January – March 2017
- Deployed license base
- The VAS (value added services) enabled license base grew by 22 thousand licenses to an accumulated base of 5,7 million.
- Net sales and other operating income decreased by -9 % year-on-year to SEK 60,3 million (SEK 66,6 million)
- EBITDA in the first quarter 2017 was SEK -9,6 million (SEK -2,5 million)
- Net result in the first quarter 2017 was SEK -21,2 million (SEK -15,8 million)
Events after the reporting date
- Nothing to report
Comments from Jorgen Nilsson, CEO of Zenterio:
We have just concluded the first quarter of 2017 and our industry is definitely moving forward with increasing momentum. Not so much on the technology front, but more driven by the growing choice of options available to consumers for watching content whenever and however they want, underpinned by the increased simplicity and access provided by the combination of broadband and OTT services.
In Zenterio, as many projects came to delivery our first quarter has been a time for reflection on what this means for us and the strategic direction that we need to take in order to stay competitive. This has required an understanding of which trends impact us most and how we can respond based on what we are good at, whilst at the same time continuing to move the company’s financial performance towards profitability and stability.
The financials in this quarter were heavily impacted by finally concluding some key legacy projects, after years of negative contribution. That decision was not easy to take as it created a strong impact on our costs, and at the same time reduced available resources for new revenue generating opportunities. In summary, the decision has had a negative effect on the quarterly results, reducing revenues compared to Q1 2016 by 8% to SEK 60.3 million, and increasing costs by 3% compared to the same period. On the EBITDA level the outcome was SEK -9.6 million, an increased loss of SEK 7.1 million compared to the result for Q1 2016 which
was SEK -2.5 million. However, as a result of the actions that management initiated at the end of 2016, quarter-on-quarter we have reduced costs by 5% to SEK 80.4 million compared to SEK 84.3 million for Q4 2016.
On the TV client software side we have decided to further strengthen our focus on the multiscreen world. That means that our graphical user interface, JetUI, is becoming ever more important as it provides operators with the ability to unify the content experience across all screen choices and to significantly shorten the route to content discovery for their customers.
Similarly, our capture of TV user data and analytics solution brings knowledge and insight to operators on the viewing habits and content preferences of customers irrespective of the device that they choose to use. This is comparable to the data available to OTT providers, like Netflix. For Zenterio, however, it is not just a tool like it is for other vendors in our industry. For us it is a complete service from data collection through to the provision of actionable reporting delivered directly to decision makers. Later this year we will enhance this analytics product by adding user behavior forecasting which will further improve the monetization potential of the service. The innovative prediction model on which the system is based has been shown to have a very high accuracy in forecasting customers’ viewing habits.
Finally, we have been investigating additional technologies that will support our ambition to secure a higher market share in future TV legacy migrations. As a result, we have decided to add an Android stack to our portfolio. We are very excited that this will be a solution differentiated from those of our competitors owing to the additional features that we are able to offer. Our philosophy is both to broaden the product portfolio, whilst at the same time using our huge TV and video expertise to offer value-added services that sit alongside and extend our recurring revenue propositions.
To sum up the expectation for the upcoming quarter, we are not only strengthening our product portfolio, but we are also preparing our organization for the positive market impact expected as a result of a series of product launches that will be coming soon from two of our Tier 1 operator customers. We have worked very hard together with our customers to make sure these launches will help take the company to the next level.
As our organization moves forward, we are continuing to add new competences and to establish partnerships which will enable us to swiftly scale our resources in a cost effective way. An additional benefit of this is that we will, if necessary, be able to site resources closer to our customers’ locations.
We look forward to the rest of 2017 with confidence, as there are great opportunities, as well as of course challenges. However, with the right priority and focus we expect to both secure our growth and begin to see the positive effect of our strong focus on profitability, cash management and disciplined use of working capital.
For more information, please contact:
Jorgen Nilsson, CEO
Phone: +46 13 36 39 50
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.