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|
|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%|
|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%|
|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
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.
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
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)
|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|
|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|
|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|
|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 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|