2018 First Half Results. September 27, 2018

Transcription

1 2018 First Half Results September 27, 2018

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 R&D in Image Processing and Compression for the French Ministry of Defense Fabrice Sana Chief Financial Officer Degrees from the European Business School and ESSEC Management Control Director for Karavel Finance Controller for Alstom Manager at Arthur Andersen / BearingPoint 3

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

5 ATEME Factsheet Public since M in 2017 (+30%) ATEME designs software video compression solutions to enable innovative live or on demand video delivery services while preserving picture quality. 260 people in 18 countries 700 clients in 100 countries Strategic partnerships 22 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 Growing Demand For UHD TV Western Europe UHD TV household forecast UHD TV +32% by

9 Growing number of 4K Set-Top Boxes 4K STB global installed base reached 31 million units in 2017 Source : Dataxis 9

10 HEVC Patent Pools Reacting to AV1 Release 10

11 Consolidation Clearing the Way for ATEME Sept 2015 Sept 2015 Dec 2015 Jan 2018 acquires 51% of acquires acquires acquires and becomes $ M (5-7x Sales) $125M (4x Sales) 69M (1x Sales) 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 11

12 1. ATEME 2. Market Trends 3.Financial Performance 4. Strategy 12

13 Revenues Evolution by Quarter 48.6m 37.5m m 20.6m 24.8m 28.6m H : 23.2m +11% in H m % at constant exchange rate Q1 Q2 Q3 Q4 IPO 13

14 H Revenue Split and Growth by Region H REVENUE SPLIT BY REGION H REVENUE GROWTH BY REGION LATAM 13% APAC 12% USA/Canada 37% EMEA 38% USA/CAN +40% +52% at constant exchange rate Ongoing robust demand in the region should continue to underpin growth LATAM -15% -5% at constant exchange rate EMEA +12% The strengthening of our presence in selected key countries is delivering results The ramp-up of TITAN software deployment with leading European service providers is set to drive growth over the coming quarters APAC -16% -7% at constant exchange rate High base effect (+175% growth in H vs H1 2016) High base effect (+147% growth in H vs H1 2016) 14

15 H P&L Consolidated data IFRS in thousands of euros H H % change Revenue 20,937 23, % Gross profit 12,483 10,454-16% Gross margin 59.6% 45.0% R&D expenses (2,919) (3,930) +35% Sales & marketing expenses (7,310) (8,524) +17% Other G&A expenses (1,124) (1,270) +13% Operating profit 1,130 (3,269) ns Financial loss (103) (77) ns Financial profit 31 9 ns Exchange effect (800) 240 ns Tax - (95) ns Lower gross margin due to : product mix included substantial sales of hardware significant investment in 2017 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 260 Net profit 258 (3,192) ns k vs K published figures after 188 K revenue deferred over 12 months following auditors review 15

16 Evolution Since the IPO m 20.9m 27.7m 23.2m 11.9m 12.9m 12.3m 16.3m 15.0m -0.9m -1.1m -2.5m 0.0m -1.6m 3.6m 0.3m 3.5m -3.3m 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: Commercial 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 16

17 LIABILITIES ASSETS 2018/06/30 Balance Sheet Consolidated data - IFRS in thousands of euros 2017/12/ /06/30 Non-current assets 6,310 6,580 Current assets 32,591 34,213 o/w stocks 2,660 3,279 o/w trade receivables 23,718 18,761 o/w cash and cash equivalents 2,451 6,957 38,901 40,794 Shareholders equity 18,917 16,738 Non-current liabilities 4,787 3,992 o/w non-current financial debt 4,222 3,537 Current liabilities 15,197 20,064 o/w current financial debt 1,622 1,505 o/w trade payables 6,722 11,718 38,901 40,794 17

18 H FCF Consolidated data - IFRS in thousands of euros 2017/06/ /06/30 Net Profit (Loss) 258 (3,192) (-) Elimination of non-cash elements (1,189) 1,441 Gross cash flow 1,447 (1,751) (-) Change in Working Capital 321 (7,739) Cash flow from operations 1,126 5,988 Strong performance of cash flow from operations : 5.9m Cash flow from investing activities (1,153) (1,506 w/o new tangible and intangible fixed assets (718) (1,334) w/o capitalisation of development costs (416) (294) Cash flow from financing activities 1,191 (122) w/o exercice of stock-options w/o new loans and contingent advances w/o interest expense (7) (7) w/o repayment of loans and contingent advances (467) (795) w/o repayment of financial leases (114) (156) w/o other financial flows (including factoring) Acquisition of tangible assets ( 1.2m) for labs and demos No new mid-term loan on H1 Currency effect Net Change in Cash 1,174 4,394 Opening Cash position 4,095 2,439 Closing Cash position 5,269 6,832 Cash position end of June 2018 : 6.8m 18

19 1. ATEME 2. Market Trends 3. Financial Performance 4.Strategy 19

20 New Video Delivery Schemes Enabling Major TAM Increase WIN THE VIDEO HEADEND EXPAND TO VIDEO NETWORKING $100m Contribution $250m Primary Distribution $350m Distribution $300m OTT / Multiscreen Video Delivery Infrastructure TITAN Video Head End software components can be reused in the Network to enable new video delivery schemes Limited R&D investment (reusing TITAN components) No go to market investment (same clients) Traditional Video Compression Market = $1B Network Infrastructure Market = $25B Sources : Frost & Sullivan (2014), Company 20

21 New Video Delivery Schemes BACKBONE OR CORE NETWORK Video Headend Traditional distribution scheme A centralized Video Headend provides 1000 contents X 10 formats to the whole network WIDE AREA AND METRO NETWORK ACCESS NETWORK LAST MILE Adding video processing capabilities closer to the subscribers enables multiple benefits for the Service Provider: Incremental revenues with targeted add insertion at the Metro Network Network CAPEX savings: TITAN s JITT (Just In time Transcoding) consists in sending into the network only 1 format per content. TITAN then generates specific formats upon request and available bandwidth, leading to 75% last mile bandwidth savings (1 format vs 10) 21

22 3 Year Plan Win the Video Head End market and prepare expanding to Network 2018 Gross Margin Topline expected to grow min 20% per year, with contribution from all 4 regions 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 2020 international coverage, but will not grow as fast as the topline Increasing operating profit every year 22

23 Investor Relations Shareholder structure Number of shares: 10,397,529 Potential dilution : 216,035 20,00 19, Market data ISIN: FR Ticker: ATEME Founders and management Business angels & VCs 18,00 17, Stock price: (as of Sept. 25, 2018) Market cap: m (as of Sept. 25, 2018) 16,9% 9,6% 16, , ,00 Free float 73,5% 13, Source : company, as of August 31, ,00 0 Next investor date Nov. 8, Third Quarter Revenues Liquidity contract: Gilbert Dupont Stock price Volume 23