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Ekinops H1 2024 results: EBITDA margin of 14.3%

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PARIS, July 29, 2024 /PRNewswire/ — EKINOPS (Euronext Paris – FR0011466069 – EKI), a leading supplier of telecommunications solutions for telecom operators and enterprises, reports its H1 2024 financial statements (for the period ended 30 June 2024) as approved by the Board of Directors on 29 July 2024. The statutory auditors conducted an interim review of these half-year financial statements.

m€ – IFRS

H1 2023

(6 months)

H2 2023

(6 months)

H1 2024

(6 months)

2023

(12 months)

Revenue

71.0

58.1

57.5

129.1

Gross margin

37.7

29.6

32.2

67.3

As a %

53.1 %

50.9 %

56.1 %

52.1 %

Operating expenses

31.0

31.3

29.3

62.3

EBITDA1

14.3

4.3

8.2

18.6

As a %

20.2 %

7.4 %

14.3 %

14.4 %

Current operating income (EBIT)

6.7

-1.6

3.0

5.1

Operating income

6.6

-3.0

2.6

3.6

Consolidated net income

6.0

-2.4

1.5

3.6

As a %

8.4 %

n.a.

2.6 %

2.8 %

1 EBITDA (Earnings before interest, taxes, depreciation and amortization) corresponds to current operating income restated for (i) amortization, depreciation and provisions, and (ii) income and expenses relating to share-based payments.

H1 2024 revenue: 57.5m€
Ekinops recorded H1 2024 consolidated revenue of 57.5m€, down -19% from the same period last year (identical at constant exchange rates).

Propelled by the sales rebound in France (+16% in H1 2024), the Access business line grew +1% over the period, after a decline over 2023. The Group’s main operator-customers are gradually rebuilding their Access equipment inventory, without reaching normative levels.

Conversely, sales of Optical Transport solutions were down -41% in H1 2024, after an all-time high performance in 2023 (+41% in H1 2023 and +27% on a full-year basis). This business line was mainly impacted by (i) reluctance from operators with substantial inventory to initiate CAPEX (capital expenditure), (ii) slower growth for 2023 internet traffic in a context of overcapacity and (iii) a wait-and-see attitude triggered by the delayed launch of Ekinops’ new 800G optical solution.  

Software & Services accounted for 17% of Group revenue, with an increasing share of recurring revenue, particularly for the SD-WAN solution.

Geographically, H1 2024 revenue increased by +5% in France while international business declined by -31%. International sales for this first half came out to 56% (vs. 66% a year earlier), of which 22% in North America (down -31%), 32% in EMEA (Europe, Middle East and Africa, down -32%) and 2% in Asia-Pacific (decline of -15%).

H1 2024 gross margin: 56.1% 
At mid-year, gross margin stood at 32.2m€, versus 37.7m€ Y-o-Y.

Gross margin thus reached a record level of 56.1% in H1 2024, vs. 53.1% a year earlier and 52.1% end-2023.

This record gross margin performance results from a favorable business mix (growth in the Access business line), a solid “selling price/manufacturing costs” ratio for Ekinops’ solutions, and the increasing share of Software & Services’ in Group’s revenue.

H1 2024 EBITDA margin[1]: 14.3%
At mid-year, EBITDA came to 8.2m€ vs. 14.3m€ Y-o-Y, with a -6% decline in operating expenses, driven by carefully managed costs (-11% in general costs, -6% in R&D costs and -3% in marketing and sales costs).

As such, H1 2024 EBITDA margin was 14.3%, compared to an exceptional 20.2% a year earlier and 14.4% in FY 2023.

After accounting for net depreciation, amortization and provisions (4.1m€, including 1.1m€
of amortization relating to post purchase price allocation technologies), declining due to the discontinued amortization of OneAccess technology, and non-cash expenses relating to share-based payments (0.6m€), current operating income came to 3.0m€ in H1 2024 vs. 6.7m€ a year earlier.

Current operating margin therefore stood at 5.1% of half-year revenue, vs. 9.4% the same period last year and 3.9% in FY 2023.

H1 2024 adjusted EBIT: 7.0%
Excluding amortization of intangible assets identified post purchase price allocation, adjusted current operating margin (adjusted EBIT[2]) came to 7.0%, vs. 14.0% a year earlier and 8.0% at end-2023.

Other operating expenses totaled 0.4m€, resulting in operating income of 2.6m€ for H1 2024 vs. 6.6m€ Y-o-Y and 3.6m€ for FY 2023.

After taking into account financial expenses of 0.7m€, comprising a net interest expense and foreign exchange gains on currency hedging, and a tax expense of 0.4m€, H1 2024 net income stood at 1.5m€, vs. 6.0m€ a year earlier and 3.6m€ in FY 2023

H1 2024 operating cash flow: 5.1m€
Despite the economic challenges impacting its business, Ekinops showed once again resilience with an ability to generate cash through its operations.

At mid-year, operating cash flow totaled 5.1m€, up significantly compared with H1 2023 (+0.9m€). Change in working capital requirements was limited to €2.1m, down considerably from the previous year (13.1m€ in H1 2023, boosted by the sharp increase in accounts receivable). H1 2024 decrease in accounts receivable (-3.4m€) notably offset rising inventory (3.3m€) as a result of slower business activity.

Cash flow from investments (non-current assets and R&D) amounted to -5.7m€ (vs. -4.5m€ a year earlier), with 1.1m€ in equipment investments and 4.5m€ for capitalized R&D and the acquisition of the 5View software suite.

Cash flow from financing activities totaled -4.7m€, including -2.5m€ in repayments under bank loans. No new loans were taken out during the semester.

At the end of H1 2024, change in cash flow was -€5.4m.

Comfortable net cash[3] position of €22.3m as of June 30, 2024

ASSETS – €m
IFRS

12/31

2023

6/30

2024

LIABILITIES – €m
IFRS

12/31

2023

6/30

2024

Non-current assets

78.8

85.4

Shareholders’ equity

119.4

120.4

o/w goodwill

28.5

28.4

Financial borrowings

21.4

19.5

o/w intangible assets

17.1

18.5

o/w bank loans

18.3

16.7

o/w right-of-use assets

6.7

12.4

o/w factoring

2.8

2.5

Current assets

66.6

68.9

French research tax credit pre-financing

5.1

4.3

o/w inventories

25.9

29.2

Trade payables

18.2

17.1

o/w trade receivables

30.0

26.6

Lease liabilities

7.0

12.9

Cash

47.2

41.8

Other liabilities

21.5

21.8

TOTAL

192.6

196.0

TOTAL

192.6

196.0

During the first half of 2024, Ekinops signed the lease for its new headquarters in Lannion (Brittany) as well as renewing its Belgian subsidiary’s commercial lease. This increased the Group’s right-of-use assets to 12.4m€.

Cash and cash equivalents totaled 41.8m€ as of 30 June 2024, for financial borrowings[4] of 19.5m€.

As such, Ekinops benefited from a healthy financial position at the end of H1 2024, with net cash at 22.3m€ (vs. 20.3m€ a year earlier and 25.8m€ at end-2023) with shareholders’ equity of 120.4m€ (vs. 119.4m€ as of 31 December 2023).

Subsequent to the semester, Ekinops secured a 1.8m€ subsidy, granted by the French government and Bpifrance as part of the “ORANGE MECT PART” major project of common European interest (PIIEC) initiative. The latter was developed in collaboration with Orange and its partners, to provide innovative connectivity solutions for specific configurations or digital deserts, as an alternative to current transmission solutions.

Outlook
Against a sluggish economic backdrop, Ekinops proved resilient thanks to a strong gross margin, sound management of operating expenses and a further demonstrated ability to generate cash flow despite the slowdown in business.

In Access, the gradual normalization of operator inventories in France led Ekinops to report modest growth for this segment over the semester. Looking ahead to H2 2024, the Group aims to accelerate this trend, both in France and EMEA, conditional on a favorable economic recovery. In Optical Transport, the launch of the 800G solution with its innovative features and the cost-optimized 100G product should spark fresh momentum in this business line over the coming semesters.

In this context, Ekinops expects Q3 2024 revenue to follow the same trend as previous quarters, with a more marked improvement in business targeted for Q4 2024.

In terms of external growth, Ekinops still aims to carry out operations to consolidate the Group, strengthen its offering and expand its customer base, favoring a non-dilutive source of financing.

See 2024 financial calendar here.

All press releases are published after Euronext Paris market close.

EKINOPS Contact
Didier Brédy, Chairman and CEO
contact@ekinops.com

Investors
Mathieu Omnes, Investor relation
Tel.: +33 (0)1 53 67 36 92
momnes@actus.fr

Press
Amaury Dugast, Press relation
Tel.: +33 (0)1 53 67 36 74
adugast@actus.fr

[1] EBITDA (Earnings before interest, taxes, depreciation and amortization) corresponds to current operating income restated for (i) amortization, depreciation and provisions, and (ii) income and expenses relating to share-based payments.

[2] Adjusted EBIT corresponds to current operating income adjusted for amortization of intangible assets identified after allocation of goodwill, Technologies developed and Customer relations.

[3] Net cash = cash and cash equivalents – borrowings (excluding bank debt relating to French research tax credit (CIR) pre-financing and IFRS 16 lease liabilities)

[4] excluding bank debt relating to French research tax credit (CIR) pre-financing and IFRS 16 lease liabilities

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SOURCE Ekinops

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In 75 years, China has become increasingly prominent in driving global development: Global Times editorial

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BEIJING, Sept. 29, 2024 /PRNewswire/ — The 75th anniversary of the founding of the People’s Republic of China is a momentous occasion, not only for the over 1.4 billion Chinese people but also with global significance and historical importance. 

Over these 75 years, the journey of Chinese modernization has profoundly transformed China and influenced the world, truly realizing that “our work will be written in the annals of human history.” 

This year also marks the 70th anniversary of the Five Principles of Peaceful Coexistence. Amid a changing international landscape, China has steadfastly maintained an independent and peaceful foreign policy, upholding international fairness and justice. As China increasingly approaches global center stage, it continues to make new and greater contributions to the cause of peace and development for humanity.

Seventy-five years ago, when this ancient nation in the East opened a new chapter in its history, the world was just beginning to recover from the devastation of two wars. From a struggling agricultural country, China has evolved into the world’s second-largest economy, the world’s leading manufacturing power, the top trader of goods, and the holder of the largest foreign exchange reserves. This historical elevation in national strength matches China’s significant contributions to global development. 

From 1979 to 2023, China’s average annual contribution to global economic growth reached 24.8 percent, with an average of over 30 percent from 2013 to 2023. For 12 consecutive years, China’s outbound direct investment in foreign countries has ranked among the top three globally, holding over 10 percent of the global share for eight years. China’s “new three items” – electric vehicles, lithium-ion batteries, and solar cells – are facilitating the globe to accelerate their green and low-carbon transitions, while its infrastructure projects span over 190 countries and regions worldwide. Today, averagely speaking, China engages in approximately 80 million yuan ($11.4 million) worth of trade with the world every minute, invests approximately 112 million yuan abroad every hour, and attracts about 3.377 billion yuan in foreign investment daily. The development of China is intricately linked with global progress, achieving mutual success, and driving the world toward greater progress and prosperity.

A great nation with over 5,000-year-old civilization stands majestically in the East, as over 1.4 billion people stride forward on the path to modernization. Such a vast scale itself is one of the main powerful driving forces for the progress of the entire world and human society. The practices of Chinese modernization teaches us that development is the key to solving all problems. China has proposed the Global Development Initiative to support the development and revitalization of countries in the Global South. By the end of 2023, China’s direct investment in countries participating in the Belt and Road Initiative had exceeded $300 billion. Chinese companies have built the first ultra-high voltage direct current transmission line in the Americas, the first electrified railway, the first digital mine, and numerous infrastructure and livelihood projects in Africa, making an indelible contribution to global infrastructure construction.

From “seek knowledge even if you have to go as far as China” to “seek peace even if you have to go as far as China,” peace is a valuable public good that China offers to a turbulent world. Over the past 75 years, China has never initiated any war or conflict and has never occupied an inch of another country’s territory. In the face of numerous international security challenges, China has proposed the Global Security Initiative. It has mediated the reconciliation between Saudi Arabia and Iran, facilitated a historic reconciliation among Palestinian factions, and promoted a political resolution to the crisis in Ukraine. Today, China has become the second-largest contributor to the UN regular budget, the second-largest contributor to peacekeeping operations, and the largest troop-contributing country among the permanent members of the UN Security Council. China has always been committed to promoting world peace and development.

To leave behind achievements worthy of being engraved in world history, a nation and its people must not only be judged by their material accomplishments but also by the amount of spiritual wealth they have contributed. The latter often holds more profound significance than the former. 

In today’s world, where the destinies of nations are closely intertwined, China has proposed the Global Civilization Initiative, advocating cultural exchanges that transcend estrangement, mutual learning that transcends clashes, and coexistence that transcends feelings of superiority. It addresses significant questions, such as how different civilizations can coexist and where human civilization is headed, offering Chinese wisdom and solutions to promote cultural exchanges and the advancement of human civilization.

Over the past 75 years, China has demonstrated an uncommon empathy in the political arena of major powers throughout human history. From proposing the Five Principles of Peaceful Coexistence, emphasizing equality and non-interference in other countries’ internal affairs, to the new era’s initiatives like jointly building the Belt and Road Initiative, building a community with a shared future for mankind, and the promotion of solidarity and cooperation among the Global South, China has advocated that the sovereignty of all countries are equal regardless of size on global arena while showing respect and support for the development of other countries. 

China has provided the worldview of “shared future” and the methodology of “jointly building and win-win cooperation” for all mankind. This is rare in the history of human civilization and is urgently needed in today’s world. 

The 75-year journey through challenges has underscored the invaluable role China plays in global peace, development and progress. The modernization China has promoted, which embodies justice, openness, mutual benefit, people-first policies, diversity, inclusiveness, eco-friendliness, and peace and security, will only become more significant and valuable to the world as time progresses.

View original content:https://www.prnewswire.com/news-releases/in-75-years-china-has-become-increasingly-prominent-in-driving-global-development-global-times-editorial-302261976.html

SOURCE Global Times

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Xinhua Silk Road: Research project on sustainable development of agriculture and animal husbandry launched with support from Chinese dairy giant Mengniu

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BEIJING, Sept. 29, 2024 /PRNewswire/ — With support from Mengniu public welfare foundation set up by Chinese dairy giant Inner Mongolia Mengniu Dairy (Group) Co., Ltd., China Economic Information Service recently established a research group to carry out studies on how the ecological protection compensation mechanism and the mechanism for realizing the value of ecological products can promote sustainable development of agriculture and animal husbandry.

The research group will first sort out relevant policies and theories on the topic.

Field visits and research then will be conducted in key regions of agriculture and animal husbandry development nationwide. The research group will identify prominent problems that arise in local practices where the two mechanisms are adopted to boost sustainable development of agriculture and animal husbandry and analyze specific causes. The group will also create hypotheses about combining the ecological protection compensation mechanism and the ecological product value realization mechanism to propel agriculture and animal husbandry sustainability.

Finally, the researchers will compile a report based on research results and put forward suggestions.

Founded in 2022, the Mengniu public welfare foundation carry out public welfare and charity activities mainly related to emergency and disaster relief, rural revitalization, nutrition empowerment, and ecological protection.

Original link: https://en.imsilkroad.com/p/342397.html

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SOURCE Xinhua Silk Road

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Global Times: Chinese youth increasingly embrace, share millennia-old cultural traditions

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BEIJING, Sept. 29, 2024 /PRNewswire/ — Li Ziyao, a young Chinese student studying in Boston, the US, recently completed Black Myth: Wukong, a game playing based on the classic Chinese novel Journey to the West.

He was excited that this game, rich in traditional cultural elements, has become a sensation in America too. As he observed his American classmates discussing the Monkey King, the architectural styles, and Chinese history, a strong sense of pride surged within him.

“I am witnessing firsthand how Chinese culture is being spread and understood globally in a novel and modern way,” Li told the Global Times.

Culture plays a vital role in inspiring national spirit, maintaining identity, and promoting both economic and personal development.

China’s achievements over the past 75 years are closely tied to its millennia-old culture and cultural confidence. Generations of young people with strong values and ethics worked to develop Chinese culture and present it to the world. 

Chinese civilization has thrived along with the open expression of young people. They relish and discuss with foreign friends China’s traditional culture, allowing it to resonate with international audiences. 

In ancient times, Chinese ancestors sailed the seas along the historical Maritime Silk Road, spreading Chinese culture toward the rest of the world.

Today, young people, especially Generation Z, are using unique ways to share Chinese culture with the world.

Set new trend

Li mentioned that one of the American Twitch streamers he follows, Zack, also known as Asmongold, a content creator with over 2.9 million YouTube subscribers, once commented that Chinese mythology has a natural freshness for Western players, sparking their desire to explore the unknown.

The cultural elements carried by Black Myth: Wukong are also reflected in its music. The game incorporates traditional Chinese melodies from the 1986 hit TV series Journey to the West soundtrack, including the iconic track Celestial Symphony in key scenes.

“Hearing Celestial Symphony evokes me an indescribable feeling of nostalgia. One of my American classmates told me that the music made him feel as if he were immersed in a world filled with the charm of ancient Eastern culture,” Li noted.

With the international success of Celestial Symphony, Li has noticed that many of his classmates have expressed their desire to learn traditional Chinese musical instruments, especially pipa, which embodies unique Chinese aesthetics.

In a recent interview, US musician Lauv commented on the beauty of pipa, while interacting with young pipa player Liu Jialiang, also known as Marsix.

During the interview, Marsix used pipa to perform Lauv’s breakout hit I Like Me Better. Lauv, who is also known as Ari Staprans Leff, is followed by more than 1 million fans on the platform known as X. 

The instrument’s sound, representing Chinese aesthetics, stunned the Western singer and left him with a look of amazement. Marsix’s performance has also revealed how the 2,000-year-old instrument remains versatile in playing global pop music. 

“I was thrilled to share our traditional music culture again,” the young player told the Global Times. He also emphasized that his journey with pipa has always been about “fusion.”

Since 2022, Marsix has been posting remixed pipa music that blends traditional Chinese melodies with Western genres like jazz, hip-hop, and electronic music. 

Through his fusion of traditional Chinese music, Marsix has captured the attention of international fans. On YouTube, netizens commented on Marsix’s performance, saying “the Chinese ‘guitar’ would set a new trend.” 

“I think the traditional instrument is a tool for us young Chinese musicians to express our open-mindedness to world music,” Marsix noted. 

Confident in his cultural roots, the young Chinese musician has also inspired many young fans in China to rediscover the beauty of traditional Chinese music. Marsix told the Global Times that most of his fans are in their 20s, and he hopes to guide them on a journey of rediscovering Chinese culture.

“In the past, the word ‘pipa’ would evoke images of classical performers, but now it represents a trendy instrument played by performers of all ages and genders. Young Chinese musicians are using their creativity to revive the tradition,” Zhu Xiao, a Chinese folk music fan and cucurbit flute player, told the Global Times. 

Dressed in confidence

For many in Generation Z, wearing Hanfu – traditional Chinese dress – is just like playing pipa as a way to reconnect with the cultural root and also a way to express cultural confidence.

Driven by strong curiosity about the world, Chinese storyboard artist Lei Yumeng, better known as Mi Lei, travels between reality and fantasy in her storyboard work. Nearly every piece of work she posts on social media becomes a hit. So far, the Chinese artist has more than 8 million followers on different platforms.

Lei’s love for Chinese culture extends to her admiration for Hanfu. She told the Global Times that through her paintings of Hanfu from various dynasties, she can explore the aesthetics and auspicious intentions of ancient Chinese people, as reflected in the clothing’s patterns and embroidery.

Lei’s embrace of Chinese cultural heritage has been recognized internationally, with her videos on platforms like Instagram earning praise for showcasing traditional clothing. This global appreciation has been a reminder of the richness of her motherland’s unique cultural roots, which she said she “has initially taken for granted.”

Lei said her work in animation and storytelling is a celebration of China’s cultural legacy, a legacy she is “proud to share with the world.”

 

View original content:https://www.prnewswire.com/news-releases/global-times-chinese-youth-increasingly-embrace-share-millennia-old-cultural-traditions-302262003.html

SOURCE Global Times

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