Vizrt Provides Q1 Trading Update
Slowdown in Broadcast Graphics
Escenic better than expected
Bergen, Norway, April 28, 2009, The Board of Vizrt Ltd. (Frankfurt Prime Standard, Oslo Main List: VIZ) today provides a trading update on the Company's first quarter 09 performance.
During the first quarter of 2009, Vizrt has witnessed the following sales development:
- The Broadcast Graphics (BG) market is facing problems across the board and sales in this segment fell compared to Q1 2008.
- Media Asset Management (MAM) order intake is approximately as forecasted.
- The Company's On-line business (Escenic) has performed better than expected and sales showed an increase.
- Though at this point in time it is not possible to provide an accurate statement, overall sales slowed down compared to Q1 2008.
The current challenging economic climate has hit mainly Vizrt's BG business. Although declining sales for BG software is a global phenomenon, sales were hit especially hard in Eastern Europe where falling GDPs and falling exchange rates impacted the Company's revenues negatively. Additionally, credit required to make investments has become extremely hard to obtain in Eastern Europe, as loans from banks and credit institutions have all but dried up.
More positive was that the development in MAM sales has been stable, as this is a type of investment all broadcasters sooner or later will have to make. As a result, the Company has witnessed sales on the level as in the same period as last year. However, some broadcasters have decided to delay implementation and are spreading their investments over a longer period of time.
Vizrt's on-line publishing business, Escenic, has seen a strengthening during the quarter. This was mainly due to its product offering, which allows publishing houses to change their business model from traditional revenue sources, which all have seen a dramatic decline in recent months, even stronger than previously anticipated, to one that allows them to increase the contribution from on-line revenue generation. In this market, Escenic has one of the best offerings, which has resulted in a steady growth in deal flow.
Although too early to provide accurate figures for the quarter or updated guidance for the full year, Vizrt is now anticipating a reduced revenue level and will adjust its spending accordingly.
Bjarne Berg, CEO for Vizrt, stated, "The BG sales were in line with the projections all the way up to the end of February, when it was like someone locked the door and threw away the key."
"More positive was the reception of our new products at the trade show in Las Vegas, especially for the integrated products for our online business. Furthermore, some of the business segments worst affected in Q1 came back with business in April."
"Even so we have decided to reduce our OPEX on an annualized basis by around USD 4M compared to 2008's OPEX. This also includes some unfortunate lay-offs. MAM and Escenic will not be affected by reductions in the work force. R&D, our future, is shielded as much as possible, but even here we will see some lay-offs."
Media and investors contacts:
Bjarne Berg
President & CEO
+47 9055 7711
Paal Tønsberg
CFO
+47 9117 5748
SCHWARZ Financial Communication
Frank Schwarz
+49 611 1745 398 11