EVS Q2 2014 Revenue Increases by 19.4 Percent, In Line with Expectations

Posted by Joe Zaller
Sep 08 2014

Production and playout video server specialist EVS reported revenue of €35.6 million, an increase of 19.4% versus the same period last year, and an increase of 21.5% versus the previous quarter.  Excluding the effect of exchange rate movements and event rentals, the Company’s Q2 2014 revenue increased 9.0% versus the year earlier period.

Q2 2014 results were in-line with the Company’s expectations for the quarter.  Management cited strong performance in the Americas in Q2 2014 (compared to weak Q2 2013) and the company’s involvement in delivering the recent World Cup.  This more than offset a significant drop in revenue from the Asia Pacific region.

Net profit for the second quarter was €8.9m.  This represents a 28.0% growth versus the same period a year ago and an increase of 25.4% compared to the preceding quarter.

EBIT (Earnings before Interest and Tax) for the quarter was €12.9m, up 33.5% compared to the year earlier period and up 29.0% versus the first quarter of 2014.

 

Geographic Revenue:

  • Revenue from EMEA in the second quarter of 2014 was €17.7m, up 1.8% last year. Sales in EMEA accounted for 50% of group revenue.

 

  • Americas’ revenue for the second quarter of 2014 was €8.6m, up 170.8% versus last year. Americas accounted for 24.4% of group revenue, up significantly from 10.8% last year.

 

  • Q2 2014 revenue from the APAC region was €5.1m, down 41.4% versus last year. APAC accounted for 14.2% of total revenue in the quarter, down significantly from the contribution of 29.0% last year.

 

 

Segment Revenue:

  • Revenue from sports-related applications during the second quarter of 2014 was €23.2m, or 65.2% of total group sales, an increase of 20.8% versus last year.

 

  • Revenue from Entertainment, News & Media (ENM) during the quarter was €8.3m, or 23.2% of total group sales, down -17.8% compared to last year.

 

 

System & Service Revenue:

  • Systems revenue in the quarter was €33.4m, or 93.7% of total revenue, up 19.6% versus the same period last year

 

  • Services revenue was €2.2m, or 6.2% of total revenue, up 15.8% versus the year ago period.  Services revenue includes advices, installations, project management, training, maintenance, and distant support

 

 

Operating margin for the quarter was 36.2%, an improvement over both the 32.4% from last year and the 34.1% operating margin during the first quarter of the year.

Gross margins for the quarter were 75.0%, a slight decrease from the 76.3% gross margins during the Q2 2013 and flat versus the 74.9% gross margin level from last quarter.

Operating expenses grew by 6.8% versus the same period a year ago.  Management attributed the increase to additional hiring and incremental costs including investments in DYVI Live/SVS.

R&D expenses in the quarter were €6.2m, or 17.6% of revenue, up 11% from the same period last year, and down 0.5% versus last quarter.

Selling and administrative expenses in the quarter were €6.8m, or 19% of revenue, up 3.1% versus the same period a year ago, and up 25.6% versus the previous quarter.

The company ended the quarter with 503 employees, up from 497 at the end of last quarter, and up 5.4% from the 477 employees at the end of Q2 2013.

 

 

Order Book:
The order book stood at €40.9m as of August 27, 2014.  This compares to €35.4m on the same date one year ago.  All of the €40.9m order book will invoice during 2014.  This includes €7.7m for big event rentals for the 2014 World Cup and other smaller sporting events.  In addition, the Company has already secured €13m worth of orders for invoicing during 2015.

 

 

Outlook:

Based on signs of a moderate slowdown in the live production server market, EVS is now expecting low single digit revenue growth in 2014 versus 2013.  Management also indicated an expected 10-13% operating expense growth related to investments in new technologies.

“In the current challenging environment, we have been able to protect our market shares in our 4 target markets and deliver solid results in the second quarter.” said EVS CEO Joop Janssen. “At the upcoming IBC tradeshow in Amsterdam, we will launch new features and solutions, which will help us to consolidate our leading position in Sports and ENM. We are confident that our strategy is right and that our continued efforts will start paying off when the market situation improves.”

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Related Content:

Press Release: EVS Reports Second Quarter 2014 Results

EVS Q2 2014 Earnings Call Presentation

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