EVS Revenue Jumps 83 Percent in Record Q2 2012, CFO Calls Quarter “Awesome”

Posted by Joe Zaller
Sep 03 2012

Production and playout video server specialist EVS announced that its revenue for the second quarter of 2012 was €42.8m, 82.9% higher than the same period a year ago, and up 43% versus the previous quarter.  Excluding currency fluctuations and big event rentals, which are a major revenue driver for EVS, the company said its revenue increased 62% versus the second quarter of 2011

The company’s Q2 2012 revenue includes €3.5m of rentals relating to the Euro football championships, equally split between its studio and outside broadcast (OB) segments.  EVS said that more than 220 of its servers were deployed at the Euro 2012 championships.  In its presentation to equity analysts, the company also described its participation in the 2012 London Olympics, which will be recognized in Q3 2012.

Net profit in the quarter was €15.9m, up 181% versus the same period a year ago. EBIT (earnings before interest and tax) in the quarter was €23.2m, up 183% compared to the same period last year.  The corresponding operating margin for the quarter was 54.2%, up from 35% last year, and 45.1% last quarter.

Consolidated gross margins for the quarter were 81.2%, up from 76.9% last year and up from 77.6% last quarter. The company attributed its margin expansion to higher sales leverage on fixed manufacturing and field support expenses.

Bookings in the second quarter of 2012 quarter were was €37.9m, down from €40.6m last quarter, which was a record for the company.   Orders in the OB segment grew by 34% in 1H12, while orders in the studio segment grew by 32% during the same period. As of August 29, 2012 the company’s order backlog for the remainder of 2012 was €48m, up 31.6% higher than a year ago (up 15% excluding big event rentals).  The company also disclosed that it has already secured €8.4m of orders to be delivered in 2013.

Operating expenses in the quarter increased by 17.5% versus last year due to higher employee headcount and the impact of a one-off R&D tax credit last year. SG&A expenses were €5.66m, up 10% versus last year.  R&D expenses were €5.15, up 27% versus last year.


Segment Results:

  • Studio revenue in the second quarter of 2012 was €17.2m, up 79.3% versus last year (up 57.2% on a constant currency basis and excluding big events), and up 42% versus last quarter.  The studio segment accounted for 40.2% of revenue in the quarter, with outside broadcast (OB) making up the remainder.  The company says it has achieved a compounded annual growth rate (CAGR) of 20% in the studio segment since 2006.


  • OB revenue in Q2 2012 was €25.6m, an increase of 85.3% versus last year (up 65.6% on a constant currency basis and excluding big events), and up 43% versus the previous quarter.  OB sales represented 59.8% of total sales in 2Q12.



Regional Results:

  • Revenue from the EMEA region was €23.5m (55% of total revenue), up 146.9% versus last year, and up 34% versus last quarter. 49.5% versus same period a year ago.  The company said that it had €3.5m of rental income in the quarter as a result of the Euro 2012 soccer championships.


  • Revenue from the Americas was €12.7m, up 61% versus last year and up 125% versus the previous quarter.  The company said that the US market continues to be driven by upgrades of existing to HD, and the building of new OB vans.

  •  APAC revenue for the quarter was €6.6m, an increase of 10.8% versus last year, and down 3% versus the previous quarter.    The company said that it has seen a recovery in the Japanese market and that majority of its APAC revenue in the quarter came from the OB segment.



1H 2012 Results:

Revenue for the first six months of 2012 was €72.86m, up 58% versus the first half of 2011.

Net profit for 1H 2012 was €24.6m up 69% versus the previous year.

Consolidated gross margin were 79.7%, up from 77.0% last year due to higher sales volume.

Operating expenses for the first six months increased by 17.1% due to increased headcount and non-recurring tax credit last year.

The operating margin for the first six months of 2012 was 50.4%, compared to 37.3% last year.



Major Capital Project to Consolidate Facilities in New Headquarters Building

The company said it has started the construction on a new €40m headquarters building in order to consolidate its operations, which are currently split between six separate sites. EVS expects this project to be complete during the first half of 2014.

The company said that following the sale of its existing facilities, as well as new subsidies, that the net cost of this project will be approximately €26m.

In order to finance this project, EVS entered into a roll-over straight loan for €14m in July 2012, but due to strong cash generation the company says it has so far financed €6.5m of this project without having to draw from this facility.



Outlook for 2H 2011

EVS said that with revenue of more than €120m already secured for 2012, its sales should grow by more than 25% this year, and that its EBIT profit should be about 40% higher than last year. However, company management says it remains cautious due to a difficult macroeconomic environment and competitive pressure. Because there are no major sporting events in 2013, the company will not benefit to the same extent from large rental contracts as it did in 2012.  Nevertheless, EVS says its new product introductions could partially offset the market slow-down that typically follows major sporting event years.  As a result EVS says that it expects 2013 to be a good “studio year” for the company, and that it will again benefit from major sporting events in 2014, primarily in emerging markets.


Calling the company’s results for the period “awesome,” EVS CFO Jacques Galloy said that Q2 2012 was the best sales quarter in the history of the company. “High market demand for our solutions resulted in a jump of 83% of 2Q12 sales, partially in relation with the Euro soccer 2012 but mainly due to market share gains. This growth is a fact in all our regions and market segments, despite a macro-economic environment that remained uncertain. Higher EBIT margin of 54.2% has been achieved thanks to higher sales leverage and good cost control, even though we continue to reinforce some of our teams in a selective way around the globe. This record first half year, combined with a high order book, anticipates a very strong 2012 year. Even though we expect the usual slow down that follows large sporting events, it is now clear that the second half of the year will be better than anticipated at the beginning of the year with full year sales growing by more than 25% while operating expenses should grow by around 13-16%, implying results growth around 40%. Last, we remain cautious for uneven year 2013, without big sporting events”.



Related Content:

Press Release: EVS Reports Record Quarter in Q2 2012, Increases Guidance

EVS Q2 2012 earnings presentation to equity analysts

Previous Quarter: EVS Reports Record Revenue and Order Book in Q1 2012

Previous Year: EVS Reports Q2 2011 Results


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