EDGEWARE Q EARNINGS CALL 10:00 FEBRUARY 1, 2019

Transcription

1 EDGEWARE Q EARNINGS CALL 10:00 FEBRUARY 1, 2019

2 TODAY S PRESENTERS KARL THEDÉEN CEO ANNIKA NORIN CFO 2 EDGEWARE 2019

3 AGENDA Q4 PRESENTATION 1. Results & highlights Q4 2. Financials in depth 3. Summary 3 EDGEWARE 2019

4 ABOUT EDGEWARE LET S MAKE TV AMAZING AGAIN Founded in 2004 Video processing and delivery solutions for modern TV services over the Internet Scalable, high performance and costefficient solution Global presence with HQ in Stockholm. 99 employees in 14 countries Blue-chip customer base of mobile- and cable operators, broadcasters as well as OTT providers 200 customers in 70 countries Listed on Nasdaq Stockholm Stockholm Hong Kong 4 EDGEWARE 2019

5 OCTOBER DECEMBER 2018, IN KEY FIGURES NET SALES, MSEK GROSS MARGIN OPERATING PROFIT, MSEK (EBIT MARGIN %) CASH FLOW KEY FIGURES 79,0 OCTOBER DECEMBER (+15,5%) 71,7% 14,6 (18,4%) 16,6 KEY FIGURES 231,9 JANUARY DECEMBER (-2,1%) 69,1% -9,1 (-3,9%) -4,9 5 EDGEWARE 2019

6 HIGHLIGHTS DURING Q4 GROWING MARKET GROWTH OPPORTUNITIES Increased demand for our combined offering for IPTV and OTT TV CDNs MARKET EXPANSION Expanding with local staff in China to address the important Chinese market INNOVATIVE PRODUCTS Demoing Ad Enabler from Amazon Web Services (AWS) at Inter BEE, Tokyo EDGEWARE AD ENABLER Acquiring leading subtitling experts, Cavena, to strengthen origin offering vs broadcasters EFFICIENT OPERATIONS New organization launched, focus on sales efficiency and innovation capability Reduced OPEX run-rate cost entering 2019 with >10% without affecting operational and R&D capacity 6 EDGEWARE 2019

7 IMPORTANT WINS ANNOUNCED IN Q4 Com Hem delivering personalized ads for OTT TV with Edgeware s Ad Enabler Televisa expanding its CDN with Edgeware s CDN solution and adding time-shift capabilities Major European customer upgrading existing HW and SW platform enabling Ad Insertion for IPTV 7 EDGEWARE 2019

8 IPTV/TELCO INVESTMENT TO ADD -> TV SERVICES TO MULTIPLE DEVICES AND ADD NEW FUNCTIONALITY AND ADDING NEW SERVICES EXPANDING TV SERVICE OFFERING EXPANDING HW & SW INVESTMENTS MULTIPLE DEVICES Invest in origin SW with ad enabling support Invest in CDN SW & HW with ad stitching support TV ORIGIN IPTV OTT TV RTSP + HTTP 8 EDGEWARE 2019

9 2018 IN SUMMARY Challenging first half Low investment levels Too high cost level Implemented cost reduction and efficiency measures Successful IBC trade show launching cloud-ready origin SW offering Including support for live OTT events and dynamic Ad Insertion Increased services business Back to growth and profitability (EBIT) in second half 9 EDGEWARE 2019

10 CAVENA

11 EDGEWARE ACQUIRES CAVENA

12 RATIONALE FOR THE ACQUISITION Increase the portfolio adjacent to origin to drive more sales vs Broadcasters and Content owners Establish Edgeware origin solution with the best support for various subtitle formats and formatting on the market Niche differentiator where few are good Strong proposition in markets where subtitling is important, e.g. APAC, LATAM and Nordics Turning image subtitles to text, enabling flexible rendering in consumer device (change language, font-size, position etc.) Develop a cloud solution including comprehensive support for subtitling Cloud based studio mid-to-small size live/linear content producers Cost effective solution for localization of content (i.e. sports needing local subtitles) Deal will close in February Edgeware will pay 8 MSEK on debt free basis for all outstanding shares of Cavena Image Products AB 12 EDGEWARE 2019

13 PRODUCT PORTFOLIO TO BROADEN THE ADDRESSABLE MARKET Size of customer Address with SW components to enhance inhouse solution Cavena adding customers from the broadcasting space System solution SW only or SW and HW SAAS Origin/CDN, Delivery via the Cloud Large OTT, Telco, CDN Mid sized Telco/Cable IPTV/OTT Small/mid sized local/regional content owners (OTT/broadcasters) # of customers Pls note, company names are examples only, not all are Edgeware customers 13 EDGEWARE 2019

14 AGENDA Q4 PRESENTATION 1. Results & highlights Q4 2. Financials in depth 3. Summary 14 EDGEWARE 2019

15 EDGEWARE IN NUMBERS Q & FULL YEAR 2018 NET SALES (MSEK) Q418 Net Sales increased 15,5% YoY SEK million ,5% YoY Net Sales Increase in local currencies +9,6% Strong tailwind in Q4 from EUR and MXN Q1-Q4 Net Sales decreased -2,1% YoY Decrease in local currencies -6,2% EMEA Net Sales Q4: 71,5 MSEK (54,7) Full year: 161,5 (163,9) Americas Net Sales Q4: 3,8 MSEK (6,0) 0 Q4 Full Year Full year: 48,4 (37,1) APAC Net Sales Q4: 3,7 MSEK (7,7) Full year: 22,0 (35,8) 15 EDGEWARE 2019

16 NET SALES & GROSS MARGIN Q4 Net Sales for Products in Q4 increased 18,6% YoY. Services increased +5,1 % YoY. Gross margin 71,7% (73,8%) Lower license sales in product mix Net Sales for Products 2018 decreased -3,8% YoY. Services increased +3,7% YoY Gross margin 69,1% (74,4) impacted by lower capacity license sales in the product mix and bad debt, vs EDGEWARE 2019

17 EBIT AND EBIT MARGIN Q4 *EBIT 2016 HAS BEEN ADJUSTED FOR COSTS RELATED TO THE IPO. NO ADJUSTMENTS DONE 2017 AND High revenue, healthy gross margin and reduced OPEX gave positive EBIT in Q4 EBIT margin 18,4% Q4 OPEX YoY -2,6 MSEK run-rate decrease > 10% 2018 OPEX YoY +4,9 MSEK, impact from restructuring 4,7 MSEK Total number of employees end of Q4 was 99 (112) 17 EDGEWARE 2019

18 BALANCE SHEET AND CASH FLOW EDGEWARE Q Q Full year 2018 Full year 2017 Total Assets 319,9 311,7 319,9 Capitalized expenditure R&D 22,7 19,9 22,7 Equity 238,1 244,7 238,1 Equity Ratio 74,4% 78,5% 74,4% Net Cash & Current investment 168,0 172,8 168,0 Cash flow from operating activities +20,7 +16,0 +11,6 Cash flow for the period +16, ,9 311,7 19,9 244,7 78,5% 172,8-2,7-97,0* Strong balance sheet, equity ratio 74,4% (78,5. Dec-17) Capitalized expenditure YTD 20,7% (19,6) of gross R&D Net impact on EBIT from R&D capitalization/amortization YTD was +2,8 MSEK (+5,1) Cash position/current investment 168,0 MSEK (172,8 Dec-17) No loans or interest bearing debt Cash flow for the period +16,6 MSEK (11,6), impacted by less WC and operating profit * -75,0 MSEK of cashflow reduction 2017 related to investment in a short-term interest fund Q cash flow will be impacted by the Cavena transaction 18 EDGEWARE 2019

19 AGENDA Q4 PRESENTATION 1. Results & highlights Q4 2. Financials in depth 3. Summary 19 EDGEWARE 2019

20 OCTOBER DECEMBER 2018, SUMMARY NET SALES, MSEK GROSS MARGIN OPERATING PROFIT, MSEK (EBIT MARGIN %) CASH FLOW KEY FIGURES OCTOBER DECEMBER 79,0 (15,5%) 71,7% 14,6 16,6 (18,4%) 20 EDGEWARE 2019

21 THANK YOU! Q1 REPORT TO BE PRESENTED APRIL 25, 2019