NETGEM (EPA:ALNTG) - 2015 Full Year Results. First Quarter 2016 Revenue

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13/04/2016 20:59

2015 Full Year Results
First Quarter 2016 Revenue

Paris La Défense, April 14, 2016

Consolidated 2015 Results and Financial Position

EUR million Consolidated IFRS          2015       2014        Change

Revenue                                 78.8       72.5      9%      6.3
Gross profit                            25.8       26.6      3%      0.8
Current operating income                 1.9        0.8    149%      1.1
Operating income                         1.6        0.0      ns      1.6
Net income                               1.4       2.3       ns      3.7
OCI (currency translation adjustment)    0.4        2.4      ns       ns
Total comprehensive income               1.8        0.1      ns      1.7

Revenues for 2015 reached EUR 78.8 million increasing by 9% yearonyear.
Gross profit reached EUR 25.8 million.

The gross profit decline of 3%, despite the revenue increase, reflects the
progressive change in business model from oneoff sales to recurring license
revenue.

The US dollar appreciation in H1 2015 semester also impacted gross profit.

Current operating income for 2015 amounted to EUR 1.9 million, a 149% increase
over 2014. Operating expenses decreased by 8% to EUR 23.9 million, notably due
to the streamlining of operations started in 2014. The French business was
refocused, leading to a nonrecurring EUR2.3 million charge in 2015.

The financial income was EUR 0.4 million (including investment of the Group's
cash balance) and group tax charges reached EUR 0.6 million.

The Group recorded a net profit of EUR 1.4 million in 2015 (group share) and
total comprehensive income (IFRS) amounted to EUR 1.8 million.

At the General Meeting of June 9, 2016, the Company's Board of Directors will
propose to maintain the annual dividend to EUR 0.15 per share for 2015.

EUR million Consolidated IFRS                         2015       2014

Cash flow related to operations - after tax (A)         2.8       (4.9)
of which:
- before tax and changes in working capital           4.8        1.5
- Taxes paid                                          0.4        0.5
- Decrease (increase) in working capital              1.7        5.9
Cash flow related to investments (B)                    1.4        2.3
Operating cash flow (A + B)                             1.4        7.2
Cash flow related to financing                          5.7        6.8
Net change in cash                                      4.3       14.0

The Group's operations generated EUR 2.8 million of cash after tax in 2015.
Cash flows related to operations before tax and changes in working capital
amounted to EUR 4.8 million. The EUR 1.7 million increase in working capital is
mainly due to strong activity in the last quarter of 2015.

After taking into account EUR 1.4 million investments in the acquisition of
operating assets, the EUR 5.9 million dividend distribution for 2014, EUR 0.5
million of share buy backs and EUR0.6 million of financial income, the Group's
cash balance at 2015 year end amounted to EUR 36.4 million, a year-on-year
decrease of EUR 4.3 million.

EUR million Consolidated IFRS          31/12/2015     31/12/2014
Shareholders' equity and debt
Equity, Group share                           54.9           59.4
Current and noncurrent financial
liabilities                                    0.6            0.6
Analysis of net cash
A. Cash                                       36.4           40.7
B. Current financial liabilities               0.6            0.6
C. Current net cash (A) (B)                  35.8           40.1
D. Noncurrent financial liabilities
E. Net cash (C) + (D)                         35.8           40.1

Group financial statements were approved by the board on 13 April 2016.
Statutory audit work was completed and auditors' report is in the process of
being published.

Consolidated revenue for the 1st quarter of 2016, Strategy and Outlook for the
Year

EUR million Consolidated IFRS            Q1 2016          Q1 2015
Revenue                                      19.0             19.0

For the quarter ended 31 March 2016, Netgem reports EUR 19.0 million in
consolidated revenue, stable compared to 2015.

The Company is focusing its international business development efforts on its
new #telcoTV cloud TV platform. Since its launch in October 2015 at the IBC
exhibition, Netgem won 12 nominations and awards for its unique multiscreen
user experience.

In France, the Company has focused its investment on the operator VOD business
and deployments on local alternative FTTH networks.

Significant transactions and events

The Group continues its share buy back program and now owns about 5.3% of its
capital.

French tax authorities are auditing Netgem SA regarding its "Crédit d'Impôt
Recherche" (R&D tax grant), challenging 90% of the tax credits claimed for 2011,
2012, 2013, and leading to a potential tax liability of EUR3.0 million. The
Company is challenging the current notification, it considers that its R&D
effort is fully compliant with the conditions of the tax grant, and will defend
vigorously its position. This potential tax liability is not provisioned in the
audited accounts.

Provisional calendar of financial communications
- Annual shareholders' meeting: June 9, 2016
- Revenue and results for H1 2016: July 29, 2016, before market opening
- Revenue for Q3'2016: October 13, before market opening

About Netgem
Netgem is a provider of innovative solutions and video entertainment services
for the connected home. Combining proven technology assets and expertise in
content and new uses on all screens, Netgem's offers help multiservice
operators worldwide to enhance and enrich their relationship with endusers.
Netgem is present in Europe, Asia and South America with over 4 million active
households worldwide. Netgem is listed on NYSE Euronext Paris Compartment C
(ISIN: FR0004154060, Reuters: ETGM.PA, Bloomberg: NTG FP)

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