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  DALET company press release from 22/04/2020

  22/04/2020 - 18:50

2019 ANNUAL RESULTS IN LINE WITH OBJECTIVES


Paris, 22 April 2020

CURRENT OPERATING PROFIT POSITIVE

CURRENT OPERATING MARGIN (EXCLUDING OOYALA): 5.3%

strong balance sheet and liquidity positon: Gross cash of €9.1 MILLION, NET CASH of €2.2 MILLION
 

In € millions 2018 2019 Change
Revenues 55,6 58,5 +5%
Cost of goods and third-party services resold 6,7 5,2 -22%
Commercial gross profit 48,9 53,3 +9%
Commercial gross margin 88% 91% +3pt
Other cost of revenues 17,6 19,8 +13%
Gross profit 31,3 33,5 +7%
Gross Margin 56% 57% +1pt
Research and development 13,3 15,7 +18%
Selling and marketing 9,9 11,6 +17%
General and administrative 5,4 6.0 +10%
Current operating income 2,7 0,2 -91%
Operating income 2,7 -0,7 -128%
Net income, Group share 2,39 -2.13 -189%

The consolidated financial statements have been audited. The auditors' report will be published once the due diligence procedures required for the publication of the yearly financial report are complete.


DALET, a leading provider of software solutions for the creation, management and distribution of multimedia content for broadcasters, operators and content producers, has published its yearly audited results for financial year 2019. The year's highlight was the strategic acquisition of Ooyala's Flex Media platform, which enables the Group to extend its offering to a wider market and to accelerate its strategic evolution towards a recurring revenue model (subscription-based licenses).


Growth in revenues and in commercial gross profit

For the 2019 financial year, DALET's sales amounted to € 58.5 million, up +5%, and excluding Ooyala revenues, the organic growth was +2%. Excluding hardware revenues from both years, organic growth of the higher quality core DALET business in 2019 was +6%.

The share of recurring revenues, a key performance indicator for the company, increased to 36%, thanks to both strong organic growth in Maintenance/support revenues (+14%) and to the initial new stream of subscription revenues from the Ooyala Flex platform.

The group has thus largely achieved its objective of increasing its commercial gross profit (revenues minus cost of goods and third-party services resold), with an increase of +6% excluding the contribution of Ooyala assets and +9% including the latter, representing 91% of revenue.

The overall gross profit of the business increased +7% in 2019 to 33.5M€. Excluding hardware, gross profit for the business increased +8% with a gross margin profile of 62%.


Current operating income at breakeven on the new scope of consolidation

Operating expenses on the historical business grew at a rate comparable to revenues. Thus, the Group's current operating income, on its historical business, increased by 13% to €3.0 million. The current operating margin on the historical business was 5.3%, in line with the guidance set at the beginning of the financial year.

Current operating income is break even at €0.2 million, also in line with expectations, including a €2.8 million loss on the Ooyala Flex platform post-closing, which had been taken into consideration when the acquisition terms and price were negotiated. Cost savings and efficiencies have been implemented at Ooyala in order to rapidly lower the break-even point.

The operating loss for the year was -€0.7 million and reflects the costs related to the Ooyala transaction and restructuring for €1.0 million. Net income group share was -€2.1 million.


Net cash (excluding IFRS 16): €2.2 million

Thanks to a significant improvement in working capital over the period, operating cash flow rose sharply to €8.0 million, compared with €3.5 million for the 2018 financial year. The Group continued its investment efforts (-€4.7 million), mainly on the cloud and Artificial Intelligence, to which the cash impact of the acquisition should be added (-€2.0 million).

As a result, the group has a solid balance sheet with a gross cash position of €9.1 million and net cash position (excluding IFRS 16) of over €2.2 million at 31 December 2019, and shareholders' equity of €18.5 million. The group's liquidity position is strong, with €1.9 million of short-term debt (< 1 year), excluding possible deferrals of debt repayments to be granted by the Group's lenders in light of the
Covid-19 situation.

Following the application of IFRS 16, the group recorded € 3.8 million in lease debts at 31 December 2019


Record level of bookings in 2019

In 2019, the group recorded a record €41.9 million in new orders (excluding Ooyala), compared with €39.8 million for the previous record in 2017 and €31.2 million bookings in 2018. As compared to 2018, bookings were especially strong in North America (+19%) and in EMEA (+50%) on the backs of multiple wins, including the recently announced mega deal with Spanish public radio station RNE. At 31 December 2019, DALET therefore had a backlog of orders billable over 2020 at its highest level ever at €49.7 million, including nearly €6 million for Ooyala Flex.


Business update in response to the Covid-19 situation

As soon as the crisis began and the restrictions were put in place, DALET activated its Business Continuity Plan by reinforcing its measures to protect its employees, while ensuring that the quality of service for its customers remained intact.

DALET thus continues, mainly in remote mode, to execute projects and deploy solutions for its customers, even if some activities are delayed. In particular, DALET is working with multiple News stations, which currently have very large audiences, to help them overcome the technical difficulties linked to the remote work of a large part of their staff.

However, the current situation is having an impact on the Group's business. The development of the health crisis in Europe and the United States has led some customers to slow down or postpone their investments in this context. Some operations at client sites have not been possible since the end of February due to travel restrictions.

Based on preliminary estimates, the Company expects revenue for the first quarter of 2020 to be comparable to last year. In this context, the growth target indicated when the 2019 sales figures were published (8 to 12% growth) is highly unlikely to be achieved, even in the event of a dynamic recovery. The Group is closely monitoring developments and is implementing appropriate cost-saving measures. DALET will indicate its new guidance as soon as visibility on the exit from the crisis improves on a country-by-country basis.

The company has solid fundamentals to face this situation:

  • a provider of mission-critical software system solutions to our customers' core operations
  • a record order book of more than €49.7m at 31 December 2019. To date, no orders have been cancelled, however revenue recognition on some projects will be delayed
  • a significant share of recurring revenues (support contracts, Ooyala Flex Media subscription contracts, i.e. 36% of 2019 sales) that is expected to grow this year despite market conditions; to date, the Group has not seen a material change to retention rates and payments of maintenance and subscription contracts
  • a solid financial situation with a liquid balance sheet of €9.1 million of gross cash and net available cash of €2.2 million at December 31, 2019. The Group is taking cash preservation measures, by resorting if necessary to the aid measures put in place by the authorities in the countries where it operates.

The Group will keep the market informed of any significant developments in its business.


Medium-term growth dynamics reinforced by a richer product offering

For its historical business, DALET intends to rely on the quality of its offerings and a strong position with its customers to continue its development. In addition, with the integration of the Ooyala Flex Media Platform, the group is broadening its multi-platform content distribution offer to a greater number of verticals and market segments while accelerating the transition of part of the group's business to subscription-based revenues.

DALET is thus ideally positioned to seize the opportunities for growth in these new target markets for the group as soon as economic conditions return to a more favorable environment.

Next publication

Q1-2020 revenues on 12 May 2020 after the close of trading
 


About DALET Digital Media Systems

DALET solutions and services enable media organizations to create, manage and distribute content faster and more efficiently, fully maximizing the value of assets. Based on an agile foundation, DALET offers rich collaborative tools empowering end-to-end workflows for news, sports, program preparation, post-production, archives and enterprise content management, radio, education, governments and institutions.

DALET platforms are scalable and modular. They offer targeted applications with key capabilities to address critical functions of small to large media operations - such as planning, workflow orchestration, ingest, cataloguing, editing, chat & notifications, transcoding, play out automation, multi-platform distribution and analytics.

The integration of the Ooyala Flex Media Platform business has opened vast opportunities for DALET customers to deploy successful strategies that better address their audience with agile multi-platform content distribution in a wider range of markets, such as sports for teams and leagues, brands and corporate organizations, as well as Media and Entertainment companies looking to scale up their digital offerings.

DALET solutions and services are used around the world at hundreds of content producers and distributors, including public broadcasters (BBC, CBC, France TV, RAI, TV2 Denmark, RFI, Russia Today, RT Malaysia, SBS Australia, VOA), commercial networks and operators (Canal+, FOX, MBC Dubai, Mediacorp, Fox Sports Australia, Turner Asia, Mediaset, Orange, Charter Spectrum, Warner Bros, Sirius XM Radio), sporting organizations (National Rugby League, FIVB, Bundesliga) and government organizations (UK Parliament, NATO, United Nations, Veterans Affairs, NASA).

DALET is traded on the NYSE-EURONEXT stock exchange (Eurolist C): ISIN: FR0011026749, Bloomberg DLT:FP, Reuters: DALE.PA. For more information on DALET, visit www.dalet.com

Contacts

Actus Finance & Communication : Investors: Olivier Lambert +331 53 67 36 33
Press-Media: Vivien Ferran +331 53 67 36 34



APPENDIX: DETAILED FINANCIAL INFORMATION 2019

INCOME STATEMENT BY FUNCTION
(in euro thousands)
2018 2019
Revenues 55 617 58 548
Cost of Revenues -24 304 -25 018
Gross Profit 31 313 33 529
Research and Development expenses -13 264 -15 682
Selling and Marketing expenses -9 937 -11 625
General and Administrative expenses -5 431 -5 975
Current Operating Income 2 681 247
Other operating income and expenses 16 -992
Operating Income 2 696 -745
Financial income and expenses 239 -461
Pre-tax income 2 935 -1 206
Income Tax -547 -927
Net consolidated income 2 388 -2 133
Net consolidated income, attributable to Group 2 387 -2 134
Attributable to non-controlling interests 1 1

 

BALANCE SHEET Dec 31 2018 Dec 31 2019
 (in euro thousands) 12 months 12 months
     
Goodwill 5 447 8 726
Intangible assets 5 076 7 116
Right of use Assets   3 557
Property, plant and equipment 1 176 1 027
Long-term financial assets 390 582
Long term restricted cash 81 81
Other non-current assets 2 053 1 939
Deferred tax assets 179 270
NON-CURRENT ASSETS 14 401 23 296
Inventories 277 128
Trade receivables 19 746 19 454
Sundry debtors 2 890 5 177
Cash and cash equivalents 6 407 9 118
Current tax assets 1 119 1 357
CURRENT ASSETS 30 439 35 235
TOTAL ASSETS 44 840 58 531
     
Capital 7 189 7 564
Premiums 9 682 11 383
Consolidated reserves -3 146 -759
Consolidated income 2 387 -2 134
Translation reserves 1 480 2 238
Shareholder's Equity (attributable to the Group) 17 591 18 293
Non-controlling interests 10 11
SHAREHOLDERS' EQUITY 17 602 18 304
Long term financial debt 2 747 5 074
Non-current lease debt   2 369
Long term provisions 683 1 015
Deferred tax liabilities 486 918
Deferred revenue-non current part   296
Other non current liabilities 1 049 803
NON CURRENT LIABILITIES 4 965 10 475
Short-term provisions 9 194
Short-term financial debt 1 618 1 880
Current lease debt   1 410
Current tax liabilities 144 561
Suppliers 3 882 4 723
Tax and social security liabilities 4 572 5 470
Deferred revenue – current part   14 162
Other creditors 12 049 1 351
CURRENT LIABILITIES 22 273 29 752
TOTAL LIABILITIES 44 840 58 531

 

STATEMENT OF NET CASH FLOWS 31 dec 2018 31 dec 2019
(in € thousand) 12 months 12 months
Consolidated net income (including non-controlling interests) 2 388 -2 133
+/- Depreciation, amortization and provisions (except on current assets) 3 635 6 514
+/ - Income and expense linked to stock options and similar 59 59
-/+ Gains and losses on disposals -9 0
Cash flow after cost of net financial debt and tax 6 073 4 440
+ Cost of net financial debt -185 -140
+/- Tax expense (including deferred taxes) 547 927
Cash flow before cost of net financial debt and tax (A) 6 434 5 226
- Tax paid (B) -611 -663
+/- Change in working capital requirement from operating activities (including liabilities for employee benefits) (C) -2 293 3 473
= NET CASH FLOW FROM OPERATING ACTIVITIES (D) = (A + B + C) 3 530 8 036
- Cash outflow for acquisitions of property, plant and equipment and intangible assets -4 223 -4 746
+ Cash from disposals of property, plant and equipment and intangible assets 49 0
+/- Impact of changes of scope   -2 065
+/- Change in loans and advances made -76 -85
= NET CASH FLOW FROM INVESTMENT ACTIVITIES (E) -4 250 -6 896
     
-/+ Repurchase and resale of treasury shares -15 -77
+ Cash from new borrowings 1 400 3 875
- Loan repayments (including finance leases) -1 270 -1 320
- Lease liability repayments   -1 234
- Net financial interest paid (including finance leases) 174 137
+/- Other cash flows from financing activities -82 6
= NET CASH FLOW FROM financing activities (F) 206 1 387
     
+/- Impact of changes in exchange rates (G) 71 148
= CHANGE IN NET CASH POSITION (D + E + F + G) -443 2 675
     
Cash at end of period    
Cash and cash equivalents - Bank overdrafts 5 924 8 600
Cash at opening    
Cash and cash equivalents - Bank overdrafts 6 367 5 924
     
Change -443 2 675

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  Original Source: DALET