ADB Group reports its half-year 2013 results Donnerstag, 08. August 2013 - 06:00

Geneva – 8 August 2013

Advanced Digital Broadcast Holdings SA (SIX: ADBN) reported today its unaudited consolidated financial results for the half-year 2013.

The first-half 2013 revenue reached US$ 210.4 million, representing a decrease of 1.5% from the US$ 213.7 million recorded in the same period of the last year. For comparison, it needs to be remembered that last year’s first semester was impacted by stronger than usual digital TV equipment sales due to the European Football Championships and the Olympic Games.

Gross profit amounted to US$ 59.6 million, or 28.3% of revenue, an increase of 0.9% over the US$ 59.0 million, or 27.6% of revenue, for the first-half 2012. This is a result of the company’s tight control over the cost of goods sold, including a transition to ODM/JDM model.

The 2013 first-half operating expenses accounted for US$ 56.0 million, a decrease of 0.8% from the US$ 56.5 million for the first-half 2012. Within operating expenses, SG&A declined by 4.1% compared to the same period of last year, largely due to the cost savings in the overhead expenses. R&D increased by 1.6% compared to the same period of the prior year due to the continued focus of the Group on investing in research and innovation. The depreciation level stayed largely flat compared to last year, whereas the amortization level declined to US$ 9.9 million. Finally, the repair charges were also reduced significantly in the first semester of 2013.

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) amounted to US$ 16.1 million or 7.7% of revenue during the first-half 2013, up 3.1% from the US$ 15.7 million or 7.3% of revenue for the same period in 2012.

Other income includes US$ 2.1 million worth of refunds received from customs offices of the European Union and regarding import duties paid in the past three years. This gain is expected to occur only in the year 2013.

Earnings Before Interest and Tax (EBIT) amounted to US$ 4.6 million or 2.2% of revenue during the first-half 2013, compared to US$ 1.7 million or 0.8% of revenue for the same period in 2012. At the end of the semester, the Group was able to post a profit for the period of US$ 3.2 million, compared to a loss of US$ 0.4 million for the same period last year. Earnings per share (EPS) was US$ 0.63, compared to a loss per share of US$ (0.08) a year before.

At the end of June 2013, we closed the semester with a net cash position of US$ 27.4 million. This represents an increase of US$ 10.7 million compared to the first-half 2012. The total cash and treasury investments amounted to US$ 45.3 million at the end of June 2013.

Mr. Andrew Rybicki, Group Chairman, commented: “The first half of 2013 has been slightly slower in sales development than last year, but the overall picture is more satisfying. The margin development is going in the right direction. Our strategy is to focus on margins and cash flow generation, and not grow the top line for the sake of it. Our staff has fully adopted this strategy, and the results are starting to show it. Furthermore, I’m delighted that we have our new CEO, Mr. Peter Balchin, to lead the effort of executing our strategy. It is an important step forward for our company.”

Mr. Peter Balchin, Chief Executive Officer of ADB Group added: “There are several and significant opportunities in the area ADB operates, and I intend to take full advantage of it. There are also challenges there, which I am confident ADB Team will tackle successfully. I look forward to working with them, and to the challenges in the front of us.”

Consistent with the policy adopted in 2012, the company has decided not to issue guidance for the year 2013.

Business overview

General trends

The industry dynamics in Europe are changing as a result of consolidations and impact of the internet-based OTT (Over-The-Top) television content distribution. The pay-TV industry is largely mature, while the dividing lines between the broadband and traditional broadcast operators started clearly blurring, as both of them provide very similar packages of content and services. What this translates into is the market’s slower overall growth, and significantly increased cost awareness of the operators.

The overall market sentiment is relatively good – market research institutes (MRG, Research and Markets) forecast continuing growth in digital TV equipment for the next two-three years. Main drivers are mainly the multi-room and multi-devices viewing trends, as well as the OTT. Furthermore, the transition to high-definition equipment is still far from complete and thus demand for high-end products and services stays robust. This, with the combination of ADB Group’s gateway and multiscreen technology, provides us with interesting opportunities going forward.

All this supports the Group strategy in focusing on innovative software, complete systems and services while further streamlining its core business.

Group business during first-half 2013

Europe continues being the largest platform for the Group business. Total of Europe constituted 94% of revenue, where Western Europe contributed 68% and Eastern Europe 26% to the business. Americas brought 6% and Asia Pacific closed to 0.3% of the revenue during the first-half 2013.

During the first-half 2013, the top ten customers accounted for 81% to the total revenue, which is slightly higher than during the first-half 2012. The composition of the top ten customers was largely unchanged, reflecting an overall good satisfaction level enjoyed by our customers.

The digital television products and services provided to broadcasting customers accounted for 64% of our revenue during the first-half of 2013. The demand was particularly strong with cable and satellite customers. Products and services to broadband customers accounted for 26% of our overall revenue; the demand came mostly from Switzerland and was also stronger in Spain and Italy, compared to 2012. Customer services and systems accounted for 10% of our revenue.

During the first semester of this year, the Group has received several industry recognitions. Epicentro is a software suite designed to enable Connected Home applications using the Home Gateway as a multi-service hub, and represents the development of new business models around the Broadband Home. In February 2013, Epicentro Software Platform was selected as a finalist in the TV Connect Industry Awards, “Best Digital Home Service Innovation” category. In July 2013, ADB’s new Media Box Platform (ADB-3740SX) scooped two shortlist nominations – for “Best customer premise technology”, and “Best satellite contribution/ distribution/transmission solution” – at CSI, Amsterdam. These nominations strengthen the Group’s belief that focusing on multi-service, multi-screen and system solutions is an important part of the strategy and will continue to ride the technology trends.

Organizational update

During the first semester of 2013, the Group appointed a new CEO, Mr. Peter Balchin. Mr. Balchin, a seasoned executive of the telecom and pay-TV industries, comes to ADB from Altech Multimedia (UEC) in South Africa, which he had been successfully heading for the past three years, immediately before joining ADB Group. He started with his new responsibilities on 1 July 2013.

The management of ADB Group will hold a conference call to comment on this press release today at 15.00 CET. Participants shall dial the number +41 (0) 44 580 7718 with pass code “ADB”.

This press release and further information on ADB Group can be found on the Group’s the Group website at www.adbholdings.com

For further information please contact:

Tina Nyfors

Investor Relations /Group Communication

Tel: +41 22 592 8433

Fax: +41 22 592 8402

t.nyfors@adbglobal.com

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