Earnings Release • Jul 23, 2020
Earnings Release
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COVID-19 outbreak takes a toll on business activity in H1 Encouraging rally since June
Thorigné-Fouillard, 23 July 2020, 6:00 p.m.
Thorigné-Fouillard, France - Kerlink (ALKLK - FR0013156007), a French specialist in solutions dedicated to the Internet of Things (IoT), published its first-half 2020 revenue today.
| Revenue by business line In thousands of euros |
Q2 2020 | Q2 2019 | Change | H1 2020 | H1 2019 | Change |
|---|---|---|---|---|---|---|
| Historic and alternative telecom operators |
270 | 561 | -52% | 790 | 1,103 | -28% |
| Private operators | 1,822 | 2,852 | -36% | 3,806 | 5,181 | -27% |
| Reference design | 63 | 60 | +5% | 169 | 178 | -5% |
| Total | 2,155 | 3,473 | -38% | 4,765 | 6,462 | -26% |
IFRS – Unaudited figures
Group business activity declined in the first half of 2020 against an unprecedented economic backdrop and health crisis. The slump, which was a direct result of the COVID-19 outbreak and was primarily concentrated in France, stemmed from postponements of orders that were due for delivery in Q2.
In spite of this context, the Group did not lose any client during the period.
Business activity has been picking up since June, with projects that were temporarily put on hold starting up again and Kerlink winning new clients.
This unprecedented situation caused a slump in business activity during the second quarter, both in the historic and private telecoms operator segments, bringing Kerlink's sales growth to a temporary standstill in this priority target market. Nevertheless, and to ensure conditions are optimum in preparation for the recovery, the Group has been pushing ahead with its proactive strategy of strengthening its ecosystem of partners capable of offering its private operator clients end-to-end vertical solutions to speed up the adoption and roll-out of IoT solutions in targeted vertical sectors.
COVID-19 outbreak takes a toll on business activity in H1 Encouraging rally since June
| Revenue by type of sale In thousands of euros |
Q2 2020 | Q2 2019 | Change | H1 2020 | H1 2019 | Change |
|---|---|---|---|---|---|---|
| Equipment | 1,451 | 2,753 | -47% | 3,184 | 4,815 | -34% |
| Services | 704 | 720 | -2% | 1,581 | 1,647 | -4% |
| Total | 2,155 | 3,473 | -38% | 4,765 | 6,462 | -26% |
IFRS – Unaudited figures
The Services line, which the Group has been driving to expand in recent months, generated €1.6 million in revenue and accounted for 33% of total sales over the period. The decline in first-half revenue from Services was under control, at 4% relative to the year-earlier period.
| Revenue by geographical region In thousands of euros |
Q2 2020 | Q2 2019 | Change | H1 2020 | H1 2019 | Change |
|---|---|---|---|---|---|---|
| NCSA (Americas) | 51 | 87 | -41% | 124 | 112 | +11% |
| APAC (Asia-Pacific) | 158 | 68 | +132% | 341 | 343 | +1% |
| EMEA excl. France | 712 | 1,141 | -38% | 1,827 | 1,986 | -8% |
| International | 921 | 1,296 | -29% | 2,292 | 2,441 | -6% |
| France | 1,234 | 2,177 | -43% | 2,473 | 4,021 | -38% |
| Total | 2,155 | 3,473 | -38% | 4,765 | 6,462 | -26% |
IFRS – Unaudited figures
Business momentum was favourable in the Americas at the start of the year. Order intake increased, in step with intensified efforts on the sales front. Sales were up, despite the slowdown in the second quarter due to the economic and health crisis.
In Asia, the upturn in business activity at the end of the second quarter is encouraging. Business activity in France and Europe was worse affected by the introduction of lockdown restrictions.
Despite reduced visibility on the timescale for a return to normal conditions, over the next few months the Group will be able to leverage the advantages of having a fully-integrated business model, combining the sale of some of the world's best network equipment with a range of value-added network services. Its advanced solutions for verticals, such as Facility Management and Contact Tracing, are particularly relevant in the current context. These should drive growth in revenue from sales of services over the coming months and bolster the Group's competitive positioning as soon as the crisis is over, helped by strengthened marketing efforts, notably across digital channels, to adapt to the current state of play.
The Group's firm hand on its finances will help it through this period, with a stronger cash position at end-June 2020 than at end-December 2019. This cash does not include the French state guaranteed loan (PGE), the application for which is currently being processed.
Kerlink Group is a leading global provider of connectivity solutions for designing, launching, and operating public & private Internet of Things networks. Its comprehensive product portfolio includes industrial-grade network equipment, best-of-breed network core, operations and management software, value-added applications and expert professional services, backed by strong R&D capabilities. Kerlink specializes in enabling future-proof intelligent IoT connectivity for key verticals such as fleet management, transportation & logistics, retail, asset tracking, and smart metering, as well as smart agriculture & environment, and smart cities, buildings, and factories. More than 120,000 Kerlink installations have been rolled out with more than 330 clients in 69 countries. Based in France, with subsidiaries in the US, Singapore, India, and Japan, Kerlink is a founding and board member of the LoRa Alliance™ and the uCIFI Alliance™. It is listed on Euronext Growth Paris under the symbol ALKLK.
For more information, visit www.kerlink.com or follow us on Twitter @kerlink_news.
24 September 2020, after market close
Investors contact: Actifin Benjamin Lehari +33 (0)1 56 88 11 25 [email protected]
Financial press contact: Actifin Isabelle Dray +33 (0)1 56 88 11 29 [email protected]
Kerlink press & market analysts contact: Mahoney Lyle Sarah Lyle +33 (0)6 75 85 60 42 [email protected]
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