EVS Broadcast Equipment - EVS Q3 2020 Business update
Publication on November 12, 2020, before market openingRegulated
information EVS Broadcast Equipment S.A.: Euronext Brussels
(EVS.BR), Bloomberg (EVS BB), Reuters (EVSB.BR)
EVS Q3 2020 Business
update
EVS global leader in live video technology for broadcast
and new media productions todayannounces its
business update for the third quarter ending 30 September
2020.
HIGHLIGHTS
o Covid-19 crisis continue to impact significantly
Live Service Providers, one of the three main revenue pillars while
LAB customers continue the modernization of their broadcast
centers.o Accelerated traction for remote production
workflows allowing EVS to promote several new workflow
solutionso Order book* for 2020 revenues as of October
31st ** of EUR 41.0 million, vs. EUR 44.3 million at the same date
last year. (-7% vs same period last year)o Order
intake* YTD until end October 2020: -8.5% vs same period last
yearo Confirmation of the Opex guidance, expected to
increase slightly YoY following integration of Axon (excluding
extraordinary costs) but with a marked decrease when considering
only former EVS perimeter.
* excluding big events rentals and including Axon as of May
1st** including 2H2020 already recognized Revenues and open orders
on hand that will be recognized as revenues in 2020
COMMENTS
Serge Van Herck, CEO comments
the business development: “We continue to see the impact of the
pandemic on our customers. With less events to produce for Live
Service providers, these have seen their revenues and cash inflows
dropping, which resulted in recapitalization needs for some of them
and delayed or cancelled investments.Adoption of remote production
workflows is accelerating. Thanks to the flexible and “cloud-ready”
solution portfolio recently strengthened with LSM-VIA, EVS
efficiently supports its customers to face their challenges. We
continue to see LAB customers investing in the modernization of
their broadcast centers.”.
On the COVID-19 developments, Serge Van Herck
added: “We expect this pandemic will not be over soon and will
continue to impact EVS in the first part of 2021. In anticipation
of this, we are looking to further adjust our cost structure”.
Commenting on the results and the outlook,
Yvan Absil, CFO, said: “Our orderbook (without big
events) as of October 31st amounts to EUR 41.0 million. There is
also an additional EUR 17.1 million of orders (excl big events
rentals) to be recognized as revenues in 2021 and beyond; this
represent an increase of 10 % vs the same period last year. On the
costs side, thanks to marked decrease in the former EVS perimeter
(reductions in consulting, travel, marketing expenses and bonus)
and despite the integration of Axon since May 1st, costs will only
slightly increase YoY. Finally, our cash position remains really
strong with a total cash available of EUR 52.5 million at the end
of September”.
On the Share Buy Back program, Yvan Absil,
added: “We have now completed the EUR 5 million share buyback
program announced in May 2020”.
EVS Market Dynamics and customer wins
Our 3 market pillars of revenues (Live Service
Providers – LSP, Live Audience Business – LAB and Big Event Rental
– BER) are significantly impacted by the pandemic.
The major summer sport events have been
postponed to 2021, which should postpone related EVS revenues from
2020 to 2021. EVS had announced earlier this year that its order
backlog as of Dec 31st, 2019 included EUR 12.3 million of Big Event
Rental orders to be recognized in 2020. It has to be noted that
these events are postponed and not cancelled.Product developments
that have already been performed are expected to be reused and
planned revenues will in principle shift from 2020 to 2021.
Due to the cancellation and postponement of
various live events earlier this year (sport, concerts,
entertainment shows), various LSP customers have heavily reduced
their purchasing activity as their priority was to keep their staff
ready for the restart period. Their spending for buying new
equipment still is in many cases postponed to a later date
At the same time, these customers accelerate the
adoption of remote production to lower their production costs and
ensure respect of governmental guidelines. LSM-VIA has been
“field-proven” during the summer in some of these remote
workflows.
Some of our LAB customers are suffering as well.
Many stadiums, universities and colleges are currently not allowed
to organize any live event in their premises. On the positive side,
many news related broadcast centers see their news audience peak at
this moment in time which translates in continued ordering of
certain of our solutions.Traction for remote production workflows
has significantly increased, with EVS offering several options to
ease the work of operational teams working from a distance and from
home.
Until end October, the yearly order intake declined 8.5% versus
the same period last year (excl. big event rentals and including
Axon as of May 1st 2020).
Some key activities:
- Virtual IBC has been organized with hundreds of customers from
everywhere in the world attending different remote demos for rich
and personalized interactions
- Live Production Anywhere webshow, organized in partnership with
our customers, focusing on Remote Live Production, organized with
active participation of many EVS departments to show usage of EVS
solutions and the dedication of EVS for its customers.
- Continuous remote interactions with customers to assist them in
the design of their new solutions.
Some key wins:
- Large 4K upgrade and extension with a major player in
China
- Continuous traction for VIA platform and Media Infrastructure
for modernization of broadcast centers, notably in eSports
- After NALA & APAC, Europe sees increasing adoption of our
IP enabling XT-VIA server solutions
Status of AXON integration
With the addition of Axon products to the EVS portfolio, EVS is
offering a broad and comprehensive modern IP based media
infrastructure solution. Teams from both companies are progressing
well on the integration, which is on track, on time and within
budget.
Some key milestones have already been achieved:
- Lead to cash process synchronized, enabling EVS sales force to
start selling new Media Infrastructure solutions
- Joint value propositions presented to our customers
- Teams in NALA strengthened and prepared to deliver, integrate
and deploy Media Infrastructure solutions everywhere
- Vast majority of team integration within a single organization
is completed
- Integration of ERPs being effectively planned, and some other
tools already integrated
We also start to see the first synergies:
Revenue synergies:
- Some first deals have been signed that would have never
happened in an “Axon stand-alone” scenario, in all regions of the
world
- Within global offerings including former EVS products, some
integrators are swapping infrastructure from other vendors by new
EVS Media Infrastructure components to ensure a consistent and more
solid proposal
Cost synergies:
- Some headcount replacements have been cancelled; the function
being now covered by former Axon colleagues.
- Some costs have decreased for purchasing of BOM elements thanks
to larger volumes reached when combining demand from the 2
previously separated entities
Outlook
The order book (to be recognized in 2020 on top
of the 1H 2020 revenues already disclosed) on October 31, 2020
amounts to EUR 41.0 million compared to EUR 44.3 million last
year (at the same date) excluding big event rentals and including
Axon order intake as of May 1st 2020.
In addition to this order book to be recognized
in 2020, EVS already has EUR 17.1 million of orders to be
invoiced in 2021 and beyond (excl. big event rentals) (+ 10.0 % vs
the same period last year).
Based on the current market outlook and given
the uncertainties around covid-19 impacts, EVS does not give any
revenue guidance for the year 2020. Operational expenses (excluding
Axon) are expected to see a marked decrease compared to 2019.
Corporate Calendar:
February 25, 2021: 2H2020 and FY 2020
results
For more information, please contact: Yvan
ABSIL, CFO*EVS Broadcast Equipment S.A., Liege Science Park, 13 rue
du Bois Saint-Jean, B-4102 Seraing, BelgiumTel: +32 4 361 70
00. E-mail:corpcom@evs.com; www.evs.com*representing a
srl |
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 We create return on emotion. EVS is globally
recognized as a 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. |
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