KERLINK (EPA:ALKLK) - First-half 2017 revenues

Transparency directive : regulatory news

25/07/2017 17:49

First-half 2017 revenues
Revenue up 87% to over EUR10 million
Increase in business from international telecoms operators

PRESS RELEASE                     Thorigne-Fouillard, 25 July 2017, 06:00 p.m.

Thorigne-Fouillard, France - 25 July 2017, 06:00 p.m. - Kerlink (ALKLK -
FR0013156007), a global specialist in network solutions for the Internet of
Things (IoT), publishes its first-half 2017 revenue today. As expected, the
company pursued its aggressive strategy of capturing market shares in order to
take full advantage of the massive investments currently happening into IoT
worldwide. As a result, it posted revenue up almost 87% for the period, to
reach EUR10.1 million.

Revenue by          H1 2017    H1 2016  Change H1 2017
business (EURk)                          vs H1 2016

Public operators     5,320      1,223        335%
Private operators    4,712      4,088         15%
Reference design        56         89          Ns
Total               10,088      5,400        +87%

Under IFRS (unaudited data)

Fourfold increase in revenue generated with public operators

As anticipated, this excellent performance was mainly driven by strong growth
in sales generated with public operators (former incumbents and alternative
telecom operators). Kerlink is now progressively benefiting from the execution
of orders signed in recent months with several major French and international
market players.

Tata agreement enters deployment phase with roll-out of the first worldwide
LoRaWan(TM) network

These key contracts include the start of the roll-out of the world's largest
LoRaWAN(TM)  IoT network for Tata Communications in India, in accordance with
the schedule jointly announced last March. More than 2,000 stations were
produced during the period and have now entered the delivery and installation
process. The agreement signed in March 2017 with Tata Communications covers
the provision of more than 10,000 Kerlink Wirnet(TM) iBTS Compact stations.
With this agreement now in the deployment phase, Kerlink has demonstrated its
ability to bring its growth and organisation to the next level, and now has a
major shop window for its technology that should significantly boost its
growth potential with the largest global telecoms firms.

Steady growth with private operators continues

Revenue generated with private operators grew by 15% over the period. This was
in line with Group projections, given that resources have been largely
allocated to closing deals and accelerating the deployment of major projects
with international telecoms operators.

Value-added services: 70% growth

Over the period, revenue from value-added services increased by 70% to reach
EUR1.1 million. While this segment's contribution to total business is
proportionally small, it should increase substantially in the future, once the
major infrastructure projects have been completed. Revenue generated by the
Reference Design offering (turnkey services for producers of connected objects
that want to incorporate an optimised network connectivity solution into their
products) also remains modest, with the first significant royalties on
agreements already signed.

International revenue up 3.7x

Revenue by geographic
area (EURk)                 H1 2017     H1 2016    Change

NCSA (Americas)               178          49       x3.6
APAC (Asia-Pacific)         2,379         339         x7
EMEA (Europe ex. France)    1,408         690         x2
France                      6,123       4,322       +42%
Total                      10,088       5,400       +87%

Under IFRS (unaudited data)

Revenue generated on international markets totalled almost EUR4 million, an
increase of 3.7 times compared to the first half of 2016. The contribution of
sales achieved outside France practically doubled over the period, accounting
for just under 40% of first-half revenue, compared with 20% in the first half
of 2016.

Asia was the main driver of this trend (24% of first-half 2017 revenue),
notably thanks to the start-up of the agreement with Tata Communications.

EMEA revenue also showed strong growth, to EUR1.4 million, thanks to the
contribution of agreements signed with leading European operators.

For the Americas (North, Central and South America), revenue from the
Chicago-based subsidiary Kerlink Inc. established in January 2017 will start to
contribute from the second half of 2017. This subsidiary will be a major asset
for the Group as it aims at tapping into the vast potential of the North
American market, and more widely, the increasing number of opportunities in
South America.

Strengthening of the organisation to support the acceleration in growth

Following the success of the capital increase carried out in May 2017, Kerlink
has the resources to successfully achieve the strategic and commercial
investment needed to support its acceleration in growth. To this end, and as
anticipated, efforts to strengthen its structure continued over the period, and
will weigh on the results accordingly.

Excellent visibility on the second half of 2017

Kerlink enters the second half of the year with excellent visibility, thanks to
the quality of its order book and the continuation of its strong sales growth.
As such, the Group is confident in its ability to replicate its first-half
performance with a similar growth rate in the second half.

Revenue of EUR70m in 2020

In view of this favourable outlook and based on current market trends, Kerlink
is confident it will reach its target of exceeding revenue of EUR70 million in
2020.

About Kerlink

Kerlink specialises in network solutions for the Internet of Things (IoT). Its
mission is to provide its clients - telecom carriers, businesses and public
authorities - with network solutions (equipment, software and services)
dedicated to the Internet of Things. Over the past three years, Kerlink has
invested more than EUR8 million in R&D. In just over 10 years, more than 70,000
Kerlink installations have already been rolled out for more than 260 clients,
including GrDF, Suez, Saur and Médiamétrie. In 2016, Kerlink generated
revenue of EUR14.1 million, 25% of which internationally. Since 2013, it has
posted average annual growth of more than 50%. Kerlink has been listed on
Alternext Paris since May 2016.

For more information, go to www.kerlink.fr and follow us on Twitter
@kerlink_news

Upcoming events
H1 2017 results: 28 September after market close
www.kerlink.fr

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

Press relations / Isabelle Dray
+33 (0)1 56 88 11 29
idray@actifin.fr

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