ADB Group reports full-year 2010 results
(Thomson Reuters ONE) -
ADB Holdings S.A. /
ADB Group reports full-year 2010 results
Processed and transmitted by Thomson Reuters.
The issuer is solely responsible for the content of this announcement.
* Revenue reached US$ 356.6 million
* Full-year EBIT at 5.0% of revenue, or US$ 17.7 million
* Newly acquired broadband business profitable and cash generating
* Five new customers won in 2010 for ADB core business only
* Two Tier-1 US cable deals won in early 2011
* Revenue growth in 2011 expected to be over 40%
* Board of Directors recommends a dividend
Geneva - 23 February 2011
Advanced Digital Broadcast Holdings S.A. (SIX: ADBN) reported today ADB Group's
unaudited consolidated financial results for the full year 2010.
The full year revenue reached US$ 356.6 million, to which the newly acquired
broadband business (Pirelli Broadband Solutions, renamed as "ADB Broadband", or
"ADBB") contributed US$ 20.0 million. It has been consolidated with the ADB
Group core business for the month of December 2010 only.
The gross profit amounted to US$ 114.7 million or 32.2%, compared to 36.5% in
2009. The decrease is mostly attributable to the inflexible materials pricing
caused mainly by continuing component shortages and competitive pricing
environment that the Group experienced during the year. Another, albeit small,
factor is the inclusion of the newly acquired broadband business, which yields
lower gross margin than the ADB Group traditional business, as it is
structurally different.
In line with the Group strategy of scalable business model and cost
optimization, the gross margin decrease was partially compensated by decrease in
operating expenses. The operating expenses decreased to US$ 92.6 million in
2010 from US$ 107.4 million in 2009, Earnings Before Interest and Tax (before
acquisition expenses) amounted to US$ 17.7 million, or 5.0% of the revenue, in
line with management expectations. Respective EBIT figures in 2009 were US$
27.7 million and 7.3% of the revenue.
Net Profit After Tax amounted to US$ 12.9 million or 3.6% of the revenue,
compared to US$ 15.3 million in 2009 or 4.0%. Earnings Per Share amount to 2.55
USD per share, compared to the reported US$ 2.76 USD per share in 2009.
The Group closed the year with the net cash position of US$ 31.6 million. The
main uses of the cash during the year have been the acquisition, the
distribution of a first dividend to the shareholders, the share buyback, the
continued investments into new product platforms and the deliberate accumulation
of inventory to mitigate component shortages.
Mr. Andrew Rybicki, Chairman and Group CEO, commented: "The acquisition of
Pirelli Broadband Solutions ("PBS") has been a significant milestone and a major
achievement in our corporate life. Not only have we acquired a well-run, around
US$ 150 million, profit-generating European company, whose products and customer
base will significantly enhance the Group's business, but we also conducted it
using our in-house resources alone, and as a non-dilutive transaction to the
shareholders. In short, this acquisition is a clear benefit to our shareholders
and a super-charged booster to our business. I therefore consider the slight
decrease of our 2010 revenue less important, as the acquisition of PBS will
bring it up to around 40% in 2011. Furthermore, we again demonstrated the
scalability of our business model and ability to keep the costs under control,
by achieving 5% EBIT and continuing our dividend distribution. I am proud of our
staff and wish to take this opportunity to express my sincere thanks to them for
achieving 2010 results despite the huge effort that the process of acquisition
and the first steps of integration have demanded from them."
Outlook for 2011
The Group sees 2011 as a year of significant expansion. It is also therefore a
year of integration, streamlining of the product base and further optimizing the
company operating costs. This will include certain reorganization, reduction of
operating costs (including staff costs), and further unification of the
technology base. In the market, the Group observes that while the economic
recovery seems to be underway in many countries, it still appears uneven. The
component shortage is easing out, but still needs to be watched closely. The
Group gives the following guidance for the full year 2011:
* Revenue is expected to grow over 40%
* EBIT% (before acquisition and integration costs) is expected to be in mid
single digits
The Group anticipates incurring certain costs related to acquisition and
integration, particularly early in the year. Those costs, combined with the
effect of normal seasonality of the business, are likely to impact our first
half year results.
Business overview
The business of managing and delivering television content to consumers has been
clearly evolving towards the business of delivering, managing and distributing
the multimedia content within consumers' homes. Traditional television screen is
quickly taking shape of a family entertainment, communication and personal data
storage centre (e.g. a photo album). It does not compete with a PC and/or with
a smart phone - it embraces them as members of a new, multimedia family. A
family of devices and technologies that need to be well managed to meet
expectations of a modern consumer and his or her family. Similarly, the ADB
Group traditional set top box, which has been serving us well over the past
several decades, also changes its shape and colours. For once, today's TVs have
no longer the "tops", nor do they rely on the content delivered to them through
the traditional media such as satellite, cable or an unsightly antenna on the
roof. They are all "flat" and they now also "listen" to the internet and "talk"
to it as well, by sending home-generated content to such storage and
distribution centres as YouTube(TM) or Facebook(TM). And the "box" is again
faithfully helping us to manage all that traffic of various signals and deliver
new type of experience to consumer, although its is not just a "box" anymore -
instead, it is a cluster of various "boxes", with a complex software that makes
all of them work together.
This is what ADB Group has started developing few years ago and this is what it
has been increasingly offering to its customers: a variety of "boxes", run by a
powerful and complex software that makes them work together and "talk sense" to
their smart phone and laptop peers, as well as to the outside, not less complex
world. That is where the newly acquired broadband technology and products come
strongly into the picture. In addition of being strategically important, the
acquisition also provides interesting opportunities for cross-selling and thus
leveraging the existing customer base. For example, the Group sees a possibility
of migrating the gateway technology to the cable business, in addition to its
current IP markets.
Mr. Rybicki said: "From the Group's operational and business development points
of view, we have significantly improved our position and competitiveness by
instant addition of the broadband technology and respective new customers to our
portfolio of assets, in line with our long term convergence strategy. This will
significantly help offering our customers the solutions they expect faster, and
will broaden the base of our prospects."
Mr. Francois Pogodalla, CEO of ADB S.A., commented: "We are thrilled to see our
convergence strategy accelerating rapidly now. We already have our Virtual
Gateway - the advanced software solution that distributes seamlessly any
multimedia content throughout the household. Now we can also add the residential
gateways with their connectivity software and create new end-to-end solutions
for the operators. This gives us a fantastic platform to build on."
The Group won five new customers during 2010 for its ADB core business: CableTel
(Bulgaria), Canal Digital (Norway), Telecom Italia (Italy), First Media
(Indonesia), and TSTT (Trinidad&Tobago). Further customers were added as well to
the portfolio as a result of the acquisition
ADB Group is pleased to announce today that it has concluded a deal with one of
the largest cable operators in the United States for a delivery of a turnkey
pay-TV solution for applications in the commercial segment. This solution
includes ADB's next generation set-back box, together with communication and
system management software, as well as the integration of the entire system. The
Group is also pleased to announce that it has just received a purchase order
from another major US cable operator for the same type of product and
application. Francois Pogodalla, CEO of ADB S.A., commented: "After a lot of
work, it feels good to finally get going with the US cable market, in addition
to the US IPTV market where we have been successfully operating for years. Our
team has been working really hard to make this happen. Now we are in with the
customers, and we can start delivering. We conservatively anticipate rather
modest contribution in 2011, but for the first time in our history we will
generate revenue from the US cable business this year. This is a strategically
important move for us."
In the field of technology recognitions during 2010, ADB Group received an award
for The Best Interactive TV Service/Application, at IPTV World Forum in London.
This was particularly important achievement, as it was the first such solution
operating in the three-way hybrid environment. Furthermore, ADB took first prize
in both "The Best Interactive TV Technology or Application" and "Best Customer
Premise Technology" categories at 2010 IBC, in Amsterdam. The winning solution
included our highly acclaimed Carbo(TM) high definition user interface, and its
three-way hybrid platform,
During 2010, the cable business continued to be Group's largest business
segment, contributing 35% of its revenue (39% in 2010). The cable TV industry,
which has also evolved significantly, both in technical and commercial sense,
still represents the largest business opportunity amongst the four segments ADB
Group serves. The above notwithstanding, we note a strong growth of our IPTV
segment in 2010, which increased its share of the total Group's business from
19% in 2009 to 26% in 2010. Satellite business continued at the same level as
last year, accounting for 29% of the Group revenue as in 2009. Terrestrial
demand remained subdued due to the general economic conditions, and only
contributed 5% to the Group revenue, compared to 12% in 2009. Other businesses,
consisting of specialized software, gateway products and accessories,
contributed 5% to the Group revenue, compared to 1% in 2009.
The Group keeps focusing on the high end of the market with a particular
emphasis on software and system solutions. 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. Nine customers have
now adopted Carbo user interface in their system. This represents a steep
increase from the year before.
Organizational update
Mr. Francesco Schiavinato, the head of ADB Broadband business, has been
appointed to the ADB Group Executive Committee, effective immediately.
The Board of Directors has acknowledged the resignation of Mr. Philippe Geyres
from his position at the Board of Directors of ADB Holdings S.A. Mr. Rybicki
stated: "Mr. Philippe Geyres has brought valuable insights to our company, and
contributed to its development. He left the Board due to certain conflict of
interests resulting from his new executive position. We thank him for all his
contributions and wish him well in his future endeavours."
Ms Tina Nyfors has agreed to be in charge of the Group's Investor Relations and
Communications, as Senior Vice President, starting March 2011.
Dividend policy and dividend distribution
The Board of Directors have decided to establish a dividend payment policy. Such
a policy calls for distributing to the shareholders 30% or more of the net
profit after taxes of each business year. In agreement with this policy, the
Board of Directors recommends a dividend to be paid out with respect to the year
2010 profits, and intends to propose the payment of such a dividend at the next
Annual General Meeting of the Shareholders.
Conference call
ADB Group management will hold a telephone conference on that day to discuss the
2010 financial results and outlook for the year 2011, today at 15.30 CET.
To connect to the conference call, participants should dial the following
number: +41 (0) 44 580 6398
Participant pass code is "ADB".
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
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 a broad range of
products and services,, including software, consumer premises devices, system
integration and after sales services, The development and sales of the Group's
products and services are conducted through the brands ADB (www.adbglobal.com)
and ADB Broadband (broadband.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
S.A. does not intend to register its securities in the United States of America.
ADVANCED DIGITAL BROADCAST HOLDINGS SA AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
YEARS ENDED 31 DECEMBER 2010 AND 2009
(Expressed in United States Dollars)
2010 2009
$ $
Revenue 356,619,397 381,005,778
Cost of sales (241,898,796) (241,967,509)
Gross profit 114,720,601 139,038,269
Research and
development expenses (48,918,533) (60,758,207)
Selling, general and
administrative
expenses (43,681,682) (46,681,151)
Other income 1,001,534 329,551
Other expenses (5,378,074) (4,240,232)
Acquisition expenses (538,539) -
Impairment charges - (8,180,625)
Finance income 2,111,027 2,311,978
Finance costs (4,526,086) (3,806,975)
Profit before tax 14,790,248 18,012,608
Income tax expense (1,883,360) (2,761,968)
Profit for the year 12,906,888 15,250,640
Earnings per share
Basic 2.55 2.76
Diluted 2.51 2.71
ADVANCED DIGITAL BROADCAST HOLDINGS SA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
YEARS ENDED 31 DECEMBER 2010 AND 2009
(Expressed in United States Dollars)
2010 2009
$ $
Movement in available-
for-sale investments (626,086) 673,381
Credit (charge) of
deferred tax from
movement in available-
for-sale investments 49,022 (49,894)
Actuarial loss directly
recognised in equity (133,601) (571,422)
(Charge) credit of
deferred tax for direct
recognition of actuarial
loss in equity (3,942) 96,065
Movement in cash flow
hedges (726,027) 1,897,114
Credit (charge) of
deferred tax from
movement in cash flow
hedges 52,194 (221,393)
Translation adjustments 307,336 401,324
Net (loss) gain
recognised directly in
equity (1,081,104) 2,225,175
Profit for the year 12,906,888 15,250,640
Total comprehensive
income for the year 11,825,784 17,475,815
ADVANCED DIGITAL BROADCAST HOLDINGS SA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
31 DECEMBER 2010 AND 2009
(Expressed in United States Dollars)
ASSETS 2010 2009
$ $
Non-current assets
Goodwill 25,792,385 9,393,440
Intangible assets 32,784,758 18,595,435
Property and
equipment 15,773,046 11,370,070
Deferred income tax
assets 4,785,778 3,718,745
Long-term trade
receivables - 4,056,908
Other non-current
assets 1,027,545 1,223,478
Total non-current
assets 80,163,512 48,358,076
Current assets
Inventories, net 50,362,159 19,722,746
Other current assets 28,096,129 5,557,166
Trade receivables,
net 92,822,350 78,587,485
Treasury investments 14,522,613 28,731,753
Time deposits - 6,173,850
Cash and cash
equivalents 84,502,898 65,405,033
Total current assets 270,306,149 204,178,033
Total assets 350,469,661 252,536,109
EQUITY AND LIABILITIES
Capital and reserves
Share capital 1,193,563 1,326,181
Share premium 59,786,295 76,551,414
Share-based
compensation reserve 4,586,298 4,373,022
Other reserves (13,102,458) (768,854)
Retained earnings 19,630,344 39,252,110
Treasury shares (3,370,395) (42,759,071)
Total equity 68,723,647 77,974,802
Non-current liabilities
Long-term bank loans 2,906,044 6,041,849
Retirement benefit
obligations 7,243,199 5,166,459
Deferred income tax
liabilities 398,888 1,186,411
Long-term
liabilities 8,211,074 72,332
Total non-current
liabilities 18,759,205 12,467,051
Current liabilities
Bank loans 63,624,901 21,198,243
Current portion of
long-term bank loans 904,834 3,793,087
Trade and other
payables 144,400,590 95,305,468
Accrued expenses 34,483,385 33,590,350
Provisions 10,868,616 3,140,133
Taxes payable 515,797 2,821,626
Other current
liabilities 8,188,686 2,245,349
Total current
liabilities 262,986,809 162,094,256
Total liabilities 281,746,014 174,561,307
Total equity and
liabilities 350,469,661 252,536,109
ADVANCED DIGITAL BROADCAST HOLDINGS SA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED 31 DECEMBER 2010 AND 2009
(Expressed in United States Dollars)
2010 2009
$ $
CASH FLOWS FROM
OPERATING ACTIVITIES
Profit for the year 12,906,888 15,250,640
Adjustments for:
Income tax
expense 1,883,360 2,761,968
Depreciation 2,394,061 2,454,542
Amortisation 18,031,398 18,217,561
Impairment
charges - 8,180,625
Finance costs 4,526,086 3,806,975
Finance income (2,111,027) (2,311,978)
Share-based
payment expense 396,223 1,171,479
Provision for
inventory 1,473,069 3,147,816
Others 201,983 59,817
Profit before
working capital changes 39,702,041 52,739,445
Working capital
changes:
Trade and other
receivables 29,675,570 (13,712,022)
Inventories (21,395,907) 3,136,076
Other current
assets (11,673,027) 1,226,811
Trade and other
payables 4,665,102 22,380,474
Accrued expenses (13,595,662) 7,097,988
Provisions (1,068,740) (337,737)
Other current
liabilities 40,581 (1,307,258)
Others 967,980 304,385
Cash generated by
operating activities 27,317,938 71,528,162
Interest paid (2,965,504) (3,806,426)
Tax paid (3,942,790) (2,355,555)
Net cash provided by
operating activities 20,409,644 65,366,181
CASH FLOWS FROM
INVESTING ACTIVITIES
Acquisitions of
property and equipment (3,979,037) (2,172,317)
Proceeds from sale
of property and
equipment 116,026 93,497
Payments for
intangible assets (23,493,535) (18,203,728)
Sale (purchase) of
treasury investments
and time deposits 19,756,904 (24,632,728)
Interest received 2,114,303 2,158,122
Payments for
acquisition of business (8,600,424) -
Net cash used in
investing activities (14,085,763) (42,757,154)
(Continued)
ADVANCED DIGITAL BROADCAST HOLDINGS SA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED 31 DECEMBER 2010 AND 2009
(Expressed in United States Dollars)
2010 2009
$ $
CASH FLOWS FROM FINANCING
ACTIVITIES
Increase in bank loans 34,896,180 3,855,671
Share sale pursuant to
exercise of stock options 925,908 744,158
Share purchase (8,318,291) (23,021,937)
Dividends paid (13,955,473) -
Net cash provided by
(used in) financing
activities 13,548,324 (18,422,108)
TRANSLATION ADJUSTMENT ON
FOREIGN CURRENCY (774,340) (147,478)
NET INCREASE IN CASH 19,097,865 4,039,441
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 65,405,033 61,365,592
CASH AND CASH EQUIVALENTS,
END OF YEAR 84,502,898 65,405,033
ANALYSIS OF BALANCES OF
CASH AND CASH EQUIVALENTS
Time deposits 7,521,703 17,648
Cash and bank balances 76,981,195 65,387,385
84,502,898 65,405,033
ADVANCED DIGITAL BROADCAST HOLDINGS SA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
YEARS ENDED 31 DECEMBER 2010 AND 2009
(Expressed in United States Dollars)
Share-Based
Share Share Compensation Other Retained Treasury Total
Capital Premium Reserve Reserves Earnings Shares Equity
$ $ $ $ $ $ $
Balance at 1
January 2009 1,326,181 76,551,414 3,342,232 (2,994,029 ) 24,783,800 (21,404,311 ) 81,605,287
Profit for the
year - - - - 15,250,640 - 15,250,640
Other
comprehensive
income - - - 2,225,175 - - 2,225,175
----------- ------------- -------------- ------------- ------------- ------------- -------------
Total
comprehensive
income - - - 2,225,175 15,250,640 - 17,475,815
Purchase of
ordinary shares - - - - - (22,877,273 ) (22,877,273 )
Share purchase
costs, net - - - - - (144,664 ) (144,664 )
Sale of treasury
shares pursuant
to
exercise of
stock options - - - - - 744,158 744,158
Reclassification
of losses on
sale of
treasury shares - - - - (923,019 ) 923,019 -
Share-based
payments - - 1,030,790 - 140,689 - 1,171,479
----------- ------------- -------------- ------------- ------------- ------------- -------------
Balance at 31
December 2009 1,326,181 76,551,414 4,373,022 (768,854 ) 39,252,110 (42,759,071 ) 77,974,802
Profit for the
year - - - - 12,906,888 - 12,906,888
Other
comprehensive
expense - - - (1,081,104 ) - - (1,081,104 )
----------- ------------- -------------- ------------- ------------- ------------- -------------
Total
comprehensive
income - - - (1,081,104 ) 12,906,888 - 11,825,784
Transfer
treasury share
due to
acquisition - - - - - 11,247,238 11,247,238
Put option
issued pursuant
to
acquisition - - - 282,751 - - 282,751
Liability
arising in case
of exercise
of put option
issued pursuant
to
acquisition - - - (11,535,251 ) - - (11,535,251 )
Capital
reduction (132,618 ) - - - (30,645,178 ) 30,777,796 -
Payment of
dividend - (16,765,119 ) - - 2,809,646 - (13,955,473 )
Purchase of
ordinary shares - - - - - (8,617,372 ) (8,617,372 )
Sale of treasury
shares pursuant
to exercise
of stock options - - - - - 1,394,710 1,394,710
Reclassification
of losses on
sale of
treasury shares - - - - (4,876,069 ) 4,586,304 (289,765 )
Share-based
payments - - 213,276 - 182,947 - 396,223
----------- ------------- -------------- ------------- ------------- ------------- -------------
Balance at 31
December 2010 1,193,563 59,786,295 4,586,298 (13,102,458 ) 19,630,344 (3,370,395 ) 68,723,647
--- End of Message ---
ADB Holdings S.A.
Avenue de Tournay 7 Chambesy Switzerland
ISIN: CH0021194664;
ADB Group reports full-year 2010 results:
http://hugin.info/136393/R/1491470/427114.pdf
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originality of the information contained therein.
Source: ADB Holdings S.A. via Thomson Reuters ONE
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Datum: 23.02.2011 - 06:00 Uhr
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