VOGO — Earnings Release 2020

Jul 21, 2020

Press release

Montpellier, July 21, 2020

First-half 2020: revenue of €2.3 million up 216% and driven by the integration of VOKKERO®

A more international and better diversified Group

A position in Healthcare with EasyCov, a saliva test for SARS-COV-2: first royalties expected in the second half of the year

VOGO (ISIN code: FR0011532225 - Ticker: ALVGO) is announcing the publication of its first-half 2020 revenue (unaudited figures).

Over the first six months of 2020, the Group's revenue totalled €2.3 million, a 216% increase compared to the first half of 2019. This growth was driven by the integration of VOKKERO®, which was acquired in October 2019 and contributed €1.7 million to the Group's first-half 2020 revenue.

Despite a solid organic growth trend over the first few months of 2020, VOGO's like-for-like revenue (excluding VOKKERO®) came out at €548k, down 24%. This trend was due to the expected impact of the health crisis on business in the first half of the year, when all major national and international sporting events were either postponed or cancelled.

Strategic acquisition of VOKKERO®: multiple benefits

Over the first months of 2020, VOGO continued to integrate the activity of VOKKERO®, a key international reference in audio communication systems for professional sports, and the industry and services sectors. There are several benefits to this strategic acquisition for the Group.

This acquisition has significantly improved the Group's international position. VOGO generated €1.4 million in revenue outside France in the first half of 2020, representing 63% of its total business (vs. 22% in the first half of 2019). North America already reached 11% of the Group's first half revenue. With its local presence and the strategic hire of Greg Millard as President of the VOGO NORTH AMERICA subsidiary in February 2020, the Group is now ideally placed to step up its expansion in the United States and benefit from the considerable growth potential on this market.

Strengthening and restructuring its sales teams over the first half of 2020, the Group has been able to significantly broaden its commercial reach. At the end of June 2020, VOGO had 12 salespersons working in France and the United States (vs. three before the acquisition). To step up its business development, the Group has an expanded indirect distribution network with over 30 commercial partners (vs. 13 before the acquisition). Broadening its market coverage through a wide indirect distribution network affords VOGO some key growth drivers while optimising the cost of onboarding new clients. The Group generated over €1 million through these indirect sales channels over the first half of 2020 (compared to €82k in the first half of 2019), which accounts for 46% of first-half revenue.

Moreover, this acquisition enabled VOGO to consolidate its position in the Sports industry, with a unique solution that combines audio and video technology systems. As such, the Group generated €1.3 million in the Sports sector in the first half of 2020, an increase of 89% compared to the same period last year. This growth includes a €995k contribution from VOKKERO®. Business in the Sports sector accounted for 59% of the Group's revenue in the first half of 2020 (compared to 98% in the first half of 2019).

Press release

Montpellier, July 21, 2020

The acquisition finally allowed the Group to expand into new sectors such as industry and services. In the first half of 2020, the Group generated revenue of €620k in the industry sector, which represents 27% of total revenue for the period. The Group recorded revenue of €113k, or 5% of total revenue, in other sectors including services. Thanks to VOKKERO's® solid brand recognition and commercial footprint in these new sectors (illustrated by the reference listings of its communication solutions with SNCF and the French Public Procurement Agency -UGAP-), the Group has reached a key milestone in its sector diversification strategy.

A position in Healthcare to proactively contribute to the recovery of the Sports economy

In April, VOGO joined the consortium formed by the biotechnology company SKILLCELL, a subsidiary of the ALCEN group and the CNRS SYS2DIAG laboratory (CNRS/ALCEN) to develop EasyCov, a saliva test for SARS-COV-2.

As part of the consortium, VOGO developed a digital solution that integrates the automatic analysis of the results by way of a colorimetric reading "EasyCov Reader" and a digital portal that is interoperable with all the healthcare information systems, in order to conduct rapid localised mass testing.

EasyCov allows diagnosis of SARS-COV-2 based on a saliva sample in under one hour and provides several industries that are subject to multiple restrictions given the current environment the opportunity to conduct localised testing as a step towards resuming normal activity. Through its involvement in the technological development of the test, VOGO is helping to support the recovery of the Sports economy by deploying EasyCov during training and sporting competitions, for example.

In two months, the consortium has achieved several milestones in the development of EasyCov: conducting a clinical trial, developing a digital solution, implementing a production and distribution chain (>200,000 tests per week), signing an initial partnership with INOVIE to distribute and conduct tests across its network of laboratories and obtaining its CE marking.

VOGO generated revenue of €200k in the first half of 2020 from its technological contribution to the EasyCov development programme, which accounts for almost 10% of the Group's total revenue for the period.

Over the coming months, VOGO will start to receive royalties that will be indexed to the number of tests sold and conducted. These royalties will start at 7% of pre-tax revenue and will vary according to the sales levels reached. For sales exceeding 500,000 kits at a catalogue price of 20 euros (before tax), VOGO will receive royalties of 3.5% of pre-tax revenue. In light of the various international trade negotiations undertaken by the consortium, VOGO is expected to receive its first royalties during the second half of 2020.

Outlook: reasserted confidence in the future

The recovery of the Sports industry is gaining traction. Encouraging signs have been seen since June with professional athletes returning to training, and competitions and major national and international events resuming. However, the possibility of a future crisis means that today the world of professional sports must reinvent their practices, the fan experience, broadcasting channels for events and economic models, which until now have been the norm.

Against this backdrop, VOGO intends to play a leading role in assisting economic stakeholders in the sports world through the deep transformation of their industry, while fully harnessing the opportunities of new technologies. The Group has already demonstrated its agility in innovation, in particular through:

Press release

Montpellier, July 21, 2020

• Its technological contribution as part of the consortium that developed the EasyCov saliva test, which offers multiple advantages compared to the systems that are currently available. It is quick and painless, and testing can be localised and rolled out on a massive scale. EasyCov should be able to provide rapid localised mass testing on the ground, in situations such as sports competitions or checks for transport or within companies.
• Broadening the VOGOSPORT offering (which historically was limited to in-venue usage) with the launch of a new out-of-venue "Virtual Seat" solution for rights holders, broadcasters, federations, leagues, clubs and event organisers. The new service addresses the needs of sports industry players who, to withstand the current health crisis, have to reinvent themselves, be ready for potential after-shocks and provide economic stakeholders in the sports world new sources of revenue. (Press Release of 30 June 2020)
• Major technological advancements with the distribution of the VOGOSPORT video solution on the 5G network and the "pro" functions that incorporate artificial intelligence (AI) for the purposes of player health or video assistance for referees. This high value-added development enabled the Group to obtain €1.8 million in funding from Bpifrance, €1.6 million of which will be received during the 2021 and 2022 financial years.

In light of these items and on the back of a solid cash position of €6.9 million at 30 June 2020 (compared to €6.5 million at 31 December 2019), which includes a Government-Backed Loan of €2.5 million, VOGO is confident in its ability to navigate this crisis by drawing on the strength of the technological and sales model that it now has in place.

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About VOGO

VOGO develops, markets and distributes live & replay, audio and video solutions for spectators and professionals in sports arenas. The acquisition of Vokkero® in October 2019 enriched this range of professional solutions, with the integration of an internationally recognised line of audio communications systems in the world of sport (over 20 disciplines), as well as in industrial, service and entertainment sectors. All of the Group's technologies have patent protection. VOGO is present in France (Montpellier, Paris and Crolles) and in North America, with an office in New York. VOGO has been listed on the Euronext Growth stock market since November 2018 (ISIN code: FR0011532225 - ALVGO) and is included in the "Tech 40" index since July 2020.

For more information: www.vogo-group.com/en/