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ADB Group Reports Record Financial Results For 2008 |
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Corporate news announcement processed and transmitted by Hugin AS.
The issuer is solely responsible for the content of this
announcement.
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* Revenue grew 22.6 % over 2007, reaching US$ 360.8 million
* EBIT increased by 188%, to US$ 19.4 million
* More than 80% of Digital TV Equipment revenue from high-end
products
* Seven new customer wins in Digital TV Equipment segment
* Two significant new customers won for Software and Services
segment
* Good order backlog and visibility for 2009
Geneva - February 24, 2009, 06:00 a.m. (CET)
ADB Holdings SA (SIX: ADBN) reported today ADB Group's unaudited
consolidated financial results for the full year 2008.
Revenue for the full year 2008 reached US$ 360.8 million, increasing
22.6% compared to 2007 and ahead of the Group's expectations, driven
by strong demand in the last quarter across all business sectors.
Gross profit reached US$ 144.3 million or 40.0% of the revenue,
increasing 44.8% over 2007. This development was due to favorable
sales mix throughout the year, positive impact of foreign exchange,
favorable purchasing environment, and contribution of the Software
and Services segment. The efficiencies in the supply chain management
and successful cost reduction programs also contributed to the
outcome. Earnings Before Interest and Tax rose to US$ 19.4 million or
5.4% of revenue, compared to US$ 6.7 million or 2.3% of revenue in
2007, while cash EBIT was US$ 28.1 million. Net profit reached US$
14.9 million or 4.1% of revenue, increasing 172% compared to US$ 5.5
million or 1.9% of revenue. Fully diluted earnings per share
increased to USD 2.52, up 177% from US$ 0.91 a year earlier.
The Group cash generation from operating activities was strong all
along the entire year 2008, reaching US$ 88.2 million. After
investing US$ 12.4 million in share buy-back programs, the Group
recorded a net cash position of US$ 43.8 million at the end of 2008.
This compares to a net debt position of US$ 11.7 million at the end
of 2007.
The Group has also significantly reduced its working capital, closing
the year with net current assets of US$ 38.0 million ($22.0 million
in 2007), and a gross cash and cash reserves position of US$ 71.0
million ($30.8 million in 2007). Consequently, the Group enters the
year 2009 with a strong balance sheet.
Andrew Rybicki, Chairman and CEO of ADB Group, commented: "After
two-and-half years of hard work our Group has finally returned to the
level of performance which meets my minimum expectations. We fixed
all problems that have been degrading our results since mid-2006,
addressing both internal and external factors. We have overhauled the
ship completely and made it more resilient to such external factors
by diversifying our supplier base, decreasing certain dependencies
and significantly strengthening internal controls and the management.
We also benefited from adhering to our strategy of delivering
high-end products and advanced technology. Consequently, we have
firmly returned to a reasonable profitability level, supported by a
strong balance sheet. With almost two-thirds of our 2009 sales budget
covered by customers' orders and long-term commitments, we expect
this performance to continue and improve in 2009 and beyond."
Outlook for 2009
While ADB Group starts the year 2009 with a good visibility and order
backlog, it takes into account the challenging overall macroeconomic
situation and uncertain foreign exchange environment. The Group
observes that the macroeconomic environment may present factors, the
impact of which on the Group's business is at this point minimal, but
unpredictable in its developments. The Group therefore gives the
following guidance for the full year 2009:
Revenue is expected to continue growing in 2009. The gross margin is
likely to come in line with the Group long-term strategy and
expectations. Finally, the Group expects to maintain an acceptable
level of profitability.
Business segment performance
Digital TV Equipment segment
The Digital TV Equipment business segment yielded US$ 353.0 million
of revenue in 2008, growing 25.8% over 2007. It delivered segment
Earnings Before Interest and Tax of US$ 22.4 million, or 6.3% of
revenue, growing 155% over 2007.
High-definition TV (HDTV) product sales grew significantly,
accounting for 72% of the segment's revenue, up from 57% in 2007.
Personal Video Recorders (both high and standard definition)
represented 39% of the Digital TV Equipment revenue, compared to 26%
in 2007. The key contributing factors to this development are high
demand from pay-TV operators, generated by growing public awareness
and acceptance, as well as by increasing simplicity and reliability
of such devices' operation. This in turn is a clear result of more
efficient software solutions which the Group provides.
The year was strong for IPTV business, which constituted 27% of the
Group revenue and grew 36% over 2007. The main drivers were the
expansion of the customer base as well as the demand by recurring
customers. Terrestrial segment represented 18% of Group revenue,
compared to 12% in 2007. Terrestrial share of revenue grew
significantly due to increased product purchases in Northern Europe
and solid demand in Italy. Cable maintained its position as the
largest business of the Group, representing 39% of Group overall
revenue, driven by demand from both existing and new customers.
Satellite segment sales represented 13% of the Group revenue, all
generated by the Group's high-end products.
The efforts of Group's technology departments received three
significant recognitions during the year:
* In March the IPTV World Forum awarded ADB Group with "Best IPTV
Customer Premise Equipment Technology", for the second year in a
row;
* In May the Group obtained CableLabs' tru2way(TM) (formerly known
as OCAP) certification for its new set-back box model (thus far
the only one in the world);
* In September, the International Broadcast Conference recognized
ADB Group with "Best Customer Premises Technology Award".
Building on the achievement of the CableLabs' certification, ADB
Group signed in June a Memorandum of Understanding with the leading
US cable operators and major consumer electronics companies for the
committed development of tru2way, the new interactive technology
platform for the US cable market. In early January 2009, the Group
also announced its co-operation with Sony for developing products for
the US cable market.
Software and Services segment
The Software and Services business segment recorded revenue of US$
18.2 million, out of which US$ 9.0 million were intergroup sales. The
segment recorded a Loss Before Interest and Tax of US$ 3.0 million.
During the latter part of 2008, the Group re-aligned the Software and
Service segment's US operations to be more in line with its North
American strategy. The segment was profitable in the second half of
the year. Some of the key achievements for this segment were the
first commercial deployment of its Blu-ray software solution, the
acquisition of new customers for its MHP middleware as well as for
its newest product additions such as its push-VOD system. In
addition, the Software and Services segment played a key role in the
Group's win of TFN in Taiwan. The Group regards these successes as an
indication that the strategy of product portfolio development matches
the market demand.
The Software and Services segment remains a powerful facilitator in
building the Group overall business, and plays an important role in
the Group overall strategy. The Group intends to continue its
investment in this segment to develop a complete product and services
offering and targeting its self-sustainability and profitability.
Revenue analysis per region and customer base
During the full year of 2008, Europe represented 84.6% of the Group
revenue whilst Middle East and Africa accounted for 6.5%, Asia
Pacific 2.5% and the Americas 6.4%. Both West and East European
customers accounted for a large part of the growth, Eastern Europe
representing 20% of the Group's total revenue. The top 10 customers
of the Group grew strongly during the year, representing 84% of
revenue. No customer represented more than 22% of the Group's
revenue. Overall, Group's customer base continues to consist of a
well balanced mix of recurring and new customers.
Impact of discontinued operations
The New Initiatives business segment was discontinued during 2008,
and all its activities were closed down entirely before the end of
the year. When including the impact of the discontinued operations,
the Group's net profit was US$ 11.6 million, or 3.2% of revenue
compared to US$ 0.5 million or 0.2% of revenue in 2007. Earnings per
share were USD 1.96, compared to US$ 0.08 in 2007.
Results for the second half of 2008
Results for the second half of 2008 developed as follows, compared to
the previous semesters:
+-------------------------------------------------------------------+
| US$ millions | Second half | First half | Second half |
| | 2008 | 2008 | 2007 |
|-------------------+----------------+--------------+---------------|
| Revenue | 190.9 | 169.9 | 173.3 |
|-------------------+----------------+--------------+---------------|
| Gross profit | 76.6 | 67.7 | 59.4 |
|-------------------+----------------+--------------+---------------|
| Gross margin % | 40.1% | 39.9% | 34.3% |
|-------------------+----------------+--------------+---------------|
| EBIT | 8.3 | 11.1 | 7.5 |
|-------------------+----------------+--------------+---------------|
| EBIT margin % | 4.3% | 6.5% | 4.3% |
|-------------------+----------------+--------------+---------------|
| Net Profit | 7.3 | 7.6 | 6.8 |
|-------------------+----------------+--------------+---------------|
| Net Profit margin | 3.8% | 4.5% | 3.9% |
| % | | | |
+-------------------------------------------------------------------+
Accruals made for the non-recurring items worth in aggregate US$ 6.1
million primarily impacted the second half of the year 2008.
Share buy-back
During year 2008, the Group purchased shares under two programs. The
first program started in February 2008 with the objective of
purchasing less than 2% of the total outstanding shares. The second
program started in September 2008, with the intention to acquire a
number of shares up to the permissible legal limit (max. 10% of all
outstanding shares), before the end of March 2009. The total number
of shares purchased under both programs during 2008 was 413,423
shares at the average purchase price of CHF 31.66 per share. The
second program was successfully completed at the end of January 2009.
Consequently, the Group owns today a total of 617,589 of its
registered shares, or 9.98% of its issued and outstanding share
capital.
Note:
Following the decision to abandon the New Initiatives business
segment, announced at the beginning of year 2008, and the application
of IFRS 5: "Non-current Assets Held for Sale and Discontinued
Operations", financial data is reported only in respect of the
continuing operations of the Group unless otherwise indicated.
Analysis and comparison to previous periods are also made with
reference to the continuing operations only.
Conference Call
The management of ADB Group will hold a conference call to discuss
2008 financial results and outlook for the year 2009, today at 15:00
CET.
To connect to this conference, participants will be required to dial:
+41 (0) 44 580 6403.
To ask a question, participants will be required to dial: 01
The main financial statements for 2008 are attached to this press
release. This press release and further information on ADB Group can
be found on the Group's website at www.adbholdings.com
For further information please contact:
Tina Nyfors
EVP, Corporate Development
Telephone: +41 22 592 8433
t.nyfors@adbglobal.com
-end-
About ADB Group (SIX: ADBN)
ADB Group (www.adbholdings.com) was founded in 1995 and is a leading
developer of solutions required to view and interact with digital TV
broadcast through cable, satellite, terrestrial and IP networks. The
Group primarily sells consumer premise devices, including set-top
boxes, with over 12 million units deployed since 1997. The
development and sales of the Group's products and services are
conducted in three main operating segments: the Digital TV Equipment
segment, mainly operated by ADB (www.adbglobal.com), Software and
Services segment, encompassing Osmosys (www.osmosys.tv) and Vidiom
Systems (www.vidiom.com).
This press release contains forward-looking statements. You are
cautioned that any such forward-looking statements are not guarantees
of future performance and involve risks and uncertainties, and that
actual results may differ materially from those in the
forward-looking statements as a result of various factors, among
which:
* future developments of the world digital TV market, in particular
the future demand for digital TV products in the key markets and
from key customers served by our Group;
* pricing pressures, competitive market situation;
* our and the industry's capability to successfully and timely
innovate and develop challenging technology, and our capability
to hire and retain high-level employees;
* changes in the exchange rates between the US$ and the main other
operating currencies of the Group, including the Euro and the
Polish Zloty;
* our ability in an intensive competitive environment, to continue
securing orders from existing or new customers and to achieve
our pricing expectations for volume supplies of new products in
whose development we have or are currently investing;
* the ability of our suppliers to meet our demands for supplies,
qualitatively or quantitatively, and to offer competitive
pricing;
* our gross margin could vary significantly from expectations based
on changes in revenue levels, product mix and pricing, changes in
unit costs, and the timing and execution of shipments ramp-ups;
* changes in the economic, tax, social or political environment,
including import and other duties, military conflict, terrorist
activities, as well as natural events such as severe weather,
health risks, epidemics or earthquakes in the countries in which
we, our key customers and our suppliers operate;
* our ability to obtain required licenses on third-party
intellectual property on reasonable terms and conditions, the
impact of potential claims by third parties involving
intellectual property rights relating to our business, and the
outcome of litigation;
* the results of actions by our competitors, including new product
offerings and our ability to react thereto;
Advanced Digital Broadcast Holdings SA undertakes no obligation to
publicly update or revise any forward-looking statements. Advanced
Digital Broadcast Holdings SA reserves the right to amend the
information at any time without prior notice.
The information contained in this press release may not be considered
as being a substitute for economic, legal, tax or other advice and
you are cautioned to base investment decisions or other decisions on
the content of this release. You are recommended to consult your
investment advisers or other advisers prior to making any decision.
This press release is not an offer of securities for sale or a
solicitation to invest in Advanced Digital Broadcast Holdings SA
securities. In particular, it is not an offer of securities for sale
in the United States of America, its territories and possessions.
Securities may not be offered or sold in the United States absent
registration or an exemption from registration under the U.S.
Securities Act of 1933, as amended. Advanced Digital Broadcast
Holdings S.A. does not intend to register its securities in the
United States of America.
ADVANCED DIGITAL BROADCAST HOLDINGS S.A. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
YEARS ENDED 31 DECEMBER 2008 AND 2007
(Expressed in United States Dollars)
2008 2007*
$ $
Revenue 360,816,542 294,296,719
Cost of sales (216,507,049) (194,650,920)
Gross profit 144,309,493 99,645,799
Research and
development
expenses (67,404,993) (45,869,895)
Selling,
general and
administrative
expenses (52,529,445) (43,948,748)
Other income 433,693 4,830,650
Other expenses (5,429,943) (7,934,038)
Finance income 4,868,573 3,647,751
Finance costs (6,231,115) (4,627,018)
Profit before
tax 18,016,263 5,744,501
Income tax
expense (3,098,098) (256,760)
Profit for the
year from
continuing
operations 14,918,165 5,487,741
Loss for the
year from
discontinued
operations (3,329,669) (5,034,298)
Profit for the
year 11,588,496 453,443
Earnings per
share
From
continuing and
discontinued
operations:
Basic 1.96 0.08
Diluted 1.96 0.08
From
continuing
operations:
Basic 2.53 0.91
Diluted 2.52 0.91
* Re-presented to reflect the requirements of IFRS 5: "Non-current
Assets Held for Sale and Discontinued Operations"
ADVANCED DIGITAL BROADCAST HOLDINGS S.A. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
31 DECEMBER 2008 AND 2007
(Expressed in United States Dollars)
ASSETS 2008 2007*
$ $
Non-current assets
Goodwill 15,906,695 18,030,051
Intangible assets 18,562,158 17,026,839
Property and
equipment 11,429,514 13,676,461
Deferred income
tax assets 3,281,531 3,323,146
Long-term trade
receivables 8,301,209 14,803,689
Other 1,110,577 1,123,006
Total non-current
assets 58,591,684 67,983,192
Current assets
Inventories, net 26,006,638 32,594,941
Other current
assets 6,400,377 7,897,588
Trade receivables,
net 60,631,162 100,871,902
Available-for-sale
investments 9,599,494 2,023,743
Cash and cash
equivalents 61,365,592 28,785,049
Total current
assets 164,003,263 172,173,223
Total assets 222,594,947 240,156,415
EQUITY AND
LIABILITIES
Capital and
reserves
Share capital 1,326,181 1,326,181
Share premium 76,551,414 76,551,414
Share-based
compensation
reserve 3,342,232 1,674,280
Other reserves (2,994,029) (1,563,899)
Retained earnings 24,783,800 13,195,304
Treasury shares (21,404,311) (8,975,137)
Total equity 81,605,287 82,208,143
Non-current
liabilities
Long-term bank
loans 9,529,943 2,720,156
Retirement benefit
obligations 4,171,832 4,040,897
Deferred income
tax liabilities 1,207,720 732,307
Long-term payables 78,251 291,399
Total non-current
liabilities 14,987,746 7,784,759
Current
liabilities
Bank loans
(secured) 14,031,639 24,770,040
Bank loans
(unsecured) - 14,892,000
Current portion of
long-term bank
loans 3,615,926 151,406
Trade and other
payables 72,924,994 55,406,464
Accrued expenses 26,491,813 47,403,048
Provisions 3,477,870 1,924,000
Taxes payable 1,907,065 221,363
Other current
liabilities 3,552,607 5,395,192
Total current
liabilities 126,001,914 150,163,513
Total liabilities 140,989,660 157,948,272
Total equity and
liabilities 222,594,947 240,156,415
* Re-presented to reflect the reclassification of share-based
payments compensation to share-based compensation reserve
ADVANCED DIGITAL BROADCAST HOLDINGS S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED 31 DECEMBER 2008 AND 2007
(Expressed in United States Dollars)
2008 2007*
$ $
CASH FLOWS FROM
OPERATING
ACTIVITIES
From continuing
operations:
Profit for the
year 14,918,165 5,487,741
Adjustments for:
Income tax expense 3,098,098 256,760
Depreciation 2,980,426 3,354,312
Amortisation 17,985,155 15,907,783
Finance costs 6,231,115 4,627,018
Finance income (4,868,573) (3,647,751)
Share-based
payment expense 1,667,952 607,311
Provision for
inventory 3,394,698 1,862,520
Others 279,972 140,079
Profit before
working capital
changes 45,687,008 28,595,773
Working capital
changes:
Trade and other
receivables 45,119,707 (22,078,430)
Inventories 3,185,137 4,535,980
Trade and other
payables 17,609,588 (22,560,282)
Accrued expenses (19,822,356) (11,061,658)
Provisions 1,553,870 784,000
Other current
liabilities (1,726,005) 3,078,368
Others 2,509,708 2,291,398
Retirement benefit
obligations 448,645 487,758
Cash generated by
(used in)
operating
activities 94,565,302 (15,927,093)
Interest paid (4,084,975) (4,579,122)
Tax paid (744,066) (2,335,702)
Net cash provided
by (used in)
operating
activities 89,736,261 (22,841,917)
Net cash used in
operating
activities from
discontinued
operations (1,488,005) (4,287,528)
Net cash provided
by (used in)
operating
activities 88,248,256 (27,129,445)
CASH FLOWS FROM
INVESTING
ACTIVITIES
From continuing
operations:
Acquisitions of
property and
equipment (2,469,952) (2,922,793)
Proceeds from sale
of property and
equipment 369,019 536,874
Payments for
intangible assets (20,863,032) (18,672,292)
Proceeds from sale
of intangible
assets 656,756 -
(Purchase) sale of
available-for-sale
investments (7,672,714) 16,132,238
Interest received 2,761,595 3,303,970
Net cash used
in investing
activities (27,218,328) (1,622,003)
(Continued)
ADVANCED DIGITAL BROADCAST HOLDINGS S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED 31 DECEMBER 2008 AND 2007
(Expressed in United States Dollars)
2008 2007*
$ $
CASH FLOWS
FROM
INVESTING
ACTIVITIES
(CONTINUED)
Net cash
provided by
(used in)
investing
activities
from
discontinued
operations 139,901 (940,619)
Net cash
used in
investing
activities (27,078,427) (2,562,622)
CASH FLOWS
FROM
FINANCING
ACTIVITIES
From
continuing
operations:
(Decrease)
increase in
bank loans (15,356,094) 4,398,347
Decrease in
loans to
shareholders - 7,966,201
Share
purchase (12,429,174) (2,588,265)
Net cash
(used in)
provided by
financing
activities (27,785,268) 9,776,283
Net cash
provided by
financing
activities
from
discontinued
operations - -
Net cash
(used in)
provided by
financing
activities (27,785,268) 9,776,283
TRANSLATION
ADJUSTMENT ON
FOREIGN CURRENCY (804,018) (826,384)
NET INCREASE
(DECREASE) IN
CASH 32,580,543 (20,742,168)
CASH AND CASH
EQUIVALENTS,
BEGINNING OF
YEAR 28,785,049 49,527,217
CASH AND CASH
EQUIVALENTS, END
OF YEAR 61,365,592 28,785,049
ANALYSIS OF
BALANCES OF CASH
AND CASH
EQUIVALENTS
Time deposits 26,415,356 10,172,074
Cash and bank
balances 34,950,236 18,612,975
61,365,592 28,785,049
* Re-presented to reflect the requirements of IFRS 5: "Non-current
Assets Held for Sale and Discontinued Operations"
Business Segments
Software
and Digital TV
Year 2008 Services Equipment Eliminations Consolidated
$ $ $ $
REVENUE
External
sales 9,219,715 351,596,827 - 360,816,542
Inter-segment
sales 8,981,284 1,386,217 (10,367,501 ) -
Total revenue 18,200,999 352,983,044 (10,367,501 ) 360,816,542
RESULT
Segment
result (3,015,658 ) 22,394,463 - 19,378,805
Finance
income 4,868,573
Finance costs (6,231,115 )
Income tax
expense (3,098,098 )
Profit for
the year from
continuing
operations 14,918,165
Loss for the
year from
discontinued
operations (3,329,669 )
Profit for
the year 11,588,496
BALANCE SHEET
Segment
assets 25,607,362 135,607,362 - 161,214,724
Unallocated
corporate
assets* 61,380,223
Consolidated
total assets 222,594,947
Segment
liabilities 3,281,583 108,538,396 - 111,819,979
Unallocated
corporate
liabilities* 29,169,681
Consolidated
total
liabilities 140,989,660
OTHER
INFORMATION
Capital
expenditure 3,708,090 19,624,894 - 23,332,984
Depreciation 507,945 2,472,481 - 2,980,426
Amortisation
of intangible
assets 3,035,495 14,949,660 - 17,985,155
* Includes assets ($28,966) and liabilities ($85,108) from
discontinued operations
Accruals made for certain non-recurring items worth in aggregate US$
6.1 million were expensed in the Consolidated Income Statement of
2008. All of these non-recurring losses relate to the Digital TV
Equipment business segment.
Software
and Digital TV
Year 2007** Services Equipment Eliminations Consolidated
$ $ $ $
REVENUE
External
sales 16,294,359 278,002,360 - 294,296,719
Inter-segment
sales 6,477,190 2,527,541 (9,004,731 ) -
Total revenue 22,771,549 280,529,901 (9,004,731 ) 294,296,719
RESULT
Segment
result (2,049,056 ) 8,772,824 - 6,723,768
Finance
income 3,647,751
Finance costs (4,627,018 )
Income tax
expense (256,760 )
Profit for
the year from
continuing
operations 5,487,741
Loss for the
year from
discontinued
operations (5,034,298 )
Profit for
the year 453,443
BALANCE SHEET
Segment
assets 27,277,841 181,211,820 (129,306 ) 208,360,355
Unallocated
corporate
assets* 31,796,060
Consolidated
total assets 240,156,415
Segment
liabilities 3,448,947 110,594,092 (129,306 ) 113,913,733
Unallocated
corporate
liabilities* 44,034,539
Consolidated
total
liabilities 157,948,272
OTHER
INFORMATION
Capital
expenditure 5,151,508 16,443,577 - 21,595,085
Depreciation 509,831 2,844,481 - 3,354,312
Amortisation
of intangible
assets 3,756,930 12,150,853 - 15,907,783
* Includes assets ($3,098,379) and liabilities ($1,279,575) from
discontinued operations
**Re-presented to reflect the requirements of IFRS 5: "Non-current
Assets Held for Sale and Discontinued Operations"
Expenses for certain non-recurring items worth in aggregate $12.0
million were included in the Consolidated Income Statement of 2007.
All of these non-recurring losses relate to the Digital TV Equipment
business segment.
--- End of Message ---
ADB Holdings S.A.
Avenue de Tournay 7 Chambesy Switzerland
ISIN:
CH0021194664; Index: SPI, SPIEX, SSCI;
Listed: Main Market in SIX Swiss Exchange;
Copyright © Hugin AS 2009. All rights reserved.
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