Significant growth in earnings in 2017

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Anne-Pauline Petureaux

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Paris, Wednesday, April 25, 2018

Keywords: Antenna Measuring | 2017 Earnings

PRESS RELEASE

Significant growth in earnings in 2017

• Organic growth in revenue: +7.7%
• EBITDA: +24.8%
• Operating income: +112%

(*) The variations are calculated on values in €k

The financial statements were approved by the Board of Directors on April 20, 2018. Consolidated account audit procedures were carried out. The certification report will be released after certain procedures are completed that are necessary for publishing the annual financial report.

MVG had a very good 2017 financial year marked by a clear improvement in its economic indicators, thus reaping the fruits of its sales momentum and its measures to improve productivity.

The Group relies mainly on its ability to supply competitive products with a high technological value.

Significant improvement in the main financial indicators:
EBITDA +24.8% - Current operating income: +18.5%

Thanks to a proactive sales momentum which generated a new record for order intake over the year, the revenue stood at €71.0 M, showing 7.7% growth (+9.7% at constant exchange rates).

The gross margin rose from €41.5 M to €44.9 M, an increase of 8.1%. The gross margin increased by 0.2 points to 63.1% under a favorable product mix leaning towards “all electronic”.

Thanks to excellent control of current operating expenses, the EBITDA increased significantly to €7.8 M compared to €6.3 M last year (+24.8%). The impact of the fluctuations in exchange parities was not significant. The EBITDA margin rate reached 11.0% compared to 9.5% last year, i.e. an increase of 1.5 points due to operational efficiency measures.

Non-recurring operating expenses also decreased greatly, with the Group benefiting from the judgment in the intellectual property dispute in the United States at the end of 2016. The net operating income was thus €4.3 M compared to €2.0 M at December 31, 2016, a sharp increase of 112%.

Finally, net financial income was €(2.0) M compared to €(0.5) M in 2016, a difference explained mainly by the re-evaluation of intra-group loans on the closing date following changes in the euro/dollar parity. The impact of this latent exchange loss was -€1.8 M.

The tax expense on this occasion was exceptionally high at €1.6 M. It is explained by a re-evaluation of the deferred taxes classed as assets of -€0.8 M, mainly due to the recent change in the tax rate in the United States and in France for future years.

Finally, the Net Income was €0.6 M (+300%) and the group share of net income was €1.3 M (+28.6%).

New growth in operational cash flows and very healthy balance sheet

Shareholders' equity stood at €69.8 M on December 31, 2017, compared to €70.4 M on December 31, 2016, with the effect of exchange rates.

The cash flow generated by the activity was €5.6 M as of December 31, 2017 (compared to €4.7 M on December 31, 2016), in particular because of favorable WCR effects, which covered all investment flows (€3.0 M). The free cash flow thus increased considerably to €2.6 M (€+1.5 M compared to last year).

Over the period, the Group made loan repayments of €1.2 M. At end-2017, MVG thus had a net cash flow position of €19.6 M (€1.7 M higher than at end-2016), some of which (€6.5 M) was allocated after the purchase of the Orbit/FR minority holdings in early April.

Sound prospects for growth in 2018:

A very substantial order book supporting a new year of growth

Simplified organizational situation with the purchase of the ORBIT/FR minority holdings

At the beginning of 2018, MVG showed a new order intake record of €77.6 M, which led to an order book on January 1, 2018, of €69.8 M[1]. With the benefit of this high visibility, the Group is aiming for 2018 to be new year of growth for its revenue and margins.

The purchase of the Orbit/FR minority holdings paves the way to simplifying the legal structure of MVG, extending organizational synergies and developing new innovations within the Group.

On the technological side, Microwave Vision intends to increase its technological progress on the 5G very high frequency market, which is a real challenge for the main telephone service providers. MGV is ahead on this market which presents major technological barriers and high potential. Sales of 5G products, including those for the connected vehicle, are already very promising and allow the Group to expect a solid growth driver in this activity over the next few years.

2018 first quarter sales will be published on May 24, 2018.

About MICROWAVE VISION

Since its creation in 1986, The Microwave Vision Group (MVG) has developed a unique expertise in the visualization of electromagnetic waves. These waves are at the heart of our daily lives: Smartphones, computers, tablets, cars, trains and planes -- all these devices and vehicles would not work without them. Year after year, the Group develops and markets systems that allow for the visualization of these waves, while evaluating the characteristics of antennas, and helping speed up the development of products using microwave frequencies.  The Group's mission is to extend this unique technology to all sectors where it will bring strong added value. Since 2012, MVG is structured around 3 departments: AMS (Antenna Measurement Systems), EMC (Electro-Magnetic Compatibility), EIC (Environmental & Industrial Control). MVG is present in 10 countries and generates 90% of sales from exports. MVG has over 300 employees and a loyal customer base of international companies. The Group generated revenues of € 71.0 million in 2017. MVG has received the BPI "Innovative Enterprise" award, and is illegible for PEA-PME. 

NYSE Euronext Growth: ALMIC | Alternext, FR ISIN code 0004058949 | For more information: http://www.mvg-world.com