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www.evs-global.com
February 21, 2008Pierre L’Hoest, CEO
Jacques Galloy, CFO
4Q07 & FY07 Earnings
1www.evs-global.com
2www.evs-global.com
Forward Looking Information
The statements made in this presentation that are not historicalfacts contain forward-looking information that involves risks and uncertainties. All statements, other than statements of historical fact, which address EVS Group’s (“EVS”, “XDC” or the “Company”) expectations, should be considered as forward-looking statements. Such statements made by EVS are based on knowledge of the environment in which it currently operates, but because of factors beyond its control, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that may cause actual results to differ from anticipated results include, but are not limited to, financing risk, acquisition risk, changes in technology, and other risks as outlined in the filings with securities regulators and can also be found at www.evs-global.com
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Agenda
Financials
Business update
Outlook
Corporate
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Agenda
Financials
Business update
Outlook
Corporate
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Highlights 4Q07 & FY07
Sound Market Fundamentals (HDTV, going tapeless, Web/3G)Small and large studio projects winsBeijing 2008 traction across all regions (OB & Studio)4Q07: EUR 27.2 million revenue (+43.2%), EPS up 36.8% to EUR 0.85FY07: EUR 94.7 million revenue (+11.2%), EPS up 0.5% to EUR 2.91Investing for the future: FY07 opex +26.9% vs FY06Stable FY07 EBIT margin of 65.4% (vs 66.8% in FY06)Winter Orderbook of EUR 36.4 million at February 20 (+67.0%)
38% dedicated to Studio (longer lead time)
Gross dividend 2007: proposal of EUR 2.28/share (Final 1.48)
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Record 4Q07 revenue of EUR 27.2 million2007 quarters exceed EUR 20 million level despite lack of big events
27,224,4
23,3
6,9
9,8
7,36,2
9,47,3
8,6 8,5 8,7
11,9
16,6
8,7 8,1 7,8
19,721,9
19,919,0
24,1
16,4
20,1
1Q02
2Q02
3Q02
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
Quarter Big Events RentalsQuarter Revenue
EUR millions
LaunchXT[2]
Launch[IP] Director
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Organic growth & operating leverageFY07 sales EUR 95 million, 65% EBIT margin
2217
28 2734
4652
85
95
30
2 59
65%
8%11%
15%
36% 39% 42% 41%
32%
48%
58% 62%67%
0
10
20
30
40
50
60
70
80
90
100
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20070%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Sales (EUR millions)EBIT Margin
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Weaker EMEA offset by stronger US + AsiaEMEA -14%, NALA up 49% at const xrate, APAC +36%
3,74,5
7,7
3,3
4,43,8
13,2
9,610,5 10,8
6,9
8,3
10,9
15,5
13,3 13,5
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2004 2005 2006 2007
3,0
5,8
7,0
3,62,8
2,1
4,6 4,9 4,75,3
8,2
2,5
7,9
9,5
8,1
5,2
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2004 2005 2006 2007
NALA EMEA APAC
Revenue, EUR millions
Growing HDTVStudio ~ 31%81% is HDPanAm Games ‘07
Weak USD
HD take-off signsNo sport events in ‘07Studio ~ 35%43% is HD
Strong 2008UK, Spain, Eastern Europe
Jap, Cor, AusStudio ~ 30% 72% is HDNo sport events in ‘07
Upcoming OG. 2008
2,01,6 1,9 1,8
0,9
1,9 1,8 1,8
4,9
3,4
2,4
5,75,1
5,5 5,36,5
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2004 2005 2006 2007
15,5
6,5
5,2
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Ongoing Studio Sales GrowthHD migration most advanced in Outside Broadcast
FY03 FY04 FY05 FY06 FY07
Mobile SD Mobile HD
Revenue (EUR millions)
61.9
FY03 FY04 FY05 FY06 FY07
Studio SD Studio HD
23.3
%HD in Studio Production%HD in Outside ProductionRevenue (EUR millions)
64%
40%40%
71%
65.4
29.2
25.8
37.2 37.5
59%53%28%
5.28.8
14.432%
18%
CAGR 03-07: +55%
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4Q07 Revenue of EUR 27.2 millionEBIT Margin impacted by opex growth
4Q06 3Q07 4Q07
Revenues 19.0 24.4 27.2Gross margin 87% 87% 87%
S&A (2.7) (3.4) (3.1)R&D (1.5) (1.8) (2.2)
EBIT 12.2 15.8 18.4EBIT margin 64% 65% 68%
Taxes (3.7) (5.1) (5.9)
XDC @equity (0.1) (0.7) (1.3)
Net Profit 8.4 9.9 11.5Basic EPS 0.62 0.73 0.85
1) Basic EPS is computed on the adjusted number of shares, i.e. less own shares
1)
Q4EUR millions, IFRS
Sales+43% vs 4Q06
+45% at constant FX
+55% excl event rentals
EBITOpex growth
Leverage of strong sales
34% effective tax rate
EPS +37%
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FY07 Net Profit of EUR 39.5 millionLimited impact of weak US dollar (EUR 1.4 million or 1.5% of revenues)
1) Forward exchange contracts have generated EUR 0.5 million gain on FY072) Net profit, group share, excluding non-recurring exceptional results, net of tax, and excluding XDC contribution
FYEUR millions, IFRS Sales
+11% vs FY06
+15% at constant FX
+22% excl rentals
EBITopex growth
+27%+29% @const $
+18% average staff growth
XDC dilution in 2006
FY06 FY07 FY07 varReported @Const $ @Const $
Revenues 85.1 94.7 97.5 -2.8Gr Profit % 86% 87% 87% -
S&A (10.3) (13.0) (13.4) -0.4R&D (5.5) (7.0) (7.0) -
EBIT 56.9 61.9 63.6 -1.7EBIT margin 66.8% 65.4% 65.3% +0.1pp
Exchange result - 0.8 - +0.8Taxes (18.5) (19.8) (20.0) -0.2
Net Profit excl. XDC 39.4 43.6 45.0 -1.4margin % 46.3% 46.0% 46.2%
XDC contribution (2.5) (3.0) (3.0) -XDC dilution profit 3.4 - - -Net profit 39.4 39.5 40.9 -1.4
1)
2)
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End 2004 End 2007
R&D
S&A
OPS
Team Growth, +18% over 1y, +59% over 3y… to pursue long term growth
Leverage effect on future sales
60
110
160
210
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Expanding R&D and Sales teams
118
188
188
Still 25 open staff positions
In FTEsIn FTEs
+59%
18%
34%
48%
15%
40%
45%
Average age:35 years
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Net result variance
39.5
-3.9
43.6
+12.2
39.4
-0.2-1.4-1.5-2.7-2.8
FY06Gr P
ft FXS&A
R&D
TaxOther
FY07 ex
cl XDC
XDCFY07
Net Result
FY07 net profit of EUR 39.5 million, +0.2%FY07 net profit from operations excl XDC, +11%
FY07 – EUR millions
Gearing
Strong NALA & APAC
But weak US$
Sales & Marketing
65.4% EBIT margin
Slightly lower tax rate
2006’s XDC dilution pft
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DLP Cinema™ Theatre LocationsEstm’d 5,300 Screens as of Dec 2007 / 280 XDC systems
AsiaAsia650 Screens650 Screens
EuropeEurope700 Screens700 Screens
AmericasAmericas4,000 Screens4,000 Screens
EVS 47% affiliate XDC focuses on Europe
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FY07 Income Statement
Contribution of EUR -3.0 millionto EVS Group over FY07
XDC 100% - in € FY06 FY07
Revenue 2.3 2.5
EBITDA -2.8 -3.1
Net result -4.5 -6.4
EVS share x 60.2% x 47.2%/47.2%
XDC contrib. -2.5 -3.0Dilution profit +3.4 -XDC total contrib +0.9 -3.0
Leading EU deployment
Sales up 7.1%
280+ installed screens
Strong team of 47 FTE’s
G3 & 3D deployment
Ongoing negotiations
Funding
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EVS strong balance sheet
DSO ~45 daysIncl R&D & Demo’sXDC at equity + bond
Tax provisions
75.062.9TOTAL LIABILITIES
62.150.1Shareholders’ equity
4.33.8Non current liabilities8.69.0Current liabilities0.20.6Dividend payable
75.062.9TOTAL ASSETS
11.38.0Non current assets7.25.8XDC at equity + bond5.66.4Inventories
15.413.8Current assets35.528.9Cash
31 Dec 200731 Dec 2006EUR millions
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Agenda
Financials
Business update
Outlook
Corporate
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EVS Products Highlights
Release Multicam v9.0Bandwidth +40%Advanced Time Code Management
Integration AVID DNxHDVC3 SMPTE CompliantRelease IP Director v5.5Metadata
More info to be released at NAB 2008 Las Vegas+30% sqm for private rooms
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3,550 EVS XT serversMore than 2,000 people.days of training in 2007 on EVS tools
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
XT*HDReady
XT*SD
HCT*SD1,000
1,200
2,300
1,900
1,500
700850
@December 31
# of
Launchof
XT
Launchof
500
Launchof
HD
Innovation & growth
3,550 servers
500 IP Directors
5,000+ users
35% is HD
35% in Studio /
65% in OB trucks
SD to upgrade to HD
1 Upgrade for 7 new
networked systems
2,800
Launchof
3,550
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« HDTV Viewers happy with Pic quality, not so much with programming », Nielsen
The High Def Content Gap
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Europe - HD ReadyUS - HD ReadyJapan - HD ReadyTotal HD Capable
HDTV Drivers
APACJapan : 30% HD ReadyOlympics
NALA40% HD ready sets penetration22% HD viewers penetrationPrime Time of Networks is HD
EMEAHD initiatives, Euro2008, Olympics3% HD capable but 15% HD trucksStill 0% HD in 10 countries…
WORLDBlu-Ray vs HD DVDFull MPEG2-MPEG4 HD PVR
Simulcast SD/HDSource: Screendigest
71m homes with HD Ready screens
33% onlyreceivingHD signal
High DefContent
GAP
In million homes
239m
* An HD Capable home has an HD Ready Screen and receives an HD TV Signal
*
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HD in Europe One way forward
0%
10%
20%
30%
40%
50%
60%
70%
80%
2003 2004 2005 2006 2007 2008 2009 2010 2011 20120%
10%
20%
30%
40%
50%
60%
70%
80%
% US Trucks in HD% HDReady Sets in US% HD Capable in US
0%
10%
20%
30%
40%
50%
60%
70%
80%
2003 2004 2005 2006 2007 2008 2009 2010 2011 20120%
10%
20%
30%
40%
50%
60%
70%
80%
% EU Trucks in HD% HDReady Sets in EU% HD Capable in EU
1Q08
45%40%22%
15%20%3%
Start HD in US
Start HD in EU
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Growing # of European HD ChannelsMovies and Sport Are Preferred HD Contents
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Beijing Olympics 2008 go HD !« Citius, Altius, Fortius » - 8.08.2008-24.08.2008
200+ participating countries, 10,000+ athletesCumulated 40bn+ hours of TV viewers Infrastructure
15+ locations & stadia3,000+ TV staff in China & 5,000+ remote1,000+ cameras1,000+ hours of live TV streaming44,000+ hours of global TV production4,000+ hours international feed60,000+ sq. m. for the IBC
SpecialsFirst Full HD gamesFirst Tapeless Central Media ServerManaging time zones (EU +6, NY -12)
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The TV Workflow2 billion viewers – 150 languages – 200 TV Stations
1 Host40 Feeds
60 Partners24/7
…
200 Rights Holders24 time zones
1.000 Cameras60 OB van’s
FIELD INTL BROADCAST CENTER WW DISTRIBUTION
Ingest Edit On-Air Play-OutCapture
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# XT servers shall reach ~600
1996
2000
2004
2008
RIGHTS HOLDERS
PARTNERS
HOST
OB
2008 Integrated workflow
Outside Broadcast60 vans, 100% HD EVS
Host Broadcast (new!)100% HD Tapeless Media Server100 [IP]Director workstationsIOC Tape Archive IndexingBOB / EVS service agreement
Broadcast PartnersLog into Media Server150 [IP]Director workstationsInterop w/ Post-Production
Ww Right HoldersTime delay managementHighlights packagesNew Media
~2.000 EVS users in Beijing
A long term partnership2008 milestone: EVS digitizes the Host operations
3670
325
600
Atlant
a
Sydne
y
Athen
s
Beijing
Overseas
In Beijing
MediaServer
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Ingest / Record
Host Broadcast goes tapeless2008 MediaServer showcases future generic tapeless studio
OG 2004
On Air Play-outEdit
OG 2008
GenericStudio
Audio & Video Metadata Browse & Search Clips Edit Studio CR Master CR
1) CR = Control Room, Transmission
1) 1)
TapePaperLog
Tape
Linear
Non Linear
4.30pm: gold medal Tape
XT[2]
N/A
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Ingest / Record
Host Broadcast goes tapeless2008 MediaServer showcases future generic tapeless studio
OG 2004
On Air Play-outEdit
OG 2008
GenericStudio
Audio & Video Metadata Browse & Search Clips Edit Studio CR Master CR
1) CR = Control Room, Transmission
1) 1)
TapePaperLog
Tape
Linear
Non Linear
4.30pm: gold medal Tape
XT[2]
XT[2]
IP Logging IP Browsing
Non Linear
FCPXT[2]DB
Non Linear
N/A
N/A
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Ingest / Record
Host Broadcast goes tapeless2008 MediaServer showcases future generic tapeless studio
OG 2004
On Air Play-outEdit
OG 2008
GenericStudio
Audio & Video Metadata Browse & Search Clips Edit Studio CR Master CR
1) CR = Control Room, Transmission
1) 1)
TapePaperLog
Tape
Linear
Non Linear
4.30pm: gold medal Tape
XT[2]
XT[2]
IP Logging IP Browsing
Non Linear
FCPXT[2]DB
XT[2] IP Logging IP Browsing
Non Linear
FCPXT[2]
TransmissionServers
DB
N/A
N/A
Media Asset Management
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Musical reality showFull VTR Replacement solutionLoop recording for faultless productionHighlight package productionDirect interaction with Avid craft editorsNative quality preservationCut production time
« The edited output is then streamed directlyto Avid Unity, so that editors can immediatelystart working on their timeline for more complex post-production. »Tharaka Mohotty – Director of Engineering
MTV Channel - Sri Lanka VTR Replacement
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Agenda
Financials
Business update
Outlook
Corporate
31www.evs-global.com
EVS TV long term growth driversStrong momentum
Increasing # content distribution channelsDigital TV, Sat-TV, Cable-TV, IPTV, WebTV, DTT, VOD, Free-to-Air
Accelerated by SD to HD transitionOngoing from current 8-35% Broadcast HD penetration
Tapebased to tapeless transitionOngoing from current 35% servers penetration
Multimedia or SpeedclippingFrom linear to non-linear video consumptionMobile TV, internet TV, IPTV
Create Near-Live Studio Mkt nicheGetting 5% of a 1 bn€ market opportunity
Increasing popular SportsInternationalization, second leagues, Stadiums
Grab powered by EVS
32www.evs-global.com
7.5
16.7
14.3
17.9
1.8
EVS events rentals
EVS OrdersJan+Feb for 08, excl.events
EVS BL 1/1 for 08,excl. events
Winter orderbook of EUR 36.4 millionUp 67.0% vs 2007
+67.0%
36.4
21.8
@ 21 Feb 07 @ 21 Feb 08
EMEA back on track !
38% Studio / 62% OB
Beijing 2008
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Guidance 2008
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Studio Production
Outside Broadcast
27 30
5246
34
17
28
EVS TV Sales In EUR millions Growth year
Euro 2008
Beijing 2008
1H08 > 2H08
Recruit
Open offices
New products
85
95
8-24 Aug 08
7-29 Jun 08
www.evs-global.com
Record FY07 revenueHigher opex, but stable EBIT margin at 65%Winter order book of EUR 36.4m, +67.0%2007: good year anticipating on 2008Studio around 31% for FY07Towards Euro2008 & Beijing 20081H08 > 2H08
Conclusions
35www.evs-global.com
Agenda
Financials
Business update
Outlook
Corporate
36www.evs-global.com
EVS shareholding as of December 31, 2007in % shares and issued warrants – based on last received shareholders statements
Unidentified64.5%
Warrants1.2%
BIP5.6%
PoweCap5.9%
Treasury shares2.2%
Founders18.4%
Cytindus2.2%
Basis : 13,875,000 ordinary shares
Outstanding warrants : 171,150
Treasury shares : 305,871 shares
Standard velocity: 64%
Mkt Cap: EUR 966 million
Average daily volume: - 35,000 shares- EUR 2.3 million
* Board members
*
*
*
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Corporate Matters
CalendarThursday 15 May 2008: 1Q08 sales & earningsTuesday 20 May 2008: Annual Shareholders MeetingTuesday 10 June 2008: Postponed Extraordinary Shareholders MeetingTuesday 27 May 2008: Final dividend 2007 - Coupon 6 – ex-dateMonday 2 June 2008: Final dividend 2007 - Coupon 6 – pay-dateThursday 17 July 2008: trading update on 2Q08 sales & earningsThursday 4 September 2008: 2Q08 sales & earningsThursday 13 November 2008: 3Q08 sales & earnings
Investor relationsAnnual Report online on our website (FR + UK)Visit our new website on www.evs-global.com !Your requests are welcome on [email protected]
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EVS Recruits for both HQ and Foreign Offices… Engineers, sales managers, project managers …
www.evs.tv/jobs
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Appendices
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Negative USD currency effectEVS adopts neutral position
USD / EUR FY06 FY07 Var%
Average XRate 0.7964 0.7297 -8.4%
At period end 0.7593 0.6793 -10.5%
EVS Cash Flow hedging Policy
In base 100
US Revenue 100
Expenses in USD (35)
Net USD position 65
Forward 6-12 months x 50%
= neutralIncome statement and cash flow statement are converted at the average exchange rate of the period Assets and liabilities are converted at the exchange rate in force on the reporting date
USD / EUR variation
Avg ‘06
Avg ‘07
41www.evs-global.com
Sizing the opportunity10.000 TV Stations worldwide, growing110.000 Professional Broadcast Cameras, growing
10%-45%10%-40%HD Penetration %
~1,150~2,400Current # EVS servers
30%90+%EVS Servers Mkt share
25-40%35-50%Servers Penetration %
30%100%(Near-)Live ingest %
80,00080,000160,000
14,0001,00015,000
#cameras#intermediate feeds (ex.sat)
# channels to ingest
STUDIO production
(entertainment, drama, series, sport mags,
talk shows, weather, adverts)
OUTSIDEproduction(sport, music)
Based on currentmarket conditions
* one EVS server currently manages between 1 and 6 channels
x10