CONFIRMATION OF EXPECTED TRENDS IN THE FIRST QUARTER
- ROBUST MOMENTUM IN GROWTH ACTIVITIES
- DECLINE IN REVENUE FROM LEGACY ACTIVITIES, MAINLY REFLECTING UNFAVORABLE BASE EFFECT
- RETURN TO CONSOLIDATED GROWTH IN SECOND-QUARTER 2017 AS FORECASTED
Paris, May 3, 2017, 5:40 p.m. - Digital marketing specialist HiMedia Group (ISIN code: FR0012821890 - HIM, HIM.FR), which will propose changing its legal name to AdUX in line with its trade name at the Shareholders' Meeting on May 4, 2017, has published its revenue for the first quarter of 2017.
- Revenue of €11.3 million in first-quarter 2017 ([1])
- Revenue from growth activities (2) rose by 11% year-on-year in first-quarter 2017 and represented 55% of consolidated revenue.
- Due to unfavorable base effect, revenue from legacy activities declined by 34% year-on-year in first-quarter 2017.
- EBITDA held firm in the first quarter, when business is traditionally weak
- EBITDA (3) : negative €0.3 million in first-quarter 2017 (1) versus €0 million in first-quarter 2016.
Commenting on the first-quarter figures, Cyril Zimmerman, Chairman and Chief Executive Officer of HiMedia Group (AdUX) said: "Despite a start to the year that was sluggish on the face of it, mainly due to unfavorable base effect on traditional advertising activities, business is developing as anticipated and we can confirm that we will return to growth and achieve higher margins in 2017."
FIRST-QUARTER 2017 REVENUE
| (€m) | Q1 2017 (1) | Q1 2016 | Change | ||
| Group | Revenue | 11.3 | 13.3 | -15% | |
| Gross margin | 5.4 | 6.4 | -15% | ||
| EBITDA (3) | (0.3) | 0.0 | |||
| (€m) | Q1 2017 (1) | Q1 2016 | Change | ||
| Growth activities (2) | Revenue | 6.2 | 5.6 | +11% | |
| Gross margin | 3.3 | 2.9 | +11% | ||
| EBITDA (3) | (0.2) | (0.2) | |||
| Legacy activities | Revenue | 5.0 | 7.7 | -34% | |
| Gross margin | 2.2 | 3.5 | -38% | ||
| EBITDA (3) | (0.2) | 0.2 |
Consolidated revenue amounted to €11.3 million in the first quarter of 2017, down on the prior-year period as announced. The 15% decrease was mainly due to a high basis of comparison reflecting the removal from the consolidation scope of a contract in April 2016 that had generated revenue of €1.5 million over the first three months of 2016. Adjusted for this effect, the first-quarter consolidated revenue would have been down by 5%.
Growth activities expanded at a more modest pace over the first three months of 2017 than previously, due to weaker business in January and February in Spanish-speaking Latin America and in France.
The trend improved however in March and April. AdUX therefore confirms its expectation that the overall business will return to growth in the second quarter.
( [1] ) Based on the unaudited financial statements at March 31, 2017. (2) Growth activities correspond to native and local advertising (or community advertising for Spanish speakers in the United States) including the Admoove, Local Media, Himedia Sweden, Latam Digital Ventures and Quantum subsidiaries. (3) Earnings before interest, tax, depreciation and amortization.
EBITDA HELD FIRM AND IS EXPECTED TO IMPROVE IN 2017
Margins were stable over the first three months and gross margin tracked the change in revenue. In the midst of this gradual turnaround in business, the Company continued to cut costs and was able to limit the EBITDA loss to €0.3 million in the first quarter.
The best results tend to be reported in the second and fourth quarters, while the first and third are characterized traditionally by weaker business and margins, as was the case in 2016. Taking into account these seasonal fluctuations, the Group confirms its objectives to improve profitability over the full year.
OUTLOOK AND FINANCIAL STRUCTURE
The Company's focus on advertising campaigns that are both effective for advertisers and more respectful of the Internet user experience corresponds to a real market expectation and is producing results. The Group expects consolidated revenue to expand in 2017, driven by continued momentum in growth activities and a more modest contraction in legacy activities as from the second quarter.
Over the longer term, the Company having the financial resources to ensure its development with a cash position of €7.1 million and a transferable equity interest in HiPay valued at €1.9 million on the basis of the share price on 31 March 2017, expects EBITDA margin levels to rise to above 10%.
Investor calendar:
- First-half 2017 results on July 27, 2017 after the markets close
- Third Quarter Revenue on November 9, after the markets close
Investor and analyst contact Media contact
Delphine Maillet, Citigate Christine Amella, Patricia Goldman Communication delphine.maillet@citigate.fr camella@patricia-goldman.com Tel. : +33 1 53 32 84 75 Tel. : +33 1 47 53 65 72
About HiMedia Group: A pioneer in the sector, HiMedia is a European leader in digital marketing.
With operations in six European countries, the United States and Latin America, HiMedia reported revenue of €59 million in 2016.
Independent since its creation, the company is listed on Euronext Paris, in compartment C, and is included in the CAC Small, CAC All-Tradable and CAC SME indices. ISIN: FR 0012821890 / Symbol: HIM For more information, visit: www.himediagroup.com and infofin@hi-media.com Follow us on Twitter: @Himedia_is_AdUX LinkedIn: www.linkedin.com/company/himediagroup
his press release may contain certain forward-looking statements. Although HiMedia Group believes that these statements are based on assumptions that were reasonable as of the date of this press release, they are by their very nature subject to risks and uncertainties that could cause actual results to differ from those indicated or projected in these statements. HiMedia Group operates in a continually changing environment and new risks may emerge. HiMedia Group assumes no obligation to update these forward-looking statements to reflect any new information, future events or other circumstances.
( [1] ) Based on the unaudited financial statements at March 31, 2017. (2) Growth activities correspond to native and local advertising (or community advertising for Spanish speakers in the United States) including the Admoove, Local Media, Himedia Sweden, Latam Digital Ventures and Quantum subsidiaries. (3) Earnings before interest, tax, depreciation and amortization.
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