Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EVS Broadcast Equipment SA (EVSBY, Financial) reported a strong order intake of EUR 141 million, a 7% increase compared to the previous year.
- Revenue reached a new high of EUR 98.1 million, marking a 12% growth from last year.
- The company successfully delivered major summer events, showcasing its capabilities in live production.
- EVS Broadcast Equipment SA (EVSBY) is expanding its AI capabilities, enhancing live motion production.
- The company announced strategic acquisitions of MOG Technologies and a minority stake in TinkerList, aiming to strengthen its product offerings and market presence.
Negative Points
- The EBIT margin declined slightly to 24.3% from 25% last year, despite strong revenue performance.
- Economic and geopolitical risks, including inflation and potential impacts from upcoming North American elections, pose challenges.
- The LSP market in the UK is experiencing tension, with two customers going bust recently.
- APAC region saw a decline in revenue compared to last year due to specific deals not repeating.
- The company faces ongoing challenges in managing inventory and electronic components, although the situation is stabilizing.
Q & A Highlights
Q: Can you explain the 44% growth in your pipeline and its significance? How does it compare to sales, and what is the probability of converting this pipeline into orders?
A: The pipeline growth is driven by new opportunities, particularly with the introduction of VIA MAP, which is attracting interest from customers looking to replace aging systems. The conversion rate from pipeline to orders is over 50%, indicating a strong potential for future order intake. However, larger projects can take 1 to 2 years to convert from pipeline to orders. β Serge Van Herck, CEO
Q: What gross margin should we expect in the second half of the year, considering the potential for higher sales and big events?
A: The gross margin might be slightly lower in the second half due to the mix of sales, but it is expected to remain around 70% for the full year. β Veerle De Wit, CFO
Q: Can you elaborate on the growth in the Live Audience Business (LAB) in the USA and the main drivers behind it?
A: Growth in the LAB sector is driven by increased interest from non-broadcast players like corporate and government sectors. We are strengthening our team and channel partner management to support this growth. β Benoit Quirynen, SVP Strategy and M&A
Q: How is the LSP market in the UK affecting your business, and is it related to a replacement cycle or something structural?
A: The challenges in the UK LSP market are due to smaller players struggling to compete and broadcasters investing in their own capacity. This is not linked to a replacement cycle but rather a regional effect. β Serge Van Herck, CEO
Q: What is the margin profile of MOG Technologies, and how does it compare to EVS's current margins?
A: MOG Technologies primarily deals in software, with some project-based and hardware revenues. While their gross margin is slightly above EVS's current margin, they are not yet EBIT positive due to their scale. β Veerle De Wit, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
