STOCKHOLM – February 18, 2019 – today Zenterio reports fourth quarter 2018.
October– December 2018
- Deployed license base and recurring revenue
- The VAS (value added services) enabled license base grew by 0,1 million licenses to an accumulated base of 7,4 million.
- Quarterly ARPU (Average Recurring revenue per Unit) grew to SEK 1,80 (0,59 SEK) representing a year-on-year growth by 207%.
- Net sales and other operating income decreased by 13,9 % year-on-year to SEK 55,6 million (SEK 64,6 million).
- EBITDA in the fourth quarter 2018 was SEK 5,2 million (SEK 11,8 million). Items affecting comparability of SEK 3,6 million (SEK 0,0 million), arising from restructuring, were included.
- Net result in the fourth quarter 2018 was SEK –36,9 million (SEK -1,0 million) and included an impairment loss on goodwill of SEK 30,0 million.
- Operating cash flow was SEK 21,0 million (SEK 11,1 million).
Events after the reporting date
- Nothing to report
Comments from Jorgen Nilsson, CEO of Zenterio:
Firstly, I want to start this fourth quarter report 2018 with reporting a positive EBITDA for the quarter and for the full year of 2018. Secondly, another, even larger, milestone has been achieved, marking the next step in the history of Zenterio; we have finalized our 4-year multi- product program for Deutsche Telecom (“DT”) delivering their most sophisticated TV proposition ever launched.
The excellent teamwork between DT, 3rd parties and Zenterio has been a fantastic achievement delivering high quality software rich in features, including key integration of the Netflix and Amazon platforms. We will now build our standard offering based on these achievements for a broader market. This implies no more need for major developments and the end to the complex and low margin part of our business model.
The transformation and restructuring of our company, that we have mentioned in earlier reports, as well as the impact of traditional development resources and contractors have continued during Q4 in parallel with us finishing the achievements mentioned above. The organization is quickly transforming to become a smaller and more nimble company. We now have an opportunity to change our financial constraints by increasing our focus on our major growth areas, Data cloud products and services, by finding new innovative solutions. This includes Android product propositions as well as following market trends with our own value proposition. We have launched a new service delivery structure with focus on Maintenance and Support, On-Site Advisory and In-sourced Technical Engineering offerings. These disciplines are all based on the extremely skilled personnel we have and their ability to address other industries’ development needs. The focus is to establish recurring revenues and to limit customised professional services.
For Zenterio this transformation means no more major dependencies on single large customer programs as well as capitalizing on what we already have. This will enable us to aggressively extend and capitalize new innovative solutions on the Adscribe data analytics platform catered towards more specific target offerings in the video business domain. The key is to quickly establish proof points with this new portfolio and hence demonstrate that our business insights can expand on a broader set of customers, not only TV and Video operators who need to know customer data and to take customer experience and monetization to a new level.
This means that we are leaving our dependency on the traditional Zenterio OS product and its large non-recurring integration services. We will instead expand on the investment we did in acquiring AdScribe. This expansion has been hampered by our needed focus on finalizing our old contracted work – a dependency we are now leaving. This implies that the huge and complex integration service business will be reduced and so will our top line. However, this is for the right reason and we can now finally rebuild the company in a manner that focuses more on shareholder value.
We need to target new customers through the new Sales organization established in the fall and use the new go-to-market model that we will introduce in 2019. This will make us more visible in the market. By spending time where it matters, we will push our new business offerings to scale with speed and, by working closely with target customers finalize our product offerings.
Regarding the financial performance of the quarter we are very pleased to share our result. We had another acceptable quarter with positive EBITDA. Net sales amounted to SEK 55,6 million, -13,9% compared to Q4 2017, mainly based on less professional services. On the EBITDA level, the improvement that started in the beginning of the year continued and resulted in an EBITDA of SEK 5,2 million, impacted by needed restructuring cost of SEK 3,6 million, compared with SEK 11,8 million in Q4 2017. Based on these reported numbers, 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. In regard to net sales year over year the result was SEK 236,2 million for full year 2018 compared to full year 2017 of SEK 240,3 million. During this 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.
Based on these statements of transformation, management begins 2019 with confidence and will nurture the continued trust in Zenterio as a partner for the future, with solutions that capture industry trends, adding value and innovation for 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.
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About Zenterio (www.zenterio.com)
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.
For more information, please contact:
Jorgen Nilsson, CEO
Phone: +46 13 36 39 50
Steven Moodie, CFO
Phone: +46 13 36 39 50