STOCKHOLM – June 5, 2019 – Zenterio, a leading television and multiscreen solutions provider, reports today their Annual Report of 2018.
The VAS (value added services) enabled license base grew by 2,6% and added 0,2 million licenses to an accumulated base of 7,4 million licenses.
The total license base grew by 2,2% and added 0,2 million licenses to an accumulated base of 8,6 million licenses.
Net sales and other operating income decreased by 1,7 % year-on-year to SEK 236,2 million (SEK 240,3 million).
EBITDA in year was SEK 5,4 million (SEK 19,6 million). Items affecting comparability of SEK 7,6 million relating to restructuring were included.
Net result year to date 2018 was SEK –72,2 million (SEK -29,4 million) and included impairment loss on goodwill of SEK 30,0 million.
In February, Zenterio announced that Telekom Romania decided to use Zenterio OS for their new set-top-boxes (STB) for their interactive IPTV serivce.
In April, Zenterio entered into partnership with Artificial Solutions to deliver converssational AI for Interactive TV services.
At IBC 2018 Trade Show in Amsterdam, a successful launch of Zenterio’s new products Zenterio TV powered by Zenterio Cloud was made. These products deliver the ultimate television experience and the launch led to increased publicity.
In August, Zenterio announced that OTE Group will launch their new boxes within COSMOTE TV, which is OTE Group’s pay-tv service, with Zenterio OS as software.
Deutsche Telekom launched in the beginning of September a feature-rich 4K IPTV, OTT and satellite box powered by Zenterio OS, EntertainTV.
A restructuring of the company’s organisation and review of future need of resources were made during the second half year. The company reported an item affending comparability of SEK 7,6 million as a result of these actions.
In September, Zenterio launched a new article in a series of three with focus on pay-tv and it’s future.
In November, Zenterio launched a new White Paper: Pay-TV 2020.
New CEO appointed, Mr Kristian Toivo with effect from April 10th 2019.
Acquisition of Sixty A.S shares (minority). The deal will be completed August 2019 where Zenterio will get 50% of the voting rights. Sixty is a media and TV solution company.
The year 2018 saw Zenterio allocating full focus to finalizing the 4-year product program for Deutsche Telekom (“DT”), delivering the most sophisticated TV client solution ever launched, integrating traditional IP-TV with Netflix, YouTube and Amazon services. The successful completion of this program was a result of hard work by all of Zenterio’s employees and excellent teamwork with DT and other parties involved in the program. As a result of this focus on DT we can report good financial results, including a positive EBITDA for the full year 2018.
As the DT program has come to an end, 2019 will be a year of restructuring and transformation, with full focus on reducing the cost base, developing the product portfolio and acquiring new customers to compensate for the significantly reduced business with DT. We have also started a journey towards a future where we will position the company to use its competences and experience to benefit from the changed landscape in TV and Media, where direct to consumer or over-the-top (“OTT”) offerings and content attract an ever-increasing share of the investments.
To adapt to a reduced business volume in 2019 we started a restructuring of the company during the second half of 2018. This reduced the cost run-rate with approximately 50% by the end of Q1 2019.
During 2018 we re-focused our product development to create a new portfolio that is aligned with the trends in the market. This includes TV Client and Analytics solutions based on Cloud technology that is based on the rich feature-set and OTT integrations delivered to DT.We will now offer this as our standard TV Client solution to other customers to provide these state-of-the-art capabilities faster and with less customised development, enabling short time-to-market for their advanced TV offerings. Recognizing another growing trend in the market, we are making a software stack for Android TV available for those customers that decide to move to this technology.
To support our product business and capture additional value provided by our skilled and experienced personnel, we have launched a new service organization that offers its capabilities both to our traditional customers, other TV and Media companies, as well as selected associated industries.
The new product and services portfolio will enable us to aggressively hunt for new business to re-build our sales pipeline and eventually recover some of the business volume earlier associated with DT.We established a new Sales organization in the autumn and will use a new go-to-market model that includes selected use of partners and channels. This will make us more visible and increase our reach in the market.
To complement our new product and services portfolio we have in Q1 established a partnership with Sixty A/S of Bergen, Norway, with the target to have a combined portfolio offering increased value in the content space. Zenterio will become a major shareholder in Sixty through completion of the transaction in Q3.
Zenterio delivered a positive EBITDA full year 2018 of SEK 5,4 million despite SEK 7,6 million of restructuring cost, compared with full year 2017 of SEK 19,6 million. Net sales for 2018 was SEK 231,9 million compared with full year 2017 of SEK 238,8 million. During the year we have had two major contracted deliveries that have significantly negatively impacted the overall profitability outside the DT program and they are now both finally delivered.
We expect a top line in 2019 that is significantly lower, due to the reduction of DT business. We expect additional restructuring costs also in 2019 as the transformation of the company continues. This, together with finalisation of the transaction with Sixty A/S will require additional financing to enable execution of the new strategy.
The successful execution of the transformation in 2019 will ensure that Zenterio remains a major and trusted player in the evolving TV market, with products and services that capture industry trends, providing value and innovation to our clients’ customers.
Finally, I would like to thank all employees, key partners and our customers for their fantastic participation in what we have achieved in 2018.
English annual report: Zenterio_YearlyReport2018_ENG
Svensk årsredovisning: Zenterio_Årsrapport2018_SWE
Zenterio enables TV Operators to securely and efficiently manage and deliver entertainment to the home while increasing business insight and value. Zenterio’s portfolio of products and solutions includes a complete TV and OTT entertainment experience client. In addition, Zenterio provides cloud-based solutions for content aggregation, data and analytics, home automation integrations and advanced advertising capabilities with a focus on reducing cost and increasing ARPU. Zenterio also provides professional and consulting services, with global partners, to provide future-proofed lifecycle management for Linux and Android platforms.
Kristian Toivo, CEO
Phone: +46 13 474 55 07
Per Sjöqvist, CFO
Phone: +46 70 789 5819