Earnings Release • Jul 27, 2012
Earnings Release
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Neuilly-sur-Seine, July 27th, 2012 - Netgem (www.netgem.com), a leader in connected home entertainment solutions, today announced its consolidated revenue and results for the first half of 2012.
Netgem has reported consolidated revenue of € 38.2 million for the semester ending on June 30th 2012, a 12% fall year-on-year, reflecting a new decrease in the French market.
International revenue for the first half of 2012 amounted to € 22.3 million, a 15% increase year-onyear, representing 58% of the Group's sales. During the first half of the year, Netgem has signed contracts with five new operators, confirming a positive commercial momentum of the Group's offering.
| IFRS data in €M | Q2'12 | Q2'11 | Change | H1'12 | H1'11 | Change | ||
|---|---|---|---|---|---|---|---|---|
| Revenue | 19.8 | 17.6 | +2.2 | 12% | 38.2 | 43.3 | -5.1 | -12% |
| - International | 13.3 | 7.5 | +5.8 | 78% | 22.3 | 19.5 | +2.8 | 15% |
| - France | 6.4 | 10.1 | -3.7 | -36% | 15.9 | 23.8 | -7.9 | -33% |
The Group recorded a current operating profit of € 5.0 million for the first half of 2012, representing 13% of revenue.
During this period, the gross margin amounted to € 13.8 million (36% of revenue), reflecting an international expansion that does not deteriorate profitability, despite the impact of a temporary rise in Hard Disk Drives prices resulting from flooding in Thailand.
Operating expenses totaled € 8.8 million for the first half of 2012, a 2% decrease year-on-year. This performance was not achieved at the expense of innovation and business development.
The Group recorded a € 3.5 million consolidated net profit for the first half of the year, which represents € 0.09 per share. Consolidated net profit includes a negative financial result of € 0.2 million, mainly a result of the US dollar/Euro exchange rate evolution, and a tax expense of € 1.2 million.
Following dividends payment, the Group's net cash position and shareholders' equity amount respectively to € 46.7 million and € 51.4 million, as of June 30th, 2012.
The connected television market continues to show high growth potential globally. Connected television technologies enable operators to deploy new innovative services, with a better control over investments compared to the first-generation of IPTV solutions. Netgem demonstrates a proven knowhow for these new Over-the-Top solutions.
In this context, Netgem re-affirms its objective to double international sales between 2011 and 2014.
The Group enjoys a healthy financial position and continues to evaluate new growth opportunities. The recent acquisition of PlugnSurf (announced on June 18th 2012) fits into this strategy.
At the end of June 2012, Netgem acquired 100% of the equity of PlugnSurf, a startup company that offers expertise in mobile boxes. PlugnSurf was fully consolidated into Netgem as of June 30th 2012.
Since the start of the share-buyback program at the end of 2011, the Group has bought back 1.2 million of its own shares, of which number circa half of them were used for the vesting of free shares already granted.
| In € million | H1'12 | H1'11 | Change |
|---|---|---|---|
| Revenue | 38.2 | 43.3 | -12% |
| Gross Margin | 13.8 | 17.4 | -21% |
| Gross Margin in % of Revenue | 36% | 40% | |
| Current Operating Profit | 5.0 | 8.5 | -41% |
| Current Operating Profit in % of Revenue | 13% | 20% | |
| Net Profit, Group Share | 3.5 | 6.5 | -46% |
| Net Profit, Group Share, per share in € | 0.09 | 0.17 | |
| Operating Cash flow (1) | 3.8 | 3.3 | |
| Cash flow linked to financing operations | -6.8 | -4.0 | |
| Net change to cash position | -3.0 | -1.0 | |
| In € million | 06/30/2012 | 12/31/2011 | |
| Shareholder equity and Debt | |||
| Group Shareholder equity | 51.4 | 54.0 | |
| Current and non-current financial debt | 0.3 | - | |
| Analysis of net cash position | |||
| A. Cash & cash equivalents | 47.1 | 50.0 | |
| B. Current financial debt | - | - | |
| C. Current net cash (A) + (B) | 47.1 | 50.0 | |
| D. Non-current financial debt | (0.3) | - | |
| E. Net cash position (C) + (D) | 46.7 | 50.0 |
(1) Operating cash flow includes net cash flow linked to operating business and cash flow linked to investment operations.
About Netgem: Netgem provides Connected Home Entertainment Solutions to Multiservice Operators to help them strengthen their endcustomer relationship and drive revenue growth. Based upon Netgem's hardware and software technologies, operators are able to develop innovative convergent services and a unique broadcast TV experience, enriched by the power of Internet. Netgem is present in more than twelve countries around the world with an install base of more than 4 million. Netgem is listed on Compartment C of NYSE Euronext Paris. ISIN : FR0004154060, Reuters : ETGM.PA, Bloomberg : NTG FP
Site Internet: www.netgem.com Twitter http://www.twitter.com/netgem
Press Contact: Julie Dardelet: [email protected]
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