2020 first quarter revenues - actusnews wire...worldwide) •products end of life confusing clients...
TRANSCRIPT
2020 First Quarter Revenues
May 6, 2020
2ATEME © 1991-2020
Disclaimer
This presentation does not constitute or form part of and should not be construed as any offer for sale of or solicitation of any offerto buy any securities of ATEME, nor should it, or any part of it, form the basis of or be relied on in connection with any contract orcommitment whatsoever concerning ATEME’s assets, activities or shares.
All statements other than historical facts included in this presentation, including without limitations, those regarding ATEME’sposition, business strategy, plans and objectives are forward-looking statements.
The forward-looking statements included herein are for illustrative purposes only and are based on management’s current views andassumptions. Such forward-looking statements involve known and unknown risks. For illustrative purposes only, such risks includebut are not limited to impact of external events on customers and suppliers; the effects of competing technologies competitiongenerally in main markets; profitability of the expansion strategy; litigation; ability to establish and maintain strategic relationshipsin major businesses; and the effect of future acquisitions and investments.
ATEME expressly disclaims any obligation or undertaking to update or revise any projections, forecasts or estimates contained in thispresentation to reflect any change in events, conditions, assumptions or circumstances on which any such statements are based,unless so required by applicable law. These materials are supplied to you solely for your information and may not be copied ordistributed to any other person (whether in or outside your organization) or published, in whole or in part, for any purpose.
3ATEME © 1991-2020
Presenters
Michel ArtièresFounder & Chief Executive Officer
Degree in Engineering from Supelec, Paris, with a specialization in signal processing and telecommunications
Fabrice Sana Chief Financial Officer
Degrees from the European Business School and ESSEC
4ATEME © 1991-2019
1.ATEME for beginners2. Market Trends
3. Q1 2020 Revenues
4. Strategy
5ATEME © 1991-2020
ATEME Factsheet
43 Patents
Up 55% in 2019
300 people in 18 countries
Public since 2014
800 clients in 100 countries
66.4 M€ in 2019 (+18%)
ATEME helps Content Providers and Service Providers transform their video delivery to
enable innovative live and on demand video services and enhance the quality of experience
MRRMONTHLY
RECURRINGREVENUE
6ATEME © 1991-2020
A Complete Offer for the Complete Video Flow
Service Provider(Satellite, Cable, Telco)
Video Headend
Event
ContributionPrimary
DistributionDistribution
OTT / Multiscreen
Subscriber
CDNContent Provider
TV Network
Kyrion encoders in the trucks and decoders at the TV station
TITAN is a virtualized Video Headend software covering all Live and File needs
7ATEME © 1991-2019
1. ATEME for beginners
2.Market Trends3. Q1 2020 Revenues
4. Strategy
8ATEME © 1991-2020
Sept 2015
$300-500M(5-7x Sales)
acquires
Sept 2015
$125M (4x Sales)
acquires
Dec 2015
€69M (1x Sales)
acquires
Consolidation Clearing the Way for ATEME
Essentially down from 7 to 4 Players
• Envivio partners are Ericsson competitors
• Redundant employees (Sales worldwide)
• Products end of life confusing clients
• Redundant employees (Rennes R&D) Ideal
Scenario
for ATEME
Jan 2018
acquires 51% of
and becomes
Oct 2018
acquires 100% of SPVTG
and becomes
• US service providers running away from their competitor (Amazon Prime Video)
9ATEME © 1991-2020
4K UHD TV Continues To Enjoy Significant Growth
Source : NSR – « Globl Satellite Capacity Supply and Demand, 16th edition – June 2019
From 148 UHD satellite TV channels in 2019 to ~ 700 by 2027
Sources : Futuresource and UHD Partners France
4K UHD TV shipments increased by
nearly 33% in 2018 and expected to
increase another 21% in 2019 and
16% in 2020.
2019 will be the first year that 4K
UHD TV shipments surpass non-4K
UHD TV shipments.
61% of North American households
will have 4K UHD TVs by end of 2019 96116
148
194
239
298
369
452
531
611
686
92131
159
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
NSR Forecast Actual Result
30% of French households today
have 4K UHD TVs
French 4K UHD
TV channels
AAGR2019-2027 :
+20%growth
10ATEME © 1991-2020
The Media Landscape
Studios/Broadcasters/NetworksCreated string brands in the 80’s-90’s
Service Providers (MVPDs) Historically, got the broader access to customer
SVOD or Ad-Supported VOD ServiceImpose Binge Watching as the Way to consume video
Virtual Service Providers (vMVPDs)New content or Skinny cost-effective bundlesNew
Entrants
Digital Native
Traditional Players
TV/STB native
Content ProvidersCreate/Produce/License Content
Service ProvidersAggregate/Distribute Content
11ATEME © 1991-2020
Challenges: Lost in Searching, Fragmentation, Subscription Fatigue
Where do I find this content ? (eg: Aquaman vs Avengers vs Peaky
Blinders)
Content Fragmentation
Will we pay for 10-12 services ?Again my ID/Password/Credit Card ??
(Player solving this issue in a diff Industry: WhatsApp)
Subscription Fatigue
12ATEME © 1991-2020
Opportunities: SPs Become OTT App Aggregators, Personalized TV
MVPDs (Comcast, LG, Canal+…) acting as OTT App Market Place
In some regions sensitive to credit card payment, they are also carrier billing
Personalized TV
aka Linear On Demand
‘’The great un-bundling could give birth to the great re-bundling’’, Matt Strauss, Chairman, Peacock and NBCUniversal Digital Enterprise
13ATEME © 1991-2020
The Power of Personalization
Source: The Trade DeskSource: Google
Source: Tivo
Reduce Churn Rate for Service Providers Customers are Looking for It
Increase Ads Revenue
14ATEME © 1991-2019
1. ATEME for beginners
2. Market Trends
3.Q1 2020 Revenues4. Strategy
15ATEME © 1991-2020
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Q1 Q2 Q3 Q4
Revenues Evolution by Quarter
€37.5m
€28.6m
€12.3m
€17.9m€20.6m
€24.8m
IPO
€48.6m
-9%OrganicgrowthIn Q12020
-11%at constant
exchange rate
€56.5m
13.6
€ 66.3 m
12.4
16ATEME © 1991-2020
Q1 2020 Revenue Split and Growth by Region
USA/CAN-30%
LATAM-37%
APAC+62%
Q1 2020 REVENUE SPLIT BY REGION Q1 2020 REVENUE GROWTH BY REGION
-xx%at constant
exchange rate
+xx%at constant
exchange rate
+xx%at constant
exchange rate EMEA+22%
-33%at constant
exchange rate
-39%at constant
exchange rate
+59%at constant
exchange rate
EMEA32%
USA/Canada39%
Latam10%
Apac19%
17ATEME © 1991-2020
2 749
6 934
4 847
Q1 2018 Q1 2019 Q1 2020
USA & Canada
In €
K
-30%
-33%at constant
exchange rate
18ATEME © 1991-2020
4 438
3 1933 884
Q1 2018 Q1 2019 Q1 2020
EMEA
In €
K
+22%
19ATEME © 1991-2020
1 267
1 989
1 255
Q1 2018 Q1 2019 Q1 2020
LATAM
In €
K
-37%
-39%at constant
exchange rate
20ATEME © 1991-2020
1 1101 471
2 379
Q1 2018 Q1 2019 Q1 2020
APAC+62%
In €
K
+59%at constant
exchange rate
21ATEME © 1991-2020
IPO July 2014
20162015
2014
Growing Profitably Since 2016
2017
€12.3m
€-2.5m
€15.0m
€-1.6m
€16.3m
€0.0m
€12.9m
€-1.1m
€11.9m
€-0.9m
165
135
170
€22.5m
€3.6m
Revenues
Net Loss/Profit
220
€20.9m
€0.3m
€27.7m
€3.5m
2018
€23.2m
€-3.2m
252
€33.3m
€4.9m
2019
€30.1m
€-1.2m
300
€36.2m
€5.8m
22ATEME © 1991-2019
1. ATEME for beginners
2. Market Trends
3. Q1 2020 Revenues
4.Strategy
23ATEME © 1991-2020
Prepare Expanding to CPs and SPs OTT delivery
Service Provider(Satellite, Cable, Telco)
Video Headend
PrimaryDistribution
Traditional Distribution
SubscriberCDN
Content ProviderTV Network
CDN
2 Enable new decentralized
distribution workflow for SPs
1 Enable CPs’ direct access
to consumers
OTT
Most of ATEME business today
Playout Compression Distribution
24ATEME © 1991-2020
Playout Brings Video Contents To Home
Live Streams
Video Files
Subtitles
Playlist
Graphics
PLAYOUT
Source : ESPN User Interface
25ATEME © 1991-2019
TITAN Business Model
Industry standard : Project based business model New business model : Multi-year Engagement
• TITAN pay-up perpetual licenses (1 license per SD/HD/UHD channel)
• Recurring Annual support 15-20%
• Optionally some clients source the servers from ATEME
ATEME benefit: revenue predictability
Customer benefit: guarantee their move to a new video compression vendor is future proof
Year1 Year2 Year3 Year4 Year5
*
*Optionally some clients source the servers from ATEME
“Recurring CAPEX”:
• Most clients need additional licenses for extensions• Largest clients operate in multiple sites or countries
Each project includes: Largest clients operate multiple video headends
We offer these clients to “drive” ATEME software roadmap against multi-year commitment
26ATEME © 1991-2019
Backlog and Recurring Revenue
BacklogMulti-Year Contracts
SLA
SLA to renew
Software lease contracts
€
OtherBacklog
Mo
nth
ly R
ecu
rrin
g R
eve
nu
e
Q1 Q2 Q3 Q4 2021 2022 2023
Starting 2020 with :• Monthly Recurring Revenue up 55%
(over €880,000 vs €570,000 in January 2019)• €8.4 million in multi year contracts (vs 0 in 2019)
27ATEME © 1991-2020
Impact of Covid-19FINANCIAL SIDE
• Cancelation of some Kyrion hardware orders relating topostponed sporting events like the UEFA footballchampionship and the Olympic Games.
• Some clients will postpone their investments to H2, notablythose most exposed to the decline in advertisement orsports-related revenues.
• But the surge of SVOD consumption and network capacityis accelerating many projects, resulting in a significantpipeline of funded opportunities.
• €2 million savings in travels and marketing costs.
• Temporary hiring freeze for customer-facing positions, butvisibility is sufficient to hire a further 10 engineers in June.
OPERATIONAL CONTINUITY
Business Continuity Plan to ensure full continuity in of all our operations, including R&D, 24/7 support, and supply chain functions. In particular:
• ATEME’s flagship software, TITAN, can be demonstrated, delivered, and installed remotely.
• Multiple video calls and webinars every week with customers around the globe, including a highly successful 24-hour webinar in mid-April where our experts from all continents shared their views on market trends, emerging technologies and presented ATEME solutions to 1,500 customers.
• R&D team is set to file five new patents in May.
28ATEME © 1991-2020
Visibility on a significant pipeline of funded opportunities
A solid foundation of monthly recurring revenues for more than one year
2020 Outlook
Solid cash position
+€2 million
savings
H1 business to shift to H2, and H1 2020 should remain flat.
Considerable improvement
expected in H2
New objectives for the full year will be announced at the end of H1
29ATEME © 1991-2020
Investor Relations
Next investor dates
Market data
ISIN: FR0011992700 - Ticker: ATEME
Stock price: €12.54 (as of May 5, 2020)
Market cap: €131.7m (as of May 5, 2020)
Concert Artières
12%Xavier Niel
5%
Keren Finance6%
Axa IM5%
Otus Capital10%
Others < 5%60%
Liquidity contract: Kepler Cheuvreux
Source : Company, as of May 5, 2020
Shareholder structureNumber of shares: 10,498,851Potential dilution : 260,901
Stock price (€)
Volumes(nb of shares)
June 10, 2020 Annual Shareholders Meeting
July 16, 2020 2020 Half-Year Revenues
September 24, 2020 2020 Half-Year Results
November 5, 2020 2020 Third Quarter Revenues0
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