DALET S.A. Paris, 22 September 2020
GROSS PROFIT STABLE AT €13.7 MILLION
INCREASED SEASONNALITY EFFECT ON OPERATING RESULTS DUE TO THE ECONOMIC CONTEXT
SOLID BALANCE SHEET AND CASH: €10.2 MILLION GROSS CASH
| In € millions | H1 2019 | H1 2020 | Variation |
| Revenues | 24.6 | 25.9 | 5% |
| Cost of revenues | 10.9 | 12.2 | 13% |
| Gross profit | 13.7 | 13.7 | -1% |
| Gross margin | 56% | 53% | -3pt |
| Research and development | 6.9 | 9.0 | 31% |
| Selling and marketing | 5.4 | 5.5 | 1% |
| General and administrative | 2.9 | 2.9 | -1% |
| Current operating income/(loss) | (1.5) | (3.7) | n/a |
| Operating income/(loss) | (1.5) | (3.7) | n/a |
| Net income/(loss), Group share | (1.93) | (3.76) | n/a |
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 financial results for its first half-year ended June 30, 2020.
It is noted that Dalet's business experiences significant seasonality, with higher revenues in the second semester compared to the first semester. This seasonality is further amplified in 2020 by the global health crisis that marked the second quarter of 2020.
Growth in recurring revenues and resilience of gross margin
In the first half of 2020, DALET generated revenues of €25.9 million, up 5% on a reported basis. While license sales were slowed down by the health crisis in the Group's various markets, resulting in the postponement of project milestones, recurring revenues increased significantly (+24%) over the first half of the year. This performance reflects the integration of Subscription revenues from the Flex Media platform acquired in July 2019 (€1.0 million over the period) and the good momentum in Maintenance/Support revenues (+13%).
The recurring portion of revenues, a key indicator for the company, reached 46% in the first half (compared with 39% in H1 2019).
Gross Profit was stable over the first half of 2020 at €13.7 million, representing a gross margin of 53%, down from 56% in the corresponding period last year. The slight decrease reflects a less favorable revenue mix and a lower contribution of the service activities associated with the current economic context.
Increased Seasonality on Operating Profit
Current operating loss for the half year was -€3.7 million, as the level of revenues and its increased seasonality did not allow for optimal absorption of expenses, particularly R&D expenses. Since the beginning of the health crisis, the Group has implemented the appropriate cost-saving measures, enabling it to control the evolution of its marketing and sales expenses as well as general and administrative expenses, which remained stable over the period.
Research & Development expenses increased by €2.1 million, reflecting investments for future growth, notably related to the convergence of product lines and a negative accounting impact (depreciation larger than R&D capitalization over the period: -€0.2 million in H1 2020 compared to a positive impact of +€0.4 million in H1 2019). Net income (Group share) for the first half of the year amounted to a loss of €3.8 million in a context of increased seasonality due to the current economic context.
Net cash (excluding IFRS 16 impact): €2.8 million
Cash flow from operations for the period was €4 million (as compared to €4.2 million for the same period last year) enabling Dalet to cover its investment efforts (-€2.3 million). In addition, the Group benefited from a loan of €1.5 million (approximately €1.4 million) in the US under the US Government's Paycheck Protection Program (PPP) Loans.
At June 30, 2020 the Group has a strong capital structure with a net cash balance (excluding IFRS 16) of €2.8m (out of €10.2 million total cash), and shareholders' equity of €13.8m. The Group thus confirms that it has a solid cash position enabling it to look to the future with confidence and to maintain its main growth investments.
Following the application of IFRS 16, the Group recognizes €3.0 million in rental debts as of June 30, 2020.
Business resilience and outlook for year-end 2020
Despite the uncertainties linked to the evolution of the health and economic context, DALET believes that it will be able to limit the effects of the crisis on the Group's business, thanks in particular to a growing share of recurring revenues (46% in the first half of 2020) and to maintaining the order book at a high level.
Over the first half of 2020, the Group has booked orders worth €14.3 million (compared with €17.6m over the same period in 2019 and €14.8m in 2018). As of June 30, 2020 and taking into account the postponements already announced by customers, DALET's billable order book for the 2nd half of 2020 stands at €28.5 million.
Based on the current economic and health context, Dalet reaffirms its objective of achieving, for full year 2020, revenues excluding Hardware close to last year's level and current operating profit close to breakeven.
Next publication
Q3 revenues on 4 November 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 H1 2020
| CONSOLIDATED INCOME STATEMENT | 30 june 2019 | 30 june 2020 |
| (in € thousands) | 6 months | 6 months |
| Revenues | 24,613 | 25,919 |
| Cost of revenues | -10,884 | -12,267 |
| Gross Profit | 13,728 | 13,652 |
| Research and development | -6,895 | -9,016 |
| Selling and marketing | -5,427 | -5,471 |
| General and administrative | -2,909 | -2,868 |
| Current operating income | -1,502 | -3,703 |
| Other income and expenses from operations | 0 | |
| Operating income | -1,502 | -3,703 |
| Net financial income (expense) | -201 | 79 |
| Pre-tax income | -1,703 | -3,625 |
| Income tax | -229 | -134 |
| Net consolidated income | -1,932 | -3,759 |
| Net income, Group share | -1,932 | -3,760 |
| Net income, Minority interests | 0 | 1 |
| BALANCE SHEET | 31 december 2019 | 30 june 2020 |
| (in euro thousand) | ||
| Goodwill | 8,726 | 8,531 |
| Intangible assets | 7,116 | 6,605 |
| Right-of-use assets (leases) | 3,557 | 2,899 |
| Property, plant and equipment | 1,027 | 927 |
| Long-term financial assets | 582 | 561 |
| Long-term restricted cash | 81 | 85 |
| Other non-current assets | 1,939 | 2,140 |
| Deferred tax assets | 270 | 237 |
| NON-CURRENT ASSETS | 23,296 | 21,984 |
| Inventories | 128 | 197 |
| Trade receivables | 19,454 | 14,999 |
| Sundry debtors | 5,177 | 3,566 |
| Cash and cash equivalents | 9,118 | 10,699 |
| Current tax assets | 1,357 | 1,545 |
| CURRENT ASSETS | 35,235 | 31,005 |
| TOTAL ASSETS | 58,531 | 52,989 |
| Capital | 7,564 | 7,959 |
| Premiums | 11,383 | 10,993 |
| Consolidated reserves | -759 | -3,673 |
| Consolidated income, Group share | -2,134 | -3,760 |
| Translation reserves | 2,238 | 2,306 |
| Shareholder's equity (attributable to the Group) | 18,293 | 13,825 |
| Non-controlling interests | 11 | 12 |
| SHAREHOLDER'S EQUITY | 18,304 | 13,837 |
| Long-term financial debt | 5,074 | 6,265 |
| Non-current lease debt | 2,369 | 1,918 |
| Long-term provisions | 1,015 | 1,153 |
| Deferred tax liabilities | 918 | 812 |
| Deferred revenue-non current part | 296 | 334 |
| Other non-current liabilities | 803 | 904 |
| NON-CURRENT LIABILITIES | 10,475 | 11,386 |
| Short-term provisions | 194 | 164 |
| Short-term financial debt | 1,880 | 1,595 |
| Current lease debt | 1,410 | 1,098 |
| Current tax liabilities | 561 | 533 |
| Suppliers | 4,723 | 4,017 |
| Tax and social security liabilities | 5,470 | 5,220 |
| Deferred revenue – current part | 14,162 | 14,314 |
| Other creditors | 1,351 | 826 |
| CURRENT LIABILITIES | 29,752 | 27,767 |
| TOTAL LIABILITIES | 58,531 | 52,989 |
| STATEMENT OF NET CASH FLOWS | 30 june 2019 | 30 june 2020 |
| (in € thousand) | 6 months | 6 months |
| Consolidated net income (including non-controlling interests) | -1,932 | -3,759 |
| +/- Depreciation, amortisation and provisions (except on current assets) | 2,771 | 3,178 |
| +/- Income and expense linked to stock options and similar | 29 | 16 |
| -/+ Gains and losses on disposals | 0 | 1 |
| Cash flow after cost of net financial debt and tax | 869 | -564 |
| + Cost of net financial debt | -96 | -35 |
| +/- Tax expense (including deferred taxes) | 229 | 134 |
| Cash flow before cost of net financial debt and tax (A) | 1,001 | -464 |
| - Tax paid (B) | -351 | -171 |
| +/- Change in working capital requirement from operating activities (including liabilities for employee benefits) (C) | 3,547 | 4,608 |
| = NET CASH FLOW FROM OPERATING ACTIVITIES (D) = (A + B + C) | 4,197 | 3,974 |
| - Cash outflow for acquisitions of property, plant and equipment and intangible assets | -2,320 | -2,075 |
| +/- Change in loans and advances made | -1 | -272 |
| = NET CASH FLOW FROM INVESTMENT ACTIVITIES (E) | -2,321 | -2,347 |
| -/+ Repurchase and resale of treasury shares | -268 | -124 |
| + Cash from new borrowings | 800 | 1,390 |
| - Loan repayments (including finance leases) | -603 | -433 |
| - Lease liability repayments | -504 | -744 |
| - Net financial interest paid (including finance leases) | 101 | 42 |
| +/- Other cash flows from financing activities | 3 | -4 |
| = NET CASH FLOW FROM FINANCING ACTIVITIES (F) | -470 | 127 |
| +/- Impact of changes in exchanges rates (G) | 65 | -133 |
| = CHANGE IN NET CASH POSITION (D + E + F + G) | 1,472 | 1,620 |
| Cash at end of period | ||
| Cash and cash equivalents – Bank overdrafts | 7,396 | 10,220 |
| Cash at opening | ||
| Cash and cash equivalents – Bank overdrafts | 5,924 | 8,600 |
| Change in cash | 1,472 | 1,620 |
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- News release on accounts, results
Full and original press release in PDF: https://www.actusnews.com/news/65136-pr-dalet-rs-2020.pdf
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