January – December 2016
- Deployed license base
- The VAS (value added services) enabled license base grew by 109% in the full year 2016, adding 2,97 million licenses to an accumulated base of 5,7 million
- Net sales and other operating income increased 40% year-on-year to SEK 285,7 million (SEK 203,9 million)
- EBITDA in the full year 2016 were SEK -10,3 million (SEK -61,5 million)
- Net result in the full year 2016 was SEK -65,4 million (SEK -100,0 million)
October – December 2016
- Deployed license base
- The VAS (value added services) enabled license base grew by 15% in the fourth quarter, adding 0,87 million licenses to an accumulated base of 5,7 million
- Net sales and other operating income decreased -1% quarter-on-quarter to SEK 67,9 million (SEK 68,3 million)
- EBITDA in the quarter were SEK -8,4 million (SEK -3,5 million)
- Net result in the quarter was SEK -19,7 million (SEK -13,7 million)
- Both Net sales and other operating income, EBITDA and Net result were impacted by a SEK 19,8 million write down for our largest customers program. The write down was initiated by identified additional risk factors and revised profitability levels
No events after the period to report
Comments from Jorgen Nilsson, CEO of Zenterio:
The fourth quarter has again been a busy one. Our greatest challenge in this quarter has been the large number of software releases for our main customers. We have now delivered more than 10 major software releases to the Deutsche Telekom Group. It has been a fantastic achievement, and it is bigger than anything that Zenterio has done in the past.
However, as a result of these large demands on the organization, we have been forced to increase the number of resources as well as use overtime when needed. Those efforts have naturally increased our overall cost base. In addition, our quarterly result was impacted by the consequences of our largest customer’s multi year fixed-priced program. We have identified additional risk factors and prudently revised the profitability levels from the start of the program up until the end of the quarter. Hence both revenue and EBITDA for the fourth quarter were impacted by this SEK 19.8 million program write down accumulated from the beginning of the project, leading to negative development on EBITDA, compared to the same quarter last year.
However, for the full year revenues of SEK 285.7 million represents a 40% growth, compared to full year 2015. Full year EBITDA loss improved by SEK 51.2 million on a year on year basis (a negative EBITDA of SEK -10.3 million, compared to a negative EBITDA of SEK -61.5 million for full year 2015). Excluding the write down, we would have fulfilled our objective of a positive EBTDA for the full year.
The management team is working hard to mitigate future costs and we are having a pragmatic dialogue with our customers to jointly find a way to deliver on time, while at the same time manage our cost levels moving forward. We have converted two key customers from fixed price to time and material on commercial terms and we are already seeing positive effects as a benchmark. In addition, to these changes, we are only months away from a number of exciting commercial launches in 2017 that will have a further positive impact on Zenterio’s profitability and predictability. Starting with those launches we will be more closely involved in planning and delivering new features and functions, as well as proposing our data analytics and advertising solutions. In our other major project in Mexico together with Megacable, we are performing well when it comes to time, profitability and how the overall customer relationship is progressing. But more work is needed.
In 2017, Zenterio will develop its offering with a broader solution and continue to focus on operators that need to migrate and update their legacy systems. Here we also see an opportunity to add a broad range of expertise, making recommendations and providing step by step guidance as operators need to understand what they require to deliver what consumers want with a great customer experience in a multiscreen world. That will mitigate future risks and improve overall commercial performance for all parties.
We enter 2017 with very positive operational feedback from our customers, and we are finally starting to have a comprehensive installed base of solutions as great reference cases. This shows operators that they can put their trust in Zenterio’s solutions and transformation program capability. We will continuously add relevant technology to fulfill the transformation our customers are facing as they move to the next level of consumer experience and data analytics to connect to their TV solutions via our new program based delivery model.
In addition, during the quarter we successfully closed a SEK 85 million rights issue, which was oversubscribed, with very strong support from our shareholders. It was an important process which involved many key stakeholders and we were able to articulate both the challenges we face and the opportunities we see in order to grow the company’s relevance as well as our profitability within the TV industry.
With this capital injection we triggered an option that would have otherwise expired during the quarter and Zenterio acquired the remaining 75% of shares in AdScribe. Zenterio now owns 100% of AdScribe, acquiring its key assets and proprietary technology for consumer data analytics and interactive advertising and, just as importantly, the competences and strong marketing and advertising insights that the AdScribe team brings with them.
To finish up, I want to mention that a Zenterio Team won the Hackathon software development competition at the IoT Solutions World Congress in Barcelona in October. We are definitely getting more engaged in the IoT domain as we work more closely with certain operators.
I want to thank all of the employees at Zenterio and at our subsidiaries, as well as at our key partners, for their great passion and their contribution to what we are trying to accomplish. And of course I want to extend thanks, and my gratitude, to our shareholders for their fantastic support.
For more information, please contact:
Steven Moodie, CFO
Phone: +46 13 36 39 50
Zenterio provides an independent OS for interactive TV aimed at creating an industry standard. Zenterio also offers an intuitive multiscreen UI, a powerful Data Analytics solution, Consulting Services and additional Value Added Services to TV operators. Zenterio partners with global system integrators, set-top box suppliers, CA/DRM providers, chip-set manufacturers and services providers. Zenterio has offices in Stockholm, Linköping and Atlanta and is owned by private investors and private equity firm Scope. The Chairman of the Board is former Nokia CEO Mr. Olli-Pekka Kallasvuo and the CEO is former Ericsson executive Mr. Jorgen Nilsson. For more information please visit zenterio.com.