2018 Annual Results. March 28, 2019

Transcription

1 2018 Annual Results March 28, 2019

2 Disclaimer This presentation does not constitute or form part of and should not be construed as any offer for sale of or solicitation of any offer to buy any securities of ATEME, nor should it, or any part of it, form the basis of or be relied on in connection with any contract or commitment whatsoever concerning ATEME s assets, activities or shares. All statements other than historical facts included in this presentation, including without limitations, those regarding ATEME s position, business strategy, plans and objectives are forward-looking statements. The forward-looking statements included herein are for illustrative purposes only and are based on management s current views and assumptions. Such forward-looking statements involve known and unknown risks. For illustrative purposes only, such risks include but are not limited to impact of external events on customers and suppliers; the effects of competing technologies competition generally in main markets; profitability of the expansion strategy; litigation; ability to establish and maintain strategic relationships in major businesses; and the effect of future acquisitions and investments. ATEME expressly disclaims any obligation or undertaking to update or revise any projections, forecasts or estimates contained in this presentation to reflect any change in events, conditions, assumptions or circumstances on which any such statements are based, unless so required by applicable law. These materials are supplied to you solely for your information and may not be copied or distributed to any other person (whether in or outside your organization) or published, in whole or in part, for any purpose. 2

3 Presenters Michel Artières Founder & Chief Executive Officer Degree in Engineering from Supelec, Paris, with a specialization in signal processing and telecommunications Fabrice Sana Chief Financial Officer Degrees from the European Business School and ESSEC 3

4 1.ATEME 2. Market Trends 3. Financial Performance 4. Strategy 4

5 ATEME Factsheet Public since M in 2018 (+16%) ATEME designs software video compression solutions to enable innovative live or on demand video delivery services while preserving picture quality. 250 people in 18 countries 700 clients in 100 countries Strategic partnerships 36 Patents 5

6 A Complete Offer for Video Flow Contribution Primary Distribution Distribution Event Content Provider TV Network Service Provider (Satellite, Cable, Telco) Video Headend CDN OTT / Multiscreen Subscriber Kyrion encoders in the trucks and decoders at the TV station TITAN is a virtualized Video Headend software covering all Live and File needs 6

7 1. ATEME 2.Market Trends 3. Financial Performance 4. Strategy 7

8 Consolidation Clearing the Way for ATEME Sept 2015 Sept 2015 Dec 2015 Jan 2018 Oct 2018 acquires acquires acquires acquires 51% of acquires 100% of SPVTG $ M (5-7x Sales) $125M (4x Sales) 69M (1x Sales) and becomes and becomes US service providers running away from their competitor (Amazon Prime Video) Envivio partners are Ericsson competitors Redundant employees (Sales worldwide) Products end of life confusing clients Redundant employees (Rennes R&D) Essentially down from 7 to 4 Players Ideal Scenario for ATEME 8

9 Units - in millions Growing Demand For UHD TV 4K TV +38% CAGR By 2022, nearly two-thirds (62%) of connected flat panel TVs will support 4K. Connected 4K TV sets K STB 31 million units in 2017 Growing number of 4K Set-Top Boxes Source : CISCO VNI global IP traffic forecast Source : Dataxis There are now 142 channels and services transmitting in 4K worldwide of which: 85 coming from IPTV-based services (60%) ; 55 coming from satellite (39%) ; 2 coming from terrestrial channels that are making experimental broadcasts (1%). Source : Eutelsat Report, Oct

10 Number of subscribers in millions Exabytes per month UHD Content Impacts IP Video Growth Netflix Subscribers Worldwide UHD IP video will account for 22% of global IP video traffic by Netflix is the key service driving UHD SVoD spend. Depending on the country, around 20 percent to 30 percent of subscribers have opted for the UHD premium tier. +29% CAGR Source : Statista Source : CISCO VNI global IP traffic forecast The amount of traffic crossing the global internet will increase by 153% to around 356 exabytes a month by 2022, with video accounting for 82% of traffic. More traffic will cross the internet in 2022, than in the entire span of combined. And in five years, 60% of the world s population will be using the internet. 10

11 ATEME supports all HDR compression standards HDR is included in over half of all 4K UHD TVs sold worldwide in 2018 Realtek, Mediatek et Hisilicon are semiconductor manufacturers for TVs, set-top boxes, etc. 11

12 ATEME supports all HDR compression standards 12

13 Latest Tech News / Others Trends We Monitor Dec. 1 st, 2018 : NHK launched the first 8K channel in the world with a broadcast of 2001: A Space Odyssey. NHK to broadcast 2020 Olympic Games in 8K. Numerous Content/Service Providers launch 5G trial 5G promises higher quality/faster delivery of entertainment May accelerate cord-cutting effect and enable more app-type bundles to succeed 13

14 1. ATEME 2. Market Trends 3.Financial Performance 4. Strategy 14

15 Revenues Evolution by Quarter 56.5m +16.2% in m 37.5m % at constant exchange rate 17.9m 20.6m 24.8m 28.6m m Q1 Q2 Q3 Q4 IPO 15

16 2018 Annual Revenue Split and Growth by Region 2018 REVENUE SPLIT BY REGION 2018 REVENUE GROWTH BY REGION LATAM 12% APAC 19% EMEA 37% USA/CAN +18% +21% +xx% at at constant exchange rate EMEA +11% USA/Canada 33% LATAM -17% -14% -xx% at constant exchange rate APAC +70% +73% +xx% at constant exchange rate 16

17 2018 P&L Consolidated data IFRS in thousands of euros 2017 H H Revenue 48,599 23,236 33,251 56,487 Gross profit 29,098 10,454 17,401 27,855 Gross margin 59.9% 45.0% 52.3% 49.3% R&D expenses (6,158) (3,930) (3,316) (7,246) Sales & marketing expenses (2) (15,633) (8,524) (8,221) (16,745) Other G&A expenses (2) (2,416) (1,270) (1,272) (2,542) Operating profit 4,890 (3,269) 4,592 1,323 Operating margin 10.1% % 2.3% Financial loss (200) (77) (62) (139) Financial profit Exchange effect (1,325) Tax income 453 (95) 31 (64) Lower gross margin due to : product mix included substantial sales of hardware significant investment in 2018 in the customer services team Impact of currency effect Operating profit impacted by increase in operating expenses : Increase in R&D investments Continued S&M international expansion Rise in total headcount from 220 to 250 Net profit 3,819 (3,192) 4,898 1,706 Net margin 7.9% % 3.0% 17

18 Evolution Since the IPO m 11.9m 12.9m 12.3m -0.9m -1.1m -2.5m 0.0m m 15.0m 3.6m -1.6m m 20.9m 3.5m 0.3m m 23.2m 4.9m -3.2m IPO July Phase 1: 30 hires in 6 months (opened Rennes R&D office) Phase 2: Design of TITAN 4 and reorganization of international offices Phase 3: Commercia l launch Growth acceleration in H2 2016: a 2 years ROI since the IPO 50 hires in 12 months (R&D in France, Support engineers and Sales in all 4 regions) Revenues Net Loss/Profit 18

19 LIABILITIES ASSETS 2018/12/31 Balance Sheet Consolidated data - IFRS in thousands of euros 2017/12/ /12/31 Non-current assets 6,364 (1) 6,757 Current assets 32,591 37,518 o/w stocks 2,660 3,625 o/w trade receivables 23,538 (2) 21,865 o/w cash and cash equivalents 2,451 6,254 38,775 44,275 Shareholders equity 18,791 (3) 21,537 Non-current liabilities 4,787 5,629 o/w non-current financial debt 4,222 1,444 Current liabilities 15,197 17,108 o/w current financial debt 1,622 1,444 o/w trade payables 6,722 8,738 38,775 44,275 (1) vs 6,310 k published due to 180 k of depreciation for trade receivables (IFRS 9) (2) vs 23,718 k published due to 54 k of deferred tax on depreciation for trade receivables (IFRS 9) (3) vs 18,917 k published due to 126 k (depreciation for trade receivables - deferred tax on depreciation for trade receivable) 19

20 2018 FCF Consolidated data - IFRS in thousands of euros 2017/12/ /12/31 Net Profit (Loss) 3,819 1,706 (-) Elimination of non-cash elements (1,937) (2,872) Gross cash flow 5,756 4,487 (-) Change in Working Capital 6,607 (892) Cash flow from operations (851) 5,379 Strong performance of cash flow from operations : 5.4m Cash flow from investing activities (1,756) (2,915) w/o new tangible and intangible fixed assets (1,110) (2,294) w/o capitalisation of development costs (607) (534) Cash flow from financing activities 979 1,253 w/o exercice of stock-options w/o new loans and contingent advances 1,700 2,094 w/o interest expense (14) (75) w/o repayment of loans and contingent advances (848) (1,363) w/o repayment of financial leases (241) (337) w/o other financial flows (including factoring) (523) 136 Acquisition of tangible assets ( 2.1m) for labs and demos New mid-term loans on H2 Currency effect (27) 50 Net Change in Cash (1,656) 3,767 Opening Cash position 4,094 2,439 Closing Cash position 2,439 6,206 Cash position end of Dec : 6.2m 20

21 1. ATEME 2. Market Trends 3. Financial Performance 4.Strategy 21

22 Content Providers Line-Up for Direct-To-Consumer OTT Services NEW OTT Services Announced to be launched in the Coming Months. More to Come Going direct to consumer = Less Intermediate in Distribution chain = Increased Revenue Access to end-user consumption may lead to targeted advertisement, hence even more revenue promises Consequence on ATEME = Growth opportunities, these companies invest on Video Solutions 22

23 Prepare expanding to CPs and SPs OTT delivery Primary Distribution Traditional Distribution Most of ATEME business today Content Provider TV Network Service Provider (Satellite, Cable, Telco) Video Headend 2 Enable CDN new decentralized distribution workflow for SPs Subscriber 1 Enable CPs direct access to consumers CDN OTT 23

24 2 Year Plan 2019 Win the Video Head End market and prepare expanding to CPs and SPs OTT delivery Multi-year contracts leading to increasing predictability in topline growth (+20%), with contribution from all 4 regions Gross Margin expected up (shift to software) R&D investments to develop innovative Network solutions, but will not grow as fast as the topline S&M investments to keep developing our international 2020 coverage, but will not grow as fast as the topline Increasing operating profit every year 24

25 Investor Relations Shareholder structure Number of shares: 10,434,116 Potential dilution : 219,510 Others < 5% 70% Concert Artières 12% Xavier Niel 6% Stock Price ( ) Volume ( ) 20, , , Market data ISIN: FR Ticker: ATEME Stock price: (as of March 25, 2019) Market cap: 108.5m (as of March 25, 2019) Keren Finance 6% Dorval AM 6% 14,00 12,00 10, Next investor date May 7, First Quarter Revenues June 6, 2019 Annual Shareholders Meeting July 18, Half-Year Revenues Source : company, as of February 28, ,00 0 Sept. 26, Half-Year Results Liquidity contract: Gilbert Dupont Nov. 5, Third Quarter Revenues 25