EVS Broadcast Equipment

Feb. 17, 2023 - The results of 2022 are entirely supporting the growth ambitions of EVS. All the fundamentals for topline performance are strong: EVS realizes a record-high order intake and achieves a historical revenue number, despite the increased delivery terms in 2022. EVS is able to demonstrate a strong net profit result and as a consequence, realizes a solid Earnings Per Share.

FY22 Highlights

• Record order intake at EUR 218,8 million, growing 46,5% YoY.
• Revenue performance in line with expectations at EUR 148,2 million, growing 7,7% vs. FY21 despite increased delivery terms announced early 2022 and despite reduced Big Event Rental (BER) activity. The growth is realized through strong growth in North America and in the MediaInfra solution.
• Controlled OPEX growth, in line with market expectations.
• Healthy net profit at EUR 31,3 million driven by a strong financial income performance and a one-off benefit in taxes, resulting in fully diluted earnings per share of EUR 2,29.

2H22 Highlights

• Record order intake of EUR 130,1 million (including Big Tech 2022 contract).
• Revenue for the second half of 2022 at EUR 80,5 million, growing 6,1% compared to the same period last year.
• Big Event Rental revenue at EUR 4,2 million, down EUR 4,9 million compared to 2H21.
• Revenue excluding Big Event Rental at EUR 76,3 million, growing EUR 9,5 million.
• Net profit amounts to EUR 15,9 million, leading to fully diluted earnings per share of EUR 1,14

Outlook 2023

• The important order intake of 2022 has considerably fueled the order book to be delivered in future periods. The total order book at the end of 2022 is of EUR 141,8 million, growing 122% compared to last year.
• The order book reserved for 2023 is estimated at EUR 85,9 million, growing 68,4% compared to beginning of the year 2022.
• Based on the order book and current market dynamics, the revenue guidance for the year 2023 is set at EUR 145-155 million.The revenue range demonstrates the ambition of EVS to continue the organic growth, in a year with no Big Event Rental revenue.
• With the growth engine launched, the focus in 2023 for EVS will be on profitable growth.
• EVS plans no further growth in team members nor do we expect an increase in our capital expenditure envelope.
• We expect to pay out dividends in 2023 in line with our dividend policy, namely a base dividend per share of EUR 1,10.

Comments

Serge Van Herck, CEO comments:

"I'm proud to say that 2022 was again quite a successful year for EVS. Our PlayForward strategy, as defined at the end of 2019, is starting to deliver the expected growth momentum.

In 2022, we had a second record year in a row, with strong growth in revenues, order intake, and team member size. We showed significant growth in North America, announced our largest contract ever in August with the "Big Tech 22 contract" worth over 50MioUSD, and successfully fought against inflation and component shortages throughout the year.

We feel we are winning market share in our Live Audience Business and protecting our position in the Live Service Providers markets. We successfully supported many of our customers in delivering the live TV production of major sports events in Asia, the Middle East, and North America.

The growth of our team is clearly unlocking our sustainable growth ambitions. Our strong employer branding has enabled us to successfully hire strong talent across the world. Our team member engagement survey shows again further improvements compared to the years before, resulting in our recent "Top Employer" certification.

We are making good progress in our vision of developing a strong ecosystem relying on our VIA platform as we are successfully moving from product to solution sales. Our introduction of Artificial Intelligence (AI) in XtraMotion is a revolution in the industry and it represents a major differentiator.

The Axon acquisition in May 2020 has translated into our Media Infrastructure revenue growth and positively contributes to our bottom line, demonstrating our capability to execute successfully large acquisitions. We have also launched our new ERP and upgraded our VIA Portal applications such as our customer ticketing system to support our long-term growth ambitions.

In line with our commitments, we continued to deliver strong dividends for our shareholders. Our sustainability strategy has started to deliver strong results aligned with our customer's expectations, and resulting in good ESG ratings like the Ecovadis Silver medal. We completed our first carbon footprint analysis: this will be a critical management tool for taking the right sustainability decisions in the future.

In conclusion, our PlayForward strategy, is clearly being appreciated by our customers and channel partners. This is helping us to get back into growth mode. While economic market conditions remain very challenging with high inflation,  component shortages and with the war in Ukraine, we feel that our customers increasingly appreciate the reliability, performance and innovative edge of our solutions and services.

Our ambition for the next years is to continue to deliver growth on both our top and bottomline. We are convinced that by focusing on cost control we will be able to deliver upon this promise."

Commenting on the results and the outlook, Veerle De Wit, CFO, said:

"Our 2022 revenue results clearly demonstrate our ability to achieve organic growth. Even despite increased delivery terms, announced early 2022, and with a declining Big Event Rental revenue, we are able to realize a strong top line performance. All indicators lead us to conclude that this organic growth is here to stay: the revenue performance, together with the strong secured revenue position for 2023, are a solid basis to continue our growth path.

Being a company in growth mode, means that the necessary resources need to be invested to support this growth: 2022 has been a year where we invested in additional resources, in new product developments, and in the back-bone of our operations. This backbone, a globally released new ERP system, has allowed us to optimize our processes and refine our cost control. As a result, the granularity of our reporting is improving, which has led to a decision to write off EUR 0,7 million of Bill of Material costs in 4Q22.

Our operational expenses grew in a controlled way. Control over our spending patterns remains an attention point for 2023, especially in the current volatile market.

Thanks to sound treasury management and tax benefits, we are able to generate a strong Net Profit worth EUR 31,3 million, driving a diluted Earnings Per Share of EUR 2,29.

Our balance sheet also remains healthy with a very low debt level and a sound cash position. Our cash position is declining throughout 2022, as a consequence of high dividends paid, and as a consequence on increased Net Working Capital requirements. The impact on Net Working Capital is temporary: the implementation of the new ERP system has created a delay in invoicing in the fourth quarter – the quarter with the highest volume – resulting in a large volume of receivables not due at the end of 2022. This is a temporary effect, that will normalize early in 2023, as soon as the invoices become due.

Based on the strong results for the year 2022, we are able to maintain our dividend policy defined earlier in 2022."

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