KERLINK (EPA:ALKLK) - FIRST-HALF 2021 RESULTS

Transparency directive : regulatory news

23/09/2021 17:45

FIRST-HALF 2021 RESULTS
Sustained recovery across all business activities in Q2 2021
Sharp reduction in operating losses
A stronger and more secure financial position
Significant growth expected for the end of the financial year

PRESS RELEASE
Thorigné-Fouillard, 23 September 2021, 5:45pm.

Thorigné-Fouillard - Kerlink (AKLK - FR0013156007), a specialist provider of
networks and solutions for the Internet of Things (IoT), today released its
consolidated earnings for the first half of 2021.

Following the impact of the 2020 health crisis, a sustained recovery was
recorded in the first two quarters of the 2021 financial year. Half-year
revenue stood at EUR7.6m, up 59%. The Group had an excellent second quarter
(+11% compared with Q2 2019).

This latest financial year has been marked by an increase in direct sales to
private network operators and has benefited from an increase in the number of
distribution partnerships signed with players in the IoT ecosystem.

From a financial perspective, the return to a solid growth is reflected in a
sharp improvement of the Group's earnings. The successful fundraising that
totalized more than EUR11m in the second quarter strengthened Kerlink's
financial structure and enabled it to continue its development.

Consolidated half-year financial statements

On 21 September 2021, the Board of Directors approved the consolidated
financial statements as at 30 June 2021.

In thousands of euros          H1 2021  H1 2020  Change (EURk)
Revenue                         7,578   4,765      2,813
Gross margin                    3,672   2,551      1,121
Gross margin rate               48.5%   53.5%         -
Other operating costs          -4,049  -4,299       -250 (-5%)
EBITDA                           -376  -1,748     +1,372
Depreciation and amortisation   - 820  -1,736        916
Operating income (expense)     -1,197  -3,484     +2,287
Financial income                  -53     655       -708
Income tax                         21     -21        +42
Group net income (expense)     -1,229  -2,849      1,620

A limited review has been carried out on the half-year IFRS consolidated
financial statements. The statutory auditor's report on the limited audit is
currently being prepared.

Increasing contribution from the private network operators segment

Sales to private network operators accounted for more than 90% of the Group's
income in the first half of the year. These results demonstrate the relevance
and success of the strategic positioning adopted by Kerlink more than two years
ago to target of these players and a clear shift in the weight of these targets
in the customer portfolio. Revenue from this market segment is more than
EUR6.8m, up from nearly EUR4.0m - a 72% increase compared with the first half
of 2020 and up 27.7% compared with 30 June 2019.

Strong growth in equipment sales

Sales of infrastructure equipment mainly benefited from the resumption of
business activity. Revenue exceeded EUR6m in the first half, compared with
EUR3.2m in 2020 and EUR4.8m in 2019.

The Group particularly benefited from the first income from the partnership
signed with Cal-Chip Connected Devices, in the context of roll-out of the IoT
"People's Network" by the US company Helium. This network provides public,
long-range and low-consumption wireless coverage by combining the LoRaWAN(r)
wireless protocol with Helium blockchain technology, allowing any LoRaWAN
sensor to transfer data via the network. By creating its blockchain, the Helium
network has decentralised IoT network coverage, paving the way for the
deployment of a global community wireless network, open and available all
around the world and providing a glimpse of the future of distributed networks
(edge networking).

Meanwhile, revenue from services (operation and administration of IoT networks,
value-added applications and professional services) was stable at EUR1.6m over
the period.

Take-off in US sales

The geographical breakdown of sales recorded strong revenue growth in the
Americas region. The remarkable acceleration in income (EUR1.3m compared with
around EUR0.1m in 2019 and 2020) is mainly explained by sales resulting from
the partnership with Cal-Chip Connected Devices in the United States. The
agreements signed with Microshare also contributed to the take-off of sales in
the zone.

Renewed business activity was recorded in the APAC zone (Asia-Pacific)
following the slowdown in 2020 due to the health crisis. Half-year revenue in
the region increased by 42% to EUR0.5m in the first half of 2021, compared with
approximately EUR0.3m in 2019 and 2020.

In the EMEA region (Europe, Middle East, Africa), revenue was up 34% compared
with the first half of 2020. Revenue came out at EUR5.8m, close to the total in
first-half 2019 (EUR6.0m over a comparable period, business activity at the
time having been carried out in part with telecom operators).

Significant reduction in operating losses

The growth in business activity led to an automatic improvement in the Group's
earnings.

Kerlink also benefited from the full effect of measures to control operating
expenses implemented in 2019. As at 30 June 2021, other operating costs stood
at EUR4.0m compared with EUR4.3m as at 30 June 2020, a decrease of 5.8%. As at
30 June 2021, EBITDA was nearly back to breakeven point at -EUR0.4m compared
with -EUR1.7m at 30 June 2020. The operating result also improved very
significantly, with an operating loss reduced to -EUR1.2m compared with
-EUR3.5m over the first six months of the 2020 financial year. The final net
result for the first half of 2021 stands at -EUR1.2m, up from -EUR2.8m.

The Group recalls that in the first half of 2020, Depreciation and amortisation
expense (EUR1.7m) included EUR644,000 in additional impairment on the goodwill
of Wyres and that the finalisation of that company's acquisition resulted in a
reassessment of the earnout on the purchase of the balance of Wyres shares,
which in the first half generated a gain of EUR670,000 recognised as financial
income.

A stronger financial position

In order to secure its medium-term development and respond to strong growth in
the order book, Kerlink carried out a fundraising in the first half of the
year. With a target initially set at EUR8m, the operation was very successful,
reaching more than EUR11m from leading investors. This operation accelerates
the development of a new range of connectivity equipment, to secure purchases
of electronic components in a context of significant tensions over both prices
and procurement times and to support the development of the NaaS (Network as a
Service) offering. Group shareholders' equity therefore stood at EUR15.9m, up
from EUR6.6m at 31 December 2020. As at 30 June 2021, the Group's cash position
stood at EUR16.6m, up from EUR6.5m at 31 December 2020. At the end of the
financial year, financial debt totalled EUR7.6m (excluding rental debt in
accordance with IFRS16).

Solid growth expected in 2021

The second half of the year opened with a strong commercial outlook, boosted by
a wide range of projects and a growing order book across all zones and
activities. It partly incorporates orders from the partnership with Cal-Chip
Connected Devices, in the context of roll-out of the "People's Network". Helium
recently issued the HIP19 licence, enabling Kerlink to begin integrating the
first base stations into its network at the end of August.

However, the end of the financial year will continue to be impacted by
continuing tensions over the availability of certain electronic components,
which are likely to affect the fulfilment of some orders. In this context,
Kerlink forecasts a 2021 revenue of at least EUR16 m for the full year
corresponding to a growth of more than 40%. With regard to the commercial
backlog to be delivered in 2021, revenue could even reach EUR19 million,
subject to noticeable improvement of the international context affecting the
supply of electronic components.

In addition to this expected growth in activity, the 2021 financial year should
also see strong growth in earnings.

About Kerlink

Kerlink Group is a leading global provider of end-to-end connectivity solutions
for designing, deploying, and operating public & private low power/wide area
(LPWA) Internet of Things (IoT) networks. Its comprehensive product portfolio
includes industrial-grade network equipment, best-of- breed network core,
operations and management software, value-added applications and expert
professional services, backed by strong R&D capabilities. Kerlink specializes
in enabling future-proof intelligent IoT connectivity for three major domains:
Smart City & Quality of Life - urban operations, utilities & metering, retail &
public places, infrastructure & hubs, health; Smart Building & Industry -
buildings & real estate, industry & manufacturing, asset monitoring & tracking,
and Smart Agriculture & Environment - precision agriculture, cattle monitoring
& farming, environment & climate, and wildlife protection. More than 140,000
Kerlink installations have been rolled out with over 350 clients in 70
countries. Based in France, with subsidiaries in the US, Singapore, India and
Japan, Kerlink is a co- founder and board member of the LoRa Alliance(r) and
the uCIFI Alliance(tm). It is listed on Euronext Growth Paris under the symbol
ALKLK.

For more information, visit www.kerlink.com or follow us on our social media -
Twitter @kerlink_news, LinkedIn #Kerlink, YouTube - Kerlink

                               Upcoming events
         2021 Third Quarter Renues : October 21st, after market close

www.kerlink.fr

Investor contact:
Actifin
Benjamin Lehari
+33 (0)1 56 88 11 25
blehari@actifin.fr

Financial press contact:
Actifin
Isabelle Dray
+33 (0) 1 56 88 11 29
idray@actifin.fr

Kerlink press & market analysts contact:
Mahoney Lyle
Sarah Lyle
+33 (0)6 75 85 60 42
slyle@mahoneylyle.com

www.kerlink.com
Linkedin Kerlink
Twitter @kerlink_news
Youtube Kerlink

KERLINK's latest news

18/04/2024 18:00

KERLINK (EPA:ALKLK) - FIRST-HALF 2021 RESULTS

Transparency directive : regulatory news

KERLINK's latest news

Other stories