(H1 2017 Results - 27, July 2017)
Netgem accelerates its development in the cloud and
proposes a public share buyback offer of €25 million
Strategy and Outlook
The activity throughout the year should confirm the trends observed in the first half, with the confirmation of the strong performance in Europe, a return to normal in Asia and the first deliveries under license in Mexico, allowing the company to have a good visibility on its business to the end of the year. The
company will confirm in 2017 its return to profits initiated in 2015.
At IBC in September, the Company will present a new partnership program around Diamond, its virtual set-top box platform. The main objective of this program is to enable the company to strengthen its indirect sales presence among operators aiming to move their historic IPTV offer to the cloud.
The transition to the Microsoft Azure cloud, underlying the Diamond platform, improves the mutualisation of the innovation effort between customers. As a consequence, the company is able to continue expanding the scope of services offered on its platform - TV, video, music, connected home - without a significant increase in R&D effort.
Activity, results and financial position - first half of 2017:
The first half of 2017 was characterized by a very good performance with our European customers, all of
which are continuing to recruit new subscribers to their entertainment offerings built on Netgem’s platform.
The product offering for European customers continues to strengthen thanks to the increasing penetration
of the virtual set-top-box platform (Diamond) and the first positive feedback for the Soundbox solution.
Soundbox combines the Diamond virtual set-top-box software with an enhanced version of a soundbar
designed with specialist audio partners. This unique system combines audio and video services within a
single application and a single device for all screens and rooms in a home. Netgem's Telco customers
see it as a way to differentiate their offers, increase their income and reduce their capex since the system
no longer requires set-top boxes. The consumer gains an innovative solution offering maximum simplicity,
limiting the number of devices, applications and remote controls necessary to implement a complete
digital entertainment system.
Netgem also announced two new market gains in the Middle East European region during the past six
months, in particular the opening of the German market where Netgem intends to strengthen its position
in the months and years ahead.
This performance in Europe has offset a temporary slowdown in Asia and the impact of the transition to
software licenses in Mexico.
SOURCE:
http://www.netgem.com/datas/media/1501324007_PR-UK_ResultsH12017.pdf
Netgem accelerates its development in the cloud and
proposes a public share buyback offer of €25 million
Strategy and Outlook
The activity throughout the year should confirm the trends observed in the first half, with the confirmation of the strong performance in Europe, a return to normal in Asia and the first deliveries under license in Mexico, allowing the company to have a good visibility on its business to the end of the year. The
company will confirm in 2017 its return to profits initiated in 2015.
At IBC in September, the Company will present a new partnership program around Diamond, its virtual set-top box platform. The main objective of this program is to enable the company to strengthen its indirect sales presence among operators aiming to move their historic IPTV offer to the cloud.
The transition to the Microsoft Azure cloud, underlying the Diamond platform, improves the mutualisation of the innovation effort between customers. As a consequence, the company is able to continue expanding the scope of services offered on its platform - TV, video, music, connected home - without a significant increase in R&D effort.
Activity, results and financial position - first half of 2017:
The first half of 2017 was characterized by a very good performance with our European customers, all of
which are continuing to recruit new subscribers to their entertainment offerings built on Netgem’s platform.
The product offering for European customers continues to strengthen thanks to the increasing penetration
of the virtual set-top-box platform (Diamond) and the first positive feedback for the Soundbox solution.
Soundbox combines the Diamond virtual set-top-box software with an enhanced version of a soundbar
designed with specialist audio partners. This unique system combines audio and video services within a
single application and a single device for all screens and rooms in a home. Netgem's Telco customers
see it as a way to differentiate their offers, increase their income and reduce their capex since the system
no longer requires set-top boxes. The consumer gains an innovative solution offering maximum simplicity,
limiting the number of devices, applications and remote controls necessary to implement a complete
digital entertainment system.
Netgem also announced two new market gains in the Middle East European region during the past six
months, in particular the opening of the German market where Netgem intends to strengthen its position
in the months and years ahead.
This performance in Europe has offset a temporary slowdown in Asia and the impact of the transition to
software licenses in Mexico.
For the six months ended June 30, 2017, Netgem announces a consolidated revenue of € 32.9 million
and a gross profit of € 12.7 million. Revenue and gross profit for the period were impacted by the strategic
agreement for software license signed with ZTE and Totalplay in Mexico.
The participation in Vitis (service provider of La Fibre VideoFutur) is not included anymore in the
consolidation perimeter for 2017, contrary to 2016. If Vitis had not been consolidated in 2016, the turnover
and the gross profit for H1 2016 would have amounted to respectively € 36.7 million and € 14.0 million .
Operating income in the first half of the year reached € 3.1 million, confirming the solid return to
profitability observed in 2016.
After taking account of an income tax charge of € 0.9 million, and the share of losses under the equity
method of € 0.8 million for Vitis, the Group recorded a net profit of € 1.3 million for the period.
The sales momentum in our Vitis participation is materializing. The triple-play "La Fibre Videofutur"
service is now available on an addressable park of 318,000 fiber plugs, expected to increase by 180,000
additional plugs in the second half of the year. The capital contributions of Caisse des Dépôts and
Océinde took place as planned during the semester to finance marketing investments.
The Group's net cash position reached € 30.1 million, down € 2.7 million in the first half. The Group held
7.9% of its capital in treasury at end of June 2017.
http://www.netgem.com/datas/media/1501324007_PR-UK_ResultsH12017.pdf
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