evs investors 2q08earnings 080904 analysts publish · the statements made in this presentation that...

www.evs-global.com

September 4, 2008Pierre L’Hoest, CEO

Jacques Galloy, CFOGeoffroy d’Oultremont, IRO

2Q08 Results

1www.evs-global.com

2www.evs-global.com

Forward Looking Information

The statements made in this presentation that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, other than statements of historical fact, which address EVS Group’s (“EVS”, “XDC” or the “Company”) expectations, should be considered as forward-looking statements. Such statements made by EVS are based on knowledge of the environment in which it currently operates. Because of factors beyond its control, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that may cause actual results to differ from anticipated results include, but are not limited to, financing risk, acquisition risk, changes in technology, and other risks as outlined in the filings with securities regulators and can also be found at www.evs-global.com

3www.evs-global.com

Agenda

Financials

Business update

Outlook

Corporate

4www.evs-global.com

Agenda

Financials

Business update

Outlook

Corporate

5www.evs-global.com

2Q08 HighlightsRecord revenue (+47.7%) and net profit (+59.4%)

2Q08: EUR 34.4 million revenue (+47.7%, or +52.2% at cst xrate)Sound Market Fundamentals (HDTV, going tapeless, Web/3G)Very strong progression in studio segment (+182%)Big events traction, mainly for studio segmentStrong EMEA (+128%), NALA -16% at cst xrate, APAC +56%USD impact: EUR -1.1 million on revenue; EUR -0.4 million on net profit

2Q08 EBIT margin of 64.0% (63.5% in 2Q07)Lower margins on rentals offset by better product sales mix

Summer orderbook of EUR 38.5 million at August 31 (+33%)Including rentals (Q3) of EUR 6.9 million relating to BeijingStudio (longer leadtime) 47.1% of orderbook but 36.8% of Jan-Aug order intake

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Record 2Q08 revenue of EUR 34.4 million

20.1

16.4

24.1

19.0 19.921.9

19.7

7.88.18.7

16.6

11.9

8.78.58.67.3

9.4

6.27.3

9.86.9

23.324.4

27.225.4

34.4

1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

Quarter Big Events RentalsQuarter Revenue

EUR millions

LaunchXT[2]

Launch[IP] Director

V1.0

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Strong EMEA and AsiaEMEA +128%, NALA -16% at constant exchange rate, APAC +56%

3,74,5

7,7

3,34,4

3,8

13,2

9,610,5 10,8

6,9

8,3

10,9

14,4

18,9

15,5

13,3 13,5

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

2004 2005 2006 2007 2008

3.0

5.8

7.0

3.62.8

2.1

4.6 4.9 4.75.3

8.2

2.5

7.9

9.5

8.1

6.7 6.9

5.2


2004 2005 2006 2007 2008

NALA EMEA APAC

Revenue, EUR millions

2,0 1,6 1,9 1,80,9

1,9 1,8 1,8

4,9

3,42,4

5,75,1 5,5 5,3

4,3

8,6

6,5


2004 2005 2006 2007 2008

18.9

8.66.9

Growing HDTVStudio ~ 35%83% is HD

Weak USDTraction of Olympics

HD take-off signsEuro2008 tractionPresteigneCharterStudio ~ 33%54% is HD (vs 43% in ‘07)

Strong 2008Traction of Olympics

Jap, China, Cor, AusPresteigneCharterStudio ~ 34% 71% is HD

Traction of Olympics

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2Q08 EPS of 1.12 EURReported – stable EBIT Margin despite impact of rentals and opex growth

Q2Sales +47.7% vs 1Q07

+52.2% at constant FX

EBIT Rentals, NAB trade fair

Opex growth

Leverage of strong sales, better product mix

EPS: +59.5% 30.1% effective tax rate

2Q07 1Q08 2Q08

Revenues 23.3 25.4 34.4Gross margin 88.3% 88.1% 85.9%

S&A (3.7) (3.2) (4.5)R&D (1.5) (2.1) (2.4)

EBIT 14.8 17.1 22.0EBIT margin 63.5% 67.3% 64.0%

Exchange result (0.2) 0.6 (0.0)XDC @equity (0.5) (0.8) (0.5)

Taxes (4.8) (5.6) (6.6)

Net Profit 9.6 11.7 15.2Basic EPS 0.70 0.86 1.12

1) Basic EPS is computed on the adjusted number of shares, i.e. less own shares

1)

EUR millions, IFRS

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Efficient natural and financial hedging2Q08 impact: EUR 1.2 mio on revenue, EUR 0.4 mio on net profit

2Q07 2Q08 2Q08 VarReported Reported @Const $ 2Q08

Revenues 23.3 34.4 35.5 -1.1Gross margin 88.3% 85.9% 85.0% -0.9pp

S&A (3.7) (4.5) (4.7) -0.2R&D (1.5) (2.4) (2.4) -

EBIT 14.8 22.0 22.5 -0.5EBIT margin 63.5% 64.0% 63.4% +0.6pp

Exchange result (0.2) 0.0 0.0 -XDC @equity (0.5) (0.5) (0.5) -Taxes (4.8) (6.6) (6.7) -0.1

Net Profit 9.6 15.2 15.6 -0.4Basic EPS 0.70 1.12 1.15

1) Basic EPS is computed on the adjusted number of shares, i.e. less own shares2) Unrealized exchange gain of EUR 0.4 million as at June 30, 2008.

1)

Q2EUR millions, IFRS, at constant exchange rate

4% lower sales

2% lower EBIT Increasing natural hedge

with more U$ purchases

3% lower net profit Forward contracts gains

US$ related taxes

Flat EPS of EUR 1.15

2)

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1H08 Revenue of EUR 59.8 millionReported - EBIT Margin impacted by opex growth

1H07 1H08Revenues 43.2 59.8Gross margin 87.7% 86.8%

S&A (6.5) (7.7)R&D (3.0) (4.5)

EBIT 27.7 39.1EBIT margin 64.2% 65.4%

Exchange result (0.4) 0.6XDC @equity (1.0) (1.4)

Taxes (8.9) (12.2)

Net Profit 18.1 26.9Basic EPS 1.33 1.98

1) Basic EPS is computed on the adjusted number of shares, i.e. less own shares

1)

H1EUR millions, IFRS

Sales +38.6% vs 1H07

+43.3% at constant FX

EBIT +28% opex growth

Leverage of strong sales

EPS: +48.3% 0.5m financial hedge gain

31.1% effective tax rate


Team Growth, +25% over 1 year… to pursue long term growth

Leverage effect on future sales

60

110

160

210

260

Dec-01

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

40% staff in R&D

226

- Still 20-30 open staff positions- Average age: 35 years

In FTEs and %In FTEs

3214%

10246%

9140%

Operations

R&D

S&A


Breakdown of +3.1m net result variance

15.2

+0.0

15.2

+9.0

9.6

+0.1+0.0-1.8

-0.9-0.8

2Q07

Gr Pft

S&A

R&D TaxExc

hange r

esult

Other

2Q08

excl

XDC

XDC

2Q08

Net Result

2Q08 net profit of EUR 15.2 million, +5.6m58% growth mainly due to operational leverage

2Q08 – EUR millions

Highlights

Strong EMEA sales

Gross margin leverage !

Opex growth

Higher taxes

Stable XDC


Start of the large scale deploymentFirst deployment in Austria; EVS owns 47.2% of XDC

1. Studios to co-finance 75% value of max 8.000 screens First company to sign 6 major US studios (Virtual Print Fees model) 5 years for deployment, 10 years of Virtual Prints Fees

2. Added value of XDC Technology development & integration Service to exhibitors (deployment and maintenance) Service to distributors (content lab, network management)

3. Deployment status Major VPF deal with 193 Cineplexx Austria screens – EUR 24 million – 8 years XDC = #1 in Europe, 300 rented screens + 193 Cineplex

4. Next steps Sign similar VPF agreements with European movie distributors Sell the VPF proposal to exhibitors Secure debt + mezzanine + equity financing Break-even after 2011


2Q08 Income Statement

Contribution of EUR -0.6 millionto EVS Group over 2Q08

XDC 100% 2Q07 2Q08in thousands of EUR

Revenue 611.0 991.3

EBITDA -462.0 -43.8

Net result -1,247.0 -1,214.5

EVS share x 47.2% x 47.2%XDC contribution -588.6 -573.2

Leading EU deployment

47% affiliate of EVS

Sales up 62.2%

R&D no longer capitalized

Strong team of 50 FTE’s

Ongoing negotiations


EVS strong balance sheetRoE 70%; Dividend yield ~3.5%

DSO ~63 daysIncl R&D & Demo’sXDC at equity + bond

7.1m tax provisions

=70% of total B/S, after final dividend cash-out (20m)

93.375.0TOTAL LIABILITIES

65.862.1Shareholders’ equity

4.54.3Non current liabilities21.58.6Current liabilities1.40.2Dividend payable

93.375.0TOTAL ASSETS

12.511.3Non current assets5.87.2XDC at equity + bond9.65.6Inventories

22.315.4Current assets43.135.5Cash

30 June 200831 Dec 2007EUR millions


Acquisition of Dwesab BVBAStrengthening studio skills

Dwesab has more than 20 years broadcast experience 4 IT/ Broadcast engineers, Brussels based, currently Benelux driven Software applications for TV station automation (TOM®) Strong field service and project engineering skills

Strong operational fit Synergies with existing customers (RTL, Talpa, VRT, Alfacam, SBS, ..) Existing interface b/w XT2 world and TOM applications (tapeless archiving projects) Workflow consultancy for the broadcasting industry New EVS Dutch/French speaking business unit based in Brussels

The deal Acquisition price: EUR 2.0 million, incl. EUR 0.9 million cash


Agenda

Financials

Business update

Outlook

Corporate


Train, deliver, learn & grow


All major broadcasters used EVS

BBC (UK) CH7 (AUSTRALIA) TVNZ (NEW ZEALAND) NBC (US) KBS (KOREA) MBC (KOREA) Japan Pool (JAPAN) ARD-ZDF (GERMANY) TVE (SPAIN) France Television (FRANCE) Channel 13 (CHILI) Mediacorp (SINGAPORE) TVB (HONG KONG) YLE (Finland) VRT (Belgium) RAI (ITALY) RTR (RUSSIA) RTBF (Belgium)And many more …

700 EVS systems:

200 in OBs and 300 in IBC, 200 overseas

44,000+ hours global TV production

150,000 file exchanges by EVS solutions

400,000 logs captured in central media server


All OB vans exclusively equipped with EVS100% of images recorded on EVS servers

716 Cameras in OBs

600 Full HD (25i/s)

100 Full HD Super Motion (x3)

16 HD Ready Hyper Motion (x5-x15)

Alfacam


On-site / off-site split production is now proven concept !

BBC (UK)

CH7 (AUSTRALIA)

TVNZ (NEW ZEALAND)

NBC (US)

Canal + (FRANCE)

France Television (FRANCE)

TVB (HONG KONG)

RTR (RUSSIA)

And others …

Split production: home operations as a complement of set up in Beijing

Cost savings for TV stations

Reduce carbon footprint

200 networked XT2s overseas

Ex.: 100,000 logs at BBC created by 20 people in London

Discovery of the IPDirector 5.0 and total reliability of the product


Record audience also on the webInternet seen as a complement for TV, not a competitor

U.S.214 mio viewers

1.3 bio page views

53 mio unique users

75.5 mio video streams

10 mio hours of video

Latin America29 mio video streams

10 mio VOD

Europe (EBU)51 mio unique users

180 mio video streams

22 mio hours of video

China153 mio viewers

237 mio video streams

Mobile: 20 mio page views /day

Australia2.3 mio viewers

32 mio page views

4 mio video streams

4.5 billion TV viewers but also:USA : 30 times more page views than for Athens !

The web compensates for weak broadcast covered countries.

Needfor more videoproduction and clip searches


Conclusions

Strong EVS brand recognition (products and services)

Strong positions in both OB and IBC

Diversity of use of EVS solutions HD/SD, record, slowmotion, news, highlights, live edit, delays, play-out, etc.

Increasing importance of split production – proven concept

Strong Gigabyte interface eases huge files transfers to post-production tools

High added value of the EVS servicefrom the consultancy, design of the workflow, set up of the systems, training of the

operators and support/maintenance, both in Beijing and locally

The Operational service will be further increased and Structured in the future to sustain the adoption of our products


Beijing as trigger and accelerator

Leverage on EVS presence in TV stations outside of Beijing

More to come…

Each event is an opportunity to expand our solutions in all TV stations (different right holders for different events)

2009 2010 2011 2012

CONFEDCUP

HONG KONGEAST ASIAN

GAMES

VANCOUVERWINTERGAMES

FIFAWORLD CUP

S AFRICA

YOUTH OLYMPICS

GAMES

NEW DAILYCOMMGAMES

PANAMGAMES

EUROUKRAINEPOLAND

LONDON2012 …..


Focus on studio workflowsat the largest EMEA broadcast trade fair

IBC 2008 : September 12-16 in Amsterdam

2008


Focus on media sharing (file transfer)for more interoperability with post-production

2008


Exchange your Content with Peerless Multi-Formats Media Sharing Solutions

Improve your Production Workflow with RevolutionaryProduction Content Management Software Suite IPDirectorVersion 5, including the IPEdit and the IPMediaViewer

Get Smoother and Faster News and Sport HighlightsProduction with New CleanEdit [Suite] Features

Enlarge your Production Perspectives with XT2Web, direct access to the media of the XT platform with internet

2008 Boost your tapeless workflows


New presence in the IPTV/mobile area

Demo’s of media sharing

The XT based technology allows the delivery of sport content to mobile

2008 EVS brings sport to new media


Agenda

Financials

Business update

Outlook

Corporate


16.2 16.7

12.5 14.9

6.9

0.3

2007 2008

Big eventsrentals

Orders July &August

BL July 1, excl.events

Summer orderbook of EUR 38.5 million (August 31) - Up 32.9% vs 2007

+33%29.0

38.5

Usual geo mix

EUR 6.9m rentals for Beijing’08 (Q3) (mainly studios)

Studio 47% of orderbookLonger leadtime37% of order intake Jan-Aug

HD ~ 50%

2.4m for 2009 (+60%)

*

* Panam Games Rio2007


Guidance 2008Good double digit growth, despite limited visibility and U$ evolution

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Studio Production

Outside Broadcast

27 30

5246

34

17

28

EVS TV Sales In EUR millions Growth year

Sales (double digit)EPS

Euro 2008 (Q2) and Beijing 2008 (Q3)

More Studio

ExpandRecruit

Open offices

New products

85

95

8-24 Aug 08

7-29 Jun 08

www.evs-global.com

Record 2Q08 revenue, EUR 34.4m, +48%

Investment in innovation & services

Stable EBIT margin: 64.0%

Record order book of EUR 38.5 m, +33%

Studio driven acquisition of Dwesab

2008: good double-digit sales & EPS growth

Conclusions


Agenda

Financials

Business update

Outlook

Corporate


Warrants0,4%

Unidentified64,1% PoweCap

2,7%

Treasury shares1,7%

Cytindus2,1%

BIP5,2%

Lazard AM2,9%

Founders17,9%

Fortis IM2,9%

EVS shareholding as of Sept 4, 2008in % shares and issued warrants – based on last received shareholders statements

Sept 4, 2008 stock data:

Basis : 13,875,000 ordinary sharesOutstanding warrants : 62,350Treasury shares : 253,188 sharesMkt Cap: EUR 846 million

1H08 stock data:

Standard velocity: 83.9%Average daily volume:

- 46,575 shares- EUR 3.0 million

EVS has bought back 103K shares over 8M08 at an avg price of EUR 60equiv. to EUR 6.2 million

* Board members

*

*

*


Corporate Calendar

12-16 September: IBC tradefair in Amsterdam

Thursday 13 November 2008: 3Q08 revenue & earnings

Thursday 19 February 2009: FY08 revenue & earnings

Thursday 14 May 2009: 1Q09 revenue & earnings


…

evs investors 2q08earnings 080904 analysts publish · the statements made in this presentation that...

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