ADB Group delivers a mid-period business updateThursday, April 28th, 2011
- Business transformation underway
- Q1 revenue short but profitability ahead of management expectations
- Changes in the management structure
- Business development progressing satisfactorily
- Revised guidance for full-year 2011
- Dividend proposal for AGM confirmed to be 1.0 CHF/share
GENEVA — Advanced Digital Broadcast Holdings S.A. (SIX: ADBN) gave today an update on the development of its business.
During the first quarter of the year, the ADB Group underwent significant changes in its structure. The company has now three strategic divisions: Broadcast, Broadband and Emerging Business. The company also further streamlined its operations and trimmed its headcount, which actions are expected to bear fruit during the second half of 2011 due to the time element involved in these measures.
The new broadband business continues contributing positively to the company revenue and profitability. It is worth noting that the customer services increased significantly their contribution to the Group profit line, and are expected to grow further. This follows the Group strategic move to emphasize services and solutions. The business development work of the year has started well, achieving the previously reported steps in the US cable market and further progress in the European landscape.
The high-end products form a significant majority of the Group product sales, as before. The revenue development during the course of the first quarter fell short of management expectations, largely due to the economic recovery being slower than anticipated. Most of the demand came from cable, satellite and broadband segments, while IPTV and terrestrial lagged behind of the original forecast. The Group has also decided to scale down most of its retail and digital terrestrial business, with the exception of products necessary to serve its most important B2B customers. Implementing this change will impact the Group consolidated revenue line, but is expected to improve the margin potential.
During the first quarter the Group recorded better than expected profitability, due to effective cost control. However, the EBIT forecast for the year currently shows lower than anticipated levels due to the shortfall in the revenue line, and the restructuring efforts needed.
Consequently the Group has now revised 2011 full-year guidance downwards as follows:
- Revenue growth to be in a range of 30%
- EBIT% (before M&A and integration costs) will remain positive
Mr. Andrew Rybicki, the Chairman and CEO, commented: “This is clearly a transformational year for the ADB Group, caused mainly by the acquisition of the new type of business and know-how, as well as by accelerated development of the service-oriented activities. The integration of the new broadband business into the Group is going well, allowing us to target its completion in Q1 of 2012. The business development side has also done well during the Q1, and I expect it to continue on this positive trajectory. On the other hand, it became crystal clear that more profound changes were necessary in the structure of our core business and its management, so we took advantage of the momentum and implemented them at the same go. It is my firm belief that the Group will be better off after this restructuring, and that the results will be beneficial for the years to come.”
The Board of Directors also confirmed to the company that they will be putting forward a proposal for a dividend for 1.0 CHF per share to be distributed to the shareholders, in the forthcoming Annual General Meeting of the Shareholders.