Vizrt Reports Q4 and 2012 Results - Growth in APAC and The Americas partially offsetting continued market softness in Europe
Continued margin growth
Bergen, Norway, February 14, 2013. Vizrt Ltd. (Oslo Main List: VIZ)
Revenues of MUSD 121.8 for 2012, flat on a dollar neutral basis, compared to
MUSD 125.3 in 2011, despite the challenging market conditions for most of
2012.Â Gross margin and recurring EBIT improved compared to 2011. The MAM
product line continued to grow, despite the economic uncertainties.
Â Geographically, APAC and the Americas posted 9% growth each, partially
offsetting slowdown in Europe. Vizrt posted a recurring EBIT of MUSD 19.3 (16%
margin) for FY 2012 and MUSD 7.0 (23% margin) in Q4 2012.
* Revenues for FY 2012 came in at MUSD 121.8, on a dollar neutral basis,
compared to MUSD 125.3 in 2011. Revenues for Q4 2012 were MUSD 30.3, down
9% compared to the same period LY.
* Recurring EBIT was MUSD 19.3 for FY 2012 and MUSD 7.0 for Q4 2012,
corresponding to a 16% and 23% margin respectively, compared to MUSD 18.5
(15%) and MUSD 7.2 (21%) for the same periods LY.
* EBITDA reached MUSD 25.8 for FY 2012 and MUSD 8.9 for Q4 2012,
corresponding to a 21% and 29% margin respectively, compared to MUSD 24.9
(20%) and 8.9 (27%) for the same periods LY.
* The Company posted a net profit of MUSD 4.7 (4%) for FY2012 and MUSD 3.9
(13%) for Q4 2012, compared to MUSD 16.0 (13%) and MUSD 6.0 (18%) for the
same periods LY. Net income was impacted by a MUSD 7.8 non-cash impairment
charge recorded in Q2 2012 and MUSD 1.4 revaluation of contingent
consideration related to the LiberoVision acquisition.
* Backlog to date is MUSD 47.1, up 2% compared to the same period LY.
* Cash flow from operating activities FY 2012 was MUSD 17.1, compared to MUSD
24.6 for FY 2011. Cash flow from operating activities in Q4 2012 was MUSD
3.8, compared to MUSD 12.4 for Q4 2011. As of December 31, 2012 the cash
position amounted to MUSD 78.9, up from September 30, 2012 by MUSD 3.6.
* Third and final closing for the acquisition of the remaining 20% of
LiberoVision is to be concluded no later than February 28, 2013. The
consideration, based on LiberoVision adjusted EBIT for 2012 is MCHF 2.2
(app. MUSD 2.4), to be paid 80% in cash and 20% in Vizrt's shares. MUSD 1.4
was recorded in Q4 2012 to adjust the contingent liability to the final
* The 2012 annual impairment test for Escenic's intangible assets is currently
being performed, and will be completed by the time the audited financial
statements will be submitted. As of December 31, 2012, such intangible
assets amounted to MUSD 3.0. If the Company determines that any portion of
intangible assets is to be impaired, it will recognize a non-cash charge
that would impact earnings and earnings per share for the fourth quarter of
2012, as well as for the full financial year ended December 31, 2012.
* The board of directors is to resolve on dividend distribution in its next
meeting, scheduled to be held April 18, 2013.
Management summary and outlook
Martin Burkhalter, Vizrt CEO, commented on the results: "Despite tough market
conditions in Europe in 2012, we were able to conclude the year with nearly flat
revenues compared to last year, as well as improving our margins. The decline in
revenues was due to the continued market weakness in Europe, where macro-
economic related uncertainties resulted in substantially longer investment
decision cycles, especially with regards to larger projects.Â Although these
effects weigh on the global business environment, we managed to increase our
sales in APAC and The Americas."
"Our margin improvement is the direct result of a strong focus on cost control,
as well as an improvement of our gross margins. Despite our focus on cost
control, we have not compromised our capabilities to implement our strategic
objectives and further development of the company, maintaining our innovative
edge, and offering prime products and services enabling our clients in achieving
high quality and workflow efficient content distribution and channel
"As to our product lines, BG has been relatively stable. Notwithstanding the
difficult market conditions we recorded further growth in MAM. We feel that
broadcasters and other content owners are recognizing the importance of a file
based workflow and the value of extending and expanding the economic life and
usability of media assets. We expect broadcasters to continue to invest in this
area and we therefore see an even stronger upside for this product line once
there is a more sustainable global economic recovery. Performance of our Online
business was below expectations. This product line is strongly affected by the
uncertainties in the macroeconomic environment."
"We see ourselves returning to our earlier communicated 13% target revenue
growth, mid- to long-term.Â For 2013 we anticipate growth, though in the mid to
high single digit range.Â Growth will come predominantly from The Americas and
APAC, with Europe expected to show a modest recovery in the second half of the
year.Â For 2013 we will maintain our focus on cost control, though as said,
without compromising the strength of our organization, and we will continue to
invest in expanding our product and market leadership position."
Vizrt product lines and geographical overview
Broadcast Graphics (BG)
BG revenues for FY 2012 of MUSD 94.3 showed a slight decrease of 3% compared to
FY 2011 and a 12% decrease comparing Q4 2012 to Q4 2011. Compared to Q3 2012, BG
revenues were up 4%. BG revenues accounted for 77% of total revenues.
Media Asset Management (MAM)
MAM revenues FY 2012 came in at MUSD 21.9, a 7% increase Y-o-Y and a 12%
increase comparing Q4 2012 to Q4 2011. Compared to Q3 2012, MAM revenues were
down by 7%. MAM revenues FY 2012 accounted for 18% of total revenues.
ONL revenues for FY 2012 came in at MUSD 5.7, compared to MUSD 8.3 for 2011, a
decrease of 32%. Comparing Q4 2012 to Q4 2011 revenues decreased by 29%.
Compared to Q3 2012 ONL revenues were up by 15%. ONL revenues for FY 2012
accounted for 5% of total revenues.
Both, The Americas and APAC posted 9% growth as compared to 2011. The Americas
revenues totaled MUSD 30.3, as compared to MUSD 27.8 in 2011, and APAC came in
with MUSD 31.1, as compared to MUSD 28.5 in 2011. Revenues in the EMEA region
were affected by the ongoing weakness in the macro-economic environment, and
were down by 13% from MUSD 69.1 to MUSD 60.4.
Gross profit and gross margin
The gross margin for 2012 was 67%, as compared to 66% for the same period LY.
The increase is mainly due to improved delivery of MAM projects and continued
improved margins for the MAM product line. The gross profit for 2012 was
affected by a MUSD 2.6 amortization of intangible assets from acquisitions,
compared to MUSD 2.8 for FY 2011. Adjusted for these amortization effects, the
gross margin was 69%, compared to 68% LY.
The gross margin for Q4 2012 was 70%, as compared to 69% for the same period
LY.Â The gross profit was affected by MUSD 0.7 in Q4 2012, compared to MUSD 0.7
in Q4 2011, in relation to the amortization of intangible assets resulting from
acquisitions. Adjusted for these amortization effects, the gross margin was
72%, compared to 71% for FY 2011.
Recurring operating expenses
Total recurring operating expenses for FY 2012 and Q4 2012 were MUSD 62.6 and
MUSD 14.3, down 3% compared to FY 2011, and significantly lower as compared to
each of the first three quarters of 2012. The decrease is mainly due to an
annualized adjustment of the variable compensation component, included mainly in
OPEX, and based on annual target achievements as well as a lower headcount
resulting from our policy not immediately to fill non-mission critical
vacancies. The quarterly average recurring OPEX of MUSD 15.7 better reflects the
recurring OPEX cost base.
Adjusted on a dollar neutral basis, revenues for 2012 came in at the same level
as 2011. The effect of currency fluctuations in the second half of the year,
offset the effects as reported for the first half of 2012. Â The net currency
effect, both on OPEX and revenues, was near to neutral and of no material
influence on a full-year basis.
The order backlog to date is MUSD 47.1, up 2%, compared to LY MUSD 46.4, and
down 1% compared to the Q3 2012 results release date. BG backlog was at MUSD
25.3, MAM backlog at MUSD 18.3 and ONL backlog at MUSD 3.5. For BG and MAM
backlog was up 1% and 9%, respectively, compared to the same period LY, whereas
for ONL the backlog was down 24% comparing to the same period LY.
Balance sheet, cash flow and liquidity
Cash flow generation from operating activities in 2012 was MUSD 17.1, compared
to MUSD 24.6 in 2011. Cash flow generation from operating activities in Q4 2012
was MUSD 3.8, compared to MUSD 12.4 in Q4 2011. A cash dividend of MUSD 10.0 was
paid in Q1 2012.
Vizrt has a strong financial position with no interest-bearing debt and a net
cash position of MUSD 78.9 as of December 31, 2012 (including MUSDÂ 0.6
restricted cash), compared to MUSD 73.1 as of December 31, 2011 (including
MUSDÂ 0.6 restricted cash). Furthermore, shareholders' equity as of December
31, 2012 was MUSD 122.5, which is equivalent to an equity ratio of 76%.
As communicated in 2011, Vizrt Ltd. is undergoing a tax assessment for the years
2006 through 2008. A tax order and a tax assessment have been issued for the
year 2006 and 2007 respectively, both appealed by the Company. No tax assessment
has so far been issued for 2008. Currently, the Company's management is unable
to predict the final outcome of the deliberations with the tax authorities on
its consolidated financial results, however the company has provisions for the
amounts currently deemed likely.
As of December 31, 2012, the Company had 575 employees, compared to 585 as of
December 31, 2011. This decrease in headcount is due to the company's strict
recruitment policy in 2012 limiting both replacements and new recruitments.
Please use the links at the end of this message to download a full Q4 2012
report including tables and the management presentation.
1' Excluding Â MUSD 7.8 non cash goodwill and other assets impairments related to
Escenic recorded in Q2 2012 and MUSD 1.4 revaluation of contingent liability
related to Liberovision acquisition recorded in Q4 2012.
2' EBITDA: Earnings before interest, tax, depreciation and amortization.
3' Equity divided into Total liabilities and Equity
An Analyst Conference will be held on February 14, 2013 at 09:30 a.m. (CET) at
DNB Head Offices, Dronning Eufemias Gate 30, BJÃ˜RVIKA in Oslo.
Management will furthermore discuss the FY 2012 results in a conference call at
1.15 p.m. (CET) Call details are as follows:
+47 24 159584 (Norway)
+44 203 3679216 (UK)
+49 69 247501895 (Germany)
A replay of the call will be available until February 21, 2013. Please use the
+49 30 868757040 (Germany); +44 203 024 54 07 (UK), +1 408 9160685 (US)
Investors and media contacts:
President & CEO
+41 22 365 75 01
+47 5351 8040
SCHWARZ Financial Communication
+49 611 1745 398 11
Vizrt provides real-time 3D graphics and asset management tools for the
broadcast industry - from award-winning animations & maps to online publishing
tools. Vizrt's products are used by the world's leading broadcasters and
publishing houses, including: CNN, CBS, Fox, the BBC, BSkyB, ITN, ZDF, Star TV,
Network 18, TV Today, CCTV, NHK, The Globe and Mail, Times Online, The
Telegraph, and Welt Online.Â Furthermore, many world-class production houses and
corporate institutions such as the Stock Exchanges in New York and London use
Vizrt is a public company traded on the Oslo Main List: VIZ, ISIN: IL0010838154.
For further information please refer to www.vizrt.com
This press release contains forward-looking statements with respect to the
business, financial condition and results of operations of Vizrt and its
affiliates. These statements are based on the current expectations or beliefs of
Vizrt's management and are subject to a number of risks and uncertainties that
could cause actual results or performance of the Company to differ materially
from those contemplated in such forward-looking statements. These risks and
uncertainties relate to changes in technology and market requirements, the
company's concentration on one industry, decline in demand for the company's
products and those of its affiliates, inability to timely develop and introduce
new technologies, products and applications, and loss of market share and
pressure on pricing resulting from competition, which could cause the actual
results or performance of the company to differ materially from those
contemplated in such forward-looking statements. Vizrt undertakes no obligation
to publicly release any revisions to these forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
Report of Q4 2012:
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Vizrt Ltd. via Thomson Reuters ONE