Production and playout video server specialist EVS announced strong revenue and profit for the third quarter of 2012, along with an industry-leading operating margin of almost 50 percent.
Revenue for the third quarter of 2012 was €39.5m, 32.3% higher than the same period a year ago, and down 8% 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 6.2% versus the third quarter of 2011.
Net profit in the quarter was €12.7m, up 27.4% versus the same period a year ago, and down 20% versus the previous quarter.
EBIT (earnings before interest and tax) in the quarter was €19.3m, up 38.6% compared to the same period last year, and down 17% versus last quarter. The corresponding operating margin for the quarter was 48.8%, up from 46.6% last year, and 54.2% last quarter.
Order intake in the third quarter was up 10.7% versus last year, but decelerated compared to the first six months of the year, due to the usual market slowdown following the big events of this summer. Through October 2012 orders in the OB segment were up 20.3%, while studio orders increased by 25.8% over the same period. Studio orders currently represent 65 of the company’s open order book.
Consolidated gross margins for the quarter were 79.4%, versus 81% last year, and 81.2% last quarter.
Operating expenses (R&D, S&A) increased by 18.8% in 3Q12, mainly due to the increased number of new employees, the amortization of a new ERP system, and new top management.
SG&A expenses were €6.17m, up 27% versus last year, and up 9% versus last quarter. R&D expenses were €5.65, up 11% versus last year, and up 10% versus last quarter,
- Studio revenue in the third quarter of 2012 was €20.3m, up 76% versus last year (up 36.4% on a constant currency basis and excluding big events), and up 18% versus last quarter. The studio segment accounted for 51% of revenue in the quarter, up from 40.2% last quarter, with outside broadcast (OB) making up the remainder.
- OB revenue in Q3 2012 was €19.m million up 4.6% versus last year (down 11.2% on a constant currency basis and excluding big events), and down 25% versus last quarter. OB sales represented 48.4% of total sales in 3Q12.
- Revenue from the EMEA region was €19.5m (49.3% of total revenue), up 16.29% versus last year, and down 17% versus last quarter. EMEA revenue was driven by the 2012 summer Olympics
- Revenue from the Americas was €11.4m, up 47.8% versus last year on a constant currency basis, and down 10% versus the previous quarter. EVS said this was the second record quarter in a row for Americas revenue, thanks to new innovations for OB customers, increased penetration into the studio segment, and an enlarged product portfolio.
- APAC revenue for the quarter was €8.6m, an increase of 37.7% versus last year, and an increase of 30% versus the previous quarter. The company attributed its improved performance in Asia to strong business momentum in Japan after unusual weaker 2011, as well as increased demand in South Korea, Malaysia, Australia and mainland China.
Revenue for the first nine months of 2012 was €112.3m, up 47.9% versus the first nine months of 2011. Through the first three quarters of 2012, EVS has already surpassed its total revenue for all of 2011.
Net profit for 1H 2012 was €37.4m up 52.3% versus the previous year.
Consolidated gross margin were 79.6%, up from 78.6% last year.
Operating expenses for the first nine months increased by 17.1% due to increased headcount, a new ERP system, and lower R&D tax credits. The operating margin for the first nine months of 2012 was 48.8%, compared to 46.6% last year.
Outlook for the full year 2012
EVS said that with revenue of approximately €134m 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.
The company says that although its current rate of business exceeds previously issued guidance, its management remains cautious in a difficult and competitive environment. Because of seasonality following major sporting events earlier in the year, the company expects its Q4 2012 results to be sequentially lower.
Although 2012 will be a record year for the company, EVS says it has limited visibility for 2013, and remains cautious for uneven year 2013, without major sporting events”.
New EVS CEO Joop Janssen, said he has “started to work on the future vision and strategy plan of the company, with a focus on realizing our growth potential towards the year 2016. The result of this inclusive process will be based on the strong current fundamentals that enabled EVS to become such a successful company. I plan to share this vision in early 2013”.
Company CFO Jacques Galloy, commented: “As expected, this third quarter is again very strong with sales growing by 32.3% to EUR 39.5 million. Summer games were really successful and brought EVS to a next level. Our business grew especially in studios (+76%) and in the Americas (+48% at constant exchange rate) over the quarter. Studio sales benefitted directly from dedicated rentals relating to the Summer games. Higher sales and good cost control led to a higher EBIT margin of 48.8% of sales in 3Q12 compared to 46.6% in 3Q11. Combining 9M12 sales and the order book, we had secured sales for around EUR 134 million at October 31. We confirm record FY12 sales shall exceed +25% growth, despite the expected usual Q4 slowdown following big summer sporting events. EBIT should grow by more than 40% this year.
Press Release: EVS Reports Third Quarter 2012 Results
Previous Year: EVS Reports Q3 2011 Results, Issues Strong Guidance
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