- Operating income before depreciation and amortization up
€1,170K
- Vivendi debt fully repaid
- Strong growth in the first quarter of 2021
- Preparing for the launch of a new business line
Regulatory News:
AudioValley, an international specialist in B2B solutions in
digital audio, (ISIN code: BE0974334667 / mnemonic: ALAVY) has
published its annual results for the 2020 financial year and its
revenue for the first quarter of 2021.
Alexandre Saboundjian, CEO: “2020 was marked by several
exceptional events. The health crisis of course, but also the early
repayment of our debt to the Vivendi group and the signing of
strategic partnerships that enabled us to make up for much of the
decline in our business, heavily impacted by the fall in
advertising investment at the start of the coronavirus crisis. As
our results show, we were able to confront the crisis by
controlling our costs. These measures and the resilient mindset
that spurred each member of our teams led to a remarkable €1,170K
improvement in operating income before depreciation and
amortization (from -€548K in 2019 to +€622K in 2020)! In early
2021, we signed new strategic partnerships that give us access to
new territories such as Scandinavia. We are also preparing to
launch a new rights management business in Europe, a market worth
€10 billion!”
KEY FIGURES
in €000 - IFRS standards -
audited
2020
2019
Change
Revenue
19.583
21.962
-10,8%
Cost of sales
(10.290)
(12.223)
-15,8%
Payroll costs
(6.409)
(6.998)
-8,4%
Other administrative and commercial
expenses
(2.262)
(3.289)
-31,2%
Operating income before depreciation
and amortization
622
(548)
+1.170 K€
Depreciation and amortization
(3.977)
(4.184)
-4,9%
Operating income after depreciation and
amortization
(3.355)
(4.732)
+1.377 K€
Other income
9
+9 K€
Other expenses
(25)
(44)
+19 K€
Operating income
(3.371)
(4.776)
+1.405 K€
Gain on disposal / revaluation of
equity interest
7.091
-7.091 K€
Financial income/loss
(1.908)
2.276
-4.184 K€
Income taxes
448
(260)
+708 K€
Net income from continuing
operations
(4.830)
4.331
-9.162 K€
Net income from discontinued
operations
450
-450 K€
Net income (Group share)
(4.830)
4.781
-9.612 k€
ANALYSIS OF FIGURES
Revenue down only 10% In 2020, the Group posted a slight
decline in business of 10.8% compared with 2019 (€19.6M vs €22M).
At constant exchange rates, this fall was 10.1%.
Activity was strongly impacted by the coronavirus crisis,
particularly in Q2 when lockdown measures appeared (-22% compared
to Q2 2019). Targetspot’s business was impacted by the fall in
advertiser ad budgets, especially in the retail sector. The closure
of retail outlets also impacted in-store music broadcast
licensing.
There was a marked pick-up in activity at the beginning of the
summer, mainly thanks to strong growth in European business at
Targetspot, which helped to limit the decline in sales for the full
financial year. The recruitment of several talents also worked in
the Group's favor.
Globally, for the full year, media budgets fell -31% in Europe
and -24% in the US1. AudioValley’s activity was therefore,
comparatively, very satisfactory.
Targetspot (89% of consolidated revenue): international
expansion and European growth Targetspot ended the year with
revenue of €17.4M, down only 9.8% compared with 2019 (9% fall at
constant exchange rates). This performance was the result of
strong activity in the United States despite the crisis (€11.3M
compared with €14.1M in 2019, which represents a fall of 18.7% at
constant exchange rates, and the rapid growth of Targetspot in
Europe (€6.1M compared with €5.1M in 2019, i.e. +18.4%). Despite
the various lockdowns in Europe that impacted revenue in the 4th
quarter, the growth observed reflects the potential in extremely
buoyant markets.
The launch in April of Passport Explore, the most advanced
digital audio campaign optimization and management platform on the
market, was very well received (press release of 23 April).
Targetspot contributed to AudioValley’s expansion with the
signing of a major partnership in 2020 with MediaDonuts, an
international group specializing in advertising technologies,
covering India and South-East Asia, and a partnership with Sonos to
exclusively monetize their new streaming service Sonos Radio, with
its 60,000 radio stations, in 11 countries (press release of 29
April 2020). Targetspot is forecasting significant growth in
2021.
1 Source: World Federation of Advertisers.
Jamendo (11% of revenue): a highly promising
collaboration The Jamendo division recorded revenue of €2.2M, a
decrease of 18.2%.
The Covid crisis significantly impacted Jamendo's activity
during the 1st half of the year (-22.7% compared with the 1st half
of 2019). Business improved somewhat in the second half of the year
(-13.2%), mainly due to implementation of the new subscription
offer, as well as the signing of a global partnership with Adobe
(press release of 22 June 2020) for the launch of Adobe Stock audio
which integrates thousands of Jamendo audio tracks with its
Premiere Pro software. This partnership expands sources of revenue
for Jamendo and its musicians, while benefiting from international
visibility.
The creation of Jamendo Rights Management at the end of 2020, a
new business line devoted to collective music rights management,
will enable Jamendo to broaden its scope of action in terms of
managing and monetizing rights. This new activity, which is being
prepared for commercial launch, will be a springboard for
attracting new talent looking for channels to showcase their
musical works. The first revenue from the deployment of Jamendo
Rights Management is expected in 2021.
Operating income before depreciation and amortization
positive and up €1,170K!
The best illustration of Audio Valley's resilience is the sharp
improvement in its operating income before depreciation and
amortization (OIBDA) which was positive, up €1,170K! This
grew to €622K compared with -€548K in 2019 mainly due
to:
- a significant increase in the consolidated gross margin in
2020, at 47.5%, compared with 44.3% a year earlier; and
- control of fixed costs: temporary or permanent layoffs in the
different countries where they were applied facilitated a 8.4%
reduction in personnel costs compared with 2019. More
generally, other operating expenses, mainly marketing and
travel expenses, were cut back as much as possible and were down
31.2% compared with 2019. The company also received grants
amounting to €340K.
This improvement in OIBDA is a continuation of the trend that
began in 2019, when it had already increased by €1,125K.
Sébastien Veldeman, CFO: “The speed at which the teams
adapted as soon as the pandemic appeared enabled AudioValley to
cope with this difficult period. We have implemented strict cost
control and cash flow protection measures at Group level, through
temporary or permanent layoffs, subsidies and maximum cutting back
of other operating expenses.”
- Targetspot – The improvement in the Group’s operating
profitability stemmed exclusively from the Targetspot division: its
OIBDA rose from -€0.2M in 2019 to €1.1M in 2020, an increase of
more than €1.3M. In addition to controlling costs, this improvement
was also due to the increase in the division's gross margin rate to
45.8% compared with 42.4% in 2019.
- Jamendo – The Jamendo division saw a sharp downturn in
its activity, with less leeway for reducing costs. It recorded a
negative OIBDA of -€0.1M for the year. The gross margin rate also
improved compared with 2019 (60.8% versus 58%).
An improvement in operating income after depreciation and
amortization
In 2020, operating income after depreciation and amortization
improved by €1.4M , it is of -€3.4M after including largely
non-cash2 depreciation and amortization of €4M, broken down as
follows:
- €2.1M with no cash effect (in order to comply with IFRS
standards) relating to the straight-line depreciation charge over
technological assets recognized under the PPA (Price Purchase
Agreement) following the acquisition of the Targetspot division,
namely the Shoutcast streaming software and the Targetspot
platform;
- €1.3M in depreciation and amortization of other assets linked
to the Group’s internal development, up €0.3M;
- €0.6M in depreciation and amortization of rights of use for
assets recognized under IFRS 16 relating to lease accounting in
respect of the consolidated financial statements, which came into
force on 1 January 2019. AudioValley opted to apply IFRS 16 using
the modified retrospective approach, without restatement of
previous financial statements.
At the end of 2020, there was a net financial loss of
€1.9M, compared with net financial income of €2.3M in 2019. It
includes €1M in bond interest and €0.4M relating to a
better-fortunes clause, the conditions of which were met under a
debt waiver agreement.
Overall, the Group posted a net loss of (€4.8M),
compared with €4.8M in 2019, which had benefited from exceptional
items amounting to €11.5M: a capital gain of €7.1M relating to the
sale of the Storever division and income of €4.4M relating to the
discount obtained following the early repayment of the Vivendi
debt.
2 Non cash: no impact on cash.
Financial position: Vivendi debt fully repaid and deferral of
bond maturity
As at 31 December 2020, equity totaled €14.8M compared
with €14.4M in 2019.
2020 was marked by two positive financial events.
- In June 2020, AudioValley successfully raised €5.4M via
a private placement.
- Thanks to which, in July 2020, AudioValley repaid the last
€3M tranche of its debt to Vivendi. Signed in March 2020, the
agreement to defer payment of the last instalment until 30
September 2020 (instead of 31 March 2020) enabled AudioValley to
take advantage of the initially provided discount of 35%,
representing €8.6M.
Closing cash came to €0.8M, compared with €1.9M at the
end of 2019.
Financial debts for the 2020 financial year amounted to
€15.4M compared with €18.2M at the end of 2019. They are
mainly made up of:
- €8M in convertible bonds issued in July 2019, which mature in
July 2024;
- €5M in bonds issued in December 2019 whose maturity has just
been deferred from December 2021 to December 2024.
The Group can now fully focus its financial resources on its
international development.
Events after the reporting period: see the quarterly results
below
Outlook for 2021:
Now focused on 100% digital audio activities, AudioValley
benefits from a solid positioning combining technology and
international commercial coverage in a structurally buoyant market.
Our various partnerships with leading players and the increase in
the number of advertisers in the portfolio (more than 200)
demonstrate the ongoing shift in advertising campaigns from
traditional FM radio to digital audio media (smartphone
applications, smart voice assistants, podcasts, video games, etc.)
that enable better audience targeting. The arrival of new players
on the market, such as SONOS, which has speakers in more than 10
million households worldwide, is likely to intensify advertisers’
appetite for advertising campaigns giving unprecedented access to
the listeners they wish to reach. The partnerships signed in
2020 should boost the Group's activity in 2021.
The financial position, strengthened by the discharge of the
Vivendi debt and the deferral of a bond repayment, is also
propitious for making it through to the end of the health crisis
and quickly returning to growth.
The launch of the new rights management business Jamendo
Rights Management (based on the liberalization of collective
rights management in Europe) is also expected to generate revenue
by the end of 2021. It is targeting a market worth an estimated €10
billion in Europe of which it aims to carve out a share.
To help Jamendo in its development, and support the Rights
division, the Group is not ruling an IPO in the near future.
The statutory auditor, EY, Reviseurs d'Entreprises SRL,
represented by Eric Van Hoof, confirmed that the audit procedures
on the consolidated financial information included in this press
release have been substantially completed and have not revealed any
significant corrections which should be made to the information
contained in this press release.
REVENUE FOR Q1 2021
Double-digit growth!
Revenue for Q1 was up 13.2% compared with Q1 2020 (+17.1%
at constant exchange rates), to €5.1M. This was despite business
continuing to suffer from the effects of the pandemic and the
restrictive measures taken in the various countries, especially in
Europe (non-essential shops closed, full or partial lockdown,
etc.).
This very satisfactory result was driven by the Targetspot
division, which posted revenue of €4.6M, up 17,8% (+22.3% at
CER), compared with €3.9M in Q1 2020. Growth was driven by the
United States (+34.8% at CER), with Europe still heavily impacted
by the pandemic (-1.2%).
Meanwhile, the Jamendo division, still greatly impacted by the
crisis, posted revenue of €0.6M, down 13.8%, compared with
€0.7M in Q1 2020. Three new talents have joined the team to prepare
for the recovery.
Revenue in €000 - unaudited
Q1 2021
% of revenue
2020
Q1 2020
2021/2020
change
Variation
TCC3
Targetspot
4 574
89%
3 883
+17,8%
+22,3%
Jamendo
562
11%
652
-13,8%
-13,8%
Group total
5 136
100%
4 535
+13,2%
+17,1%
3 At CER: at constant exchange rates.
NEXT EVENTS
Release of annual financial report 30 April 2021, after market
close
2020 half-year revenue Tuesday 27 July 2021, after market
close
About AudioValley
AudioValley, based in Brussels in the heart of Europe, has been
a pioneer and leader in digital audio since 2007. Active throughout
the value chain in its sector, and with a global network,
AudioValley offers its customers & partners solutions to
develop their business through digital audio, both locally and
internationally.
The Group is home to iconic brands: Targetspot for the
monetization of digital audio content, Jamendo for music sales and
music rights management, Shoutcast for streaming technologies and
podcast management, and Winamp, the iconic audio player.
The audio sector is undergoing an unprecedented digital
revolution with ultra-connected consumers who want access to the
best audio content wherever and whenever they want. To cater for
these new consumer trends, AudioValley is developing technologies
that allow people to instantly enjoy the benefits of digital audio
and services that create links between brands and consumers,
between publishers and their audience, between publishers and
brands, and between artists and music lovers. AudioValley has sites
in 9 countries and employs some 100 people worldwide.
www.audiovalley.com
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210405005508/en/
Investor Relations: Sébastien Veldeman •
investorrelations@audiovalley.com Press Relations : Emilie
Dehan • press@audiovalley.com