PARIS, July 28, 2020 /PRNewswire/ -- EKINOPS
(Euronext Paris - FR0011466069 – EKI), a leading supplier of
telecommunications solutions for telecom operators and businesses,
has published its first half 2020 financial statements (for the
period ended June 30, 2020) as
approved by the Board of Directors on July
27, 2020. The statutory auditors have conducted a limited
review of the first half financial statements and will shortly
issue the corresponding report.
€m - IFRS
|
H1
20191
|
H1
2020
|
Change
|
Revenue
|
45.0
|
45.8
|
+2%
|
Gross
margin
|
24.9
|
24.9
|
0%
|
% of
revenue
|
55.3%
|
54.3%
|
|
Operating
expenses
|
22.3
|
23.8
|
+€1.5m
|
EBITDA2
|
8.1
|
6.5
|
-€1.5m
|
% of
revenue
|
17.9%
|
14.3%
|
|
Current operating
income
|
2.6
|
1.1
|
-€1.5m
|
Operating
income/(loss)
|
0.2
|
1.2
|
+€1.0m
|
Net
income/(loss)
|
(0.3)
|
0.9
|
+1.2m
|
% of
revenue
|
n.a.
|
2.0%
|
|
Earnings per share
(€)
|
(0.03)
|
0.04
|
|
(1) H1 2019 data has been restated in light of the revision of
the earn-out payment payable in shares in respect of the OneAccess
acquisition. This resulted in a €0.4 million increase in the
earn-out liability as of June 30,
2019, which was restated under 'Other operating income and
expenses' for the first half of 2019 (net expense of €2.8 million
versus €2.4 million as reported a year earlier).
(2) EBITDA (Earnings before interest, taxes, depreciation and
amortization) corresponds to current operating income restated for
(i) amortization, depreciation, provisions and write-offs, and (ii)
income and expenses relating to share-based payments.
Growth generated in H1 2020 despite the pandemic
In H1 2020, Ekinops posted consolidated revenue of €45.8
million, up 1.7% (1.2% at constant exchange rates), in the face of
the disruptions caused by the coronavirus (COVID-19) pandemic.
Despite particularly challenging conditions, the Group recorded
strong business momentum in the Americas (up 14.4%) and returned to
growth in France (up 12.4% over
the first half), after the 2019 slowdown in investments by the
Group's main customers in the home country.
Robust first half EBITDA margin: 14.3%
Gross margin for the period came to €24.9 million. The gross
margin rate was 54.3%, towards the upper end of the Group's
long-term target range (50-55%), compared to the 2019 full-year
margin of 53.4%.
This improvement over 2019 reflects tight control of the
price/cost ratio, despite pressure on the supply chain in the first
half, particularly for some components manufactured in
China. It is also the result of the Group's upmarket strategy,
with some initial successes announced during the first half,
including initial sales of 10G routers and the OTN (Optical
Transport Network) platform, its virtual offering chosen by Orange
Business Services, etc.
H1 EBITDA came to €6.5 million, down €1.5 million from first
half 2019. The €1.5 million increase in operating expenses over the
period was mainly due to the expansion of the R&D team (33 new
hires, 25 of whom were part of the OTN business acquisition in
July 2019). Excluding the impact of
this acquisition, first half operating expenses were slightly up,
€0.5 million, reflecting tight cost control.
Taking these additional expenses into account and despite a
challenging environment, the EBITDA margin remained resilient at
14.3%, compared to a record 17.9% in H1 2019 and 14.2% in H2 (16.0%
over the full year).
After depreciation, amortization and net provisions (€4.8
million) and non-cash expenses relating to share-based payments
(€0.7 million), current operating income amounted to €1.1 million
(2.3% of revenue) in H1 2020.
Other operating income and expenses amounted to €0.2 million
(vs. €2.8m expense restated in H1 2019), as there were no
expenses and fees relating to acquisitions during the first half.
H1 2020 operating income resulted in €1.2 million (vs. €0.2 million
a year earlier).
Net income, Group share came to €0.9 million for the first half,
compared to a loss of €0.3 million a year earlier.
€16.2 million net cash[1] as of
June 30, 2020
Ekinops generated free cash flow of €6.6 million in H1 2020 (up
20% compared to H1 2019), resulting in a net positive operating
cash flow of €4.3 million after change in working capital (up
37%).
Cash flow from investing activities amounted to a €2.2 million
outflow, including €1.6 million in CAPEX (non-current assets and
R&D), up 16% due to the acquisition of the OTN business, and a
€0.6 million expense relating to the buyout of minority interests
of former OneAccess shareholders.
Cash flow from financing activities amounted to a €13.5 million
inflow in H1 2020, including (i) a €2.9 million capital increase
following the exercise of warrants and stock options by Group
employees, (ii) new bank borrowings totaling €11.4 million net
of repayments, including a €12.0 million "PGE" - state-guaranteed
loan obtained in May 2020 and a €0.5
million loan under the PPP (Paycheck Protection Program) in
the United States.
Change in cash and cash equivalents amounted to a €15.3 million
inflow in H1 2020, ending with €47.9 million of cash and cash
equivalents as of June 30, 2020, and
total debt of €31.7 million. Ekinops is in a particularly solid and
comfortable financial position, with net cash[2] of
€16.2 million as of June 30, 2020 compared to €14.0
million at 2019 year-end.
ASSETS - €m
IFRS
|
12/31
2019[3]
|
6/30
2020
|
|
EQUITY &
LIABILITIES - €m
IFRS
|
12/31
20192
|
6/30
2020
|
Non-current
assets
|
83.9
|
77.9
|
|
Shareholders'
equity
|
86.4
|
88.7
|
o/w
goodwill
|
28.7
|
28.4
|
|
Financial
liabilities
|
18.6
|
31.7
|
o/w intangible
assets
|
34.3
|
29.7
|
|
o/w
factoring
|
6.7
|
6.3
|
o/w
right-of-use
|
6.2
|
5.8
|
|
o/w conditional
advances/interest free loans
|
1.5
|
1.6
|
Current
assets
|
38.9
|
44.3
|
|
R&D tax credit
pre-financing
|
5.4
|
3.7
|
o/w
inventories
|
10.5
|
12.9
|
|
Trade
payables
|
13.8
|
15.1
|
o/w trade
receivables
|
21.4
|
24.6
|
|
Lease
liabilities
|
6.5
|
6.1
|
Cash & cash
equivalents
|
32.6
|
47.9
|
|
Other
liabilities
|
24.6
|
24.8
|
TOTAL
|
155.4
|
170.1
|
|
TOTAL
|
155.4
|
170.1
|
Outlook
In the face of the unprecedented global situation caused by the
coronavirus, Ekinops managed to maintain its growth trajectory in
the first half of 2020. Despite the impact of the health crisis on
revenue, the Group was able to strengthen its market positions, in
particular in the United States
and France, posting double-digit
growth in both regions. It demonstrated its operational resilience
by improving its gross margin compared to full year 2019 and
maintaining a high EBITDA margin.
Ekinops moves into the second half of the year with less
visibility than usual. Nonetheless, the Group plans to stay focused
over the coming months on high value-added applications such as
SD-WAN (Software-Defined Wide Area Network), white boxes and uCPE,
OneOS6, VNF, services, 1G/10G routers, OTN and SDN software.
Backed by a solid gross margin in the first half of the year and
the success of its upmarket strategy, the Group is confident in its
goal of achieving a gross margin rate between 50%-55%, higher than
industry benchmarks.
Meanwhile, Ekinops intends to continue its prudent spending
policy over the coming months in order to keep expenses under tight
control..
Given the opportunities for value creation that have emerged
during the crisis, Ekinops should be able to step up its recovery
once the effects of the crisis have subsided, before renewing its
long-term goal of achieving growth of over 10%.
Financial reporting calendar
Date
|
Release
|
Monday, October
12, 2020
|
Q3 2020 revenue
(unaudited)
|
Tuesday, January
12, 2021
|
FY 2020 revenue
(unaudited)
|
All press releases are published after Euronext Paris market
close.
[1] Net cash = cash and cash equivalents – borrowings (excluding
bank debt relating to CIR pre-financing and IFRS 16 lease
liabilities)
[2] Net cash = cash and cash equivalents – borrowings (excluding
bank debt relating to CIR pre-financing and IFRS 16 lease
liabilities)
[3] On June 30, 2020, the
Group finalized the purchase price allocation of Ekinops Brazil.
Certain items were impacted by the retroactive effect of this
purchase price allocation. The "December 31,
2019" column includes these impacts.
For more information, visit www.ekinops.com
EKINOPS contact
Didier Brédy
Chairman and CEO
contact@ekinops.com
Investors
Mathieu
Omnes
Investor relation
Tel.: +33 (0)1 53 67 36 92
momnes@actus.fr
Press
Nicolas
Bouchez
Press relation
Tel.: +33 (0)1 53 67 36 74
nbouchez@actus.fr
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SOURCE Ekinops