EVS reports first half 2022 results
Publication on August 25, 2022, before market openingRegulated
and inside information – Press release first half 2022 resultsEVS
Broadcast Equipment S.A.: Euronext Brussels (EVS.BR), Bloomberg
(EVS BB), Reuters (EVSB.BR)
EVS reports first half 2022 results
Liège, Belgium, August 25th, 2022
Growth mode continues resulting in an upgraded
guidance
The results of the 1st half of 2022 are fully
supporting the growth trajectory that EVS is on. The fundamentals
are all strong: a record-high order intake, a historical revenue,
accompanied by a strong operating profit,
For the sake of clarity, this press release does
not include the 10-year contract worth more than USD 50 million,
that was signed in August 2022 and announced to the market on
August 19th, 2022.
H1 Financial performance
- Record order
intake of EUR 88.7 million
- Revenue in the
first six months of the year, amounts to EUR 67,7 million, + 9%
YoY.
- BER revenue is
of EUR 5,7 million, growing EUR 1,2 million in comparison to
1H21.
- Revenue
excluding BER is at EUR 62.0 million growing EUR 4,7 million
compared to the same period last year.
- Gross margin is
growing with EUR 3.3 million compared to 1H21, though the overall
gross margin percentage is eroding with 1,2Pts. This erosion is
primarily the consequence of investments in additional resources to
ensure quality support for our growing topline.
- Net profit
amounts to EUR 15,5 million, leading to a diluted earnings per
share of EUR 1,15 (equal to 1H21 results)
Outlook
- The secured
revenue is at EUR 126,4 million, growing 29% compared to 1H21
- Based on the
secured revenue at end of June 2022, the revenue guidance for the
full year is upgraded from EUR 125-140 million to EUR 140-150
million. This upgrade assumes a normal final production cycle of
the year, without any impact of shortage in components nor any
important changes linked to the pricing of components.
- The order book
evolution can be summarized as following:
- BER order book
is for EUR 3,8 million, fully bookable in 2022
- Order book
excluding BER is for EUR 87,1 million, growing 70% in comparison to
1H21, of which EUR 32,2 million is for 2023 and beyond. This
long-term order book is growing with 39%.
- The gross margin
percentage is expected to be negatively impacted by the investments
done in our operations and support organization (comparable impact
to 1H22 results). The rising prices of products and inflation are
well monitored and controlled through a permanent evaluation of our
sales prices.
- The OPEX growth
for the full year is adjusted to a range of 12-15%, as a
consequence of inflation, growth investments and post-covid
spending patterns.
- The 1st half
results currently support our dividend guidance for the year 2022,
meaning a dividend of EUR 1,1 for the full year 2022 and an
exceptional dividend of EUR 0,5, leading to a total expected
dividend of EUR 1,6 for the year. As a reminder, below is the
guidance on dividend that EVS issued for the years
2022-2024*,**.
In € per share per fiscal year |
2022 |
2023 |
2024 |
Base dividend |
1,10 |
1,10 |
1,10 |
Exceptional additional dividend |
0,50 |
0,00 |
0,00 |
Total dividend |
1,60 |
1,10 |
1,10 |
*subject to market conditions**subject to the approval of the
Ordinary General Meeting of Shareholders
Key figures
EUR millions, except earnings per share expressed in
EUR |
Reviewed |
|
1H22 |
1H21 |
1H22/1H21 |
Revenue |
67,7 |
61,8 |
5,9 |
Gross profit |
45,8 |
42,6 |
3,2 |
Gross margin % |
67,7% |
68.9% |
-1,2% |
Operating profit – EBIT |
15,7 |
15,4 |
0,3 |
Operating margin – EBIT % |
23,3% |
24.9% |
-1,6% |
Net profit (Group share) |
15,5 |
15,6 |
-0,1 |
Basic earnings per share (Group share) |
1,15 |
1,16 |
-0,01 |
Comments
Serge Van Herck, CEO
comments:
“I am very grateful to our customers, our team
members and our channel partners for further supporting and
enabling our growth mode. With H1 revenue and order intake
indicators at their highest level ever, I am proud to say that our
PLAYForward strategy is producing the expected results. Based on
those strong H1 results, I am now more optimistic for our full year
2022 results. While we are still facing important challenges in our
electronic component supply chain, we are now sufficiently
confident to increase our earlier revenue guidance for 2022 of EUR
125 million to EUR 140 million to a new guidance of EUR 140 million
to EUR 150 million.
Our 2 main Market Pillars (Live Service
Providers and Live Audience Business) continue to show strong
revenue generation. Our third Market Pillar (Big Event Rental) will
also generate the expected ‘big event year’ results in 2022 thanks
to the major winter sporting events that took place early this
year, and thanks to the major sporting events that will take place
in the Middle East by the end of this year.
In line with our PLAYForward strategy, we have
been further increasing our sales, engineering and customer service
team size in order to realize our growth ambitions. Our hiring
efforts during H1 further accelerated and we have been able to hire
over 70 new colleagues in various offices around the world,
representing a 10+% increase of our overall team size. Our employer
branding and reputation clearly helped us achieve such outstanding
results.
The high and global inflation has clearly a
negative impact on our BOM (bill of material) costs and on our
remuneration costs. We have started compensating for the impact of
those increased costs by applying price increases. We expect that
we will need to continue adapting our pricing to the raising
inflation.
Overall, I continue to feel cautiously
optimistic about our future. While economic market conditions
remain very challenging with high inflation, component shortages
and with the war in Ukraine, I feel that our customers increasingly
appreciate the reliability, performance and innovative edge of our
solutions and services. This represents a sound basis for the
future.”
Commenting on the results and the
outlook, Veerle De Wit, CFO, said:
“Our results for this first semester of 2022 are
very comforting and demonstrate that we are a company in growth
mode. All our topline indicators support our ambition. Obviously,
growth can only happen with accompanying investments: investments
primarily in resources in sales, operations & support and
R&D. The investments in R&D have been well controlled and
modeled, allowing us to validate them as intangible assets and
allowing EVS to depreciate the investment in time based on the
validation of future benefits of the development of new features.
Our balance sheet also remains very healthy with a very low debt
level and a sound cash position. Based on these strong results, we
are able to maintain our dividend policy defined earlier this
year.”
EVS Market Dynamics and customer wins
During the first semester, EVS delivered
successfully major winter events, serving the host broadcaster, as
well as hundreds of right holders, including NBC. As every year,
EVS also supported its customers (facility companies and
broadcasters) delivering the NFL Superbowl: one of the most watched
events on earth.
The modernization projects continue to be on the
agenda of our LAB customers. EVS plays a key role in the
transformation and modernization of premium broadcast and media
centres (representing our LAB customers) with a series of existing
and new projects relying on its VIA platform and new IP-based Media
Infrastructure. In this last category of solutions, EVS announced
at NAB a major multi-million deal with Fox Sports US, selecting
Media Infrastructure Strada flexible routing solution, as an
additional proof point of the traction for the new EVS solutions
and the success of the Axon integration within EVS.
We observe a decrease of revenue for LAB
customers in H1 compared to the same period in 2021. Depending on
the nature of the deal, some LAB projects can take more than 2
years for full revenue recognition. The revenue recognition is
based on the content of the deliveries and on the work in progress.
This thus depends on the pace and structure of the transformation
project. There will thus be variations, even across several years,
based on the mix of LAB active projects. The effect has been
amplified since EVS has been successful winning very significant
deals in US in late 2019 and 2020. These projects are now being
finalized or entering new phases with less revenues. Based on these
key market references, EVS will now initiate the transformation in
other regions, resulting in more normal size projects.
Live Service Providers players continue to
upgrade their portfolio of replay services to leverage the
advantages of the combination of XT-VIA and LSM-VIA. With the end
of support of previous generation of XT servers (XT3) nearing, we
observe an acceleration of the upgrades for the LSPs both in terms
of revenues and orders. As observed for previous generations, not
all customers will convert before the end of support date. It also
depends on the contract they sign with their customers and/or their
investment cycles.
LiveCeption Pure solution continues to be
deployed in smaller OB Vans and venues thanks to our Channel
Partners. The new MediaInfra Strada evolutive routing solution also
made its entry within IP OB Vans in North America.
New versions of solutions have been announced during H1
2022:
- Neuron supports
a new application, called Neuron Protect, which fulfils the
increasing demand for more secured solutions: higher level of
redundancy on top of IP networks. It proves that EVS considers
security as a top priority and provides new solution components to
face the challenges faced by the industry. The new “Compress”
version of Neuron offers new low-bitrate codec, JPEG-XS compression
required for video transport in remote operations.
- With the
addition of the new version of IP Core to Cerebrum, additional
routing capabilities are offered making use of SDN to ensure fully
secured orchestration of any IP-based video signals.
- The new version
of “MediaCeption signature” offers a comprehensive set of content
management applications combining advanced software and Web-based
modules for even richer workflows from ingest to playout. With the
RTBF deal announced in February 2022, EVS co-develops a future
Flexible Control Room solution build on Cerebrum: the solution -
embracing production automation - will support the broadcasters in
their transformation to produce more efficiently with dynamic
scaling during a production, while proposing an open solution
optimized in terms of user experience for operators of all
generations.
- LSM-VIA
continues to evolve and integrate more and more features to ease
and automate the tasks of EVS operators, offering them an
environment to personalize their way of working.
On the front of electronic components
availability, EVS manages to keep the balance between frictions in
the supply chain and deliveries to the customer through increased,
yet reliable delivery times. Until now, all orders have been
shipped on time thanks to the huge efforts and the magic talents of
several teams, adapting to the different combinations of components
while refusing to compromise on quality.
During first semester, EVS has also been
successfully strengthening the team through external hiring in
order to support the expected growth, mainly in R&D and
Customer Services teams to further develop the solutions and in the
US to better support key customers and channel partners in the
region.
NAB tradeshow was appreciated by all the
industry with the opportunity to meet customers again “in real
life”, engaging into fruitful conversations, and demonstrating for
the first time in live situation for some customers the numerous
new solutions and features proposed by EVS. The return to NAB was
also special since celebrated through the NAB 2022 Best Of Show
award for Neuron Protect which is the first NAB award for a Media
Infrastructure product inside EVS.
At the beginning of this year, EVS also enhanced
and extended the leadership team with two new members, Alex Redfern
as CTO and Xavier Orri as EVP Operations & Projects, to sustain
the growth path engaged by the company. Two US colleagues - James
Stellpflug as SVP Customer Success NALA and David Pinkel as SVP
Sales North America - have also been promoted to further strengthen
and drive the EVS teams in the Americas.
Revenue in 1H22
In 1H22, EVS revenue reached EUR 67.7 million:
an increase of EUR 5.9 million or 9.5% compared to 1H21.
At constant currency, revenue increased by 5.7%
YoY.
Revenue – EUR millions |
1H22 |
1H21 |
1H22/1H21 |
Total reported |
67,7 |
61,8 |
9.5% |
Total at constant currency |
65,3 |
61,8 |
5.7% |
Total at constant currency and excluding big event
rentals |
59,6 |
56,6 |
5.3% |
Currency fluctuations primarily impact EVS
revenues by the EUR/USD conversion, which can have a significant
impact on our results even if EUR/USD fluctuations also impact the
cost of our US operations and partially our cost of goods sold.
In the first half of the year, (excl. Big Event
Rentals) LSP represented 59% (47% in 1H21) of the revenue, LAB 41%
(53% in 1H21). Comparisons to 2021 are impacted by post-COVID
investments from our clients. Both LSP and LAB evolve in line with
our expectations in 2022 and demonstrate the long-term growth
patterns laid out in our PLAYForward strategic plan.
Geographically, revenues (excl. big event
rentals) are distributed in 1H22 as follows:
- Europe,
Middle East and Africa (EMEA): EUR 28,7 million (EUR 32.1
million in 1H21) demonstrating a minor decline compared to 1H21,
though benefiting from a strong order intake in 1H21 to secure
further growth potential.
- Americas
(NALA): EUR 25.6 million (EUR 15.8 million in 1H21),
underpinning the strong performance in that region since multiple
quarters.
- Asia
& Pacific (APAC): EUR 7.7 million (EUR 9.4 million in
1H21), despite the slowdown in the region following COVID
implications, demonstrating only a minor decline.
First half 2022 results
Consolidated gross margin was 67.7% for 1H22,
compared to 68.9% in 1H21 explained by important investments in the
operations & support department to ensure we continue to
deliver quality support all over the world, in line with our growth
patterns. There is a minor impact on the gross profit margin, given
the increased importance of MediaInfra in the overall portfolio.
However, the impact of cost price increases and inflation have been
well modeled by the corresponding sales price increases and do not
negatively affect our gross profit margin. EVS continues to keep
the balance in this area.
Operating expenses increased by 8% YoY explained
by post-COVID spending patterns. There have also been significant
investments in additional team members to fuel our future growth,
but at the same time, EVS was able to launch an IAS38 evaluation
for some R&D investments, so that the overall increase in team
member costs is very limited.
The 1H22 EBIT margin was 23.3%, compared to
24.9% in 1H21: the EBIT margin is dropping primarily following
investments in the past 12 months to support our growth
pattern.
Income taxes are at EUR 1.9 million, compared to
EUR 0.01 million last year: in 2021 EVS could still benefit from
various tax latencies linked to prior years. The group net profit
amounted to EUR 15,5 million in 1H22, compared to
EUR 15.6 million in 1H21. Basic net profit per share amounted
to EUR 1,15 in 1H22, a similar performance as in 1H21 (EUR
1,16).
Team members
At the end of June 2022, EVS employed 594 team
members (FTE). This is an increase by 52 team members compared to
the end of June 2021. This increase in team members reflects our
continued investments in the growth of EVS. We expect only marginal
increases in the remainder of the year 2022.Balance sheet
and cash flow statement
EVS continues to have a strong balance sheet
with net cash position of EUR 44.2 million with low debt level (of
which EUR 13.4 million related to IFRS 16) resulting in a total
equity representing 74.3% of the total balance sheet as of the end
of June 2022.
Other intangible assets include mainly six
months internal development costs capitalized during 2022 according
to IAS 38 (Intangible assets).
Lands and building mainly include the
headquarters in Liège as well as the right of use for the offices
abroad (IFRS16). Six months depreciations on intangible assets,
lands and buildings (including the right of use assets) and other
tangible assets reached EUR 3.4 million. Liabilities include EUR
16.8 million of financial debt (including long term and short-term
portion of it), mainly related to the lease liabilities for EUR
13.4 million and borrowings for EUR 3.3 million.
Inventories amount to EUR 30.2 million and
include around EUR 3.4 million value of Axon equipment.
In the liabilities, long-term provisions include
the provision for technical warranty on EVS products for labor and
parts. The other amounts payables include mainly customer advances
received and accruals (accrued charges and deferred income)
The net cash from operating activities amounts
to EUR 9.4 million end of 2Q22 compared to EUR 13.3 million end of
2Q21. On June 30, 2022, cash and cash equivalents total EUR 60.9
million. This is a decrease compared to June 2021 mainly explained
by the increase of the net cash used in investing activities mainly
due to the investments in tangible and intangible assets
(specifically in the internal development of intangible assets)
together with the increase of the net cash used in financing
activities mainly due to the higher amount of final dividends
distributed during 2022.
At the end of June 2022, there were 14,327,024
EVS shares outstanding, of which 908,014 were owned by the company.
At the same date, 138,832 warrants were outstanding with an average
exercise price of EUR 28.90 and a maturity of December 2022
together with 158,250 warrants with an average exercise price of
EUR 13.69 and a maturity of October 2026 and 158,600 warrants with
an average exercise price of EUR 18.21 and a maturity of June
2027.
Corporate update
During last General Assembly on May 17th, the
shareholders have acknowledged the resignation of Philippe Mercelis
and have appointed two new directors, Frédéric Vincent and Marco
Miserez, both for a period of 4 years. The Board of Directors is
currently composed of seven directors:
- Johan
Deschuyffeleer, independent director & President
(representing The House of Value BVBA);
- Michel
Counson, managing director;
- Martin
De Prycker, independent director (representing InnoConsult
BVBA);
- Chantal
De Vrieze, independent director (representing 7 Capital
SRL);
- Frédéric
Vincent, independent director;
- Marco
Miserez, independent director; and
- Anne
Cambier, independent director (representing Accompany You
SRL)
2H 2022 outlook
The secured revenue on June 30, 2022 amounts to
EUR 116.9 million, which is +36.9% growth compared to EUR 85.4
million of last year at the same date (excluding Big Events
Rentals).
In addition to secured revenue, EVS already won
EUR 32.2 million of orders to be invoiced in 2023 and beyond (no
revenue for Big Event Rentals has been secured for 2023 and
beyond), which represents an increase of 39.4% compared to EUR 23.1
million at the same date last year.
Thanks to this continued strong order book
evolution the revenue guidance for the full year 2022 is being
increased from initial guidance of EUR 125 million and EUR 140
million to a new guidance of EUR 140 million and EUR 150
million.
The gross margin percentage is expected to be
negatively impacted following the investments done in the past 12
months to hire additional team members. We expect the impact caused
by potential shortage and delay of component and raw material as
well as the rising prices to be balanced off by the price increases
modeled.
Operational expenses continue to be closely
managed and EVS expects an increase between 12-15% in the full year
of 2022.
Glossary
Term |
Definition |
Secured revenue |
Revenue already recognized as well as open orders on hand that will
be recognized as revenue in the fiscal year |
Order book <date> |
Revenues planned to be recognized after the <date> based on
current orders. |
LAB market pillar |
LAB – Live Audience BusinessRevenue from customers
leveraging EVS products and solutions to create content for their
own purposeThis market pillar covers the following types of
customers: Broadcasters, Stadium, House of Worship, Corporate Media
Centers, Sports organizations, Government & institutions,
University & Colleges |
LSP market pillar |
LSP – Live Service ProvidersRevenue from customers
leveraging EVS products and solutions to serve “LAB customers”This
market pillar covers the following types of customers: Rental &
facilities companies, Production companies, Freelance operators,
Technology partners & system integrators buying for their own
purpose |
BER market pillar |
BER – Big Events RentalRevenue from major
non-yearly big events rental.This market pillar covers the
following types of customers: host broadcasters for major
events. |
In case of discrepancies between the English and
the French Version, the English Version prevails.
Conference call
EVS will hold a conference call in English today
at 3.30 pm CEST 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.
Participants must register for the conference
using the link provided below. Upon registering, each participant
will be provided with Participant Dial In Numbers, Direct Event
Passcode and unique Registrant ID.
1. Online registration:
https://register.vevent.com/register/BI11118969a28d45c7afa4a540033211d8
2. Webcast Player URL:
https://edge.media-server.com/mmc/p/c9qib27d
Corporate Calendar
November 17th
, 2022: 3Q22 Trading update
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 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
around 530 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.
Condensed Interim Consolidated financial informationNOTE
1: condensed Consolidated income statement
(EUR thousands) |
Annex |
1H22Reviewed |
1H21Reviewed |
Revenue |
5.3 |
67,672 |
61,779 |
Cost of sales |
|
-21,841 |
-19,221 |
|
|
|
|
Gross profit |
|
45,831 |
42,558 |
Gross margin % |
|
67,7% |
68.9% |
Selling and administrative expenses |
|
-17,283 |
-14,837 |
Research and development
expenses |
|
-11,899 |
-12,221 |
Other income |
|
50 |
51 |
Other expenses |
|
-486 |
-43 |
Profit-sharing plan and warrants |
|
-474 |
-125 |
Operating profit (EBIT) |
|
15,739 |
15,383 |
Operating margin (EBIT) % |
|
23,3% |
24.9% |
|
|
|
|
Interest revenue on loans and
deposits |
|
30 |
68 |
Interest charges |
|
-473 |
-447 |
Other net financial income /
(expenses) |
5.6 |
1,939 |
322 |
Share in the result of the
enterprise accounted for using the equity method |
|
77 |
213 |
Profit before taxes (PBT) |
|
17,312 |
15,539 |
Income taxes |
5.7 |
-1,864 |
56 |
|
|
|
|
Net profit |
|
15,448 |
15,595 |
Attributable to : |
|
|
|
Non-controlling interest |
|
- |
- |
Share of the
group |
|
15,448 |
15,595 |
|
|
|
|
EARNINGS PER SHARE (in number of shares and in
EUR) |
|
1H22Reviewed |
1H21Reviewed |
Weighted average number of subscribed shares for the period less
treasury shares |
|
13,404,817 |
13,399,342 |
Weighted average fully diluted
number of shares |
|
13,479.081 |
13,586,342 |
Basic earnings – share
of the group |
|
1.15 |
1.16 |
Fully diluted earnings
– share of the group (1) |
|
1.15 |
1.15 |
|
|
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME |
|
|
|
(EUR thousands) |
|
1H22Reviewed |
1H21Reviewed |
Net profit |
|
15,448 |
15,595 |
Other comprehensive income of the period |
|
|
|
Currency translation
differences |
|
555 |
199 |
Total of recyclable
elements |
|
555 |
199 |
Gains / (losses) on
remeasurement of defined benefit obligations, net of tax |
|
933 |
- |
Total of non-recyclable elements, net of tax |
|
933 |
- |
Total other comprehensive income of the period, net of
tax |
|
|
|
Total comprehensive income for the period |
|
16,936 |
15,794 |
Attributable to : |
|
|
|
Non controlling interest |
|
- |
- |
Share of the group |
|
16,936 |
15,794 |
(1) The diluted earnings per share does
include:
- 187,000 warrants attributed in October 2020 of which, 158,250
warrants are outstanding at the end of the semester with an
exercise price below the share price. These 158,250 warrants have
maturity of October 2026; and
- 158,600 warrants attributed in June 2021 and outstanding at the
end of the semester with an exercise price below the share price.
These 158,600 warrants have maturity of June 2027.
The diluted earnings per share does not include 138,832 warrants
outstanding at June 2022 as these are not exercisable given the
exercise prices were above the share price.NOTE 2:
condensed statement of financial position
(balance
sheet)
ASSETS (EUR thousands) |
Notes |
June 30, 2022Reviewed |
Dec 31, 2021Audited |
|
|
|
|
Non-current assets
: |
|
|
|
Goodwill |
|
2,832 |
2,832 |
Other intangible assets |
5.10 |
9,985 |
6,113 |
Lands and buildings |
|
52,860 |
52,673 |
Other tangible assets |
|
3,952 |
4,307 |
Investment accounted for using
equity method |
|
1,997 |
1,920 |
Other amounts receivables |
|
1,634 |
2,408 |
Deferred tax assets |
|
4,793 |
5,933 |
Financial assets |
|
514 |
404 |
Total non-current assets |
|
78.567 |
76,590 |
|
|
|
|
Current assets
: |
|
|
|
Inventories |
|
30,232 |
25,951 |
Trade receivables |
|
44,682 |
38,924 |
Other amounts receivable,
deferred charges and accrued income |
|
8,254 |
6,417 |
Financial assets |
|
135 |
201 |
Cash and cash equivalents |
|
60,946 |
72,144 |
Total current assets |
|
144,249 |
143,637 |
Total assets |
|
222,816 |
220,227 |
EQUITY AND LIABILITIES(EUR
thousands) |
Notes |
June 30, 2022Reviewed |
Dec 31, 2021Audited |
|
|
|
|
Equity : |
|
|
|
Capital |
|
8,772 |
8,772 |
Reserves |
|
173,694 |
170,570 |
Treasury shares |
|
-17,447 |
-17,776 |
Total consolidated reserves |
|
156,247 |
152,794 |
Translation differences |
|
1,306 |
751 |
Equity, attributable to the owners of the
parent |
|
166,325 |
162,317 |
|
|
|
|
Non-controlling interest |
|
|
- |
|
|
|
|
Total equity |
5.4 |
166,325 |
162,317 |
|
|
|
|
Provisions |
|
1,636 |
1,502 |
Deferred taxes liabilities |
|
13 |
11 |
Financial debts |
5.11 |
12,931 |
13,554 |
Other debts |
5.12 |
581 |
1,825 |
Non-current liabilities |
|
15,161 |
16,892 |
|
|
|
|
Financial debts |
5.11 |
3,839 |
3,728 |
Trade payables |
|
11,094 |
10,497 |
Amounts payable regarding
remuneration and social security |
|
7,315 |
10,658 |
Income tax payable |
|
2,668 |
2,586 |
Other amounts payable, advances
received, accrued charges and deferred income |
5.6 |
16,414 |
13,549 |
Current liabilities |
|
41,330 |
41,018 |
Total equity and liabilities |
|
222,816 |
220,227 |
NOTE 3: condensed statement of cash flows
|
Notes |
1H22Reviewed |
1H21Reviewed |
Cash flows from operating activities |
|
|
|
Net profit, share of the group |
|
15,448 |
15,595 |
|
|
|
|
Adjustment for: |
|
|
|
- Other income |
|
- |
- |
- Depreciation and write-offs
on fixed assets |
|
3,362 |
3,443 |
- Profit-sharing plan and
warrants |
5.4 |
474 |
125 |
- Provisions |
|
134 |
61 |
- Income tax expense (+) /
Income (-) |
|
1,864 |
-56 |
-Interests expense (+) /
Income (-) |
|
-1,496 |
58 |
-Share of the result of
entities accounted for under the equity method |
|
-77 |
-213 |
|
|
|
|
Adjustment for changes in working capital
items: |
|
|
|
-Inventories |
|
-4,281 |
-2,153 |
-Trade receivables |
|
-4,984 |
-9,118 |
-Other amounts receivable,
deferred charges and accrued income |
|
-1,064 |
-1,398 |
-Trade payables |
|
598 |
1,690 |
-Amounts payable regarding
remuneration and social security |
|
-3,155 |
664 |
-Other amounts payable,
advances received, accrued charges and deferred income |
|
2,866 |
4,777 |
-Conversion differences |
|
1,473 |
-242 |
|
|
|
|
Cash
generated from operations |
|
11,162 |
13,233 |
Income taxes received / (paid) |
5.7 |
-1,725 |
88 |
Net cash from operating activities |
|
9,437 |
13,321 |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of intangible assets |
|
-4,462 |
-133 |
Purchase of tangible assets
(lands and building and other tangible assets) |
|
-1,250 |
-591 |
Disposal of tangible
assets |
|
- |
- |
Business acquisitions |
|
- |
- |
Other financial assets |
|
-97 |
-1 |
Net cash used in investing activities |
|
-5,809 |
-725 |
|
|
|
|
Cash flows from financing activities |
|
|
|
Reimbursement of borrowings |
5.11 |
-546 |
-521 |
Proceeds from new
borrowings |
|
- |
- |
Payment of lease
liabilities |
|
-1,357 |
-1,324 |
Interests paid |
|
-377 |
-231 |
Interests received |
|
6 |
68 |
Dividend received from
investee |
|
32 |
- |
Dividend paid - interim
dividend |
|
- |
- |
Dividend paid - final
dividend |
|
-13,402 |
-6.699 |
Other allocation |
|
- |
- |
Acquisition / sale of treasury
shares |
5.4 |
- |
- |
Net cash used in financing activities |
|
-15,644 |
-8,707 |
|
|
|
|
Net increase
/ decrease in cash and cash
equivalents |
|
-12,016 |
3,889 |
Net foreign exchange
difference |
|
818 |
364 |
Cash and cash equivalents at beginning of
period |
|
72,144 |
52,668 |
Cash and cash equivalents at end of period |
|
60,946 |
56,921 |
NOTE 4: condensed statement of change in
equity
(EUR thousands) |
Capital |
Reserves |
Treasury shares |
Currency translation differences |
Equity, share of the group |
Non-controlling interest |
Total equity |
Balance as at January 1,
2021 |
8,772 |
149,309 |
-17,835 |
276 |
140,522 |
- |
140,522 |
Profit or loss |
|
15,595 |
|
|
|
|
15,595 |
Other comprehensive
income |
|
|
199 |
|
|
|
199 |
Total comprehensive
income for the period |
|
15,595 |
|
199 |
15,794 |
|
15,794 |
Share-based payments |
|
125 |
|
|
125 |
|
125 |
Operations with treasury
shares |
|
|
59 |
|
59 |
|
59 |
Final dividend |
|
-6,699 |
|
|
-6,699 |
|
-6,699 |
Interim dividend |
|
|
|
|
- |
|
- |
Other allocation |
|
-63 |
|
|
- |
|
-63 |
Balance as per June 30, 2021 |
8,772 |
158,267 |
-17,776 |
475 |
149,739 |
- |
149,739 |
(EUR thousands) |
Capital |
Reserves |
Treasury shares |
Currency translation differences |
Equity, group share |
Non-controlling interest |
Total equity |
Balance as at January 1,
2022 (reported) |
8,772 |
170,570 |
-17,776 |
751 |
162,317 |
|
162,317 |
Profit or loss |
|
15,448 |
|
|
15,448 |
|
15,448 |
Other comprehensive
income |
|
933 |
|
555 |
|
1,488 |
Total comprehensive
income for the period |
|
16,381 |
|
555 |
16,936 |
|
16,936 |
Share-based payments |
|
474 |
|
|
474 |
|
474 |
Operations with treasury
shares |
|
-329 |
329 |
- |
- |
- |
- |
Final dividend |
|
-13,402 |
- |
- |
-13,402 |
- |
-13,402 |
Interim dividend |
|
|
|
|
|
|
|
Other allocation |
|
|
|
|
|
|
|
Balance as per June 30, 2022 |
8,772 |
173,694 |
-17,447 |
1,306 |
166,325 |
|
166,325 |
NOTE 5: notes to the consolidated financial
statements
NOTE 5.1: BASIS OF PREPARATION OF THE FINANCIAL
STATEMENTS
The consolidated financial statements of EVS
Group for the 6 month-period ended June 30, 2022, are established
and presented in accordance with the International Financial
Reporting Standards (IFRS), as adopted for use in the European
Union. The accounting framework and standards adopted by the
European Commission can be accessed through the following link on
the website:
http://ec.europa.eu/finance/company-reporting/index_en.htm. The
condensed interim financial statements of the Group for the 6
month-period ending June 30, 2022, were authorized for issue by the
Board of Directors on August 19, 2022.This interim report only
provides an explanation of events and transactions that are
significant to an understanding of the changes in financial
position and reporting since the last annual reporting period and
should therefore be read in conjunction with the consolidated
financial statements for the financial year ending on December 31,
2021. The interim condensed financial statements are prepared on a
going concern basis.
NOTE 5.2.1: SIGNIFICANT ACCOUNTING POLICIES AND
METHODS
These condensed interim financial statements
have been prepared in accordance with IAS 34 Interim Financial
Reporting, as issued by the IASB, and as adopted by the EU. The
accounting policies and methods adopted for the preparation of the
Company's IFRS consolidated financial statements are consistent
with those applied in the 2021 consolidated financial statements.
The Company’s IFRS accounting policies and methods are available in
the 2021 annual report on www.evs.com, except for the accounting
policy on intangible assets which include the capitalization of
development cost for the first time (see note 5.10) as well as the
new, amended or revised IFRS standards and IFRIC Interpretations
that have been in effect since January 1, 2022, which are listed
hereunder:
-
Amendment to IFRS 16 Leases: COVID-19-Related Rent
Concessions beyond 30 June 2021 (applicable for annual periods
beginning on or after 1April 2021).
-
Amendments to IAS 16 Property, Plant and
Equipment: Proceeds before Intended Use (applicable for
annual periods beginning on or after 1 January 2022).
-
Amendments to IAS 37 Provisions, Contingent Liabilities and
Contingent Assets: Onerous Contracts — Cost of Fulfilling
a Contract (applicable for annual periods beginning on or after 1
January 2022).
-
Amendments to IFRS 3 Business Combinations:
Reference to the Conceptual Framework (applicable for annual
periods beginning on or after 1 January 2022).
- Annual
Improvements to IFRS Standards 2018–2020 (applicable for annual
periods beginning on or after 1 January 2022.
The adoption of these new, amended or revised
pronouncements did not have a significant impact on the
consolidated financial statements of the Group.
NOTE 5.2.2: JUDGMENTS AND ESTIMATES
- The
impact of the war in Ukraine on our activities
Given the nature and location of its operations
and the fact that EVS does not currently have activities in Russia
nor in Ukraine or with Russian companies, The Company does not
foresee a direct impact of the Ukrainian conflict on its
business.
- The
impact current market volatility and macroeconomic
developments
The impacts of the current market volatility and
macroeconomic developments were taken into account by the Company
to assess potential effects on EVS’s financial performance and the
valuation of its assets and liabilities. In particular, key
assumptions used in the calculation of the post employments
obligations have been reviewed to ensure a proper valuation as per
30 June 2022.
NOTE 5.3: SEGMENT REPORTING
From an operational point of view, the company
is vertically integrated with the majority of its staff located in
the headquarters in Belgium, including the R&D, production,
marketing and administration departments. This explains why the
majority of the investments and costs are located at the level of
the Belgian parent company. Resources securing the customer facing
interactions, like sales, operations and support profiles, are
primarily hired within the respective regions. The foreign
subsidiaries are primarily sales and representative offices. The
Chief Operating Decision Maker, being the Executive Committee,
reviews the operating results, operating plans, and makes resource
allocation decisions on a company-wide basis. Revenue related to
products of the same nature (digital broadcast production
equipment) are realized by commercial polyvalent teams. The
company’s internal reporting is the reflection of the
above-mentioned operational organization and is characterized by
the strong integration of the activities of the company.
By consequence, the company is composed of one
segment according to the IFRS 8 definition, and the consolidated
income statement of the group reflects this unique segment. All
long-term assets are located in the parent company EVS Broadcast
Equipment SA in Belgium.
The company provides only one type of solution:
solutions based on tapeless workflows with a consistent modular
architecture. This is the product of EVS. There are no other
significant classes of business, either singularly or in aggregate.
Indeed, identical modules can meet the needs of different markets.
Our customers themselves are often multi-markets. Providing
information for each module is therefore not relevant for EVS.
At the geographical level, our activities are
divided into the following regions: Asia-Pacific (“APAC”), Europe,
Middle East and Africa (“EMEA”), and America (“NALA”). This
division follows the organization of the commercial and support
services within the group, which operate worldwide. A fourth region
is dedicated to the worldwide events (“big event rentals”).
The company provides additional information with
a presentation of the revenue by market pillar: “Live Service
provider”, “Live Audience Business” and “Big Event Rentals” for
rental contracts relating to the big sporting events.
Finally, sales are presented by nature: systems and
services.
5.3.1. INFORMATION ON REVENUE BY
DESTINATION
Revenue can be presented by Market Pillar: “Live
Service provider”, “Live Audience Business” and “Big event
rentals”. Maintenance and after sale service are included in the
complete solution proposed to the clients.
Revenue (EUR thousands) |
1H22 |
1H21 |
% 1H22/1H21 |
Live Audience Business |
26,291 |
30,614 |
-14.1% |
Live Service Provider |
35,718 |
26,655 |
34.0% |
Big event rentals |
5,663 |
4,510 |
25.6% |
Total Revenue |
67,672 |
61,779 |
9.5% |
5.3.2. INFORMATION ON REVENUE BY GEOGRAPHICAL
INFORMATION
Activities are divided by three regions:
Asia-Pacific (“APAC”), Europe, Middle East and Africa (“EMEA”), and
“Americas”. Aside of them, we also identify the “big event
rentals”.
Revenue for the YTD period (EUR thousands) |
APACexcl. events |
EMEAexcl. events |
Americasexcl. events |
Big eventrentals |
TOTAL |
1H22 revenue |
7,674 |
28,657 |
25,678 |
5,663 |
67,672 |
Evolution versus 1H21 (%) |
-18.2% |
-10.8% |
63.0% |
25.6% |
9.5% |
Variation versus 1H21 (%) at constant currency |
-18.2% |
-10.8% |
47.9% |
25.6% |
5.7% |
1H21 revenue |
9,379 |
32,133 |
15,757 |
4,510 |
61,779 |
Revenue realized in Belgium (the country of
origin of the company) with external clients represent less than 5%
of the total revenue for the period. In the last 12 months, the
group realized significant revenue with external clients (according
to the definition of IFRS 8) in two countries: The United States
(Americas, EUR 43,8 million in the last 12 months) and Spain
(EUR 13,8 million in the last 12 months).
5.3.3. INFORMATION ON REVENUE BY NATURE
Revenue can be presented by nature: systems and
services.
Revenue (EUR thousands) |
1H22 |
1H21 |
% 1H22/1H21 |
Sale of Equipment |
53,789 |
52,733 |
2.0% |
Other
services |
13,883 |
9,046 |
53.5% |
Total Revenue |
67,672 |
61,779 |
9.5% |
Other services include the advice,
installations, project management, training, maintenance, and
distant support. Work in progress (“WIP”) contracts are included in
both categories.
The sales of equipment are recognized at a point
in time while other services are recognized over time.
5.3.4. INFORMATION ON IMPORTANT CLIENTS
Over the last 6 months, no external client of the company
represented more than 10% of the revenue (this was same for the
same period in 2021).
NOTE 5.4: EQUITY SECURITIES
The number of treasury shares has changed as
follows during the period, together with the outstanding
warrants:
|
2022 |
2021 |
Number of own shares
at January 1 |
925,140 |
928,207 |
Acquisition of own shares on
the market |
- |
- |
Sale of own shares on the
market |
- |
- |
Allocation to Employees Profit
Sharing Plans |
-17,126 |
-3,067 |
Sale related to Employee Stock
Option Plan (ESOP) and other transactions |
- |
- |
Number of own shares at June 30 |
908,014 |
925,140 |
Outstanding warrants at June 30 |
455,682 |
325,832 |
In 1H22, the Group did not repurchase own shares
on the stock market. No shares were used to satisfy the exercise of
warrants by employees.
The Ordinary General Meeting of shareholders of
May 17, 2022, approved the allocation of 17,126 shares to EVS
employees (grant of 56 shares to each staff member in proportion to
their effective or assimilated time of occupation in 2021) as a
reward for their contribution to the group successes.
The expense recorded in the consolidated income
statement amounts to 329 kEUR for the six-month period ended on
June 30 2022.
NOTE 5.5: DIVIDENDS
The Ordinary General Meeting of May 17, 2022,
approved the payment of a total gross dividend of EUR 1.50 per
share for the year 2021.
(EUR thousands) |
# Coupon |
Declaration date |
2022 |
2021 |
- Final dividend for 2020(EUR
0.50 per share less treasury shares) |
30 |
May 2021 |
- |
6,699 |
- Interim dividend for
2021(EUR 0.50 per share less treasury shares) |
31 |
Nov.2021 |
- |
6,701 |
- Final
dividend for 2021(EUR 1.00 per share less treasury shares) |
32 |
May 2022 |
13,402 |
|
Total paid dividends |
|
|
13,402 |
13,400 |
EVS implemented the dividend policy announced by
the end of 2021 distributing an interim dividend for 2021 in
November 2021 of EUR 0.50 per share and a final dividend of EUR
1.00 per share for 2021. The total dividend of EUR 1.50 per share
includes a EUR 0.50 exceptional dividend to honor the past
commitments on dividend payout. A new dividend guidance has been
issued early 2022 and is as following:
In € per share per fiscal year |
2022 |
2023 |
2024 |
Base dividend |
1,10 |
1,10 |
1,10 |
Exceptional additional dividend |
0,50 |
0,00 |
0,00 |
Total dividend |
1,60 |
1,10 |
1,10 |
NOTE 5.6: OTHER NET FINANCIAL INCOME /
(EXPENSES)
(EUR thousands) |
1H22 |
1H21 |
- Fair value variation of
financial instruments |
-169 |
-7 |
- Exchange results |
1,955 |
268 |
- Other
financial results |
153 |
61 |
Other net financial income / (expenses) |
1,939 |
322 |
The functional currency of EVS Broadcast
Equipment SA as well as all subsidiaries is the Euro, except for
the EVS Inc. subsidiary, whose functional currency is the US dollar
and Axon Digital Design LTD. subsidiary whose functional currency
is the GBP (up till March of 2022, at which point in time the
functional currency also became the Euro). The presentation
currency of the consolidated financial statements of EVS Group is
the Euro. For more information on exchange rates, see also the note
5.9. The increase of the exchange result income is explained by the
appreciation of USD and GBP comparing to Euro.
The estimated fair values of the financial
assets and liabilities are equal to their fair book values in the
balance sheet.
Since 2022, EVS systematically measures the
group’s anticipated exposure to transactional exchange risk, mainly
relating to the EUR/USD risk. Given the group has a “long” position
in USD and based on revenue forecasts, EVS hedges future USD net
in-flows by forward or option foreign exchange contracts. The
change in the fair value of the foreign exchange contracts is
recorded directly to the income statement (other financial results)
since the Group does not apply hedge accounting on these
transactions.
The valuation techniques used are mainly based
on spot rates, forward rates and interest rate curves.
On June 30, 2022, the group holds EUR/USD FX
option contracts for a total notional amount of USD 9 million with
monthly maturities between July 2022 and June 2023 at an average
EUR/USD exchange rate of 1.0435. The fair value of those financial
instruments on June 30, 2022, amounts to EUR -0.1 million.
NOTE 5.7: INCOME TAX EXPENSE
(EUR thousands) |
1H22 |
1H21 |
- Current tax (expense) /
income |
-722 |
494 |
-
Deferred tax (expense) / income |
-1.142 |
-438 |
Income tax expense |
-1,864 |
56 |
Income taxes expense increased during the first
half of 2022 compared to the same period of 2021 primarily
following important tax latencies impacting the 2021 tax base.
The effective tax rate for the period ended on
June 30, 2022, is 10.8% (-0.4% for same period in 2021).
The evolution of effective tax rate is mainly
explained by:
- The increase of
the current tax mainly due to rise in the taxable profits. It must
be noted that in the first half of 2021, a tax relief of
EUR 0.7 million was received; and
- The increase of
the deferred tax expenses due to the high profit before tax
impacting the recoverable tax loss for EUR 1.2 million
together with the reversal of other temporary differences.
NOTE 5.8: HEADCOUNT
(in full time equivalents) |
|
At June 30 |
2022 |
|
594 |
2021 |
|
542 |
Variation |
|
+52 |
NOTE 5.9: EXCHANGE RATES
The main exchange rate that influences the
consolidated financial accounts is USD/EUR and GBP/EUR which has
been taken into account as follows:
Exchange rate USD/EUR |
Average 1H |
At June 30 |
2022 |
1.0937 |
1.0387 |
2021 |
1.2049 |
1.1884 |
Variation |
-9.23% |
-12.60% |
Exchange rate GBP/EUR |
Average 1H |
At June 30 |
2022 |
0.8420 |
0.8582 |
2021 |
0.8682 |
0.8580 |
Variation |
-3.02% |
0.02% |
NOTE 5.10: INTANGIBLE ASSETS
During 2022, intangible assets increased by EUR
3.9 million as a net movement of a capitalization of internal
development costs of EUR 4.5 million less six months depreciations
of EUR 0.6 million.
At the beginning of the period, the Group
identified internal development projects, that for the first time
of EVS Broadcast Equipment’s history fulfilled all the conditions
to be capitalized according to IAS 38 Intangible assets. This
ability arises after the implementation of extensive business
cases, where R&D together with the solutions and sales
departments perform an end-to-end exercise whereby objectives,
costs, market analysis and return are clearly
identified.
These internal development projects consist of
software that will be commercialized at the end of the development
period (expected return on investment is scheduled for 2024).
Management performed an assessment related to
the internal development projects and concluded that:
- It is
technically feasible to complete the development of these software
so that it will be available for the sale;
- The Group has
the intention to complete the development of the software in order
to sell it;
- The Group is
able to sell the software once the development will end;
- The future
economic benefits from the sales of the software have been
identified and are in excess of the budgeted development
costs;
- The Group
secured the necessary financial resources together with the
internal (and external) technical resources to complete the
development of the software in order to sell it; and
- The new
established processes allow to the Group to measure reliably the
expenditures attributable to the development of the software and
therefore, attributable to the cost of the intangible assets.
The capitalized costs during the first six months of 2022
include mainly the internal personnel costs and external
consultants costs. These costs are only related to the development
phase.
Update of the accounting policy 2.11
related to the intangible assets (the following accounting policy
will replace the accounting policy of the intangible assets in 2021
annual report).
2.11. INTANGIBLE ASSETS
Intangible assets acquired
separately
Intangible assets with finite useful lives that
are acquired separately are carried at cost less accumulated
amortization and accumulated impairment losses. The estimated
useful life and amortization method are reviewed at the end of each
reporting period, with the effect of any changes in estimate being
accounted for on a prospective basis. Intangible assets with
indefinite useful lives that are acquired separately are carried at
cost less accumulated impairment losses.
Internally-generated intangible assets –
research and development expenditure
Expenditure on research activities is recognized
as an expense in the period in which it is incurred. An internally
generated intangible asset arising from development (or from the
development phase of an internal project) is recognized if, and
only if, all of the following conditions have been
demonstrated:
- The technical
feasibility of completing the intangible asset so that it will be
available for use or sale
- The intention to
complete the intangible asset and use or sell it
- The ability to
use or sell the intangible asset
- How the
intangible asset will generate probable future economic
benefits
- The availability
of adequate technical, financial, and other resources to complete
the development and to use or sell the intangible asset
- The ability to
measure reliably the expenditure attributable to the intangible
asset during its development
Where it is not possible to reliably distinguish
between research or development costs, the costs are considered as
being research and therefore, these costs do not qualify as an
internally generated intangible asset.
The amount initially recognized for internally
generated intangible assets is the sum of the expenditure incurred
from the date when the intangible asset first meets the recognition
criteria listed above. Where no internally generated intangible
asset can be recognized, development expenditure is recognized in
profit or loss in the period in which it is incurred. Subsequent to
initial recognition, internally generated intangible assets are
reported at cost less accumulated amortization and accumulated
impairment losses, on the same basis as intangible assets that are
acquired separately.
Intangible assets acquired in a business
combination
Intangible assets acquired in a business
combination and recognized separately from goodwill are recognized
initially at their fair value at the acquisition date (which is
regarded as their cost). Subsequent to initial recognition,
intangible assets acquired in a business combination are reported
at cost less accumulated amortization and accumulated impairment
losses, on the same basis as intangible assets that are acquired
separately.
Intangible assets with a finite useful life are
depreciated on a straight-line basis over the duration of their
economic useful life (3 years for software acquired for internal
use and between 3 and 7 years for the other intangible assets) and
reviewed for impairment testing each time there is a sign of
impairment in the intangible asset.
An intangible asset is derecognized on disposal,
or when no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of an
intangible asset, measured as the difference between the net
disposal proceeds and the carrying amount of the asset, are
recognized in profit or loss when the asset is derecognized.
NOTE 5.11: FINANCIAL LIABILITIES
(EUR thousands) |
2022 |
2021 |
|
|
|
Long term financial
debts |
|
|
Bank loans |
2,228 |
2,779 |
Long term lease
liabilities |
10,703 |
10,775 |
|
|
|
Amount due within 12
months (shown under current liabilities) |
|
|
Bank loans |
1,100 |
1,095 |
Short term lease
liabilities |
2,739 |
2,633 |
|
|
|
Total financial debt (short and long-term) |
16,770 |
17,282 |
|
|
|
The total financial
debt is repayable as follows: |
|
|
- within one year |
3,839 |
3,728 |
- after one year but no more
than five |
9,350 |
9,673 |
- more
than five years |
3,581 |
3,881 |
On June 16, 2020, a new loan of EUR 5.5 million
has been negotiated with BNP Paribas Fortis in order to partially
finance the acquisition of Axon. The repayment schedule foresees a
first repayment of EUR 0.6 million in the last quarter of 2020 and
annual installments of EUR 1.1 million between 2021 and 2024 with a
final repayment of EUR 0.6 million in 2025 when the loan will
mature. On June 2022, EVS paid EUR 0.6 million, interest included
(the same was paid during the same period of 2021).
During the first six months of 2022, lease
liabilities variation includes a repayment of EUR 1.4 million (EUR
1.3 million for the same period in 2021), excluding interest of EUR
0.3 million (EUR 0.2 million for the same period in 2021).
On June 29, 2020, a roll over credit line of EUR
5.0 million has been negotiated with Belfius bank in order to
partially finance the acquisition of Axon. This amortizing credit
line will end at the latest on 30/06/2025. As of this date, EVS has
not used this credit facility.
NOTE 5.12: OTHER LIABILITIES
The variation in other debts of – 1.2 million EUR during the
first semester 2022 comes from the update of the principal
assumptions used in determining pension obligations for the Group’s
plans due to the high increase of the inflation during the period.
No new actuarial valuation report as at 30 June 2022 was provided.
It has been asked to our actuary AON to review the calculation as
per December 31, 2021 with those updated assumptions. The net
liability has been updated and a full actuarial calculation will be
performed at year-end.
The main changes in the assumptions are the following:
- Salaries
increase with the real inflation rate of 2021 (5,71%)
- LT inflation
rate increases from 1,90% to 2,10%
- Salaries
increase from 2,10% to 2,30% (caused by the inflation rate
increase)
- Actuarial rate
increases from 1,15% in January to 2,45% today.
NOTE 5.13: FINANCIAL RISK
MANAGEMENT POLICIES
The group enters into derivative transactions,
principally forward and option currency contracts, with the purpose
to secure its sales and purchases in foreign currencies against
negative variations of these currencies. The group has
transactional currency exposure arising from sales or purchases by
operating entities in currencies other than the group’s functional
currency. Foreign currency risk is described in note 5.12.1.
The group’s main financial instruments, other
than derivatives, comprise bank loans, finance leases and operating
leases, cash and short-term deposits. The purpose of these
financial instruments is to raise finance for the group’s
operations. The group has other financial instruments such as trade
debtors and trade creditors, which arise directly from its
operations. The group’s policy is, and has always been, that no
trading in financial instruments shall be undertaken. Credit risk
is described in note 5.12.2.
5.13.1 FOREIGN CURRENCY RISK
Since 2022, EVS systematically measures the
group’s anticipated exposure to transactional exchange risk over
six to eighteen months. In its current structure, the group’s
exposure is mainly linked to the EUR/USD risk. The group invoices
all clients in Euro, except in the United States where invoices are
denominated in USD. Since the majority of operating expenses are
denominated in Euro, the group has a “long” position in USD, i.e.
all of the group’s activities generate globally a positive net cash
flow in USD.
On the basis of the forecasts and according to
the market conditions, the group hedges a portion of the exchange
rate risk on estimated net future flows, mainly through foreign
exchange forward and option contracts. EVS does not apply hedge
accounting according to IAS 39 for those transactions.
Foreign exchange contracts are revalued at each
closing at their market value. The generated exchange rate profit
or loss is recorded in the “Other net financial income/(charges)”
account in the consolidated income statement.
The valuation techniques used are mainly based
on spot rates, forward rates and interest rate curves.
On June 30, 2022, the group holds EUR/USD FX
option contracts for total notional amount of USD 9 million with
monthly maturities between July 2022 and June 2023 at an average
EUR/USD exchange rate of 1.0435. The fair value of those financial
instruments on June 30, 2022, amounts to EUR -0.1 million.
5.13.2 CREDIT RISK
Credit exposure is controlled and reviewed
regularly by the management.
Trade receivables consist of a large number of
customers, spread across many geographical areas. The evolution of
the credit risk is monitored permanently. As of June 30, 2022 and
December 31, 2021, it is assumed that the carrying amounts of those
trade receivables are the most appropriate estimate to the fair
value of those assets.
The credit risk on financial instruments is
limited because the counterparties are financial institutions with
high credit ratings assigned by international credit rating
agencies.
As of June 30, 2022, the maximum amount the
group could have to pay if these guarantees are called on is EUR
0.8 million (similar to EUR 0.8 million in December 2021).
5.13.3 FAIR VALUES OF FINANCIAL INSTRUMENTS
The estimated fair values of the financial
assets and liabilities are equal to their fair book value in the
balance sheet considering (i) their short maturity or (ii) the fact
that the interest rate applicable is in line with market
conditions.
NOTE 5.14: SUBSEQUENT EVENTS
EVS announced on August 19th the signature of a
large deal (more than USD 50 million) over a period of 10 years
with a key customer in Nortth America.
There were no other subsequent events that may
have a material impact on the balance sheet or income statement of
EVS.
NOTE 5.15: RISK AND UNCERTAINTIES
Investing in the stock of EVS involves risks and
uncertainties. The risks and uncertainties relating to the
remainder of the year 2022 are similar to the risks and
uncertainties that have been identified by the management of the
company and that are listed in the management report of the annual
report (available at www.evs.com).
In terms of new risks arising since the annual
report of 2021, we highlight the potential impacts following the
war in Ukraine. The war is not only impacting revenue streams in
Russia and Ukraine, as EVS is carefully following up and respecting
the sanctions in vigor. It is also potentially impacting the supply
of components provided by that region.
NOTE 5.16: RELATED PARTIES TRANSACTIONS
During 1H 2022, the members of the executive
management considered as related parties received a total amount of
EUR 905.549 (646.765 for the same period in 1H2021). The increase
is mainly explained by the additional members in
2022.
Report of the statutory auditor on the accounting data
presented in the semi-annual press release of EVS Broadcast
Equipment SA
We have compared the accounting data presented
in the semi-annual press release of EVS Broadcast Equipment SA with
the Interim Condensed Consolidated Financial Statements as at June
30, 2022. We confirm that these accounting data do not show any
significant discrepancies with the Interim Condensed Consolidated
Financial Statements.
We have issued a review report on these Interim
Condensed Consolidated Financial Statements, in which we declare
that, based on our review, nothing has come to our attention that
causes us to believe that these Interim Condensed Consolidated
Financial Statements are not prepared, in all material aspects, in
accordance with IAS 34 Interim Financial Reporting, as adopted for
use in the European Union.
Liège, August 19th, 2022
Ernst & Young Réviseurs
d’Entreprises SCRLStatutory auditorrepresented by
Carlo-Sébastien
D’AddarioPartner* Acting on behalf of a SRL
Ref: 23CSD0014
Certification of responsible persons
Serge Van Herck, CEO*Veerle De Wit,
CFO*
Certify that, based on their knowledge,
a) the condensed financial
statements, prepared in accordance with the International Financial
Reporting Standards (IFRS) adopted by the European Union, fairly
present in all material respects the financial condition and
results of operations of the issuer and the companies included in
the consolidation,
b) the Directors’ report fairly
presents the important events and related parties transactions of
the first six months of 2021, including their impact on the
condensed financial statements, and a description of the existing
risks and uncertainties for the remaining months of the fiscal
year.
* acting on behalf of a BV
- Press release in PDF format
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