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We achieved a new revenue record, underscoring our commitment to sustainable growth. Despite the expected absence of Big Event Rental revenues in an uneven year, our strong revenue growth and effective cost control strategies resulted in robust profitability, a testament to the success of our PlayForward strategy.

The Live Audience business segment, LAB, experienced significant order intake growth, highlighting our expanding market share in broadcast studio environments. The Media Infrastructure solution segment also played a pivotal role in driving order intake growth across all regions, with anticipated contributions to Big Event Rental revenues in 2024.

We secured rental and support service contracts for major sporting events in 2024, ensuring a strong foundation for Big Event Rental revenues in the upcoming year. This strategic move reinforces our position as a key player in the industry and demonstrates our ability to secure long-term high-profile partnerships.

Customer satisfaction has reached new heights, as evidenced by the significant progress in Net Promoter Score (NPS) over the last three years, as measured by Devoncroft. Internally, our team members maintain a high level of engagement, as reflected in our yearly internal engagement survey. This commitment to excellence is further highlighted by the recognition as a 'Top Employer' in Belgium for the second consecutive year, placing us among an elite group of close to 90 companies.

On the Environmental, Social, and Governance (ESG) side, we have defined ambitious 2030 goals. EVS now proudly boasts a strong ESG rating, placing it in the top 15% of the best companies worldwide, according to evaluations from Ecovadis and Sustainalytics.

We continue to drive innovation with our generative AI-enabled XtraMotion solution as a clear example. This technology is creating a buzz within the industry, particularly in the LiveCeption solution, where it transforms regular broadcast cameras into super slow-motion cameras. The introduction of artificial intelligence-based search capabilities in the MediaCeption solution, along with the launch of the VIA MAP content management platform during the international broadcast conference in Amsterdam, showcases our commitment to pushing the boundaries of technological advancements.

EVS also continued its tradition of delivering robust dividends.

In conclusion, our PlayForward strategy is clearly being appreciated by our customers and channel partners. This is helping us to confirm our profitable and sustainable growth mode. While economic market conditions remain very challenging with high interest rates, certain component shortages and with the wars in Ukraine and Gaza, we feel that our customers, channel partners and EVS operators increasingly appreciate the reliability, performance and innovative edge of our solutions and services.”

Commenting on the results and the outlook, Veerle De Wit, CFO, said:

“Our 2023 order intake and revenue results are a clear testimony to our strategy in action. Our ambition for the year was to realize profitable and sustainable growth, in a year with no Big Event Rental. Several key performance indicators demonstrate that our PlayForward strategy is paying off. We attract new customers, we expand our portfolio of solutions with existing customers, we grow our LAB business, … and our Media Infrastructure business demonstrates its growth potential in the market.

With the focus on profitable growth, we have managed to maintain good control over our cost base. During the first three quarters of the year we kept our team member base flat, as to ensure we fully absorbed the hirings of 2022. We did accelerate hirings towards the end of 2023, based on the strong growth trajectory both of our revenue and order intake.

Our operational expenses grew in a controlled way. In the fourth quarter we have seen an increase in our operational expenses with the start of the depreciation of an important intangible asset created over the past two years (following the announcement of VIA MAP launch in September 2023). Control over our spending patterns remains an attention point for 2024, especially in the current volatile market.

We managed to generate a strong Net Profit worth EUR 36.9 million, driving a diluted Earnings Per Share of EUR 2.65.

Our balance sheet also remains healthy with a very low debt level and a sound cash position.

Based on the strong results for the year 2023, we are able to maintain our dividend policy defined earlier in 2022.”

Market & customers

Unprecedented Market Traction and Financial Performance

EVS has achieved unparalleled success in 2023, setting new records in revenue and order intake. This exceptional performance is a testament to the strong market traction EVS is experiencing, driven primarily by significant growth in Live Audience Business (LAB) market pillar and the Media Infrastructure solution in particular. The remarkable success of our MediaInfra solution is a clear indication of the strategic value of our acquisition of Axon in 2020, yielding substantial returns on investment three years post-acquisition.

Growth Drivers and Strategic Investments

The surge in revenues and order intake is largely attributed to the growth of our LAB segment. Our LAB customers are at the forefront of redefining their infrastructures, not only transitioning to Live IP but also innovating to enhance production efficiency. Through our Media Infrastructure offerings, we enable customers to undertake a seamless migration to more advanced systems, ensuring their investments are future-proof. The introduction of the multiviewer Neuron View and the expansion of the Neuron platform application family underscore our commitment to adding value for our clients. Similarly, the widespread adoption of Cerebrum as a video stream monitoring and control solution, offering unrivaled flexibility and comprehensive connectivity options, emphasizes the effectiveness of our open platform strategy.

Global Deployment and Customer Support

Our solutions, including MediaCeption and the XT-VIA servers alongside LiveCeption solutions, continue to be deployed globally by LAB and Live Sevice Providers (LSP) customers, respectively. The increasing demand for our Service Level Agreements (SLAs) highlights our role as a trusted partner in navigating the complexities of production environments. This not only secures our sales for the coming years but also enhances the predictability of our revenue streams.

Strategic Initiatives and Industry Recognition

Following the PlayForward strategic initiative in 2020, EVS has evolved into a comprehensive solution provider, now integrating these solutions into a cohesive ecosystem. The introduction of the content management platform VIA MAP at IBC represents a significant step towards ensuring consistency across our solutions and facilitating seamless interactions between different customer segments.

Our commitment to excellence and innovation has been recognized through various awards, including accolades in ESG, HR, and product innovation, notably the Golden Bridge and XtraMotion's Best of Show at NAB 2023. Additionally, the renewal of FIFA's certification for our VAR product further solidifies our industry standing.

Supply Chain and Operational Readiness

While the supply chain situation has shown improvement, challenges persist amid ongoing geopolitical tensions. EVS remains vigilant, preparing strategically to mitigate potential impacts.
As we gear up for the summer's major broadcasting events, our focus is on the final stages of preparation, from manufacturing to testing the next generation of products. This upcoming global showcase serves as a live demonstration of our capabilities to customers worldwide, reinforcing the trust placed in EVS by Host Broadcasters for these high-profile events.

Technologies

Continued Investment in Technological Innovation

At EVS, we remain steadfast in our commitment to spearheading innovation within our industry. In alignment with our strategic objectives, we have consistently allocated over 50% of our workforce to the technological development of our products and solutions. This dedication is pivotal to our ongoing progress and our ability to stay ahead in an industry characterized by rapid transformation. Our efforts are squarely focused on empowering our customers, equipping them with the necessary tools to navigate their unique challenges effectively.

Advancements in Broadcast-Specific generative AI Technologies

Since 2017, EVS has been at the forefront of integrating generative AI technologies tailored to the broadcast sector. This year, we did announce the launch of an enhanced "on-prem" version of XtraMotion, our generative AI-driven slow-motion replay solution. This latest iteration boasts significant improvements in quality and a notable reduction in latency, enabling operators to capture and leverage high-quality imagery more efficiently. This achievement was recognized with a prestigious "Best of Show award" at NAB 2023, a testament to our unwavering commitment to excellence and innovation. Furthermore, our use of generative AI extends to enhancing workflows within MediaCeption, facilitating the automatic generation of metadata and enriching the user experience.

Pioneering 5G for Remote Production Workflows

Our “Flex Production” case study, developed in collaboration with Orange Belgium, Théâtre de Liège and La Grand Poste de Liège, successfully demonstrated EVS's ability to exploit the potential of 5G technology for remote production flows, while strengthening the development of local communities and cultural organizations. This achievement underscores the effectiveness of our Balanced Computing approach, proving its relevance and applicability in real-world scenarios. Through this initiative, EVS reaffirms its position as a leader in leveraging cutting-edge technologies to redefine production workflows.

Commitment to Sustainability

EVS is deeply committed to sustainability, actively pursuing initiatives aimed at reducing the carbon footprint of our operations and, by extension, that of our customers. We have made significant strides in optimizing our architectures to minimize power consumption and have designed new products and solution components to manage infrastructure in an energy-efficient manner. These efforts reflect our dedication to environmental stewardship and our responsibility towards fostering a more sustainable future.

Corporate topics

Part of our PlayForward strategy is based on improving our internal way of working. After the implementation of a new ERP system in October 2022, we have now expanded the footprint of the ERP to include our latest acquisition Axon. This final step is ensuring a global integration of all our processes and guarantees an optimal customer experience. This is a major step for our company and fully prepares us to digest for future growth.

We also continued in 2023 our systemic list price adjustments. Even though market conditions have somewhat stabilized throughout 2023, we continue to evaluate the need for price adjustments as to protect the margin generation of the company. The analysis lead to a price increase in February 2023, while no pricing adjustment was introduced to the market in September 2023.

2023 is also the year where we consolidated our sustainability efforts in terms of ESG. Corporate sustainability is now embedded in all our operations. We have 9 main tracks that are important for us as a company, and that are important for our industry. The tracks are: customer carbon footprint, company carbon footprint, talent management, diversity & inclusion, customer experience, local social contribution, cyber security of our company, products and solutions, sustainable supply chain and business ethics. Each of these tracks are managed by an interdepartmental team and have a Leadership Team member as an executive sponsor. We have defined this year our long term objectives (horizon 2030) for each of those tracks and we systematically review the progress and refine our actions. Within the industry, we are recognized as an ESG leader and we continue to receive postive feedback from the market. In 2024 we will further refine our ESG strategy, based on a new carbon footprint analysis and we will focus on the deployment of CSRD (Corporate Social Responsibility Directive).

Within the framework of Directive (EU) 2019/1937 of 23 October 2019 on the protection of persons who report breaches of Union law, transposed into Belgian law by the Whistleblowers Act for the private sector of 28 November 2022, which came into force on 15 February 2023, EVS has set up an appropriate Whistleblowing policy and Speaking Up Procedure.

Second half and full-year revenue

In 2H23, revenue reached EUR 85.8 million, representing an increase of EUR 5.3 million or 6.6% compared to 2H22, despite the absence of Big Event Rentals in the period (vs. EUR 4.2 million of BER in 2H22).

At constant currency, revenue increased by 11.4% YoY.

For the full year 2023, revenue reached EUR 173.2 million, representing an increase of EUR 25.0 million or 16.9% compared to 2022, despite the absence of Big Event Rentals in the period (vs. EUR 10.0 million of BER in FY22). Corrected for Big Event Rentals the growth is of 25.3%. This performance demonstrates the organic growth realized in 2023.

At constant currency, revenue increased by 15.0% YoY.

Currency fluctuations primarily impact EVS revenues by the EUR/USD conversion, which can have a significant impact on our results even if EUR/USD fluctuations also impact the cost of our US operations and partially our cost of goods sold.

In the second half of the year, (excl. Big Event Rentals) LSP represented 40% (40% in 2H22) of the revenue, LAB 60% (55% in 2H22). The growth of LAB business is one of the strategic pillars of EVS and demonstrates our ability to expand our footprint with generic broadcasters.

Full-year earnings

Consolidated gross margin was at 69.7% for FY23, compared to 66.7% in FY22 (+3.0 Pts) explained by positive impact of sales price increases and a higher volume of software compared to hardware in certain solutions. The increase of revenue linked to services also explains the gross margin increase. This has resulted primarily in improved margins for most of our solutions.

Operating expenses increased by 19% YoY explained by an increase in team member base, inflation on labour cost, energy prices and travel expenses. Additionally, in 2023, EVS made investments in its digital transformation journey. The investments made in intangible assets throughout 2022 and 2023 also had a significant impact on the 2023 results, as we started the depreciation of one important project in the fourth quarter.

Overall EBIT performance was of EUR 41.1 million, generating an EBIT margin of 23.8%.

The net profit ended at EUR 36.9 million, with income tax expense amounting to EUR 3.6 million for the full year 2023 (compared to EUR 1.4 million in 2022). The increase in income tax is mainly driven by higher taxable profit, combined with the limitation on the deduction of tax latencies from previous years in Belgium, leading to lower amount of deferred tax asset that can be used during the period.

The net profit leads to a fully diluted earnings per share of EUR 2.65 (versus EUR 2.29 in 2022).

Second half earnings

The gross profit margin in 2H23 reached 69.3% compared to 65.9% in the same period last year.

Operating expenses grew 17% in 2H23 compared to the same period last year, reflecting a controlled increase in line with the increase of the activities.

The 2H23 EBIT margin was 18.9%. compared to 19.8% in 2H22. The impact of the depreciation of the intangible assets in fourth quarter is explaining the slight drop.

The Group net profit amounts to EUR 15.8 million in 2H23 compared to EUR 15.9 million in 2H22. Fully diluted earnings per share amounts to EUR 1.13 in 2H23 compared to EUR 1.14 in 2H22.

Balance sheet and cash flow statement

Balance sheet remains strong with net cash position of EUR 36.6 million with low debt level (of which EUR 12.7 million related to IFRS 16), resulting in a total equity representing 76% of the total balance sheet as of the end of 2023.

Working capital requirements are growing at EUR 89.6 million, primarily linked to growing trade receivables that evolve largely in line with our overall sales volumes. The working capital over sales ratio slightly improves from 53% at year-end 2022 to 52% at the end of 2023.

Other intangible assets include the costs for internal development capitalized during 2022 and 2023 according to IAS 38 (Intangible assets).

Lands and building mainly include the headquarters in Liège as well as the right of use for the offices abroad (IFRS16).

Inventories amount to EUR 33.0 million, an increase of EUR 4.2 million compared to the beginning of the year with the aim to support the growth of activities. The ratio of inventory vs. sales remains stable compared to prior years at 19%.

Liabilities include EUR 14.3 million of financial debt (including long term and short-term portion), mainly related to the lease liabilities for EUR 12.7 million and borrowings for EUR 1.7 million. Long-term provisions include the provision for technical warranty on EVS products for labor and parts. Other amounts payable mainly represent deferred income and advance payments received from customers on contracts in progress.

Net cash from operating activities amounts to EUR 35.7 million for the full year 2023, compared to EUR 11.0 million in 2022. The increase is mainly driven by higher net profit and lower variance in working capital requirements compared to the previous year, mainly on trade receivables (large volume of invoices were issued in late 2022 given a temporary hold of invoicing operations after the Go-Live of the new ERP system). On December 31, 2023, cash and cash equivalents total EUR 50.9 million, compared to EUR 49.1 million at the end of 2022. The increase is mainly driven by the higher cash from operating activities as described above, partially offset by the net cash used in investing activities of EUR -7.5 million linked to the investments in intangible and tangible assets (specifically in the internal development of intangible assets) together with the net cash used in financing activities of EUR -25.9 million, mainly driven by total dividend payment of EUR -21.5 million.

At the end of December 2023, there were 14,327,024 EVS shares outstanding, of which 893,820 were owned by the company. At the same date, 680,875 warrants were outstanding with an average exercise price of EUR 19.82 and maturities between October 2026 and October 2029.

Team members

At the end of 2023, EVS employed 622 team members (FTE). This is an increase by 9 team members compared to the end of 2022 (613 FTE). In 2023, EVS deliberately limited the increase in team members, as we had a wish to stabilize the workforce after a strong hiring period in 2022. Towards the end of 2023, we accelerated hirings again, given the topline growth. For 2024, we expect a controlled increase in the number of team members as to continue and fuel our future growth.

Corporate update

There has been no further change to the composition of the Board of Directors since the last General Assembly on May 16^th 2023 during which the shareholders had appointed two new directors, Serge Van Herck (representing InnoVision bv) and Soumya Chandramouli (representing FRINSO SRL), both for a period of 4 years. The Board of Directors is currently composed of nine directors:

• Johan Deschuyffeleer, independent director & President (representing The House of Value bv);

• Michel Counson, managing director;

• Martin De Prycker, independent director (representing InnoConsult bv);

• Chantal De Vrieze, independent director (representing 7 Capital SRL);

• Frédéric Vincent, independent director;

• Marco Miserez, independent director;

• Anne Cambier, independent director (representing Accompany You SRL);

• Serge Van Herck, CEO and managing director (representing InnoVision bv) ; and

• Soumya Chandramouli, independent director (representing FRINSO SRL).
  
  

Glossary

In case of discrepancies between the English and the French Version, the English Version prevails.

Conference call

EVS will hold a conference call in English on February 23rd at 10.00 am CET for financial analysts and institutional investors. Other interested parties may join the call in a listen-only mode. The presentation used during the conference call will be available shortly before the call on the EVS website.

Participants must register for the conference using the link provided below. Upon registering, each participant will be provided with Participant Dial In Numbers, Direct Event Passcode and unique Registrant ID.

1. Online registration: https://register.vevent.com/register/BI65178c2a77304896a0aee4f2f291d7a9

2. Webcast Player URL: https://edge.media-server.com/mmc/p/x8k4igzm/

Corporate Calendar

May 16th, 2024: Q1 2024 Trading update (post closing)

May 21th, 2024: General Assembly

August 13th, 2024: H1 2024 results (attention to the advanced date) (post closing)

November 14th, 2024: Q3 2024 Trading update (post closing)

Final condensed consolidated financial information

Final condensed consolidated income statement

(1)   The diluted earnings per share does include:

1. 187,000 warrants attributed in October 2020, of which 146,750 are outstanding with an exercise price below the share price and with maturity in October 2026;

2. 158,600 warrants attributed in June 2021, of which 152,600 are outstanding with an exercise price below the share price and with maturity in June 2027;

3. 183,375 warrants attributed in September 2022, of which 182,625 are outstanding with an exercise price below the share price and with a maturity in September 2028; and

4. 198,900 warrants attributed in October 2023, all outstanding with an exercise price below the share price and with a maturity in October 2029.
   
   

Final condensed statement of financial position (balance sheet)

 

Final condensed statement of cash flows

Final condensed statement of change in equity

 

* Total amount includes EUR 816 granted and EUR -26 forfeited

Notes to the consolidated financial statements

NOTE 1: BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The consolidated financial statements of EVS Group for the 12 month-period ended December 31, 2023, are established and presented in accordance with the International Financial Reporting Standards (IFRS), as adopted for use in the European Union. The condensed financial statements of the Group for the 12 month-period ending December 31, 2023, were authorized for issue by the Board of Directors on February 22, 2024. This condensed report provides an explanation of events and transactions that are significant to an understanding of the changes in financial position and reporting since the last annual reporting period and should therefore be read in conjunction with the full 2023 consolidated financial statements from which these condensed financial statements have been derived and which are planned to be published on EVS Group’s website by April 19, 2024. The condensed financial statements are prepared on a going concern basis.

NOTE 2.1: SIGNIFICANT ACCOUNTING POLICIES AND METHODS

The consolidated financial statements of EVS Broadcast Equipment SA and of its subsidiaries have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the European Union. All standards and interpretations issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) effective year-end 2023 and adopted by the European Union are applied by the Company. The consolidated financial statements have been prepared on an historical cost basis, except for the share-based payments (at the grant date), derivative financial instruments and contingent considerations, which are measured at their fair value. The consolidated financial statements are presented in thousands of euros. All values are rounded figures to the nearest thousand unless otherwise indicated. The accounting policies and methods adopted for the preparation of the company's IFRS consolidated financial statements are consistent with those applied in the 2022 annual consolidated financial statements. The company’s IFRS accounting policies and methods are available in the 2022 annual report on www.evs.com, except for the new, amended or revised IFRS standards and IFRIC Interpretations that have been in effect since January 1, 2023. The adoption of these new, amended or revised pronouncements did not have a significant impact on the consolidated financial statements of the Group.

NOTE 2.2: JUDGMENTS AND ESTIMATES

In preparing the Company’s condensed consolidated financial statements, management makes judgments in applying various accounting policies. The areas of policy judgment are consistent with those followed in the preparation of EVS annual consolidated financial statements as of and for the year ended 31 December 2022.
In addition, management is required to make estimates that affect amounts included in the financial statements. The estimates carried out on each reporting date reflect the conditions in force on these dates (for example: market price, interest rates and exchange rates). Although these estimates are based on the best knowledge of management of the existing events and of the actions that the group could undertake, the real results may differ from these estimates.
The use of estimates is particularly applicable when performing goodwill impairment tests and evaluating any additions to the purchase price of past business combinations, the determination of the contingent consideration, determining the fair value of share-based payments, the evaluation of the deferred tax position, the measurement of employee benefit obligations and the determination of the percentage of completion of projects in progress. These estimates are further discussed in the Company’s annual report.

NOTE 3: SEGMENT REPORTING

From an operational point of view, the company is vertically integrated with the majority of its staff located in the headquarters in Belgium, including the R&D, production, marketing and administration departments. This is the reason why the majority of the investments and costs are located at the level of the Belgian parent company. Resources securing the customer facing interactions such as sales, operations and support profiles are primarily hired within the respective regions. The foreign subsidiaries are primarily sales and representative offices. The Chief Operating Decision Maker, being the Executive Committee, reviews the operating results, operating plans, and makes resource allocation decisions on a company-wide basis. Revenue related to products of the same nature (digital broadcast production equipment) are realized by commercial polyvalent teams. The company’s internal reporting is the reflection of the above-mentioned operational organization and is characterized by the strong integration of the activities of the company.

By consequence, the company is composed of one segment according to the IFRS 8 definition, and the consolidated income statement of the Group reflects this unique segment. All long-term assets are located in the parent company EVS Broadcast Equipment SA in Belgium.

The company provides one class of business defined as solutions based on tapeless workflows with a consistent modular architecture. There are no other significant classes of business, either singularly or in aggregate. Identical modules can meet the needs of different markets, and our customers themselves are often multi-markets. Providing information for each module is therefore not relevant for EVS.

At the geographical level, our activities are divided into the following regions: Asia-Pacific (“APAC”), Europe, Middle East and Africa (“EMEA”), and America (“NALA”). This division follows the organization of the commercial and support services within the Group, which operates worldwide. A fourth region is dedicated to the worldwide events (“big event rentals”).

The company provides additional information with a presentation of the revenue by market pillar: “Live Service provider”, “Live Audience Business” and “Big Event Rentals” for rental contracts relating to the big sporting events.

Finally, sales are presented by nature: sale of equipment and other services.

3.1. Information on revenue by destination

Revenue can be presented by Market Pillar: “Live Service provider”, “Live Audience Business” and “Big event rentals”. Maintenance and after sale service are included in the complete solution proposed to the clients.

 

3.2. Information on revenue by geographical area

Activities are divided in three regions: Asia-Pacific (“APAC”), Europe, Middle East and Africa (“EMEA”), and “Americas”. Aside of them, we make separate distinction for the category “Big Event Rentals” which is not attributed to specific region.

 

Revenue realized in Belgium (the country of origin of the company) with external clients represent less than 5% of the total revenue for the period. In the last 12 months, the Group realized significant revenue with external customers (according to the definition of IFRS 8) in the United States for an amount of EUR 51.0 million (EUR 38.1 million in 2022) and in the United Kingdom for an amount of EUR 19.7 million (EUR 9.6 million in 2022).

3.3. Information on revenue by nature

Revenue can be presented by nature: sale of equipment and other services.

 

Other services include the advice, installations, project management, rentals, training, maintenance, and distant support. Work in progress (“WIP”) contracts are included in both categories.

The sales of equipment are recognized at a point in time while other services are recognized over time.

3.4. Information on important customers

Over the last 12 months, no external customer of the company represented more than 10% of the revenue (similar in 2022).

NOTE 4: INCOME TAX EXPENSE

Income tax expense amounts to EUR 3.6 million for the full year 2023, compared to EUR 1.4 million in 2022. The increase is mainly explained by :

• higher taxable profit (+ 24% compared to 2022), especially in Belgium (36.6 million EUR in 2023 vs 24.9 million EUR in 2022); and

• the limitation on the deduction of tax latencies from previous years in Belgium which leads to a lower amount of deferred tax asset that can be used during the period.

The effective tax rate for the period ended on December 31, 2023 is 8.9%, compared to 4.3% in 2022.

NOTE 5: INTANGIBLE ASSETS

Intangible assets increased by EUR 2.8 million in the period as a result of the capitalization of internal development costs of EUR 4.5 million, partially offset by depreciation expenses of EUR 1.7 million.

The intangible capitalized costs include mainly the internal personnel costs and external consultants’ costs related to the development phase of two important projects that should secure future growth for EVS. These projects consist in software that will be commercialized at the end of the development period. For one of the projects, the development period ended at the end of the third quarter, leading to the commencement of depreciation over a period of 5 years. The expected return on investment for the second project is scheduled for 2024, complementing the PlayForward strategy of the Group. The progress of these internal developments is monitored frequently as to ensure the future economic benefit remains assured.

NOTE 6: FINANCIAL LIABILITIES

In June 2020, a loan of EUR 5.5 million was put in place with BNP Paribas Fortis to partially finance the acquisition of Axon. The repayment schedule foresees first repayment of EUR 0.6 million in 2020 and annual installments of EUR 1.1 million between 2021 and 2024, with final repayment of EUR 0.6 million in 2025 at loan maturity.

In June 2020, a roll over credit line of EUR 5.0 million was also put in place with Belfius bank to partially finance the acquisition of Axon. This amortizing credit line will expire at the end of June 2025. As of this date, EVS has not used this credit facility.

Lease liabilities mainly include office lease contracts at the various affiliates worldwide and employees car leases.

NOTE 7: FAIR VALUE OF THE FINANCIAL INSTRUMENTS

The fair value of the financial assets and liabilities is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

- Cash and cash equivalents and short-term investments, trade receivables, trade payables, and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments;

- Long term fixed rate and variable rate other assets are evaluated by the Group based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are made to account for the expected losses of these receivables. As at December 31, 2023, the carrying amounts of such receivables, net of allowances, are assumed not to be materially different from their calculated fair values;

- The fair value of unquoted instruments, loans from banks and other financial liabilities, obligations under finance leases as well as other non-current financial liabilities is estimated by discounting future cash flows using the effective interest rates currently available for debt on similar terms, credit risk and remaining maturities. As of December 31, 2023, the effective interest rate is not materially different from the nominal interest rate of the financial obligation;

- The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. Derivatives valued using valuation techniques with market observable inputs are mainly foreign exchange forward and option contracts. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs including foreign exchange spot and forward rates and interest rate curves.

As at December 31, 2023, the Group held the following financial instruments measured at fair value:

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly;

Level 3: techniques that use inputs having a significant effect on the recorded fair value that are not based on observable market data

All fair values mentioned in the above table relate to Level 2. There were no transfers between Level 1, Level 2 and Level 3 fair value measurements during the reporting period.

NOTE 8: EXCHANGE RATES

The main exchange rates that influence the consolidated financial accounts are USD/EUR and GBP/EUR which were considered as follows:

 

NOTE 9: HEADCOUNT

At the end of 2023, the Group employed 622 team members (FTE). This is an increase by 9 team members compared to the end of 2022 (613 FTE). In 2023, EVS deliberately limited the increase in team members, as we had a wish to stabilize the workforce after a strong hiring period in 2022. Towards the end of 2023, we accelerated hirings again, given the topline growth. For 2024, we expect a controlled increase in the number of team members as to continue and fuel our future growth.

NOTE 10: EQUITY SECURITIES

The variance in number of treasury shares and outstanding warrants in the period is as follows:

In 2023, the Group did not repurchase own shares on the stock market. No shares were used to satisfy the exercise of warrants by employees.

The Ordinary General Meeting of shareholders of May 16, 2023 approved the allocation of 14,194 shares to EVS employees (grant of 42 shares to each staff member in proportion to their effective or assimilated time of occupation in 2022) as a reward for their contribution to the Group successes.

NOTE 11: DIVIDENDS

The Ordinary General Meeting of May 16, 2023, approved the payment of a total gross dividend of EUR 1.10 per share for the year 2022.

For the year 2023, an interim dividend of EUR 0.50 per share was paid in November 2023. Full year dividend of EUR 1.10 per share will be proposed to the Ordinary General Meeting of shareholders.

The latest dividend guidance issued in 2022 foresees total annual dividend distribution of EUR 1.10 per share in 2023 and 2024, subject to market conditions and to the approval of the Ordinary General Meeting of Shareholders.

NOTE 12: RISKS AND UNCERTAINTIES

Investing in the stock of EVS involves risks and uncertainties. The risks and uncertainties relating to the current year are similar to the risks and uncertainties that have been identified by the management of the company and that are listed in the management report of the annual report (available at www.evs.com).

In terms of new risks arising since the last annual report, we highlight the macro-economic environment, particulary the Middle East and the Red Sea crisis resulting in cargo shipping delays and price increases in the short term. While the situation is difficult to predict in the medium to long term, delays and cost increases are likely to continue into the following months as shipping firms begin to plan for an extended conflict. EVS closely monitors the developments in this area and pro-actively takes actions to keep these delays and rising costs under control or to minimize their effect on the profitability of the company. We also reiterate the potential impacts following the war in Ukraine. The company continues to comply with the international sanctions in vigor.

NOTE 13: SUBSEQUENT EVENTS

There are no subsequent events that may have a material impact on the condensed financial statements of the Group.

Certification of responsible persons

Serge Van Herck, CEO*
Veerle De Wit, CFO*

Certify that, based on their knowledge,

a)   the condensed consolidated financial statements, established in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union, give a true and fair view of the assets, financial position and results of the EVS Group,

b)   the press release presents the important events and a fair overview of the business development and the results of the EVS Group in the reporting period.

* acting on behalf of a bv

External Auditor

The condensed consolidated financial statements of EVS Broadcast SA for the year ending December 31, 2023 were authorized for issuance in accordance with a resolution of the Board of Directors on February 22, 2024. EY réviseurs d’Entreprises represented by Carlo-Sébastien d’Addario has confirmed that their audit procedures, which have been substantially completed, have not revealed any material adjustments which would have to be made to the accounting information included in this press release. The complete audit report related to the audit of the consolidated financial statements will be shown in 2023 annual report that will be published in April 2024.

 

Attachment

• Press release in PDF format