EVS REPORTS 2022 RESULTS
Publication on February 17, 2023, before market openingRegulated
information – Press release annual resultsEVS Broadcast Equipment
S.A.: Euronext Brussels (EVS.BR), Bloomberg (EVS BB), Reuters
(EVSB.BR)
EVS reports 2022 results
Liège, Belgium, February 17th, 2023
EVS delivers record
revenue and order intake
results
The results of 2022 are entirely supporting the
growth ambitions of EVS. All the fundamentals for topline
performance are strong: EVS realizes a record-high order intake and
achieves a historical revenue number, despite the increased
delivery terms in 2022. EVS is able to demonstrate a strong net
profit result and as a consequence, realizes a solid Earnings Per
Share.
FY22 Highlights
- Record order
intake at EUR 218,8 million, growing 46,5% YoY.
- Revenue
performance in line with expectations at EUR 148,2 million, growing
7,7% vs. FY21 despite increased delivery terms announced early 2022
and despite reduced Big Event Rental (BER) activity. The growth is
realized through strong growth in North America and in the
MediaInfra solution.
- Controlled OPEX
growth, in line with market expectations.
- Healthy net
profit at EUR 31,3 million driven by a strong financial income
performance and a one-off benefit in taxes, resulting in fully
diluted earnings per share of EUR 2,29.
2H22
Highlights
- Record order
intake of EUR 130,1 million (including Big Tech 2022
contract).
- Revenue for the
second half of 2022 at EUR 80,5 million, growing 6,1% compared to
the same period last year.
- Big Event Rental
revenue at EUR 4,2 million, down EUR 4,9 million compared to
2H21.
- Revenue
excluding Big Event Rental at EUR 76,3 million, growing EUR 9,5
million.
- Net profit
amounts to EUR 15,9 million, leading to fully diluted earnings per
share of EUR 1,14.
Outlook 2023
- The important
order intake of 2022 has considerably fueled the order book to be
delivered in future periods. The total order book at the end of
2022 is of EUR 141,8 million, growing 122% compared to last year.
- The order book
reserved for 2023 is estimated at EUR 85,9 million, growing 68,4%
compared to beginning of the year 2022.
- Based on the
order book and current market dynamics, the revenue guidance for
the year 2023 is set at EUR 145-155 million.The revenue range
demonstrates the ambition of EVS to continue the organic growth, in
a year with no Big Event Rental revenue.
- With the growth
engine launched, the focus in 2023 for EVS will be on profitable
growth.
- EVS plans no
further growth in team members nor do we expect an increase in our
capital expenditure envelope.
- We expect to pay
out dividends in 2023 in line with our dividend policy, namely a
base dividend per share of EUR 1,10.
Key figures
EUR millions, except earnings per share expressed in
EUR |
|
|
|
|
2H22 |
2H21 |
Variance |
FY22 |
FY21 |
Variance |
Revenue |
80,5 |
75,8 |
4,7 |
148,2 |
137,6 |
10,6 |
Gross profit |
53,0 |
53,2 |
-0,2 |
98,8 |
95,8 |
3,0 |
Gross margin % |
65,8% |
70,3% |
-4,5 Pts |
66,7% |
69,6% |
-2,9 Pts |
Operating profit – EBIT |
16,0 |
21,7 |
-5,7 |
31,7 |
37,1 |
-5,4 |
Operating margin – EBIT % |
19,9% |
28,6% |
-8,7 Pts |
21,4% |
27,0% |
-5,6 Pts |
Net profit (Group share) |
15,9 |
19,3 |
-3,5 |
31,3 |
34,9 |
-3,6 |
Fully diluted EPS (Group share) |
1,14 |
1,42 |
-0,28 |
2,29 |
2,57 |
-0,28 |
Comments
Serge Van Herck, CEO
comments:
“I’m proud to say that 2022 was again quite a successful year
for EVS. Our PlayForward strategy, as defined at the end of 2019,
is starting to deliver the expected growth momentum.
In 2022, we had a second record year in a row, with strong
growth in revenues, order intake, and team member size. We showed
significant growth in North America, announced our largest contract
ever in August with the "Big Tech 22 contract” worth over 50MioUSD,
and successfully fought against inflation and component shortages
throughout the year.
We feel we are winning market share in our Live Audience
Business and protecting our position in the Live Service Providers
markets. We successfully supported many of our customers in
delivering the live TV production of major sports events in Asia,
the Middle East, and North America.
The growth of our team is clearly unlocking our sustainable
growth ambitions. Our strong employer branding has enabled us to
successfully hire strong talent across the world. Our team member
engagement survey shows again further improvements compared to the
years before, resulting in our recent “Top Employer”
certification.
We are making good progress in our vision of developing a strong
ecosystem relying on our VIA platform as we are successfully moving
from product to solution sales. Our introduction of Artificial
Intelligence (AI) in XtraMotion is a revolution in the industry and
it represents a major differentiator.
The Axon acquisition in May 2020 has translated into our Media
Infrastructure revenue growth and positively contributes to our
bottom line, demonstrating our capability to execute successfully
large acquisitions. We have also launched our new ERP and upgraded
our VIA Portal applications such as our customer ticketing system
to support our long-term growth ambitions.
In line with our commitments, we continued to deliver strong
dividends for our shareholders. Our sustainability strategy has
started to deliver strong results aligned with our customer’s
expectations, and resulting in good ESG ratings like the Ecovadis
Silver medal. We completed our first carbon footprint analysis:
this will be a critical management tool for taking the right
sustainability decisions in the future.
In conclusion, our PlayForward strategy, is clearly being
appreciated by our customers and channel partners. This is helping
us to get back into growth mode. While economic market conditions
remain very challenging with high inflation, component shortages
and with the war in Ukraine, we feel that our customers
increasingly appreciate the reliability, performance and innovative
edge of our solutions and services.
Our ambition for the next years is to continue to deliver growth
on both our top and bottomline. We are convinced that by focusing
on cost control we will be able to deliver upon this promise.”
Commenting on the results and the
outlook, Veerle De Wit, CFO, said:
“Our 2022 revenue results clearly demonstrate
our ability to achieve organic growth. Even despite increased
delivery terms, announced early 2022, and with a declining Big
Event Rental revenue, we are able to realize a strong top line
performance. All indicators lead us to conclude that this organic
growth is here to stay: the revenue performance, together with the
strong secured revenue position for 2023, are a solid basis to
continue our growth path.
Being a company in growth mode, means that the
necessary resources need to be invested to support this growth:
2022 has been a year where we invested in additional resources, in
new product developments, and in the back-bone of our operations.
This backbone, a globally released new ERP system, has allowed us
to optimize our processes and refine our cost control. As a result,
the granularity of our reporting is improving, which has led to a
decision to write off EUR 0,7 million of Bill of Material costs in
4Q22.
Our operational expenses grew in a controlled
way. Control over our spending patterns remains an attention point
for 2023, especially in the current volatile market.
Thanks to sound treasury management and tax
benefits, we are able to generate a strong Net Profit worth EUR
31,3 million, driving a diluted Earnings Per Share of EUR 2,29.
Our balance sheet also remains healthy with a
very low debt level and a sound cash position. Our cash position is
declining throughout 2022, as a consequence of high dividends paid,
and as a consequence on increased Net Working Capital requirements.
The impact on Net Working Capital is temporary: the implementation
of the new ERP system has created a delay in invoicing in the
fourth quarter – the quarter with the highest volume – resulting in
a large volume of receivables not due at the end of 2022. This is a
temporary effect, that will normalize early in 2023, as soon as the
invoices become due.
Based on the strong results for the year 2022,
we are able to maintain our dividend policy defined earlier in
2022.”
Market & customers
The record high numbers in terms of revenues,
order intake and order book translate the market traction that EVS
is living. Our main growth drivers are North America and Media
Infrastructure. The performance of our MediaInfra solution clearly
demonstrates the power of our acquisition strategy. It is the fruit
of our investment in Axon in 2020, and this acquisition
demonstrates its return on investment 2 years later.
The high order intake is also thanks to our
biggest contract signed in the history of EVS: our Big Tech 2022.
This contract proved an exceptional milestone in the history of
EVS. This contract is a 10-year agreement that covers the delivery
of EVS’ live production, replay and highlight solutions
LiveCeption®, combined with a long-term services level agreement.
The contract provides our US based customer access to the latest
technology innovations for the next 10 years, a full upgrade of its
installed base, a predictable operational spend and an ease of
operations.
2022 was a year with important Big Events, that
EVS was able to support successfully. New solutions, like MediaHub
and MediaInfra Strada, were introduced in our Big Event Rental
business with success.
Market conditions have been challenging
throughout the year, with volatile interest rates, inflation and a
continued erratic components market. This volatile market has urged
EVS to implement a systemic price increase policy. Twice a year the
sales prices are evaluated based on the underlying cost for
components and inflation of labour cost. EVS has introduced 2 price
increases in 2022: a first one in February 2022, and a second one
in September 2022. The price increase policy aims to guarantee the
overall profitability of the solutions of EVS.
The erratic components market also forced EVS to
extend its delivery periods early 2022 and to change the supply
chain approach. However, as most components suffer longer
lead-times, EVS has pro-actively invested in inventory to ensure
these delivery terms are met.
EVS has received many awards in 2022, and this
for different business dimensions. Ranging from technology awards
(Neuron Protect Best of Show Award at the NAB Show), to Wallonia
International Business Awards, to IABM Environmental Sustainability
award, to Top Employer Certification 2023.
Three years after the PLAYForward strategic
exercise that has moved the focus from products to solutions, we
can confidently say that this solution driven approach is highly
appreciated by our customers and contributes to the differentiation
reflected in the order book.
Technologies
During 2022, new generation of AI products did
surface on the market. EVS continues to invest in the development
of specific machine learning algorithms for broadcast specific
components and also integrates in parallel existing AI technologies
or libraries inside the solution portfolio or the workflows
deployed for our customers.
EVS also further developed and evangelized this
year the concept of “Balanced computing” as the best distribution
of the computing workload between on-prem, datacenter and public
cloud based on the economic benefits and the technical constraints
for a specific workflow. This concept has been well received by the
market where some players start to discover the limitations in
terms of feature and the significant impact on Total Cost of
Ownership for the production of premium events.
EVS also currently invests in the development of
important solution components that will be later embraced in the
different solutions. Thanks to the capability to track the benefits
brought by these components in the future, these developments are
activated. These developments will contribute to the future
sustainable growth of EVS.
Corporate topics
2022 marks the moment where the Axon acquisition
really starts to pay off for EVS. The initial assumptions made in
terms of greographical expansion of the market are becoming a
reality. Also the developments made to ensure end-to-end
integration with EVS products demonstrate the complementarity of
this company within the EVS portfolio. It comforts us in our
Acquisition strategy and our ability to integrate companies.
One of the axes of the PLAYforward strategy is
improving our internal way of working. As a company we want to
ensure that we have efficient processes in place that promote
end-to-end collabration across all our departments. Having an
efficient operational back-bone is important in that context. In
October 2022, EVS launched a new global ERP system to ensure
optimimal functioning of our company. The launch was a success and
did not cause any major business interruption: shipping, production
and support were active as of day 1. We now have a solid base to
continously optimize our processes and ensure an optimal team
member and customer experience.
Speaking about improved processes, 2022 is also
the year where we first implemented a systemic listprice
adjustment. The market conditions require a clear methodology to
offset the impact of rising component prices and increasing
inflation over labour costs. EVS now evaluates the need for price
adjustments twice a year to protect the margin generation of the
company.
2022 is also the year where we continue to
expand our sustainability efforts in terms of ESG. After a first
hollistic report published in 2021, we continue to structure our
efforts in terms of sustainability. Our current ESG strategy and
reporting has already received postive feedback from the market: we
received a silver medal from Ecovadis, obtained encouriging score
from other rating companies and recently obtained the certification
of Top Employer for 2023. By the end of 2022, we also realized our
first EVS Carbon Footprint analysis: it provides us not only
insight on our direct and indirect CO2 emissions, but most
importantly, helps us to define our roadmap to reduce our carbon
footprint in the future.
EVS also reinvented the way it collaborates with
its channel partners. A structured channel partner program has been
developed, focused on sustainable relationships with partners more
than on opportunistic market responses, starting to develop
certification paths and clear objectives. This program allows EVS
to reach a broader set of clients and even penetrate new
markets.
Being a company in growth mode, EVS further
invested in additional team members. Additional resources were
primarily allocated to support and operations roles, as to fuel our
future growth, and some research and development resources, as to
staff some important developments ensuring future growth. Thanks to
a strong employer branding, EVS was able to attract this high
number of talents in a relatively short time frame.
Also to support our future growth ambition, EVS
further strengthened its leadership team, early 2022. A new CTO,
Alex Redfern, was welcomed and Xavier Orri was named EVP of
Projects & Operations.
Revenue in
2H22 and
FY22
In 2H22, EVS revenue reached EUR 80,5 million:
an increase of EUR 4,7 million or 6,2% compared to 2H21, despite a
drop of EUR 4,2 million on Big Event Rentals.
At constant currency, revenue decreased by 1.6%
YoY.
Revenue – EUR millions |
2H22 |
2H21 |
2H22/2H21 |
Total reported |
80,5 |
75,8 |
6,0% |
Total at constant currency |
74,7 |
75,8 |
-1.6% |
Total at constant currency and excluding big event
rentals |
70,5 |
66,8 |
5.6% |
For the full year 2022, EVS revenue reached EUR
148,2 million: an increase of EUR 10,6 million or 7,7% compared to
2021, despite a drop of EUR 3,7 million on Big Event Rentals and
despite an increased delivery term announced early 2022. This
performance demonstrates the organic growth realized in 2022.
At constant currency, revenue increased by 3,5%
YoY.
Revenue – EUR millions |
FY22 |
FY21 |
FY22/FY21 |
Total reported |
148,158 |
137,578 |
7,7% |
Total at constant currency |
142,382 |
137,578 |
3.5% |
Total at constant currency and excluding big event
rentals |
132,532 |
124,044 |
6.8% |
Currency fluctuations primarily impact EVS
revenues by the EUR/USD conversion, which can have a significant
impact on our results even if EUR/USD fluctuations also impact the
cost of our US operations and partially our cost of goods sold.
In the second half of the year, (excl. Big Event
Rentals) LSP represented 40% (31% in 2H21) of the revenue, LAB 55%
(57% in 2H21).
Geographically, revenues (excl. Big Event
Rentals) are distributed in 2H22 as follows:
- Europe,
Middle East and Africa (EMEA): EUR 39,1 million (EUR 31,7
million in 2H21)
- Americas
(NALA): EUR 25,9 million (EUR 21,7 million in 2H21)
- Asia
& Pacific (APAC): EUR 11,3 million (EUR 13,4 million
in 2H21), impacted by the slowdown in the region following COVID
implications (primarily in China). The order intake for APAC in
2H22 do recomfort us that this trend can be reversed.
Overall 2022 results
Consolidated gross margin was at 66,7% for FY22,
compared to 69,6% in FY21 (-2,9 Pts) explained by different
drivers:
- Important
investments in the operations & support department to ensure we
continue to deliver quality support all over the world, in line
with our growth patterns (representing -1,4 Pts)
- Impact of the
change in solution mix is representing -1.1 Pts following the
relative weight of Media Infrastructure in the overall
portfolio.
- Write-off worth
EUR 0,7 million linked to bill of material costs, following more
granuler inventory reporting thanks to optimized processes in our
new ERP (-0,4 Pts)
In order to maintain gross profit levels, the
impact of cost price increases and inflation have been
systematically modeled by corresponding sales price increases. This
has resulted primarily in improved margins for our Media
Infrastructure and MediaCeption solutions.
Operating expenses increased by 11% YoY
(remaining below the guidance provided) explained by inflation on
labour cost and energy prices and post-COVID spending patterns
impacting spend for travel, marketing, … EVS did also invest in
additional Research & Development resources in 2022, both
through internal engagements as well as external contracts. These
additional resources were staffed on 2 important developments,
recognized as intangible assets in 2022. The associated spend was
therefore capitalised on the balance sheet.
Overall EBIT performance is of EUR 31,7 million,
generating an EBIT margin of 21,4%.
The net profit ends at EUR 31,3 million
benefiting from a strong financial income following pro-active cash
flow management and low income taxes (EUR 1,4 million compared to
EUR 2,8 million last year) resulting from an excess in tax paid in
2021 and various tax latencies linked to prior years.
The net profit leads to a fully diluted earnings
per share of EUR 2,29 (versus EUR 2,57 in 2021).
Overall second half
2022 results
The gross profit margin in 2H22 was of 65,9%
compared to 70,3% in the same period last year. The drop is a
consequence of lesser revenue from Big Event Rentals and a higher
weight of Media Infrastructure solution in the overall mix. In
addition, the impact of the hirings done in 2022 to ensure
continued quality operations and support affect the comparison.
Operating expenses grew 13.8% in 2H22, compared
to the same period last year and are a reflection of post-COVID
spending patterns and impact of inflation.
The 2H22 EBIT margin was 19,8%, compared to
28,6% in 2H21: the EBIT margin is dropping primarily following
investments in the past 12 months to support our growth
pattern.
The Group net profit amounted to EUR 15,9
million in 2H22, compared to EUR 19,3 million in 2H21. Fully
diluted earnings per share amounted to EUR 1,14 in 2H22
compared to EUR 1,42 in 2H21.
Team members
At the end of 2022, EVS employed 613 team
members (FTE). This is an increase by 62 team members compared to
the end of 2021 (551 FTE). This increase in team members reflects
our continued investments in the growth of EVS. We expect no
further growth of our team member base in 2023, and we will ensure
that we balance the priorities of EVS with the existing
workforce.
Balance sheet and cash flow statement
EVS continues to have a strong balance sheet
with net cash position of EUR 33,8 million with low debt level (of
which EUR 12,5 million related to IFRS 16) resulting in a total
equity representing 75,4% of the total balance sheet as of the end
of 2022. The decrease in cash and cash equivalents (EUR -23,1
million) compared to end of 2021 is mainly driven by the dividends
paid in May and November (including exceptional additional
dividend), combined with the increase in working capital
requirements at the end of 2022.
The working capital requirements are growing,
primarily linked to growing trade receivables. The trade
receivables evolve largely in line with our overall sales volumes.
71% of our trade receivables is not due at year-end, with a large
volume of invoices issued in the second half of the fourth quarter,
given a temporary hold of invoicing operations after the Go-Live of
our new ERP system. We expect these trade receivales to restore in
1Q23. A sound cash position remains a priority for EVS.
Other intangible assets include the costs for
internal development capitalized during 2022 according to IAS 38
(Intangible assets).
Lands and building mainly include the
headquarters in Liège as well as the right of use for the offices
abroad (IFRS16).
Inventories amount to EUR 28,8 million, an
increase of EUR 2,8 million compared to the beginning of the year
as a reflection of a pro-active supply chain management to ensure
we systematically meet our customers’ delivery terms.
Liabilities include EUR 15,3 million of
financial debt (including long term and short-term portion), mainly
related to the lease liabilities for EUR 12,5 million and
borrowings for EUR 2,8 million. Long-term provisions include the
provision for technical warranty on EVS products for labor and
parts. Other amounts payable mainly represent deferred income and
advance payments received from customers on contracts in
progress.
Net cash from operating activities amounts to
EUR 11,0 million for the full year 2022, compared to EUR 38,7
million in 2021. The decrease is mainly driven by higher working
capital requirements resulting from higher trade receivables (as
described above) and lower trade payables, combined with lower net
profit. On December 31, 2022, cash and cash equivalents total EUR
49,1 million, compared to EUR 72,1 million at the end of 2021. The
decrease is mainly driven by lower cash from operating activities,
combined with the increase of the net cash used in investing
activities mainly due to the investments in intangible and tangible
assets (specifically in the internal development of intangible
assets) together with the increase of the net cash used in
financing activities following the higher amount of dividends
distributed during 2022, including the exceptional dividend.
At the end of December 2022, there were
14.327.024 EVS shares outstanding, of which 908.014 were owned by
the company. At the same date, 492.975 warrants were outstanding
with average exercise price of EUR 16,95 and maturities
between October 2026 and September 2028.
Corporate update
There has been no further change to the
composition of the Board of Directors since the last General
Assembly on May 17th during which the shareholders had appointed
two new directors, Frédéric Vincent and Marco Miserez, both for a
period of 4 years. The Board of Directors is currently composed of
seven directors:
- Johan
Deschuyffeleer, independent director & President
(representing The House of Value BVBA);
- Michel
Counson, managing director;
- Martin
De Prycker, independent director (representing InnoConsult
BVBA);
- Chantal
De Vrieze, independent director (representing 7 Capital
SRL);
- Frédéric
Vincent, independent director;
- Marco
Miserez, independent director; and
- Anne
Cambier, independent director (representing Accompany You
SRL)
Glossary
Term |
Definition |
Secured revenue |
Revenue already recognized as well as open orders on hand that will
be recognized as revenue in the fiscal year |
Order book <date> |
Revenues planned to be recognized after the <date> based on
current orders. |
LAB market pillar |
LAB – Live Audience BusinessRevenue from customers
leveraging EVS products and solutions to create content for their
own purposeThis market pillar covers the following types of
customers: Broadcasters, Stadium, House of Worship, Corporate Media
Centers, Sports organizations, Government & institutions,
University & Colleges |
LSP market pillar |
LSP – Live Service ProvidersRevenue from customers
leveraging EVS products and solutions to serve “LAB customers”This
market pillar covers the following types of customers: Rental &
facilities companies, Production companies, Freelance operators,
Technology partners & system integrators buying for their own
purpose |
BER market pillar |
BER – Big Event RentalRevenue from major
non-yearly big event rental.This market pillar covers the following
types of customers: host broadcasters for major events. |
In case of discrepancies between the English and
the French Version, the English Version prevails.
Conference call
EVS will hold a conference call in English today
at 3.30 pm CET for financial analysts and institutional investors.
Other interested parties may join the call in a listen-only mode.
The presentation used during the conference call will be available
shortly before the call on the EVS website.
Participants must register for the conference
using the link provided below. Upon registering, each participant
will be provided with Participant Dial In Numbers, Direct Event
Passcode and unique Registrant ID.
1. Online registration:
https://register.vevent.com/register/BIe156e14a79604a6984c8fb06a38e3c27
2. Webcast Player URL:
https://edge.media-server.com/mmc/p/yzt4d6v8
Corporate Calendar
May 16th, 2023: General
Assembly
May 17th, 2023: Q1 2023 Trading
update
August 18th, 2023: H1 2023
results
November 17th, 2023: Q3 2023
Trading update
For more information, please contact:
VEERLE DE WIT
EVS Broadcast Equipment S.A., Liege Science
Park, 13 rue du Bois Saint-Jean, B-4102 Seraing, Belgium
Tel: +32 4 361 70 00 |
E-mail: corpcom@evs.com |
Website: www.evs.com
Forward Looking Statements
This press release contains forward-looking
statements with respect to the business, financial condition, and
results of operations of EVS and its affiliates. These statements
are based on the current expectations or beliefs of EVS's
management and are subject to a number of risks and uncertainties
that could cause actual results or performance of the company to
differ materially from those contemplated in such forward-looking
statements. These risks and uncertainties relate to changes in
technology and market requirements, the company’s concentration on
one industry, decline in demand for the company’s products and
those of its affiliates, inability to timely develop and introduce
new technologies, products and applications, and loss of market
share and pressure on pricing resulting from competition which
could cause the actual results or performance of the company to
differ materially from those contemplated in such forward-looking
statements. EVS undertakes no obligation to publicly release any
revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
About EVS
EVS is globally recognized as leader in live
video technology for broadcast and new media productions. Our
passion and purpose are to help our clients craft immersive stories
that trigger the best return on emotion. Through a wide range of
products and solutions, we deliver the most gripping live sports
images, buzzing entertainment shows and breaking news content to
billions of viewers every day – and in real-time.
The company is headquartered in Belgium with around
620 employees in offices in Europe, the Middle East, Asia and North
America, and provides sales and technical support to more than 100
countries. EVS is a public company traded on Euronext Brussels:
EVS, ISIN: BE0003820371. For more information, please visit
www.evs.com.Condensed Interim Consolidated
financial information
ANNEX 1: condensed
consolidated income statement
(EUR
thousands) |
Notes |
FY22 |
FY21 |
2H22 |
2H21 |
Revenue |
5.3 |
148.158 |
137.578 |
80.486 |
75.799 |
Cost of sales |
|
-49.314 |
-41.764 |
-27.473 |
-22.543 |
Gross profit |
|
98.844 |
95.814 |
53.013 |
53.256 |
Gross margin
% |
|
66,7% |
69,6% |
65,9% |
70,3% |
Selling and administrative expenses |
|
-39.815 |
-32.392 |
-22.532 |
-17.555 |
Research and development
expenses |
|
-26.267 |
-27.088 |
-14.368 |
-14.867 |
Other income |
|
200 |
1.108 |
150 |
1.057 |
Other expenses |
|
-607 |
-114 |
-121 |
-71 |
Profit-sharing plan and warrants |
|
-643 |
-232 |
-169 |
-107 |
Operating profit (EBIT) |
|
31.712 |
37.096 |
15.973 |
21.713 |
Operating margin (EBIT)
% |
|
21,4% |
27,0% |
19,8% |
28,6% |
|
|
|
|
|
|
Interest revenue on loans and
deposits |
|
106 |
51 |
76 |
-17 |
Interest charges |
|
-912 |
-893 |
-439 |
-446 |
Other net financial income /
(expenses) |
5.6 |
1.793 |
1.254 |
-146 |
932 |
Share in the result of the
enterprise accounted for using the equity method |
|
67 |
193 |
-10 |
-20 |
Profit before taxes
(PBT) |
|
32.766 |
37.701 |
15.454 |
22.162 |
Income taxes |
5.7 |
-1.422 |
-2.797 |
442 |
-2.853 |
|
|
|
|
|
|
Net profit |
|
31.344 |
34.904 |
15.896 |
19.309 |
Attributable to : |
|
|
|
|
|
Non-controlling interest |
|
- |
- |
- |
- |
Share of the
Group |
|
31.344 |
34.904 |
15.896 |
19.309 |
|
|
|
|
|
|
EARNINGS PER SHARE (in number of shares and in
EUR) |
|
FY22 |
FY21 |
2H22 |
2H21 |
Weighted average number of subscribed shares for the period less
treasury shares |
|
13.411.972 |
13.400.624 |
13.419.010 |
13.401.884 |
Weighted average fully diluted
number of shares |
|
13.681.084 |
13.587.624 |
13.768.895 |
13.588.884 |
Basic earnings – share
of the Group |
|
2,34 |
2,60 |
1,19 |
1,44 |
Fully diluted earnings
– share of the Group
(1) |
|
2,29 |
2,57 |
1,14 |
1,42 |
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR thousands) |
|
FY22 |
FY21 |
2H22 |
2H21 |
Net profit |
|
31.344 |
34.904 |
15.896 |
19.309 |
Other comprehensive income of the period |
|
|
|
|
|
Currency translation
differences |
|
324 |
475 |
-231 |
276 |
Total of recyclable
elements |
|
324 |
475 |
-231 |
276 |
Difference on opening |
|
460 |
- |
460 |
- |
|
Gains / (losses) on
remeasurement of defined benefit obligations, net of tax |
|
1.373 |
-412 |
440 |
-412 |
Total of non-recyclable elements, net of tax |
|
1.833 |
-412 |
900 |
-412 |
Total other comprehensive income of the period, net of
tax |
|
2.157 |
63 |
669 |
-136 |
Total comprehensive income for the period |
|
33.501 |
34.967 |
16.565 |
19.173 |
Attributable to : |
|
|
|
|
|
Non controlling interest |
|
- |
- |
- |
- |
Share of the
Group |
|
33.501 |
34.967 |
16.565 |
19.173 |
(1) The diluted earnings per share does
include:
- 187.000 warrants attributed in October 2020, of which 154.250
are outstanding with an exercise price below the share price and
with maturity in October 2026;
- 158.600 warrants attributed in June 2021, of which 155.350 are
outstanding with an exercise price below the share price and with
maturity in June 2027; and
- 183.375 warrants attributed in September 2022, all outstanding
and with a maturity in September 2028.
ANNEX 2: condensed
statement of financial position
(balance
sheet)
ASSETS (EUR thousands) |
Notes |
Dec 31,
2022 |
Dec 31, 2021 |
|
|
|
|
Non-current
assets: |
|
|
|
Goodwill |
|
2.832 |
2.832 |
Other intangible assets |
5.10 |
13.215 |
6.113 |
Lands and buildings |
5.11 |
50.543 |
52.673 |
Other tangible assets |
5.11 |
4.691 |
4.307 |
Investment accounted for using
equity method |
|
1.922 |
1.920 |
Other amounts receivables |
|
3.647 |
2.408 |
Deferred tax assets |
|
4.622 |
5.933 |
Financial assets |
|
512 |
404 |
Total non-current
assets |
|
81.984 |
76.590 |
|
|
|
|
Current
assets: |
|
|
|
Inventories |
|
28.786 |
25.951 |
Trade receivables |
|
61.655 |
38.924 |
Other amounts receivable,
deferred charges and accrued income |
|
11.566 |
6.417 |
Financial assets |
|
174 |
201 |
Cash and cash equivalents |
|
49.051 |
72.144 |
Total current
assets |
|
151.232 |
143.637 |
Total assets |
|
233.216 |
220.227 |
EQUITY AND LIABILITIES(EUR
thousands) |
Notes |
Dec 31, 2022 |
Dec 31, 2021 |
|
|
|
|
Equity: |
|
|
|
Capital |
|
8.772 |
8.772 |
Reserves |
|
183.390 |
170.570 |
Treasury shares |
|
-17.447 |
-17.776 |
Total consolidated
reserves |
|
165.943 |
152.794 |
Translation differences |
|
1.075 |
751 |
Equity, attributable to the owners of the
parent |
|
175.790 |
162.317 |
|
|
|
|
Non-controlling
interest |
|
- |
- |
|
|
|
|
Total equity |
5.4 |
175.790 |
162.317 |
|
|
|
|
Provisions |
|
1.637 |
1.502 |
Deferred taxes liabilities |
|
10 |
11 |
Financial debts |
5.12 |
11.528 |
13.554 |
Other debts |
5.13 |
120 |
1.825 |
Non-current
liabilities |
|
13.295 |
16.892 |
|
|
|
|
Financial debts |
5.12 |
3.750 |
3.728 |
Trade payables |
|
9.207 |
10.497 |
Amounts payable regarding
remuneration and social security |
|
11.219 |
10.658 |
Income tax payable |
|
1.959 |
2.586 |
Other amounts payable, advances
received, accrued charges and deferred income |
5.6 |
17.996 |
13.549 |
Current liabilities |
|
44.131 |
41.018 |
Total equity and
liabilities |
|
233.216 |
220.227 |
ANNEX 3: condensed statement of cash
flows
(EUR
thousands) |
Notes |
FY22 |
FY21 |
Cash flows from operating activities |
|
|
|
Net profit, share of the
Group |
|
31.344 |
34.904 |
|
|
|
|
Adjustment for: |
|
|
|
- Depreciation and write-offs on fixed assets |
|
6.738 |
7.015 |
- Profit-sharing plan and
warrants |
5.4 |
642 |
232 |
- Provisions |
|
212 |
417 |
- Income tax expense (+) /
Income (-) |
|
1.422 |
2.797 |
- Net financial expense (+) /
income (-) |
|
-987 |
-412 |
- Share of the result of
entities accounted for under the equity method |
|
-67 |
-193 |
|
|
|
|
Adjustment for changes in working capital
items: |
|
|
|
- Inventories |
|
-2.834 |
-3.372 |
- Trade receivables |
|
-23.970 |
-10.061 |
- Other amounts receivable,
deferred charges and accrued income |
|
-3.889 |
-430 |
- Trade payables |
|
-1.290 |
4.722 |
- Amounts payable regarding
remuneration and social security |
|
541 |
3.653 |
- Other amounts payable,
advances received, accrued charges, and deferred income |
|
4.776 |
-263 |
- Conversion differences |
|
803 |
813 |
|
|
|
|
Cash
generated from operations |
|
13.441 |
39.822 |
Income taxes received / (paid) |
5.7 |
-2.469 |
-1.112 |
Net cash from operating activities |
|
10.972 |
38.710 |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of intangible assets |
|
-8.770 |
-234 |
Purchase of tangible assets
(lands and building and other tangible assets) |
|
-1.101 |
-1.357 |
Other financial assets |
|
-102 |
3 |
Net cash used in investing activities |
|
-9.973 |
-1.588 |
|
|
|
|
Cash flows from financing activities |
|
|
|
Reimbursement of borrowings |
5.12 |
-1.095 |
-1.086 |
Payment of lease
liabilities |
|
-2.828 |
-3.417 |
Interests paid |
|
-688 |
-566 |
Interests received |
|
75 |
13 |
Dividend received from
investee |
|
64 |
- |
Dividend paid |
|
-20.112 |
-13.400 |
Net cash used in financing activities |
|
-24.584 |
-18.456 |
|
|
|
|
Net increase /
decrease in cash and cash equivalents |
|
-23.585 |
18.666 |
Net foreign exchange
difference |
|
492 |
810 |
Cash and cash equivalents at beginning of
period |
|
72.144 |
52.668 |
Cash and cash equivalents at end of period |
|
49.051 |
72.144 |
ANNEX 4: condensed statement of change
in equity
(EUR thousands) |
Capital |
Reserves |
Treasury shares |
Currency translation differences |
Equity, share of the
Group |
Non-controlling interest |
Total equity |
Balance as per January 1,
2021 |
8.772 |
149.309 |
-17.835 |
276 |
140.522 |
- |
140.522 |
Profit or loss |
|
34.904 |
|
|
34.904 |
|
34.904 |
Other comprehensive
income |
|
-412 |
|
475 |
63 |
|
63 |
Total comprehensive
income for the period |
|
34.492 |
|
475 |
34.967 |
|
34.967 |
Share-based payments |
|
232 |
|
|
232 |
|
232 |
Operations with treasury
shares |
|
|
59 |
|
59 |
|
59 |
Final dividend |
|
-6.699 |
|
|
-6.699 |
|
-6.699 |
Interim dividend |
|
-6.701 |
|
|
-6.701 |
|
-6.701 |
Other allocation |
|
-63 |
|
|
-63 |
|
-63 |
Balance as per December
31, 2021 |
8.772 |
170.570 |
-17.776 |
751 |
162.317 |
- |
162.317 |
(EUR thousands) |
Capital |
Reserves |
Treasury shares |
Currency translation differences |
Equity, share of the
Group |
Non-controlling interest |
Total equity |
Balance as per January 1,
2022 |
8.772 |
170.570 |
-17.776 |
751 |
162.317 |
- |
162.317 |
Profit or loss |
|
31.344 |
|
|
31.344 |
|
31.344 |
Other comprehensive
income |
|
1.833 |
|
324 |
2.157 |
|
2.157 |
Total comprehensive
income for the period |
|
33.117 |
|
324 |
33.501 |
|
33.501 |
Share-based payments |
|
581 |
|
|
581 |
|
581 |
Operations with treasury
shares |
|
-329 |
329 |
|
- |
|
- |
Final dividend |
|
-13.402 |
|
|
-13.402 |
|
-13.402 |
Interim dividend |
|
-6.710 |
|
|
-6.710 |
|
-6.710 |
Other allocation |
|
-497 |
|
|
-497 |
|
-497 |
Balance as per December
31,
2022 |
8.772 |
183.390 |
-17.447 |
1.075 |
175.790 |
- |
175.790 |
ANNEX 5: notes to the consolidated
financial statements
NOTE 5.1: BASIS OF PREPARATION OF THE FINANCIAL
STATEMENTS
The consolidated financial statements of EVS
Group for the 12 month-period ended December 31, 2022, are
established and presented in accordance with the International
Financial Reporting Standards (IFRS), as adopted for use in the
European Union. The accounting framework and standards adopted by
the European Commission can be accessed through the following link
on the website:
http://ec.europa.eu/finance/company-reporting/index_en.htm.
The condensed interim financial statements of
the Group for the 12 month-period ending December 31, 2022, were
authorized for issue by the Board of Directors on February 16,
2023. This interim report only provides an explanation of events
and transactions that are significant to an understanding of the
changes in financial position and reporting since the last annual
reporting period and should therefore be read in conjunction with
the full 2022 consolidated financial statements from which these
condensed financial statements have been derived and which are
planned to be published on EVS Group’s website by April 14, 2023.
The interim condensed financial statements are prepared on a going
concern basis.
NOTE 5.2.1: SIGNIFICANT ACCOUNTING POLICIES AND
METHODS
These condensed interim financial statements
have been prepared in accordance with IAS 34 Interim Financial
Reporting, as issued by the IASB, and as adopted by the EU. The
accounting policies and methods adopted for the preparation of the
company's IFRS consolidated financial statements are consistent
with those applied in the 2021 consolidated financial statements.
The company’s IFRS accounting policies and methods are available in
the 2021 annual report on www.evs.com, except for the accounting
policy on intangible assets which include the capitalization of
development cost for the first time (see note 5.10) as well as the
new, amended or revised IFRS standards and IFRIC Interpretations
that have been in effect since January 1, 2022. The adoption of
these new, amended or revised pronouncements did not have a
significant impact on the consolidated financial statements of the
Group.
NOTE 5.2.2: JUDGMENTS AND ESTIMATES
-
Impacts
of current market volatility and
macroeconomic developments
The impacts of the current market volatility and
macroeconomic developments were taken into account by the company
to assess potential effects on EVS’s financial performance and the
valuation of its assets and liabilities. In particular, key
assumptions used in the calculation of the pension obligations have
been reviewed to ensure a proper valuation as per 31 December 2022.
Also, the key assumptions that are used for estimating the
recoverable amounts of cash generating units in the context of
goodwill impairment test reflect latest market conditions for
interest rates and weighted average cost of capital
-
Estimation of useful life and residual
value
Property, Plant and Equipment are depreciated
using a straight-line method to allocate their depreciable amount
on a systematic basis over their useful life. For the headquarter
building in Liège, the depreciable amount is the cost less its
estimated residual value. Useful life and residual value of an
asset is estimated on a realistic basis based on the experience of
the Group with similar assets and reviewed on a regular basis. The
effect of changes in useful life are recognized prospectively.
-
Functional currency of the Group entities
The individual financial statements of each
subsidiary are prepared in the currency of the primary economic
environment in which the entity operates. When the factors set out
by IAS 21 to determine the functional currency are mixed and the
functional currency is not obvious, management judgment is used to
determine which functional currency most faithfully represents the
economic effects of its underlying transactions, events and
conditions. The functional currency of the EVS Group entities is
EUR except for the US entity EVS Inc. for which US Dollar is
assessed by management to be the functional currency.
- Claims
and contingent liabilities
Related to claims and contingencies, judgement
is necessary in assessing the existence of an obligation resulting
from a past event, in assessing the probability of an economic
outflow, and in quantifying the probable outcome of economic
resources. This judgment is reviewed when new information becomes
available and often with support of internal and external expert
advice.
-
Impact of the war in Ukraine on our
activities
Given the nature and location of its operations
and the fact that EVS does not currently have activities in Russia
nor in Ukraine or with Russian companies, The Company does not
foresee a direct impact of the Ukrainian conflict on its
business.
NOTE 5.3: SEGMENT REPORTING
From an operational point of view, the company
is vertically integrated with the majority of its staff located in
the headquarters in Belgium, including the R&D, production,
marketing and administration departments. Therefore the majority of
investments and costs are located at the level of the Belgian
parent company. Resources securing the customer facing interactions
such as sales, operations and support profiles are primarily hired
within the respective regions. The foreign subsidiaries are
primarily sales and representative offices. The Chief Operating
Decision Maker, being the Executive Committee, reviews the
operating results, operating plans, and makes resource allocation
decisions on a company-wide basis. Revenue related to products of
the same nature (digital broadcast production equipment) are
realized by commercial polyvalent teams. The company’s internal
reporting is the reflection of the above-mentioned operational
organization and is characterized by the strong integration of the
activities of the company.
By consequence, the company is composed of one
segment according to the IFRS 8 definition, and the consolidated
income statement of the Group reflects this unique segment. All
long-term assets are located in the parent company EVS Broadcast
Equipment SA in Belgium.
The company provides one class of business
defined as solutions based on tapeless workflows with a consistent
modular architecture. There are no other significant classes of
business, either singularly or in aggregate. Identical modules can
meet the needs of different markets, and our customers themselves
are often multi-markets. Providing information for each module is
therefore not relevant for EVS.
At the geographical level, our activities are
divided into the following regions: Asia-Pacific (“APAC”), Europe,
Middle East and Africa (“EMEA”), and America (“NALA”). This
division follows the organization of the commercial and support
services within the Group, which operates worldwide. A fourth
region is dedicated to the worldwide events (“big event
rentals”).
The company provides additional information with
a presentation of the revenue by market pillar: “Live Service
provider”, “Live Audience Business” and “Big Event Rentals” for
rental contracts relating to the big sporting events.
Finally, sales are presented by nature: systems and
services.
5.3.1. INFORMATION ON REVENUE BY
DESTINATION
Revenue can be presented by Market Pillar: “Live
Service provider”, “Live Audience Business” and “Big event
rentals”. Maintenance and after sale service are included in the
complete solution proposed to the clients.
Revenue (EUR thousands) |
2H22 |
2H21 |
%
2H22/2H21 |
Live Audience Business |
45.147 |
42.986 |
5,0% |
Live Service Provider |
31.151 |
23.888 |
30,4% |
Big event rentals |
4.187 |
9.021 |
-53,6% |
Total Revenue |
80.486 |
75.894 |
6,0% |
Revenue (EUR thousands) |
FY22 |
FY21 |
%
FY22/FY21 |
Live Audience Business |
71.438 |
72.259 |
-1,1% |
Live Service Provider |
66.869 |
51.785 |
29,1% |
Big event rentals |
9.850 |
13.534 |
-27,2% |
Total Revenue |
148.158 |
137.578 |
7,7% |
5.3.2. INFORMATION ON REVENUE BY GEOGRAPHICAL
AREA
Activities are divided in three regions:
Asia-Pacific (“APAC”), Europe, Middle East and Africa (“EMEA”), and
“Americas”. Aside of them, we also identify the “big event
rentals”.
Revenue for the YTD period (EUR thousands) |
APACexcl. events |
EMEAexcl. events |
Americasexcl. events |
Big eventrentals |
TOTAL |
2H22 revenue |
11.278 |
39.107 |
25.914 |
4.187 |
80.486 |
Evolution versus 2H21
(%) |
-15,8% |
23,4% |
19,4% |
-53,9% |
6,0% |
Variation versus 2H21 (%) at constant currency |
-15,8% |
23,4% |
-7,2% |
-53,9% |
-1,6% |
2H21 revenue |
13.401 |
31.696 |
21.706 |
9.021 |
75.894 |
Revenue for the YTD period (EUR thousands) |
APACexcl. events |
EMEAexcl. events |
Americasexcl. events |
Big eventrentals |
TOTAL |
FY22 revenue |
18.952 |
67.764 |
51.592 |
9.850 |
148.158 |
Evolution versus FY21
(%) |
-17,9% |
6,8% |
37,6% |
-27,2% |
7,7% |
Variation versus FY21 (%) at constant currency |
-17,9% |
6,8% |
22,2% |
-27,2% |
3,5% |
FY21 revenue |
23.077 |
63.468 |
37.499 |
13.534 |
137.578 |
Revenue realized in Belgium (the country of
origin of the company) with external clients represent less than 5%
of the total revenue for the period. In the last 12 months, the
Group realized significant revenue with external clients (according
to the definition of IFRS 8) in one country: The United States
(Americas), EUR 38,1 million in the last 12 months.
5.3.3. INFORMATION ON REVENUE BY NATURE
Revenue can be presented by nature: systems and
services.
Revenue (EUR thousands) |
2H22 |
2H21 |
%
2H22/2H21 |
Sale of Equipment |
64.226 |
58.524 |
10,3% |
Other
services |
16.259 |
17.610 |
-7,7% |
Total Revenue |
80.486 |
75.894 |
6,0% |
Revenue (EUR thousands) |
FY22 |
FY21 |
%
FY22/FY21 |
Sale of Equipment |
118.015 |
106.416 |
10,9% |
Other
services |
30.142 |
31.162 |
-3,3% |
Total Revenue |
148.158 |
137.578 |
7,7% |
Other services include the advice,
installations, project management, rentals, training, maintenance,
and distant support. Work in progress (“WIP”) contracts are
included in both categories.
5.3.4.
INFORMATION ON IMPORTANT CLIENTS
Over the last 12 months, no external client of the company
represented more than 10% of the revenue (similar in 2021).
NOTE 5.4: EQUITY SECURITIES
The variance in number of treasury shares and
outstanding warrants in the period is as follows:
|
2022 |
2021 |
Number of own
shares at January 1 |
925.140 |
928.207 |
Acquisition of own shares on
the market |
- |
- |
Sale of own shares on the
market |
- |
- |
Allocation to Employees Profit
Sharing Plans |
-17.126 |
-3.067 |
Sale related to Employee Stock
Option Plan (ESOP) and other transactions |
- |
- |
Number of own shares at
December 31 |
908.014 |
925.140 |
Outstanding warrants at
December 31 |
492.975 |
456.432 |
In 2022, the Group did not repurchase own shares
on the stock market. No shares were used to satisfy the exercise of
warrants by employees.
The Ordinary General Meeting of shareholders of
May 17, 2022 approved the allocation of 17.126 shares to EVS
employees (grant of 56 shares to each staff member in proportion to
their effective or assimilated time of occupation in 2021) as a
reward for their contribution to the Group successes. The expense
recorded in the consolidated income statement amounts to EUR 329k
in 2022.
NOTE 5.5: DIVIDENDS
The Ordinary General Meeting of May 17, 2022,
approved the payment of a total gross dividend of EUR 1.50 per
share for the year 2021, which includes EUR 0.50 per share
exceptional dividend to honor past commitments on dividend
payout.
For the year 2022, an interim dividend of EUR
0.50 per share was paid in November 2022. Full year dividend of EUR
1,60 per share will be proposed to the Ordinary General Meeting of
shareholders, which also includes EUR 0.50 per share exceptional
dividend to honor past commitments on dividend payout.
(EUR thousands,
gross) |
# Coupon |
Declaration date |
2022 |
2021 |
- Final dividend for 2020(EUR
0,50 per share excl. treasury shares) |
30 |
May 2021 |
- |
6.699 |
- Interim dividend for
2021(EUR 0,50 per share excl. treasury shares) |
31 |
Nov. 2021 |
- |
6.701 |
- Final dividend for 2021
(incl. exceptional dividend)(EUR 1,00 per share excl. treasury
shares) |
32 |
May 2022 |
13.402 |
|
-
Interim dividend for 2022(EUR 0,50 per share excl. treasury
shares) |
33 |
Nov. 2022 |
6.710 |
|
Total paid dividends |
|
|
20.112 |
13.400 |
A new dividend guidance for upcoming years has
been issued early 2022 and is as follows*:
In € per share per fiscal year |
2022 |
2023 |
2024 |
Base dividend |
1,10 |
1,10 |
1,10 |
Exceptional additional dividend |
0,50 |
0,00 |
0,00 |
Total dividend |
1,60 |
1,10 |
1,10 |
*subject to market conditions and to the approval of the
Ordinary General Meeting of Shareholders
NOTE 5.6: OTHER NET FINANCIAL INCOME /
(EXPENSES)
(EUR thousands) |
FY22 |
FY21 |
- Exchange results |
1.393 |
1.117 |
- Fair value variation of
financial instruments |
324 |
-7 |
- Other
financial results |
76 |
144 |
Other net financial income / (expenses) |
1.793 |
1.254 |
The functional currency of EVS Broadcast
Equipment SA as well as all subsidiaries is the Euro, except for
EVS Inc. subsidiary in the USA whose functional currency is the US
dollar. Entity Axon Digital Design LTD. in the UK changed
functional currency from GBP to EUR starting as of July 1st 2022,
following updated Management assesment driven by new implementation
of EUR invoicing at the affiliate. The presentation currency of the
consolidated financial statements of EVS Group is the Euro. For
more information on exchange rates, see also the note 5.9. The
favourable exchange result is mainly explained by the appreciation
of USD vs. EUR in the period.
The estimated fair values of the financial
assets and liabilities are equal to their fair book values in the
balance sheet.
Since 2022, EVS systematically measures the
Group’s anticipated exposure to transactional exchange risk, mainly
relating to the EUR/USD risk. Given the Group has a long position
in USD and based on revenue forecasts, EVS hedges future USD net
inflows through forward or option foreign exchange contracts. The
change in the fair value of the foreign exchange contracts is
recorded directly to the income statement since the Group does not
apply hedge accounting on these transactions. The valuation
techniques used are mainly based on spot rates, forward rates and
interest rate curves.
On December 31, 2022, the Group holds EUR/USD FX
forward and option contracts for a total notional amount of USD
34,0 million with monthly maturities between January 2023 and June
2024. The fair value of those financial instruments on December 31,
2022 amounts to EUR 0,3 million.
NOTE 5.7: INCOME TAX EXPENSE
(EUR thousands) |
FY22 |
FY21 |
- Current tax expense |
-569 |
-1.245 |
-
Deferred tax expense |
-853 |
-1.552 |
Income tax expense |
-1.422 |
-2.797 |
Income tax expense amounts to EUR 1,4 million
for the full year 2022, compared to EUR 2,8 million in 2021. The
decrease is mainly explained by lower taxable profit, tax relief of
EUR 0,6 million received in December 2022 and decrease of the
deferred tax expenses due to lower consumption of recoverable tax
latencies (EUR 1,2 million in 2022 compared to 8,6 million in
2021).
The effective tax rate for the period ended on
December 31, 2022 is 4,3%, compared to 7,5% in 2021.
NOTE 5.8: HEADCOUNT
(in full time equivalents) |
|
At December
31 |
2022 |
|
613 |
2021 |
|
551 |
Variation |
|
+62 |
NOTE 5.9: EXCHANGE RATES
The main exchange rates that influence the
consolidated financial accounts are USD/EUR and GBP/EUR which were
considered as follows:
Exchange rate USD/EUR |
Average FY |
At December
31 |
2022 |
1,0537 |
1,0666 |
2021 |
1,1830 |
1,1326 |
Variation |
-10,9% |
-5,8% |
Exchange rate GBP/EUR |
Average FY |
At December
31 |
2022 |
0,8527 |
0,8869 |
2021 |
0,8599 |
0,8403 |
Variation |
-0,7% |
5,5% |
NOTE 5.10: INTANGIBLE ASSETS
During 2022, intangible assets increased by EUR
7,1 million due to capitalization of internal development costs of
EUR 8,4 million less depreciations of EUR 1,3 million.
The capitalized costs during 2022 include mainly
the internal personnel costs and external consultants’ costs. These
costs are only related to the development phase of 2 important
projects that should secure future growth for EVS.
At the beginning of the period, the Group
identified internal development projects, that for the first time
of EVS Broadcast Equipment’s history fulfilled all the conditions
to be capitalized according to IAS 38 Intangible assets. This
ability arises after the implementation of extensive business
cases, where R&D together with the solutions and sales
departments perform an end-to-end exercise whereby objectives,
costs, market analysis and return are clearly
identified.
These internal development projects consist of
software that will be commercialized at the end of the development
period (expected return on investment is scheduled for 2024). These
2 projects complement the PLAYForward strategy of the Group. The
progress of these internal developments is monitored frequently as
to ensure the future economic benefit remains assured.
We refer to H1 2022 press release for the update
of the accounting policy 2.11 related to the intagible assets
applicable as of fiscal year 2022 and that replaces the accounting
policy disclosed in 2021 annual report.
NOTE 5.11: TANGIBLE
ASSETS
The decrease of lands and buildings of EUR -2,1
million during 2022 is mainly explained by the depreciation of the
period partially offset by investments in progress of EUR 0,5
million. The increase in other tangible assets of EUR 0,4 million
is mainly driven by investments in office and IT equipment of EUR
1,1 million, net of the depreciation of the year of EUR 0,7
million.
NOTE
5.12: FINANCIAL
LIABILITIES
(EUR thousands) |
2022 |
2021 |
|
|
|
Long term financial
debts |
|
|
Bank loans |
1.675 |
2.779 |
Long term lease
liabilities |
9.853 |
10.775 |
|
|
|
Amount due within 12
months (shown under current liabilities) |
|
|
Bank loans |
1.105 |
1.095 |
Short term lease
liabilities |
2.645 |
2.633 |
|
|
|
Total financial debt (short and long-term) |
15.278 |
17.282 |
|
|
|
The total financial
debt is repayable as follows: |
|
|
- within one year |
3.750 |
3.728 |
- after one year but no more
than five |
8.676 |
9.673 |
- more
than five years |
2.852 |
3.881 |
In June 2020, a loan of EUR 5,5 million was put
in place with BNP Paribas Fortis to partially finance the
acquisition of Axon. The repayment schedule foresees first
repayment of EUR 0,6 million in 2020 and annual installments of EUR
1,1 million between 2021 and 2024, with final repayment of EUR 0,6
million in 2025 at loan maturity.
For full year 2022, lease liabilities variation
includes repayment of EUR 2,5 million, excluding interest of EUR
0,4 million.
In June 2020, a roll over credit line of EUR 5,0
million was put in place with Belfius bank to partially finance the
acquisition of Axon. This amortizing credit line will end at the
latest on 30/06/2025. As of this date, EVS has not used this credit
facility.
NOTE 5.13: OTHER
LIABILITIES - PENSION
Other long-term liabilities mainly correspond to pension
obligations. Changes recorded in 2022 in the Belgian pension
defined benefit obligation and fair value of plan assets were as
follows:
(EUR thousands) |
2022 |
2021 |
|
Defined benefit obligation |
Fair value of plan assets |
Net defined benefit liability |
Defined benefit obligation |
Fair value of plan assets |
Net defined benefit liability |
As of January
1 |
10.587 |
-8.762 |
1.825 |
8.670 |
-7.686 |
984 |
Service cost |
1.156 |
|
1.156 |
1.398 |
|
1.398 |
Administrative costs |
|
28 |
28 |
|
18 |
18 |
Net interest expenses |
120 |
-106 |
14 |
41 |
-38 |
3 |
Sub-total included in profit or loss |
1.276 |
-78 |
1.198 |
1.439 |
-20 |
1.419 |
Benefits paid |
-179 |
179 |
0 |
-141 |
141 |
0 |
Return on plan assets |
|
-153 |
-153 |
|
-106 |
-106 |
Actuarial changes (assumptions)
of which: |
|
|
|
|
|
|
Arising from changes in
demographic assumptions |
235 |
|
235 |
|
|
0 |
Arising from changes in financial
assumptions |
-1.349 |
|
-1.349 |
-1.172 |
|
-1.172 |
Arising from experience adjustments |
-367 |
-350 |
-717 |
1.791 |
-69 |
1.722 |
Sub-total included in OCI |
-1.481 |
-350 |
-1.831 |
619 |
-69 |
550 |
Contributions by employer |
|
-1.078 |
-1.078 |
|
-1.128 |
-1.128 |
As of December 31 |
10.203 |
-10.089 |
114 |
10.587 |
-8.762 |
1.825 |
The decrease in the net defined benefit liability of EUR -1,7
million is mainly driven by actuarial changes included in OCI
arising from changes in financial assumptions of EUR -1,3 million
(mainly increase in discount rate from 1,15% to 3,80%) and from
experience adjustments of EUR -0,7 million, combined with employer
contributions in the period of EUR -1,1 million and partially
offset by service cost recorded in income statement of EUR 1,2
million.
The main assumptions used for the actuarial valuation are as
follows:
- Salary increase
for financial year 2022 of 14,5% (5,7% in 2021)
- Discount rate
p.a. of 3,8% (1,15% in 2021)
- Long term salary
increase (inflation included) p.a. of 2,4% (2,1% in 2021)
NOTE 5.14:
FINANCIAL RISK MANAGEMENT
POLICIES
The Group enters into derivative transactions,
principally forward and option currency contracts, with the purpose
to secure its sales and purchases in foreign currencies against
negative variations of these currencies. The Group has
transactional currency exposure arising from sales or purchases by
operating entities in currencies other than the Group’s functional
currency. Foreign currency risk is described in note 5.14.1.
The Group’s main financial instruments, other
than derivatives, comprise bank loans, finance leases, cash and
short-term deposits. The purpose of these financial instruments is
to raise finance for the Group’s operations. The Group has other
financial instruments such as trade debtors and trade creditors,
which arise directly from its operations. The Group’s policy is,
and has always been, that no trading in financial instruments shall
be undertaken. Credit risk is described in note 5.14.2.
5.14.1 FOREIGN
CURRENCY RISK
Since 2022, EVS systematically measures the
Group’s anticipated exposure to transactional exchange risk over
six to eighteen months. In its current structure, the Group’s
exposure is mainly linked to the EUR/USD risk. The Group invoices
all clients in Euro, except in the United States where invoices are
denominated in USD. Since the majority of operating expenses are
denominated in Euro, the Group has a long position in USD, i.e. all
of the Group’s activities generate globally a positive net cash
flow in USD.
On the basis of the forecasts and according to
the market conditions, the Group hedges a portion of the exchange
rate risk on estimated net future flows, mainly through foreign
exchange forward and option contracts. EVS does not apply hedge
accounting according to IAS 39 for those transactions.
Foreign exchange contracts are revalued at each
closing date at their market value. The generated exchange rate
profit or loss is recorded in the “Other net financial
income/(charges)” account in the consolidated income statement. The
valuation techniques used are mainly based on spot rates, forward
rates and interest rate curves. Details of fair value at closing
date are presented in note 5.6.
5.14.2 CREDIT
RISK
Credit exposure is controlled and reviewed
regularly by the management.
Trade receivables consist of a large number of
customers, spread across many geographical areas. The evolution of
the credit risk is monitored permanently. As of December 31, 2022,
it is assumed that the carrying amounts of those trade receivables
are the most appropriate estimate to the fair value of those
assets.
The credit risk on financial instruments is
contained as it is spread over a selection of different
counterparties which are financial institutions with high credit
ratings assigned by international credit rating agencies.
As of December 31, 2022, the maximum amount the
Group could have to pay if guarantees are called on is EUR 0,8
million (similar to EUR 0,8 million in December 2021).
NOTE
5.15: SUBSEQUENT
EVENTS
There are no subsequent events that may have a
material impact on the condensed financial statements of the
Group.
NOTE 5.16: RISK AND
UNCERTAINTIES
Investing in the stock of EVS involves risks and
uncertainties. The risks and uncertainties relating to the current
year are similar to the risks and uncertainties that have been
identified by the management of the company and that are listed in
the management report of the annual report (available at
www.evs.com).
In terms of new risks arising since the last
annual report we highlight the macro-economic environment that
drives energy prices, components prices and labour cost to higher
levels. EVS closely monitors the developments in this area and
pro-actively takes actions to keep these rising costs under control
or to minimize their effect on the profitability of the company. We
also reiterate the potential impacts following the war in Ukraine.
The company continues to comply with the sanction screening in
vigor.
Certification of responsible persons
Serge Van Herck, CEO*Veerle De Wit,
CFO*
Certify that, based on their knowledge,
a) the condensed financial
statements, prepared in accordance with the International Financial
Reporting Standards (IFRS) adopted by the European Union, fairly
present in all material respects the financial condition and
results of operations of the issuer and the companies included in
the consolidation,
b) the Directors’ report fairly
presents the important events and related parties transactions of
2022, including their impact on the condensed financial statements,
and a description of the existing risks and uncertainties for the
remaining months of the fiscal year.
* acting on behalf of a BV
External Auditor
The condensed consolidated financial statements
of EVS Broadcast SA for the year ending December 31, 2022 were
authorized of issue in accordance with a resolution of the Board of
Directors on February 16, 2023. EY réviseurs d’Entreprises
represented by Carlo-Sébastien d’Addario has confirmed that their
audit procedures, which have been substantially completed, have not
revealed any material adjustments which would have to be made to
the accounting information included in this press release. The
complete audit report related to the audit of the consolidated
financial statements will be shown in 2022 annual report that will
be published in April 2023.
- Press release in PDF format
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