Invest in Innovation and Expansion
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MUCH MORE THAN SPORT PRODUCTIONS INVEST IN INNOVATION AND EXPANSION INCREASE MARKET SHARE IN GROWING STUDIO NICHES ANNUAL REVIEW 2010 1 KEY FIGURES REVENUE SPLIT OF 2010 REVENUE (EUR MILLIONS) STUDIO AND OUTSIDE BROADCAST PRODUCTION CONTENTS 120 +14% CAGR 100 80 111.2 60 49.9% 40 studio 2 | MESSAGE FROM THE CHAIRMAN AND THE CEO 20 0 4 | EVS IN A NUTSHELL 01 02 03 04 05 06 07 08 09 10 6 | BUSINESS REVIEW 8 > OUR KEY ACHIEVEMENTS IN 2010 10 > OUR MARKETS 16 > OUR SOLUTIONS 18 > OUR KEY PRODUCTS 20 | CORPORATE REVIEW NET PROFIT (EUR MILLIONS) 50.1% 22 > CORPORATE SOCIAL RESPONSIBILITY + EUR 12.7 MILLIONS outside broadcast 24 > CORPORATE GOVERNANCE STATEMENT 50 31 > STOCK MARKET REPORT 40 33 | FROM 1994 TO 2010 30 20 38.1 10 0 01 02 03 04 05 06 07 08 09 10 63.6% Return on equity. DIVIDEND, REIMBURSEMENT AND TREASURY SHARES 6.3% BUYBACK (EUR MILLIONS) Dividend yield in 2010. 50 40 EUR MILLIONS 30 25.9 20 39.2 Net cash at the end of 2010. 10 > MORE INFORMATION ON KEY FIGURES 0 01 02 03 04 05 06 07 08 09 10 ON PAGE 20 1 THE NUMBER MESSAGE OF STUDIO PROJECTS SHOULD FROM THE CHAIRMAN INCREASE WITH THE LAUNCH OF NEW SOLUTIONS ON AND THE CEO THE MARKET. 2010 was an important XDC, EUROPEAN LEADER year in the history of IN DIGITAL CINEMA In 2010, XDC, the 41.3% owned subsid- EVS. Not only were the iary of EVS, was able to take advantage of major sporting events all the work carried out in 2009 in terms of which marked this year its financial capabilities, in order to con- centrate fully on its operational activity in a further opportunity for 2010: the rollout of digital cinema in EVS to demonstrate all Europe. More than 2,700 contracts were signed, also through its subsidiary FTT its expertise, but it was (leading solutions integrator in Continental also the first time that and Central Europe), and 1,000 screens were installed. XDC’s leader position in INVESTING IN the company achieved this market was confirmed in 2010. FUTURE GROWTH 50% of sales in its In February 2011, XDC sold its Cinestore One of the most important aspects of the business activity to Barco in order to con- past two years has been, without any studio segment. RECORD SALES centrate on its specialist services doubt, our desire to strengthen our tech- business: integration and rollout of audi- nological basis. This has resulted in 50% IN STUDIO particular in the hiring of a number of engi- Sales of EUR 111 million are a record for torium equipment, specific software and a neers for positions involving the EVS. They rose by 45% (+31% excluding high added-value NOC (Network development of new solutions. To continue the rental contracts relating to the sporting Operating Center) network. to grow in the various niches in the studio events and at constant exchange rate). production market, it is important to The operating margin remained stable at enhance our product range, and to launch 50% of the sales for the fiscal year. The solutions which enable our customers to increase in sales was offset by some signifi- make their production processes even cant investments made principally in R&D. more efficient, thus helping them to devote Ninety specialists joined us. EVS had 366 their resources to functions which gen- employees (full-time equivalents) at the end erate added value. LOOKING of 2010, a quarter of whom are in our 18 offices abroad. The development of EVS in new markets AT 2012 makes it essential for us to pursue our It is with confidence in the future of the broadcasters. This pursuit of ever- policy of customer intimacy, whether company that the Board of Directors and increasing success is only possible TOTAL DIVIDEND through the existing offices or by opening the management continue to strive tire- thanks to those who contribute dynami- new operating sites. By observing the lessly to develop EVS: from a company cally to our structure: our employees OF EUR 2.64 locations of the forthcoming major sporting The cash flow generated by the activities in with a strong leading position in mobile around the world, our customers, our events, it is becoming clear that the 2010, the excellent financial robustness of production trucks to a group offering sig- supplies and our shareholders. We thank emerging countries, which today represent EVS and our confidence in the future pros- nificant growth potential in various niches them for their confidence and their around 20% of the sales of EVS, will con- pects of the company allows us, once in the service of television producers and encouragement. stitute one of the significant growth again, to distribute a high dividend to our engines for our industry in the years to shareholders and pursue our policy of buy- come. back of own shares. The Board of Directors will propose to the Ordinary General Strengthening our organization also means Meeting the distribution of a total gross continuously developing our decision dividend of EUR 2.64 per share (including structures towards a model which allows Pierre H. RION*, Pierre L’HOEST, the interim dividend of EUR 1.16 distrib- us successfully to combine rapid growth Chairman of the Board of Director Managing Director & CEO uted in November 2010), in other words a and an innovative business culture. This is * Representing ACCES DIRECT SA total dividend which is 6.5% up compared an area which has been monitored contin- to last year. This represents a payout ratio uously by the EVS management and of 90%. Board of Directors for the last two years. 2 - EVS - ANNUAL REVIEW 2010 3 Brussels London Bruxelles Vancouver Londres IBC (Amsterdam) (Winter Olympic Games) Hilversum Munich Freiburg Montreal Liège Paris Milan o Toulouse Seoul EVS NAB (Las Vegas) Madrid Los Angeles New Yorkork Beijng New Delhi Chengdu Tokyo (Commonwealth Games) Hong-Kong Dubai Mumbai BroadcastSingapour Asia (Singapore) IN A Johannesburg (Soccer World Cup) Sydney NUTSHELL Headquarters Other EVS offices Major trade fairs Big events in 2010 Important EVS Distributors MORE INFO? CONSOLIDATE WWW.EVS-GLOBAL.COM OUR STRATEGY THE LEADERSHIP JACQUES GALLOY, IN LIVE SPORT DIRECTOR AND CFO > Consolidation of our leadership in the niche market GEOFFROY D’Oultremont, PRODUCTION INVESTOR RELATIONS AND of outside broadcast (OB) vans. EVS is the leader in live outside broad- CORPORATE cast digital video production systems. Its COMMUNICATIONS MANAGER > Acceleration of our penetration in the studio market, products are intelligent recorders com- EVS BROADCAST EQUIPMENT S.A. real growth engine, by developing new added value bined with highly reactive applications, LIEGE SCIENCE PARK solutions for the actors of that market. such as the slow motion system, that RUE BOIS SAINT-JEAN, 16 has now become a standard worldwide. 4102 SERAING · BELGIUM > Development of a service centre for the big sporting The XT[2] production platform (and the [email protected] events and the new customer demands (archiving, XT3 as from the summer of 2011), asso- ciated with dedicated applications such etc.). as the famous LSM, enables the crea- > Development of unique solutions: hardware (struc- tion, editing and exchange of video files. tured around the XT[2] platform), applications (LSM Around 7,000 operators on all continents EXPAND IN and IPDirector as reference applications) and service use our group’s applications on a daily MULTI-CAMERA basis. EVS has developed substantial STUDIO PRODUCTION (from consultancy to training and support). expertise in compressed video and audio Based on its experience in the OB vans, data processing. The company intends > Strong business culture promoting technological EVS has been penetrating since a few to remain an innovator in the migration years the studio segment. The company innovation. from analogue to digital in television net- first attacks the applications for which the works, and from standard definition to speed is a key success factor, but also high definition. In addition, EVS will con- develops solutions for the production of tinue diversifying its offering, such as the other programs, such as TV series or graphic analytical tools for live news channels. The “Speed to Air” strat- productions. egy is based on the XT[2] and XS platforms, the software suites IPDirector and Insio, and also Xedio that is mainly used by journalists. EVS gains market shares every year in this segment, and also benefits from the gradual replacement of tapes by digital solutions and from the increasing use of high definition. This stu- dio market is an important growth engine for EVS. It is considered as 10 times big- ger than the outside broadcast market, worth USD 800 million annually, with a cur- rent market share of around 7% for EVS. 44 -- EVSEVS -- ANNUALRAPPORT REVIEW ANNUEL 2010 2010 5 W SS REVENUE SPLIT IN 2010 BREAKDOWN OF STAFF BY DEPARTMENT (BY GEOGRAPHICAL SEGMENT) (AS OF 31 DECEMBER) 54.8% Europe, Africa, 27.6% Production & 10.7% Middle-East Sales & Marketing 26.2% Operations America 15.2% General Services E E 19.0% Asia-Pacific 46.5% Research & Development EVOLUTION OF R&D INVESTMENTS (EUR MILLIONS) 20 CAGR +19% 16.2 15 10 VI 5 0 01 02 03 04 05 06 07 08 09 10 E BUSIN R 6 - EVS - ANNUAL REVIEW 2010 7 OUR KEY ACHIEVEMENTS IN 2010 06/2010 SOUTH AFRICA Ligne de hors-jeu EVS lors de la Coupe du Monde de Football 02/2010 XT[2]+ EVS launches the new XT[2]+ server, the new evolution of the XT[2] platform. Available in 6, 4 and 2 channel configurations, SD or HD 04/2010 mode, the XT[2]+ server offers new function- XTnano alities, including a new generation of hard At the NAB show in Las Vegas, EVS drives, boosted internal storage, increased launches the XTnano server, entry-level 10-11/2010 total storage with external capacity of up to 4-channels server with 4 channels of entry.