ADB Group Reports Full-Year and Second-Half 2007 Financial Results

Thursday, 28. February 2008 07:00
Corporate news announcement processed and transmitted by Hugin ASA.
The issuer is solely responsible for the content of this

* Revenue growth of 13% for the full year, outpacing market
* Return to profitability
* Second-half 2007 revenue increased by 43% compared to
first-half 2007
* Second-half 2007 net profit increased by 100% compared to
second-half 2006
* Revenue from fast-growing Eastern European markets
increased to reach 24% of the Group's revenue
* Six new customers wins announced during 2007 and one more
already in 2008, representing a major achievement
* 57% of Digital TV Equipment revenue from high definition
* ADB Group reported as #1 in hybrid IPTV STB shipments in Q2
2007 by Infonetics Research

Geneva - February 28, 2008, 07:00 a.m. (CET)

ADB Holdings SA (SWX: ADBN) reported today ADB Group's unaudited
consolidated financial results for the full year and second half year
of 2007.

Full year revenue for 2007 reached US$ 296.3 million, an increase of
13% compared to US$ 262.3 million in 2006. Gross profit was US$ 100.6
million, or 34% of revenue, a 19% increase from US$ 84.4 million, or
32% of revenue, in fiscal year 2006. Earnings before interest and tax
were US$ 2.6 million, or 1% of revenue, versus a loss of US$ 5.1
million, for the same period last year. Net profit for 2007 was
US$ 0.5 million, compared to a net loss of US$ 6.3million in 2006.
Basic and Diluted EPS were US$ 0.08, compared to US$ (1.03) in 2006.

The Group's overall results were affected by US$ 12 million
exceptional costs due primarily to the change in manufacturing
location, and US$ 4.1 million losses of the New Initiatives segment.
Excluding these items, the Group's EBIT was US$ 18.7 million, or 6%
of the revenue.

Andrew Rybicki, Chairman and CEO of ADB Group, commented: "We were
satisfied with the demand for our products during 2007. We grew our
revenue and returned to profitability. At the same time, we
decisively focused on implementing the necessary actions to improve
our business efficiency. I am pleased that we successfully completed
the move of 100% of our production to Thailand according to plan. Our
business units organization is fully in place and we have a reliable
supply chain, just in time to support our strong first-half 2008
order backlog."

Outlook for 2008

ADB Group sees the first half of 2008 being positively driven by the
upcoming European Soccer Championship, as well as the Beijing Olympic
Games. However, the Group is taking into account the short-term
concerns about the overall economic development worldwide and related
uncertainties, as well as their potential impact on the second half
of the year. Therefore for the Group has decided to remain cautious
on its full-year 2008 outlook, and currently anticipates the
following for the continuing operations:

* Revenue growth range of 9-13%
* Gross margin range of 33-36%
* Earnings before interest and taxes range of 3-5%

Business segment performance

Digital TV Equipment segment

The main business segment, Digital TV Equipment, performed well
during year 2007. The revenue from this segment was US$ 278.0
million, or 94% of the Group's revenue, growing 14% from 2006.
Reported segment result was US$ 10.1 million, or 4% of segment
revenue. Adjusted by excluding US$ 12 million of exceptional items,
the DTV Equipment segment EBIT was 8% of revenue, demonstrating its
robust financial fundamentals.

Within the Digital TV Equipment, year 2007 saw a significant growth
in the terrestrial business, which grew 164% from 2006 due to both
the recovery of the Italian DTT market and the initiation of
shipments to a new OEM customer: Grundig. Terrestrial represented 12%
of the Group's revenue. The IPTV segment continued to grow by 18%
compared to 2006, and also saw its customer base expand with
attractive prospects (Border States, US, Telefonica Chile and T-Com
Innovation, Germany). IPTV now represents 24% of the Group's revenue.
The cable segment grew by 11% due to the addition of two new
customers (INDI, Belgium, and Multimedia, Poland). It remains the
largest segment of the Group, representing 38% of the revenue. The
satellite segment, which slightly decreased compared to 2006,
represented 21% of 2007 revenue. The partnership with ITI Neovision
continues to be of strategic importance to the entire Group. During
2007, the Group restructured the financing arrangements with ITI
Neovision bringing the payment terms on par with other Group's
customers, and collecting US$ 30 million of its long-term receivable.

In a report issued in 2007, the independent industry research firm
Infonetics Research ranked ADB S.A., the Group's STB affiliate, world
leader in Hybrid IPTV shipments in the second quarter of 2007. This
confirms the Group's leadership in Hybrid IPTV technologies.

ADB S.A. also announced today that it has acquired a further new
customer for its IPTV segment, Telekom Austria. Shipments to Telekom
Austria have started at the end of 2007.

Software and Services segment

The Software and Services segment's activity increased with the
delivery of middleware and applications to some of the Group's new
customers, such as INDI and Multimedia. Software and Services segment
revenue, excluding intercompany sales, was US$ 16.3 million, or 6% of
the 2007 Group's revenue with a positive contribution to the gross
margin. Including sales of software and services to the other Group's
segment, this segment's revenue grew 14% over 2006. The segment
reported a loss of US$ 3.3 million in 2007.

New Initiatives segment

New Initiatives segment revenue was approximately US$ 2.0 million,
with a loss of US$ 4.1 million. The segment fell short of Group's
expectations on profitability and thus the Group made a financial
decision to discontinue this activity. This segment will be
discontinued during 2008, and some of its products will be
transferred to the other business segments.

Revenue analysis per region

From the standpoint of the revenue split by geographical regions,
Europe, Middle East and Africa accounted for 88% of revenue while
Asia Pacific represented 4% and the Americas 8%. The Group's focus on
fast-growing Eastern Europe resulted in 24% of its revenue derived
from this region. The top 10 customers of the Group represented 77%
of revenue, decreasing from the 78% of 2006, and no customer
represented more than 18% of the Group's revenue.

Results for the second half of 2007

Revenue for second-half 2007 reached US$ 174.3 million, a 43%
sequential increase over US$ 122.0 million for first-half 2007, and a
7% increase over US$ 163.4 million for second-half 2006. Gross profit
was US$ 59.6 million, or 34% of revenue, a 46% sequential increase
over US$ 40.9 million, or 33% of revenue, in first-half 2007, and a
12% increase over US$ 53.5 million, or 33% of revenue, in second-half

In the second half of 2007, the Group's EBIT increased 88% over the
same period last year. It reached US$ 5.3 million, or 3% of revenue,
compared with EBIT of US$ 2.8 million, or 2% of revenue, in
second-half 2006, and loss before interest and tax of US$ 2.7 million
in first-half 2007. Net profit for second-half 2007 was US$ 3.8
million, or 2% of revenue, a sequential improvement from net loss of
US$ 3.4 million in first-half 2007, and a 100% increase compared with
the second-half 2006 net profit of US$ 1.9 million, or 1% of revenue.
The difference between the first and second half results are due to
the normal seasonality of the business.

Organization update

During the latter half of 2007, ADB S.A. was reorganized into a new
business unit structure in order to better cater for specific client
and market needs. The manufacturing process was also re-organized
during the 2007, making it leaner and more efficient. It has been
lead by new ADB S.A. Chief Operating Officer Mr. Pierre-Alain Nicati
since August 1, 2007. The Group CEO and Chairman, Andrew Rybicki,
continues in the position of acting CEO of the STB affiliate in order
to keep focusing on execution capability and efficiency. In this
context, François Pogodalla has been appointed as General Manager of
ADB Holdings S.A., with the duties of supervising the Software and
Services business segment, and of coordinating general corporate
activities. He will also support CEO Andrew Rybicki as necessary in
the role of Deputy CEO.

In January 2008, ADB Group's Executive Management has been
strengthened by the arrival of Ms. Tina Nyfors, who joins the Group
as Vice President for Corporate Development, including Investor
Relations. For the last seven years Tina Nyfors was Senior Advisor in
the Zurich-based advisory firm Fincoord, where she lead M&A and
capital market transactions, investor relations and research, mainly
in digital media and broadcasting industry working on major deals for
ITI Group/tvn, Poland's leading media and entertainment group.

Share buy-back

In January 2008, the Board of Directors of the Company approved a new
share repurchase program, which the Company has already started to
execute. This program is limited to less than 2% of the outstanding
share capital. The repurchased shares will be used to fund the
Company's stock option plan or any other use in the interests of the

Conference Call

The management of ADB Group will hold a conference call to discuss
full-year 2007 financial results and outlook for 2008, today at
15:00 CET.

Interested participants should call the following number: +41 52 267
07 36
To ask a question, participants will be required to dial: *14

This press release and further information on ADB Group can be found
on the Group's website at

For further information please contact:
Tina Nyfors
VP, Corporate Development
Telephone: +41 22 592 8433

About ADB Group (SWX: ADBN)

ADB Group ( was founded in 1995 and is a leading
developer of solutions required to view and interact with digital TV
broadcast through cable, satellite, terrestrial and IP networks. The
Group primarily sells consumer premise devices, including set-top
boxes, with over 10 million units deployed since 1997. The
development and sales of the Group's products and services are
conducted in three main operating segments: the Digital TV Equipment
segment, mainly operated by ADB (, Software and
Services segment, encompassing Osmosys ( and Vidiom
Systems ( and New Initiatives segment, which includes
interactive applications, new media, content and related services..

This press release contains forward-looking statements. You are
cautioned that any such forward-looking statements are not guarantees
of future performance and involve risks and uncertainties, and that
actual results may differ materially from those in the
forward-looking statements as a result of various factors, among

* future developments of the world digital TV market, in particular
the future demand for digital TV products in the key markets and
from key customers served by our Group;
* pricing pressures, competitive market situation;
* our and the industry's capability to successfully and timely
innovate and develop challenging technology, and our capability
to hire and retain high-level employees;
* changes in the exchange rates between the US$ and the main other
operating currencies of the Group, including the Euro and the
Polish Zloty;
* our ability in an intensive competitive environment, to continue
securing orders from existing or new customers and to achieve
our pricing expectations for volume supplies of new products in
whose development we have or are currently investing;
* the ability of our suppliers to meet our demands for supplies,
qualitatively or quantitatively, and to offer competitive
* our gross margin could vary significantly from expectations based
on changes in revenue levels, product mix and pricing, changes in
unit costs, and the timing and execution of shipments ramp-ups;
* changes in the economic, tax, social or political environment,
including import and other duties, military conflict, terrorist
activities, as well as natural events such as severe weather,
health risks, epidemics or earthquakes in the countries in which
we, our key customers and our suppliers operate;
* our ability to obtain required licenses on third-party
intellectual property on reasonable terms and conditions, the
impact of potential claims by third parties involving
intellectual property rights relating to our business, and the
outcome of litigation;
* the results of actions by our competitors, including new product
offerings and our ability to react thereto;

Advanced Digital Broadcast Holdings SA undertakes no obligation to
publicly update or revise any forward-looking statements. Advanced
Digital Broadcast Holdings SA reserves the right to amend the
information at any time without prior notice.

The information contained in this press release may not be considered
as being a substitute for economic, legal, tax or other advice and
you are cautioned to base investment decisions or other decisions on
the content of this release. You are recommended to consult your
investment advisers or other advisers prior to making any decision.

This press release is not an offer of securities for sale or a
solicitation to invest in Advanced Digital Broadcast Holdings SA
securities. In particular, it is not an offer of securities for sale
in the United States of America, its territories and possessions.
Securities may not be offered or sold in the United States absent
registration or an exemption from registration under the U.S.
Securities Act of 1933, as amended. Advanced Digital Broadcast
Holdings S.A. does not intend to register its securities in the
United States of America.

--- End of Message ---

ADB Holdings S.A.
Avenue de Tournay 7 Chambesy Switzerland

CH0021194664; Index: SPI, SPIEX, SSCI;
Listed: Main Market in SWX Swiss Exchange;
View document
Related Links: Advanced Digital Broadcast Holdings SA
Copyright GlobeNewswire, Inc. 2016. All rights reserved.
You can register yourself on the website to receive press releases directly via e-mail to your own e-mail account.