FIRST QUARTER 2009 RESULTS
Bergen, Norway, May 26, 2009, Vizrt Ltd. (Frankfurt Prime Standard, Oslo Main List: VIZ) today announces its results for Q1 2009.
Revenues of MUSD 17.2 in Q109, down from MUSD 23.0 in Q108, a decrease of 25%.
EBITDA of MUSD -0.7 in Q109 compared to MUSD 5.6 Q108
EBIT of MUSD -2.4 in Q109 compared to MUSD 4.2 in Q108
The reduction in revenues and results is mainly due to reduced and postponed sales of Broadcast Graphics (BG) products
Total backlog to date is MUSD 20.3 compared to MUSD 23.1 last year (-12%)
In Q209, the Company has implemented several measures to reduce expenses. These measures are expected to reduce the current operating expenses by MUSD 4.0 on annual basis
In order to reduce the complexity of operations and to reduce expenses, the company has decided to consolidate its public listing on the Oslo Stock exchange and to submit an application for delisting from the Frankfurt Stock Exchange
OUTLOOK
Bjarne Berg, President & CEO, stated: "The results for the year so far are disappointing and reflect a global economic climate that worsened far quicker than we expected. The dramatic fall in TV advertising spending, which hit the media houses so hard over the past six months, has had a far more severe impact on our customers, and consequently their budgets, than anyone anticipated just a few months ago.
However, the impact has not been equal for all our corporate activities as the measures we took three years ago to diversify are working in our favour. The Broadcast Graphics (BG) division has been hit hardest and it is clear that our core customer base is postponing investment (CapEx) spending wherever it is not immediately necessary. Additionally, there are fewer big calendar events this year, such as major sports tournaments or US elections, which normally drive graphics system upgrades. That said, 2010 sees a number of opportunities such as the Winter Olympics in Canada, the soccer World Cup in South Africa and important mid-term elections in the US. Spending for these events is anticipated to start in Q4 of this year.
Revenues for Media Asset Management have held up better than in BG. We believe that for those projects that have already started, investments (CapEx) were ring-fenced some time ago and therefore are still going ahead. We are, however, witnessing some impact in this segment, as not as many new projects are being initiated. The usual level of investment in a MAM project is quite high and the signs are that customers may also postpone these investments until happier times. Furthermore, customers currently have the tendency to want to spread their investment out over a longer period.
Another, more recent, diversification is also paying off. It seems that some European media houses have increased their focus on online promotion in order to compensate for the decline in advertising revenues from more traditional media. This "silver lining" has generated results slightly ahead of expectations from our Web publishing operation, which we acquired last year, before the current crisis broke. It is too early to predict whether or not this trend will spread to the rest of the world, but in contrast to BG and MAM, the signs, at least for now, are positive.
It would not be wise to give any definite predictions for the rest of the year - there are just too many unknowns. However, we have already implemented all the sensible precautions that our shareholders would expect from us; we are reducing costs, we have adjusted our budgets and we expect the results of these measures to start come in fully in the second half of this year."
The FULL REPORT and MANAGEMENT PRESENTATION are provided as PDF download via the link at the end of this message.
A conference call will be held at 11:00 (CEST) today to offer analysts, investors and media the opportunity to directly discuss the results and recent developments with Bjarne Berg, CEO, and Paal Tønsberg, CFO of the company. Please use one of the following dial-in-numbers: +44 20 7784 1038 (UK), +47 2156 9640 (Norway), +49 69 2222 7436 (Germany). Participant Pass Code: 586315.
Media and investors contacts:
Bjarne Berg
President & CEO
+47 9055 7711
bberg@vizrt.com
Paal Tønsberg
CFO
+47 9117 5748
ptonsberg@vizrt.com
SCHWARZ Financial Communication
Frank Schwarz
+49 611 1745 398 11
schwarz@schwarzfinancial.com