ADB Group delivers a mid-period business update
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ADB Holdings S.A. /
ADB Group delivers a mid-period business update
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· ADB Group acquires Pirelli Broadband Solutions in Italy
· Acquisition to contribute significantly to the overall business in
2011
· Broadband access gateways reinforces ADB convergence strategy
· Strong demand in IPTV and satellite segment continues
· ADB Carbo(TM) ranked best software for pay-TV applications
· Guidance: profitability confirmed, revenue at a lower level
Geneva -21 October 2010, 15.20 (CET)
Advanced Digital Broadcast Holdings SA (SIX: ADBN) gave today an update on its
business.
Acquisition of Pirelli Broadband Solutions (PBS)
Today, ADB Group and Pirelli & C signed an agreement on ADB's acquisition of
100% of the shares of Pirelli Broadband Solutions (PBS), a company fully owned
by Pirelli & C. ADB Group will pay Pirelli a consideration consisting of EUR 14
million cash and 400'000 shares of ADB Holdings SA, totalling to approximately
EUR 22 million at the current ADBH share prices. In addition, the transaction
will include also the amount of EUR 8 million of the PBS agreed net cash
position, which brings its total value to EUR 30 million. The consideration
shares will come out of ADB Group treasury, and thus the transaction will not be
dilutive to the shareholders. The parties have agreed on a put (Pirelli) and
call (ADB) mechanism, exercisable within two years, while Pirelli will also
observe an initial two-month lock-up period on the sale of ADBH shares. The
closing is expected to take place as soon as the transaction has been cleared by
the relevant anti-trust authorities.
Pirelli Broadband Solutions supplies broadband gateways, IPTV set-top boxes,
fixed/mobile convergence devices and broadband systems management solutions to
the telecom operators in Europe and Latin America. Positioned among the top four
vendors of broadband access devices in EMEA, PBS has extensive knowledge of
broadband networks technology, including both the customer premises equipment
(CPE) as well as networks and their management. Its product line includes
broadband access devices such x-DSL and fiber-to-home gateways, IPTV and hybrid
set-top boxes, and software for the broadband platforms. PBS has been the main
supplier to most of telecom operators in Italy, and over the last few years has
expanded its business into other European and Latin America countries. The
company's 2009 revenue was EUR 132 million, while its first-half 2010 revenue
reached around EUR 58 million. The company is based in Milan, Italy.
ADB Group has put consumer experience and multimedia convergence at the core of
its strategy, as it believes that pay-TV and telecom services are set to
converge towards offering consumers powerful tools for accessing their
multimedia content, whatever the source of it, or the devices they choose to
enjoy it on. ADB has been therefore successfully focusing on high-end and
hybrid devices, as well as on software that enhances consumer experience and
facilitates convergence: its Carbo user interface and its Virtual Gateway
platform are the two most recent major strategic milestones.
Acquiring PBS is an important step in ADB Group's execution on its strategy: the
Group will gain an important piece of communication technology and product that
fits nicely into its overall vision of converging multimedia. In the near term,
the acquisition will also add significantly to the Group revenue.
Francois Pogodalla, CEO of ADB S.A., commented: "The acquisition of PBS helps us
to strike to the core of convergence of pay TV and IP-based, multimedia, and
multiscreen services. It brings us a complete portfolio of broadband gateway
products and know-how which we will combine with our pay TV set-top boxes, our
Virtual Gateway home networking platform, and our Carbo user interface. We will
be in a position to deliver to operators an end-to-end, converged multi-service
set of solutions based on open-standards and interoperability. We see this
acquisition as a clear increase of our overall strength, both in the marketing
and sales as well as in the R&D areas."
ADB Carbo(TM) is ranked best software for pay-TV applications
In September, the Carbo(TM) high definition user interface won a significant
recognition with Best Interactive TV Technology or Application award from CSI
2010. It is the first time ADB Group has won in the software category, and as
such this marks an important milestone. The Group also won Best Customer Premise
Technology categories and its 5720SX three-way hybrid platform from CSI.
Furthermore, the Group was crowned with Best Platform Receiver Award at Satkrak,
Poland in October.
Current business overview
The demand from IPTV and satellite segment continued to drive a significant part
of the Group revenue during the third quarter. Business from the cable segment
remained somewhat weaker, largely due to the shift in one of the key customers
ordering patterns. The terrestrial segment is falling behind expectations due to
the delays in the analogue switch-off in Italy and the slower than anticipated
market development in the UK and Spain, mainly due to the economic downturn in
those countries. Consequently the Group expects the revenue to decline slightly
this year.
High-definition products contributed approximately three quarters, and PVR
products a majority of the Group product sales. Hybrid products continue to form
the mainstream of the Group product sales, and are clearly seen as a very
attractive value proposition to many pay-TV operators. The user interface,
Carbo(TM ) continues to win new customers, and is becoming an industry benchmark
with its super-fast channel change and clear, intuitive navigation.
The business model of the Group remains very resilient. Group's profitability is
envisaged to remain at the same level as anticipated in the beginning of the
year, due to the scalable cost structure and effective cost control, despite
slight decline of the revenue in this year. The Group notes that the component
shortage has eased out somewhat, but component lead times remain longer than
usual. This will lead some of the orders to be delivered during early 2011
instead of 2010; the management observes that no orders have been lost or
cancelled due to this situation. The Group continues turning around its product
portfolio, where new products already contributing clearly to the sales. The
business development has progressed favourably during the third quarter, and is
creating new opportunities for the future years.
Andrew Rybicki, Chairman and CEO, stated: "Acquisition of Pirelli Broadband
Solutions is a truly important step in development of our multimedia convergence
strategy. It will allow us to accelerate our plans by integrating a successful
broadband communication business with our core activities. It will also allow us
to reach a new scale of our overall business, bringing it over half-a-billion
dollars. At the same time, our highly scalable organization and business
structures give me comfort that the integration process will be carried out
seamlessly and efficiently, to the benefit of the company and its shareholders.
I look forward to this new endeavour with both thrill and confidence.
Guidance for 2010
Given the recent business events and developments, the management adjusts the
2010 revenue guidance. The management expects the revenue to decline 5-8% on
year-on-year basis. The management expects the EBIT margin to stay at previously
anticipated levels, namely at mid single digits. This guidance is given without
accounting for the acquisition of PBS.
Organizational update
The Group also announced today that the Executive Vice President for Corporate
Development, Ms Tina Nyfors, is resigning from her position in the Group due to
a specific situation within her close family. "This was not a decision lightly
made", said Tina Nyfors. "ADB Group is a great company, and it and the whole
industry is in a very interesting phase right now. But necessity has dictated
otherwise". Tina Nyfors will remain in her position until the end of February
2011.
"We will miss her greatly", stated Andrew Rybicki, Chairman and CEO. "Tina
Nyfors has contributed significantly to the development of ADB Group, for which
I wish to thank her on behalf of all of us. But I understand and respect her
situation, and she has our full support. We wish her all the best in her future
endeavors."
Conference call
ADB Group management will hold a telephone conference to comment on this release
and to answer any questions, tomorrow on Friday 22 October 2010, at 11.00 CET.
To connect to the conference call, participants should dial the following
number: +41 (0) 44 580 6398. The participant passcode is "ADB". During the
conference call, please press "*1" on your telephone keypad if you wish to ask a
question. Members of the press are requested to stay in listen-only mode.
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
Executive Vice President
Corporate Development
Tel: +41 22 592 8433
Fax: +41 22 592 8432
t.nyfors(at)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 sells digital Pay-TV
solutions, including consumer premise devices (set-top boxes), with over 16
million units deployed since 1997. The development and sales of the Group's
products and services are conducted through ADB (www.adbglobal.com), 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 SA
does not intend to register its securities in the United States of America.
[HUG#1454029]
--- End of Message ---
ADB Holdings S.A.
Avenue de Tournay 7 Chambesy Switzerland
ISIN: CH0021194664;
ADB Group delivers a mid-period business update:
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Datum: 21.10.2010 - 15:24 Uhr
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