Kudelski 2012 half year results released

Tuesday, August 21st, 2012 
Kudelski logo

CHESEAUX, Switzerland — The Kudelski Group (SIX: KUD.S), the world’s leading provider of media content protection and value-added service technology, announced today its 2012 half year results.

RESILIENT REVENUE BASE

Stable revenues and a streamlined cost base drove first half 2012 Group results. Compared to prior periods, currency effects had a minor impact, as the USD rate increased from 0.905 in the first half 2011 to 0.929 and the EUR rate declined from 1.269 to 1.205.

Group revenues in constant currency declined by 1.8%, while reported revenues dropped by 3.0% compared to the first half of last year, reaching CHF 380.3 million. Public Access posted a sales increase of 2.9% in constant currency, while Digital TV Solution constant currency revenues declined by 3%.

Weak economic environment continued to affect the European Digital TV business generating revenues of CHF 133.3 million with; in particular, revenues from Italy, Spain, France and Portugal declining by CHF 25.4 million compared to the first half of last year. The American business, on the other hand, posted a 3.3% constant currency growth, reaching CHF 115.4 million in this first half. Asian segment revenues amount to CHF 53.8 million, roughly at the same level of the previous first half.

Considering last year’s divestment of the audio business, Polyright, EmbedICs, Medioh and Nagra Thomson Licensing, constant currency revenues for the current perimeter of consolidation were roughly at the same level as the first half 2011.

STRONG MOMENTUM IN EMERGING MARKETS

Emerging markets sustained the Group’s Digital TV business in this first half. Once again, a strong demand for the Group’s products in Latin America drove first half’s revenues, with Brazil delivering solid double digit revenue growth. Other South American markets are following the same path: at the beginning of June, Entel, a large telecom provider in Chile, has launched a solution based on Nagra advanced security solution. Furthermore, other markets, such as the Indian market, delivered a strong first half with, in particular, the shipment of half a million iDecode-based devices with embedded security in the cable market.

The Group continues to win new contracts, expanding into promising new market. Lippo Group, a new Indonesian satellite operator operating under the name IMTV, has awarded Nagravision with a Conditional Access contract. Lippo Group plans to soft launch its satellite operations in October of this year.

ONGOING PROGRESS WITH NEW INITIATIVES

New initiatives are progressing according to plan.

Following the appointment of Joe Chernesky to Senior Vice President of Intellectual Property in May 2012, the Group completed the set-up of the new Intellectual Property unit. The unit, managing a portfolio of over 4’000 patents worldwide, is now operational and has started engaging in licensing discussions with companies using patented Group technologies.

Cyber security set-up is on track. The Group will provide a comprehensive update with the official launch of this unit planned for November 2012.

Group’s Internet TV solutions continue to gain traction. To sustain the momentum of its Internet TV business, the Group has consolidated the relevant teams into a single product unit. Mediaset has subscribed to the Content Delivery Service provided by Nagravision as part of its Multiscreen Cloud Service. Other lead customers such as PRISA TV and Abertis are deploying a Nagravision-based OTT (Over-the-Top) platform. PRISA TV has reached an installed base of 250,000 Nagravision-powered OTT HD devices providing live national football league events and premium content from the main studios. Furthermore, following the announcement of the strategic partnership with Abertis, the joint cloud-based service aimed at pay-tv service providers and free-to-air broadcasters is successfully on-air. Production trials with eight European broadcasters are currently on-going.