.
Our PlayForward strategy is helping us get EVS
back into growth mode. We are focused on delivering value to our
customers and building long-term relationships with them. Our
ambition is to continue our growth mode both on the revenue side
and profitability side, and we are confident that we are
well-positioned to achieve our goals.”
Commenting on the results and the
outlook, Veerle De Wit, CFO, said:
“The start of the new year is strong, with a
record high revenue achievement for the first quarter. This result,
combined with operational expenses that are well under control,
enables us to realize a kick-start to the year: a year where we
want to demonstrate sustainable and profitable growth.
Besides a strong income statement, we are also
happy to see that our cash position is restoring compared to 4Q22.
Our cash position at the end of 2022 suffered from the timing of
the launch of the new ERP, leading to some delays in invoicing in
the last quarter of the year, and resulting in a high amount of
invoices being “not due” at the end of December. As expected, I am
happy to confirm that we recovered from that position in the first
months of 2023.
Based on the current metrics and the underlying
market conditions, we are confident enough to increase our revenue
guidance from EUR 145-155 million to EUR 150-160 million.
Next to a revenue guidance, we are also issuing
our first Earnings Before Income Tax (EBIT) guidance: based on the
1Q23 results and the market dynamics, the EBIT is expected to land
between EUR 27,5 - 32,5 million. The higher end of the range
clearly underlining our ambition to realize sustainable and
profitable growth in 2023.”
Market & customers
The main drivers of EVS in the “Premium Live
Ecosystem” remain the same as in 2022 but with higher revenues,
proving the success of the PlayForward approach oriented towards
solutions.
Based on the strong order book, revenues in NALA
region continue to grow at a strong pace. While APAC and EMEA
revenues were more stagnating last year for Q1, both regions are
now showing very significant growth in revenue. It has to be noted
that APAC revenue growth doesn’t yet consider any significant
growth from China, still largerly impacted by a slow post-Covid
restart.
The traction for MediaInfra products division
continues, especially in NALA and in EMEA. Cerebrum and Neuron
platforms have now proven to be very efficient during the Big
Events in 2022 and are becoming a reference in the market.
Both LAB and LSP revenues are significantly
increasing. LAB did show an 25%+ increase on YoY basis for Q1,
based on important MediaCeption and MediaInfra contracts collected
earlier. LSP revenue growth is even much higher thanks to the well
engaged renewal of the replay servers, accelerated by the ever
growing capabilities proposed by the new LSM-VIA replay ecosystem,
exclusively available on XT-VIA server, pushing more and more
customers to upgrade their older system (XT3 and XT4K).
EVS continues to manage carefully the inventory
of components to deliver the hardware based products according to
the promise. EVS also continuously monitors inflation to reflect it
progressively in the pricing and business model evolutions.
Technologies
EVS continues to materialize the Balanced
Computing strategy through new solutions. At NAB, EVS announced
XtraMotion 2.0 which now supports both EVS cloud deployment in SAAS
and on-premise deployment. At the conference, our customers were
amazed by the quality of the images and the short latency when
using on-premise version, success confirmed by NAB Best of Show
award in the Create category.
EVS also improved the LiveCeption solution,
bringing a new version of XNET-VIA which decreases the delay when
accessing content stored on a distant XT-VIA from a local XT-VIA.
This brings unequalled support for remote production when the
infrastructure is split between two different well connected
sites.
On the MediaInfra side, EVS announced a new
application – Neuron View high-density live production multiviewer
– that can be deployed by customers on the Neuron platform. That
additional application besides Bridge, Convert, Compress, Shuffle
and Protect enhances the ecosystem of applications that can be
virtualized on the EVS Neuron dedicated broadcast HW platform. This
application is confirming the EVS sensibility and efforts in the
ESG domain since it consumes up to 8 times less energy than pure SW
multiviewers.
IPD-VIA Create – the EVS web-based fast editing
application – was another star of the EVS booth at NAB. It brings
to MediaCeption solution a new very compelling application to
optimize the live editing workflows and ensure editors and
journalists can very quickly create videos during the event to
export to social networks and other platforms or correct colours,
add effects, insert a few images more on the timeline just a few
seconds before the content is played live.
Corporate topics
In 2023 we
will focus our corporate efforts
on supporting our profitable and sustainable growth objective. We
will create tools to ensure scale up and flawless operations. Next
to that, we will focus on optimizing our cost
structure with pro-active focus on travel
expenses, trade shows, power consumption, … Finally, our attention
goes to ramping up our
sustainability efforts, especially when it
concerns the design and energy consumption of our
solutions.
From a tooling point of view
we want to ensure that we have efficient
processes in place that promote end-to-end
collaboration across all our departments.
Having an efficient operational back-bone is important.
In that context, EVS launched a new global
ERP system in October 2022,
to improve operational
processes, and ensuring smooth scale up of the company.
In 2023 we will expand the scope of that new global ERP
system, by integrating our EVS
Netherlands operations and by focussing on continuous improvements
of the base. Next to the ERP we are also
expanding our corporate digital footprint (CRM, Via
Portal, LMS, Via
Licensing, …)
As the macro-economic environment is
still quite volatile, it is important that we
continue to focus on the profitability of our solutions. We have
considerably improved our pricing models
and strategy, to cope with market
realities and trends. This
resulted in new list prices
announced in February 2023.
We continue our efforts in relation to
ESG. Our ESG strategy and reporting has already
received postive feedback from the market: we received a silver
medal from Ecovadis, obtained
encouraging
scores from other rating
companies and recently obtained the certification of Top Employer
for 2023. After having conducted our first carbon
footprint analysis in 2022, we will focus in 2023 on refining our
roadmap to ensure optimal adherence to sustainability
goals. Also in 2023, we will
focus on creating long term objectives for all the
topics that are
most relevant and important to us as a
company.
In terms of team
members, 2023 marks the year where we want
to consolidate and leverage our
growth from the past years. As such, we expect
little net increase in the number
of team members during the
year.
Outlook
The 2023 secured revenue on March 31st reaches
EUR 118,2 million. Based on this measure, we are upgrading our
revenue guidance for the full year from EUR 145-155 million to EUR
150-160 million.
The gross margin for the full year 2023 is
expected to decline marginally as a result of a change in the
solution mix. The gross margin by solution is expected to evolve
positively, with any impact of rising costs of components being
reflected in the price increases modeled. The most recent price
increase was introduced in February 2023.
Operational expenses continue to be closely
monitored and controlled. As our focus in 2023 is on profitable and
sustainable growth, we foresee little changes in our overall
headcount position.
After the results of 1Q23, we also introduce an
EBIT guidance for the year to be in the range of EUR 27,5 - 32,5
million.
Dividend
We reiterate the full year 2023 expected
dividend distribution of EUR 1,10 per share, which remains subject
to market conditions and to the approval of the Ordinary General
Meeting of Shareholders.
Corporate Calendar
August
18th, 2023: H1 2023
resultsNovember 17th,
2023: Q3 2023 results
For more information, please
contact:
Veerle DE WIT
EVS Broadcast Equipment S.A., Liege Science
Park, 13 rue du Bois Saint-Jean, B-4102 Seraing, Belgium
Tel: +32 4 361 70 00 |
E-mail: corpcom@evs.com |
Website: 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 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
around 600 employees in 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.
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