PARIS, March 27, 2019 /PRNewswire/ -- EKINOPS
(Euronext Paris: EKI) (ISIN: FR0011466069), a leading global
supplier of telecommunications solutions for telecom operators, has
published its audited annual results for 2018 (FY ended
December 31, 2018), approved by the
Board of Directors at its meeting held on March 25, 2019. The corresponding report was
issued by the statutory auditors. Ekinops France (formerly
OneAccess) and its subsidiaries have been fully consolidated within
the Group's financial statements since October 1, 2017. Accordingly, the FY 2018
represents the first full year of consolidation of Ekinops
France.
€m - IFRS -
audited
|
20171
|
2018
|
Change in
%
|
Revenue
|
34,291
|
84,222
|
+146%
|
Gross
margin
|
17,509
|
47,088
|
+169%
|
% of
revenue
|
51.1%
|
55.9%
|
|
Operating
expenses
|
21,861
|
45,803
|
+110%
|
EBITDA2
|
257
|
10,448
|
+3,965%
|
% of
revenue
|
2.0%
|
12.4%
|
|
Current operating
income
|
(4,352)
|
1,285
|
n.a.
|
Other operating
income/(expenses)
|
(2,019)
|
(3,434)
|
|
Operating
income/(loss)
|
(6,371)
|
(2,149)
|
n.a.
|
Net
income/(loss)
|
(6,769)
|
(2,084)
|
n.a.
|
|
(1) On June 30, 2018,
Ekinops finalized the purchase price allocation of OneAccess and
its subsidiaries. Certain items were
impacted by the retroactive effect of this purchase price
allocation. Figures for December 31, 2017 were restated to
reflect
this impact; certain line items therefore differ from the published
2017 annual financial report.
|
|
(2) EBITDA (Earnings
before interest, taxes, depreciation and amortization) corresponds
to current operating income restated
for (i) amortization, depreciation, provisions and write-offs, and
(ii) income and expenses relating to share-based
payments.
|
Top 10 clients' revenue grew 32% (on a pro forma
basis)
At the end of FY 2018, Ekinops full-year consolidated revenue
amounted to €84.2 million, up 146%, exceeding the annual target
which was raised from €80 million to €82 million mid-September. On
a pro forma basis, with the consolidation of OneAccess and its
subsidiaries backdated to January 1,
2017, year-on-year revenue growth amounted to +14% (vs 2017
pro forma revenue of €73.8 million).
This excellent performance reflects the strong interest shown by
major operators and service provider customers for Ekinops'
technological solutions, at a time when network layers are
converging and there is a shift towards virtualized services and
Software-Defined Networks (SDN). Average growth for the Top 10
clients amounted to +32% in 2018 (vs 2018 on a pro forma
basis).
Record gross margin of 55.9% in 2018
In addition to this buoyant performance, the group posted record
gross profits of €47.1 million, up 169% for the period. The gross
margin represented 55.9% of consolidated revenues (vs 51.1% a year
earlier). This exceeds the group's target of achieving a gross
margin of between 50-55% over the long term, a target that takes
into account the one-off impacts of changes in the product mix,
sales cycles and occasional price pressure on certain electronic
components.
This exceptional performance in 2018 derives from a healthy
business mix, and the combined improvement in margins on IP
services products (routers, virtualized products, new OneOS6
software platform) and production costs of the Ekinops 360
platform's optical transport solutions.
Profit margins exceed targets: EBITDA margin of 12.4%
EBITDA amounted to €10.4 million, up from €0.3 million in 2017.
In addition to the steep increase in gross profits, the Group
capitalized on the new organizational structure implemented in
early 2018 after the merger with OneAccess, which came with
stringent cost control throughout the consolidation phase.
The increase in operating expenses was limited over the FY,
especially for overheads, administrative expenses and R&D
expenditure.
The EBITDA margin was reported at 12.4% of revenue, exceeding
the revised targets set during the year and compared to 2.0%
year-on-year and 9.5% at the end of the first half.
After taking into account net depreciation, amortization and
provisions (€8.9 million) and non-cash expenses relating to
share-based payments (€0.3 million), current operating income
amounted to €1.3 million in 2018, compared to a loss of €4.4
million a year earlier.
Other operating expenses of €3.4 million mainly include the
adjustment to the earn-out related to the acquisition of OneAccess
in light of the performance achieved in FY 2018. The operating loss
thus amounted to €2.1 million, compared to a loss of €6.4 million
in 2017.
Net income, Group share for 2018 also amounted to a negative
€2.1 million, compared to a negative €6.8 million the previous
year.
Balance sheet as of December
31st, 2018
In 2018, Ekinops generated €10.3 million in cash flow. The
highly efficient management of working capital generated €10
million in operating cash flow (vs a negative cash flow of €5.4
million in 2017).
Investment flows totaled €3 million in 2018, virtually entirely
used for the company's usual CAPEX (fixed assets and R&D).
As regards financing flows, net loan repayments amounted to €3
million over the year.
Ultimately, the change in cash and cash equivalents totaled €3.8
million in 2018.
On the balance sheet, financial borrowings were reduced to €10.9
million at the end of 2018 from €13.5 million at the end of 2017,
mainly as a result of a reduction in Bpifrance's factoring debt and
interest-free loans for innovation (PTZI). As of December 31, 2018, bank borrowings were limited
to €2.3 million.
Available cash stood at €25.1 million. As a result, the group
had a strong year-end net[1] cash surplus of €14.2 million (vs €7.8
million at year end 2017).
As of December 31, 2018, the
Group's consolidated shareholders' equity stood at €74.4
million.
ASSETS - €m - IFRS -
audited
|
12/31
20171
|
6/30
2018
|
|
LIABILITIES - €m -
IFRS - audited
|
12/31
20171
|
6/30
2018
|
Non-current
assets
|
73,320
|
71,128
|
|
Shareholders'
equity
|
76,293
|
74,355
|
of which
Goodwill
|
27,523
|
27,523
|
|
Financial
liabilities
|
13,494
|
10,935
|
of which Intangible
assets
|
35,236
|
30,363
|
|
o/w
factoring
|
7,424
|
4,955
|
Current
assets
|
35,606
|
37,831
|
|
of which
conditional
advances/interest free loans
|
3,069
|
2,127
|
of which
Inventories
|
8,736
|
11,232
|
|
CIR pre-financing
liabilities
|
5,036
|
4,832
|
of which Trade
receivables
|
20,703
|
20,687
|
|
Trade
payables
|
11,041
|
13,958
|
Cash & cash
equivalents
|
21,316
|
25,115
|
|
Other
liabilities
|
24,378
|
29,994
|
TOTAL
|
130,242
|
134,074
|
|
TOTAL
|
130,242
|
134,074
|
|
(1) On June 30, 2018,
Ekinops finalized the purchase price allocation of OneAccess and
its subsidiaries. Certain items were impacted by the retroactive
effect of
this purchase price allocation. Figures for December 31, 2017 were
restated to reflect this impact; certain line items therefore
differ from the published 2017
annual financial report.
|
|
Outlook
The excellent results of FY 2018, which exceed expectations,
reflect the success of the merger with OneAccess since late 2017,
in terms of sales, finance and technology.
As far as optical transport solutions are concerned, the year
was marked by the commercial success of FlexRate 100/200G
solutions, which were successfully installed in the networks of 15
new customers in just a few months, with a focus on North America. This new Flexrate range was
completed by the new ultra-low latency encryption module, PM
Crypto, and at the very end of the year, with the launch of the
400G module.
In terms of network routing and virtualization, 2018 saw the
launch of a new range of routers enabling operators to provide
enterprise services at fiber speed on existing copper
installations. Ekinops has also launched a range dedicated to the
SME market (business-in-a-box solution, ONE425 / ONE545 routers)
enabling operators to provide IP voice and data services at a price
geared to the SME market. In terms of network virtualization, the
year also saw the first deployments of OVP (Open Virtualization
Platforms), which demonstrate the relevance of implementing
communication services based on virtualized solutions and managed
by software orchestrators.
In 2019, Ekinops is committed to pursuing the roll-out of new
solutions, notably in the areas of switching and routing and for
the deployment of virtual network functions (VNF). Ekinops is also
pursuing its software development activities for SD-WAN
(Software-Defined Wide Area Network) solutions.
To drive all these developments and market future solutions, the
Group plans, in 2019, to boost the investments initiated in the
second half of the year, particularly in human resources, by hiring
around thirty new employees, two thirds of whom will be dedicated
to R&D.
2019 ambitions
Ekinops intends to pursue its dynamic development in 2019,
through organic growth in both optical transport solution and
access activities, and by leveraging commercial and technological
synergies resulting from the merger.
Moreover, given the successful integration of OneAccess into the
Group, Ekinops is keen to continue to seize strategic,
value-creating external growth opportunities.
Update on talks with Nokia Corporation regarding Alcatel
Submarine Networks (ASN)
Following press reports, Ekinops announced on October 18, 2018 that it had initiated
preliminary discussions with Nokia Corporation regarding a possible
acquisition of Alcatel Submarine Networks (ASN).
Since that date, Ekinops has continued to study the possible
acquisition of ASN and have been discussing deal terms with Nokia
Corporation. No agreement has been reached with Nokia to this day.
The success of Ekinops current strategy is shown by the strong
results announced today, and the combination of ASN and Ekinops
would mark another key milestone in the development of Ekinops.
Pursuant to statutory and regulatory obligations, Ekinops shall
inform the market if an agreement is reached or if discussions with
Nokia Corporation are discontinued.
2019 financial calendar
Date
|
Release
|
Tuesday, April 16,
2019
|
Q1 2019 revenues
(unaudited)
|
Tuesday, May 21,
2019
|
General
Meeting
|
Wednesday, July
17, 2019
|
Q2 2019 revenues
(unaudited)
|
Wednesday,
September 25, 2019
|
H1 2019 results
(audited)
|
Wednesday, October
16, 2019
|
Q3 2019 revenues
(unaudited)
|
Wednesday, January
22, 2020
|
FY 2019 revenue
(unaudited)
|
All press releases are published after Euronext Paris market
close.
For further media information, or to schedule an interview
with Ekinops please contact Beckie
Richardson, iseepr +44 (0) 113 350 1922 /
beckie@iseepr.co.uk.
For more information visit: www.ekinops.net
[1] Cash and cash equivalents – borrowings
(excluding bank debt relating to CIR pre-financing)
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SOURCE Ekinops