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Chambesy, Switzerland, Feb 28, 2008 - (ABN Newswire) - Corporate news announcement processed and transmitted by Hugin ASA. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- --------------
* Revenue growth of 13% for the full year, outpacing market growth * Return to profitability * Second-half 2007 revenue increased by 43% compared to first-half 2007 * Second-half 2007 net profit increased by 100% compared to second-half 2006 * Revenue from fast-growing Eastern European markets increased to reach 24% of the Group's revenue * Six new customers wins announced during 2007 and one more already in 2008, representing a major achievement * 57% of Digital TV Equipment revenue from high definition products * ADB Group reported as #1 in hybrid IPTV STB shipments in Q2 2007 by Infonetics Research
Geneva - February 28, 2008, 07:00 a.m. (CET)
ADB Holdings SA (SWX: ADBN) reported today ADB Group's unaudited consolidated financial results for the full year and second half year of 2007.
Full year revenue for 2007 reached US$ 296.3 million, an increase of 13% compared to US$ 262.3 million in 2006. Gross profit was US$ 100.6 million, or 34% of revenue, a 19% increase from US$ 84.4 million, or 32% of revenue, in fiscal year 2006. Earnings before interest and tax were US$ 2.6 million, or 1% of revenue, versus a loss of US$ 5.1 million, for the same period last year. Net profit for 2007 was US$ 0.5 million, compared to a net loss of US$ 6.3million in 2006. Basic and Diluted EPS were US$ 0.08, compared to US$ (1.03) in 2006. The Group's overall results were affected by US$ 12 million exceptional costs due primarily to the change in manufacturing location, and US$ 4.1 million losses of the New Initiatives segment. Excluding these items, the Group's EBIT was US$ 18.7 million, or 6% of the revenue.
Andrew Rybicki, Chairman and CEO of ADB Group, commented: "We were satisfied with the demand for our products during 2007. We grew our revenue and returned to profitability. At the same time, we decisively focused on implementing the necessary actions to improve our business efficiency. I am pleased that we successfully completed the move of 100% of our production to Thailand according to plan. Our business units organization is fully in place and we have a reliable supply chain, just in time to support our strong first-half 2008 order backlog."
Outlook for 2008
ADB Group sees the first half of 2008 being positively driven by the upcoming European Soccer Championship, as well as the Beijing Olympic Games. However, the Group is taking into account the short-term concerns about the overall economic development worldwide and related uncertainties, as well as their potential impact on the second half of the year. Therefore for the Group has decided to remain cautious on its full-year 2008 outlook, and currently anticipates the following for the continuing operations:
* Revenue growth range of 9-13% * Gross margin range of 33-36% * Earnings before interest and taxes range of 3-5%
Business segment performance
Digital TV Equipment segment
The main business segment, Digital TV Equipment, performed well during year 2007. The revenue from this segment was US$ 278.0 million, or 94% of the Group's revenue, growing 14% from 2006. Reported segment result was US$ 10.1 million, or 4% of segment revenue. Adjusted by excluding US$ 12 million of exceptional items, the DTV Equipment segment EBIT was 8% of revenue, demonstrating its robust financial fundamentals.
Within the Digital TV Equipment, year 2007 saw a significant growth in the terrestrial business, which grew 164% from 2006 due to both the recovery of the Italian DTT market and the initiation of shipments to a new OEM customer: Grundig. Terrestrial represented 12% of the Group's revenue. The IPTV segment continued to grow by 18% compared to 2006, and also saw its customer base expand with attractive prospects (Border States, US, Telefonica Chile and T-Com Innovation, Germany). IPTV now represents 24% of the Group's revenue. The cable segment grew by 11% due to the addition of two new customers (INDI, Belgium, and Multimedia, Poland). It remains the largest segment of the Group, representing 38% of the revenue. The satellite segment, which slightly decreased compared to 2006, represented 21% of 2007 revenue. The partnership with ITI Neovision continues to be of strategic importance to the entire Group. During 2007, the Group restructured the financing arrangements with ITI Neovision bringing the payment terms on par with other Group's customers, and collecting US$ 30 million of its long-term receivable.
In a report issued in 2007, the independent industry research firm Infonetics Research ranked ADB S.A., the Group's STB affiliate, world leader in Hybrid IPTV shipments in the second quarter of 2007. This confirms the Group's leadership in Hybrid IPTV technologies.
ADB S.A. also announced today that it has acquired a further new customer for its IPTV segment, Telekom Austria. Shipments to Telekom Austria have started at the end of 2007.
Software and Services segment
The Software and Services segment's activity increased with the delivery of middleware and applications to some of the Group's new customers, such as INDI and Multimedia. Software and Services segment revenue, excluding intercompany sales, was US$ 16.3 million, or 6% of the 2007 Group's revenue with a positive contribution to the gross margin. Including sales of software and services to the other Group's segment, this segment's revenue grew 14% over 2006. The segment reported a loss of US$ 3.3 million in 2007.
New Initiatives segment
New Initiatives segment revenue was approximately US$ 2.0 million, with a loss of US$ 4.1 million. The segment fell short of Group's expectations on profitability and thus the Group made a financial decision to discontinue this activity. This segment will be discontinued during 2008, and some of its products will be transferred to the other business segments.
Revenue analysis per region
From the standpoint of the revenue split by geographical regions, Europe, Middle East and Africa accounted for 88% of revenue while Asia Pacific represented 4% and the Americas 8%. The Group's focus on fast-growing Eastern Europe resulted in 24% of its revenue derived from this region. The top 10 customers of the Group represented 77% of revenue, decreasing from the 78% of 2006, and no customer represented more than 18% of the Group's revenue.
Results for the second half of 2007
Revenue for second-half 2007 reached US$ 174.3 million, a 43% sequential increase over US$ 122.0 million for first-half 2007, and a 7% increase over US$ 163.4 million for second-half 2006. Gross profit was US$ 59.6 million, or 34% of revenue, a 46% sequential increase over US$ 40.9 million, or 33% of revenue, in first-half 2007, and a 12% increase over US$ 53.5 million, or 33% of revenue, in second-half 2006.
In the second half of 2007, the Group's EBIT increased 88% over the same period last year. It reached US$ 5.3 million, or 3% of revenue, compared with EBIT of US$ 2.8 million, or 2% of revenue, in second-half 2006, and loss before interest and tax of US$ 2.7 million in first-half 2007. Net profit for second-half 2007 was US$ 3.8 million, or 2% of revenue, a sequential improvement from net loss of US$ 3.4 million in first-half 2007, and a 100% increase compared with the second-half 2006 net profit of US$ 1.9 million, or 1% of revenue. The difference between the first and second half results are due to the normal seasonality of the business.
Organization update
During the latter half of 2007, ADB S.A. was reorganized into a new business unit structure in order to better cater for specific client and market needs. The manufacturing process was also re-organized during the 2007, making it leaner and more efficient. It has been lead by new ADB S.A. Chief Operating Officer Mr. Pierre-Alain Nicati since August 1, 2007. The Group CEO and Chairman, Andrew Rybicki, continues in the position of acting CEO of the STB affiliate in order to keep focusing on execution capability and efficiency. In this context, François Pogodalla has been appointed as General Manager of ADB Holdings S.A., with the duties of supervising the Software and Services business segment, and of coordinating general corporate activities. He will also support CEO Andrew Rybicki as necessary in the role of Deputy CEO.
In January 2008, ADB Group's Executive Management has been strengthened by the arrival of Ms. Tina Nyfors, who joins the Group as Vice President for Corporate Development, including Investor Relations. For the last seven years Tina Nyfors was Senior Advisor in the Zurich-based advisory firm Fincoord, where she lead M&A and capital market transactions, investor relations and research, mainly in digital media and broadcasting industry working on major deals for ITI Group/tvn, Poland's leading media and entertainment group.
Share buy-back
In January 2008, the Board of Directors of the Company approved a new share repurchase program, which the Company has already started to execute. This program is limited to less than 2% of the outstanding share capital. The repurchased shares will be used to fund the Company's stock option plan or any other use in the interests of the Company.
Conference Call
The management of ADB Group will hold a conference call to discuss full-year 2007 financial results and outlook for 2008, today at 15:00 CET.
Interested participants should call the following number: +41 52 267 07 36 To ask a question, participants will be required to dial: *14
This press release and further information on ADB Group can be found on the Group's website at www.adbholdings.com
For further information please contact: Tina Nyfors VP, Corporate Development Telephone: +41 22 592 8433 t.nyfors@adbglobal.com -end-
About ADB Group (SWX: ADBN)
ADB Group (www.adbholdings.com) was founded in 1995 and is a leading developer of solutions required to view and interact with digital TV broadcast through cable, satellite, terrestrial and IP networks. The Group primarily sells consumer premise devices, including set-top boxes, with over 10 million units deployed since 1997. The development and sales of the Group's products and services are conducted in three main operating segments: the Digital TV Equipment segment, mainly operated by ADB (www.adbglobal.com), Software and Services segment, encompassing Osmosys (www.osmosys.tv) and Vidiom Systems (www.vidiom.com) and New Initiatives segment, which includes interactive applications, new media, content and related services..
This press release contains forward-looking statements. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements as a result of various factors, among which:
* future developments of the world digital TV market, in particular the future demand for digital TV products in the key markets and from key customers served by our Group; * pricing pressures, competitive market situation; * our and the industry's capability to successfully and timely innovate and develop challenging technology, and our capability to hire and retain high-level employees; * changes in the exchange rates between the US$ and the main other operating currencies of the Group, including the Euro and the Polish Zloty; * our ability in an intensive competitive environment, to continue securing orders from existing or new customers and to achieve our pricing expectations for volume supplies of new products in whose development we have or are currently investing; * the ability of our suppliers to meet our demands for supplies, qualitatively or quantitatively, and to offer competitive pricing; * our gross margin could vary significantly from expectations based on changes in revenue levels, product mix and pricing, changes in unit costs, and the timing and execution of shipments ramp-ups; * changes in the economic, tax, social or political environment, including import and other duties, military conflict, terrorist activities, as well as natural events such as severe weather, health risks, epidemics or earthquakes in the countries in which we, our key customers and our suppliers operate; * our ability to obtain required licenses on third-party intellectual property on reasonable terms and conditions, the impact of potential claims by third parties involving intellectual property rights relating to our business, and the outcome of litigation; * the results of actions by our competitors, including new product offerings and our ability to react thereto;
Advanced Digital Broadcast Holdings SA undertakes no obligation to publicly update or revise any forward-looking statements. Advanced Digital Broadcast Holdings SA reserves the right to amend the information at any time without prior notice.
The information contained in this press release may not be considered as being a substitute for economic, legal, tax or other advice and you are cautioned to base investment decisions or other decisions on the content of this release. You are recommended to consult your investment advisers or other advisers prior to making any decision.
This press release is not an offer of securities for sale or a solicitation to invest in Advanced Digital Broadcast Holdings SA securities. In particular, it is not an offer of securities for sale in the United States of America, its territories and possessions. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Advanced Digital Broadcast Holdings S.A. does not intend to register its securities in the United States of America.
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ADB Holdings S.A. Avenue de Tournay 7 Chambesy Switzerland
ISIN: CH0021194664; Index: SPI, SPIEX, SSCI; Listed: Main Market in SWX Swiss Exchange;
