New growth engines Presentation SFAF - annual accounts 2018 March 22, 2019
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New growth engines
Presentation SFAF - annual accounts 2018
March 22, 2019
1
New growth engines
• Netgem, connected home expert since its creation
• 2018: key year for usage behavioural changes and market structure
• Our strategy for growth step
• Outlook 2019-2020
• Results 2018
2
netgem, connected home expert since its
creation
Our Mission
connect each and every home to the digital world (
3
Netgem, connected home expert since its creation in 1996
• The first TV Box was launched 15 years ago in France
- 2004
• Near 9 millions connected homes through digital
2004 services via a Netgem Box across 20 countries
• Certified by Hollywood and the major European
publishers
• More than €1 billion in cumulated revenue
• More than €100 millions returned to shareholders
2019 • No debt
4
2018: key year for usage behavioural
changes and market structure
5
L’émergence de nouveaux modes de consommation, de nouveaux objets
connectés, et la Fibre qui change la donne
• New consumer habits are rising, with new connected devices and
Fibre to the home (FTTH) changing everything
• The tablet, mobile phones and laptops overtaking TV for
"millenials", and streaming habits lead the consumption.
• Connected speakers, the new multi-services way at the heart of
the home?
• Fibre to the home and its strengths are creating new services
opportunities: a challenge for operators to convince their already
equipped users to pay more.
These new services will be at the heart of offers for providers.
6
The end of a unique offer for all
Operators will become more and more multi-services
oriented with offers becoming more fragmented
•
7
Broadband for all: a more open market, which enriches competition
through services.
A Political will in France
France's Broadband Plan identifies "non-dense" areas, known as
'Réseaux d’Initiative Publique' or Public Initiative Networks,
which cover 40% of French households; In these areas, the
operators which provide connected equipments and services are
different from the infrastructure operators, which install the
fibre to the home
17 million households planned in the "Réseaux d’Initiative
Publique" zone, opening competition; 1 million plugs installed
in 2018 As and when connected areas are set-up, each person
can choose his own operator; Videofutur, operator of which
Netgem is co-shareholder with the 'Caisse des Dépôts et
Océinde' is today leader of this emerging market in France
- Abroad, similar business models exist, eg: the FTTH providers in
the UK
8
Our strategy for
this new stage of growth
9
Our 10 years plan
Connecting millions of homes, in France and elsewhere, to the
new services made possible by ultra-fast broadband and fibre.
How ?
By becoming the number one partner of multi-services operators,
offering them an open and secure platform of Connected Equipment and
Operated Services for the connected home.
10The 2019 news on the Netgem platform
A multi-screen cloud platform Our multiservice connected speaker
secure and certified for streaming
video on the fiber
A controlled investment thanks to the expertise of our An investment that demonstrates the successful
resources in the field of TV experiences and the integration of the expertise of a startup supported by
management of usage data, and the content security our industrial experience in terms of quality,
approved by the studios. competitiveness and financing.
112019 - 2020
Perspectives
12Recent projects and how they fit amongst this new strategy
Reinforcement within Vitis through the contribution of the activity “TV
Cloud”.
• Continue co-investment with Caisse des Dépôts and Océinde to
capture the growth of the France High-Speed Plan
• Increase Vitis' value by giving it the means to launch new differentiating
multi-screen TV offerings in the fiber market.
ZTE Partnership
• Have a privileged partner to strengthen the supply of connected
equipment (new connectivity products, financing services).
• Develop trade operators in common in the Fiber market.
132019 -2020 Perspectives
Support the Fiber / 4K migration of our current customers and the relevance of
new business models.
Demonstrate the first commercial results around our multiservice connected
speakers.
Extend the 'Connected devices' offer with the ZTE partnership
Strong growth in France on Videofutur and commercial launch of a new offer on
CloudTV platform. Target € 30 million in 2021
Growth in the UK through the FTTH operators & distributors strong partnerships.
Assessment of opportunities outside UK.
Explore opportunities beyond entertainment
14ow will we fund this new strategy?
Based on a healthy balance sheet and a proven self-financing capacity, the Group reserves
the right to use various means to accelerate its growth:
Strategic partnership similar to to expand the offer and develop the business
Acquisition of holdingsor controls in startups (as for the development of the soundbox) to
surround itself with expertise at at attractive costs.
Joint VentureV similar to Vitis for the FTTH market in France, ...
Call to shareholders as in the 2018 dividend which proposes a payment option in action.
15Two KPIs to follow our progress
It is the growth in net income and / or service income that will be the relevant
indicator of growth in future activity.
The “ net income ” (turnover less hardware cost) is the total of the margin from
the hardware sales plus all revenue from services and use of equipment. It
provides a relevant indicator of the contribution of the various "products" sold by
the Group within its consolidated scope.
Revenue from the unconsolidated scope (Vitis) is made almost exclusively of
service sales, and is therefore similar in nature to the net income of the
consolidated perimeter.
162018 Results
17Accounting principles 2018
• Application of IFRS, accounting principles consistent with those of 2017
• Audit finalized, accounts validated by the council of 21 March 2019
• Only one operational sector
• Vitis accounted for by the equity method
• IFRS 5 for bringing the platform to Vitis
18Data in millions of euros 2017 2018 Var 18/17
Consolidated Turnover 61,8 41,8 -32%
results Net revenue 25,2 19,6 -23%
Gross margin 24,6 18,5 -25%
S&M (8,8) (7,2) -18%
R&D (5,9) (6,2) 6%
G&A (3,7) (2,8) -24%
Operational expenditure (18,3) (16,2) -11%
Ebitda 6,6 2,7 -59%
Current operating income 6,3 2,3 -63%
Other operating income 0,8 2,1 176%
Operating profit 7,0 4,4 -37%
Financial bottom line 0,2 (0,9)
Put in equivalence (2,0) (2,8)
Taxes (0,6) (0,6)
Net profit attributable to the 4,7 0,2
OCI group (0,3) 0,1
Overall net income 4,4 0,3
19Consolidated results
M€ - consolidated IFRS 12/31/2018 12/31/2017 var. M€ - consolidé IFRS 12/31/2018 12/31/2017 var.
Deviations acquisition 4,3 5,8 -1,5 Equity 24,0 27,7 -3,7
Property, plant and equipments 0,3 0,7 -0,4 Employee benefits 0,2 0,2 -0,1
Investment in associates 2,4 4,9 -2,5 Non-current financial liabilities 0,3 2,9 -2,6
0,7 2,6 -1,9 Total non-current liabilities 0,5 3,1 -2,6
Non-current financial assets
4,1 4,5 -0,5
Deferred tax assets
Current financial liabilities 7,2 3,0 4,2
Total non-current assets 11,7 18,5 -6,9
Provisions - Current share 0,1 1,9 -1,8
Stocks 0,8 0,4 0,5 Suppliers and related accounts 12,0 18,4 -6,4
Customers 10,2 16,4 -6,2 Other current liabilities 4,0 5,3 -1,3
Other current assets 5,2 6,3 -1,1 Total current liabilities 23,3 28,6 -5,4
Current financial assets 7,1 7,6 -0,5
Liabilities held for sale 0,2 0,0 0,2
Cash and cash equivalents 11,0 10,2 0,7
Total current assets TOTAL LIABILITIES 48,0 59,5 -11,5
34,3 40,9 -6,6
Assets to be sold 2,0 0,0 2,0
TOTAL ASSETS 48,0 59,5 -11,5
5/9/2016
Netgem
20Consolidated cash flows
M€ - consolidated IFRS 2018 2017
Cash flow related to activity (A) 1,4 14,0
CIF before tax payment 2,8 6,4
Tax paid 0,1 - 0,4
Decrease (increase) of the WCR - 1,5 8,0
Investment cash flow (B) 3,2 -1,5
Operating cash flow (A + B)) 4,6 12,5
Cash flow related to financing - 3,9 - 35,1
Net cash flow 0,7 - 22,6
21Vitis (non consolidé, comptes non arrêtés)
M€ 2018 2017 Variation
Turnover 10.4 5.6 +86%
Net income -5.5 -3.4 -62%
M€ 31/12/2018 31/12/2017
Gross cash 5.1 5.3
222018 Dividend
• The Board proposes to maintain the dividend at a level of 10c / share.
• A stock option will be offered (10% discount)
• The founding families will take payment in shares.
23Shareholding
Capital DDV net
Famille Haddad 22% 32%
Famille Guillaumin 8% 13%
Mousse partners 10% 8%
Fidelity investments 7% 6%
Eximium 5% 5%
Employees and Executives 4% 5%
Self-owned 9% 0%
Floating 35% 30%
Total 100% 100%
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