ADB Group reports its full-year 2011 results

Advanced Digital Broadcast Holdings SA (SIX: ADBN) reported today ADB Group's unaudited consolidated financial results for the full year 2011.

The full year revenue reached US$ 399.0 million, representing a growth of 12% compared to 2010. The growth was largely attributable to integration of the new broadband business, as indicated when reporting the half-year results. The sales of the digital TV equipment contributed strongly during the second half of the year, following the usual seasonality cycle of this business. Due to the consolidation of only one month of the acquired entity business in 2010, year-on-year results are not directly comparable.

Gross profit amounted to US$ 124.0 million or 31.1% of revenue. This is an increase from the 29.2% reported in the first half of 2011, and represents the Group profiting from redirecting its business away from the retail activities, in accordance with its strategy. The service business still represents a relatively small portion of the Group revenue, but has grown significantly compared to previous year.

Operating expenses accounted for US$ 117.4 million with research and development amounting to US$68.5 million, and operating expenses to US$ 48.8 million. The decrease in operating expenses as percentage of revenue during the second half of 2011 is the result of the Group's ongoing streamlining process. Key contributors have been integration of the Operations, Finance and central R&D, and overall headcount reduction. The Group has also recorded significantly lower royalty payments to third parties, as a result of its proactive reviews and adjustments of the respective licensing agreements. This effort will continue into 2012 and beyond.

The Earnings Before Interest and Taxes (before reorganization and acquisition expenses) amounted to US$ 7.6 million, or 1.9% of the revenue, almost in line with management expectations and represents the increased profitability in the second half of 2011. The reorganization expenses amounted to US$ 15.4 million, while the expenses related to the acquisition were US$ 0.9 million, both slightly higher than anticipated. Consequently, the Group's pro-forma profit before tax was US$ 2.8 million. Taking the reorganization and acquisition charges into account, the reported loss for the year amounted to US$ 12.2 million or US$ 2.27 per share.

The net cash position of the Group strengthened significantly during the second half of 2011, allowing the Group to close the year with a net cash position of US$ 28.9 million, while the gross cash and treasuries amounted to US$ 56.7 million.

Mr. Andrew Rybicki, Group Chairman and CEO, commented: "We expected the year 2011 to be a year of transformation, and it has certainly been one. We have changed our organization, integrated the acquired broadband business into the Group, and streamlined our expenses and processes. Our staff has gone to extraordinary lengths to make it happen, and I am sure it will support a continuation of this effort in 2012. Our customers' confidence in our products and services remains strong, despite certain quality issues we had experienced during the past year, which we are now correcting. I share this confidence and am glad to see the company shaping itself up to the new challenges in 2012 and beyond, particularly in the areas of product quality improvement, the services, and the focus on complete digital TV and broadband systems, connectivity and software - the pillars of our new strategy. The outlook for 2012 is definitely positive, but due to the uncertainty of still persisting unfavorable macroeconomic situation, the Group has decided not to issue specific guidance for this year".

As the convergence of digital television and broadband connectivity technologies and services continues, the Group's vision of its future follows the suit. The connectivity between any and every consumer device, mobile and stationary, will remain the main theme in the coming years. The Group is today particularly well equipped to take a prominent position in these developments, owing to its years-long experience in the digital TV combined with the broadband communication expertise of the acquired entity, as well as to its successful in-house development of the service business. Consequently, it will channel this expertise into creation of complete solutions, which, along with associated services, will be offered to both the Group's traditional customers - pay-TV and telco operators - as well as to other interested parties. The Group is confident that this strategy, supported by over 15-years long success as a supplier of top performance and competitive end-user products, will make its effort successful in relatively short time.

The new product and service structure of the Group is reflected already today by its revenue constitution. Digital TV equipment brought in a total 58%, broadband products yielded 32%, while the customer care and other services grew to 10% of the Group 2011 revenue.

Geographically, Western Europe remains the Group's largest and dominating market, bringing in 66% of the overall revenue. Eastern Europe sales contributed 22%, Americas 6%, Middle-East and Africa 5% and Asia Pacific 1%. Please note that the comparison to previous years should take into consideration the impact of the acquisition, as the majority of the broadband products are sold to Western European customers and therefore that region is now represented more prominantly.

The year 2011 saw important business development activities making progress. Opening of the US cable market with Charter Communications and Time Warner Cable in the commercial market segment was brought into fruition, and is progressing according to plan. The business in the Nordic countries has grown considerably as well, and the Group is also pleased to announce its new cable pay-TV customer in Belgium, Tecteo/VOO TV-NET-TEL ("VOO").

The customer diversification after the acquisition remains largely unchanged. The top ten customers contributed to 70% of the Group revenue, with no single customer bringing more than 15.3%. The Group considers this to be healthy and balanced approach fostering enough cost-efficiencies but diversifying risks sufficiently.

The Group has also been nominated for "Best Quality Improvement Solution" at the IP&TV Industry Award with its Epicentro^®-PMP remote management solution. This product allows operators manage the entire home network from a distance, activate services on new devices and fix issues without the end-user even noticing. It signifies the Group's entry into the business of complete systems and associates services, very much in line with the Groups new strategy.

The Board of Directors have reviewed the Group unaudited financial results of the year, and have not yet decided on their recommendation for dividend distribution, which it will make to the Annual General Meeting of Shareholders.

Management of ADB Group will hold a conference call to comment on this press release today at 16:00 CET. Participants shall dial the number +41 (0) 44 580 6398 with pass code "ADB".

This press release and further information on ADB Group can be found on the Group's website at www.adbholdings.com

Tina Nyfors
Investor Relations /Group Communications
Tel: +41 22 592 8433
Fax: +41 22 592 8402
t.nyfors@adbglobal.com

ADB Group (www.adbholdings.com) was founded in 1995 and is a leading developer of solutions required to view and interact with digital TV broadcast through cable, satellite, terrestrial and IP networks, as well as products and systems for broadband data communication business. The Group today sells a broad range of products and services, including connected home multimedia solutions, software, consumer premises devices, consulting and engineering services and after sales services for digital Pay TV broadcast operators and broadband network operators. The Group's sales are conducted through the brand of ADB (www.adbglobal.com) and the trademarks of i-Can, Epicentro and Carbo.

This press release contains forward-looking statements. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements due to various factors, among which:

Advanced Digital Broadcast Holdings SA undertakes no obligation to publicly update or revise any forward-looking statements. Advanced Digital Broadcast Holdings SA reserves the right to amend the information at any time without prior notice.

The information contained in this press release may not be considered as being a substitute for economic, legal, tax or other advice and you are cautioned to base investment decisions or other decisions on the content of this release. You are recommended to consult your investment advisers or other advisers prior to making any decision.

This press release is not an offer of securities for sale or a solicitation to invest in Advanced Digital Broadcast Holdings SA securities. In particular, it is not an offer of securities for sale in the United States of America, its territories and possessions. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Advanced Digital Broadcast Holdings SA does not intend to register its securities in the United States of America.

CONSOLIDATED INCOME STATEMENTS
YEARS ENDED 31 DECEMBER 2011 AND 2010
(Expressed in United States Dollars)

	Excluding reorganisation	Reorga- nisation	2011 Total		Excluding reorganisation		Reorga- nisation			2010 Total
	$	$	$		$		$			$

Revenue	398,964,653	-	398,964,653			356,619,397		-	-	356,619,397

Cost of sales	(274,948,521)	-	(274,948,521)			(241,898,796)			-	(241,898,796)

Gross profit	124,016,132	-	124,016,132			114,720,601			-	114,720,601

Research and development expenses	(68,526,173)	(5,486,658)	(74,012,831)			(48,918,533)			-	(48,918,533)

Selling, general and administrative expenses	(48,828,569)	(3,168,314)	(51,996,883)			(43,681,682)			-	(43,681,682)

Other income	2,518,372	-	2,518,372			1,001,534			-	1,001,534

Other expenses	(1,554,414)	(6,697,902)	(8,252,316)			(5,378,074)			-	(5,378,074)

Earnings (loss) before interest, tax, acquisition and integration expenses	7,625,348	(15,352,874)	(7,727,526)			17,743,846			-	17,743,846

Acquisition and integration expenses			(946,385)							(538,539)

(Loss) earnings before interest and tax			(8,673,911)							17,205,307

Finance income				552,232						2,111,027

Finance costs				(5,394,495)						(4,526,086)

(Loss) profit before tax				(13,516,174)						14,790,248

Income tax credit (expense)				1,332,288						(1,883,360)

(Loss) profit for the year				(12,183,886)						12,906,888

(Loss) earnings per share
Basic				(2.27)						2.55
Diluted				(2.27)						2.51

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
YEARS ENDED 31 DECEMBER 2011 AND 2010
(Expressed in United States Dollars)

	2011	2010
	$	$

Movement in available-for-sale investments	(123,750)	(626,086)

Credit of deferred tax on movement in available-for-sale investments	872	49,022

Actuarial gain (loss) directly recognised in equity	65,553	(133,601)

Credit (charge) of deferred tax on direct recognition of actuarial gain (loss) in equity	14,503	(3,942)

Movement in cash flow hedges	3,904,963	(726,027)

(Charge) credit of deferred tax on movement in cash flow hedges	(450,832)	52,194

Translation adjustments	(2,802,697)	307,336

Other comprehensive income for the year	608,612	(1,081,104)

(Loss) profit for the year	(12,183,886)	12,906,888

Total comprehensive income for the year	(11,575,274)	11,825,784

CONSOLIDATED BALANCE SHEETS
31 DECEMBER 2011 AND 2010
(Expressed in United States Dollars)

ASSETS	2011	2010
	$	$
Non-current assets
Goodwill	25,265,925	25,792,385
Intangible assets	28,059,012	32,784,758
Property and equipment	15,675,281	15,773,046
Deferred income tax assets	6,875,200	4,785,778
Other non-current assets	484,450	1,027,545
Total non-current assets	76,359,868	80,163,512

Current assets
Inventories, net	29,574,748	50,362,159
Other current assets	21,277,001	28,096,129
Trade receivables, net	52,792,516	92,822,350
Treasury investments	14,336,691	14,522,613
Cash and cash equivalents	42,321,383	84,502,898
Total current assets	160,302,339	270,306,149

Total assets	236,662,207	350,469,661

EQUITY AND LIABILITIES

Capital and reserves
Share capital	1,193,563	1,193,563
Share premium	53,371,617	59,786,295
Share-based compensation reserve	4,608,964	4,586,298
Other reserves	(7,161,793)	(13,102,458)
Retained earnings	6,701,342	19,630,344
Treasury shares	(6,734,954)	(3,370,395)

Total equity	51,978,739	68,723,647

Non-current liabilities
Long-term bank loans	13,396,924	2,906,044
Retirement benefit obligations	6,796,232	7,243,199
Deferred income tax liabilities	842,432	398,888
Long-term liabilities	1,876,657	8,211,074
Total non-current liabilities	22,912,245	18,759,205

Current liabilities
Bank loans	12,519,810	63,624,901
Current portion of long-term bank loans	1,871,096	904,834
Trade and other payables	107,215,546	144,400,590
Accrued expenses	23,287,029	34,483,385
Provisions	6,963,014	10,868,616
Taxes payable	444,863	515,797
Other current liabilities	9,469,865	8,188,686
Total current liabilities	161,771,223	262,986,809

Total liabilities	184,683,468	281,746,014

Total equity and liabilities	236,662,207	350,469,661

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED 31 DECEMBER 2011 AND 2010
(Expressed in United States Dollars)

	2011	2010
	$	$
CASH FLOWS FROM OPERATING ACTIVITIES

(Loss) profit for the year	(12,183,886)	12,906,888
Adjustments for:
Income tax (credit) expense	(1,332,288)	1,883,360
Depreciation	3,806,520	2,394,061
Amortisation	33,888,672	18,031,398
Finance costs	5,394,495	4,526,086
Finance income	(552,232)	(2,111,027)
Share-based payment expense	352,676	396,223
Provision for inventory	1,258,767	1,473,069
Provision for inventory pursuant to reorganisation	6,482,451	-
Others	200,197	201,983
Profit before working capital changes	37,315,372	39,702,041
Working capital changes:
Trade and other receivables	40,029,834	29,675,570
Inventories	13,046,193	(21,395,907)
Other current assets	10,090,713	(11,673,027)
Trade and other payables	(37,185,044)	4,665,102
Accrued expenses	(10,433,945)	(13,595,662)
Provisions	(3,905,602)	(1,068,740)
Other current liabilities	(1,163,014)	40,581
Others	1,334,320	967,980
Cash generated by operating activities	49,128,827	27,317,938
Interest paid	(4,479,799)	(2,965,504)
Tax paid	(753,474)	(3,942,790)

Net cash provided by operating activities	43,895,554	20,409,644

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of property and equipment	(5,168,683)	(3,979,037)
Proceeds from sale of property and equipment	73,703	116,026
Payments for intangible assets	(29,524,173)	(23,493,535)
Proceeds from sale of intangible assets	3,194	-
Sale of treasury investments and time deposits	62,172	19,756,904
Interest received	552,802	2,114,303
Payments for acquisition of business	(787,394)	(8,600,424)

Net cash used in investing activities	(34,788,379)	(14,085,763)

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED 31 DECEMBER 2011 AND 2010
(Expressed in United States Dollars)

	2011	2010
	$	$
CASH FLOWS FROM FINANCING ACTIVITIES

(Decrease) increase in bank loans	(39,647,949)	34,896,180
Share sale pursuant to exercise of stock options	81,567	925,908
Purchase of treasury shares	(4,924,611)	(8,318,291)
Dividend paid	(6,414,678)	(13,955,473)

Net cash (used in) provided by financing activities	(50,905,671)	13,548,324

TRANSLATION ADJUSTMENT ON FOREIGN CURRENCY	(383,019)	(774,340)

NET (DECREASE) INCREASE IN CASH	(42,181,515)	19,097,865

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	84,502,898	65,405,033

CASH AND CASH EQUIVALENTS, END OF YEAR	42,321,383	84,502,898

ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS
Time deposits	1,668,390	7,521,703
Cash and bank balances	40,652,993	76,981,195

	42,321,383	84,502,898

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
YEARS ENDED 31 DECEMBER 2011 AND 2010
(Expressed in United States Dollars)

					Share-Based
	Share		Share		Compensation	Other		Retained		Treasury		Total
	Capital		Premium		Reserve	Reserves		Earnings		Shares		Equity
	$		$		$	$		$		$		$

Balance at 1 January 2010	1,326,181		76,551,414		4,373,022	(768,854	)	39,252,110		(42,759,071	)	77,974,802

Profit for the year	-		-		-	-		12,906,888		-		12,906,888
Other comprehensive income	-		-		-	(1,081,104	)	-		-		(1,081,104	)
Total comprehensive income	-		-		-	(1,081,104	)	12,906,888		-		11,825,784

Transfer of treasury shares pursuant to acquisition	-		-		-	-		-		11,247,238		11,247,238
Put option issued pursuant to acquisition	-		-		-	282,751		-		-		282,751
Liability arising in case of exercise of put option issued pursuant to acquisition	-		-		-	(11,535,251	)	-		-		(11,535,251	)
Capital reduction	(132,618	)	-		-	-		(30,645,178	)	30,777,796		-
Payment of dividend	-		(16,765,119	)	-	-		2,809,646		-		(13,955,473	)
Purchase of ordinary shares	-		-		-	-		-		(8,617,372	)	(8,617,372	)
Sale of treasury shares pursuant to exercise of stock options	-		-		-	-		-		1,394,710		1,394,710
Losses on sale of treasury shares	-		-		-	-		(4,876,069	)	4,586,304		(289,765	)
Share-based payments	-		-		213,276	-		182,947		-		396,223

Balance at 31 December 2010	1,193,563		59,786,295		4,586,298	(13,102,458	)	19,630,344		(3,370,395	)	68,723,647

Loss for the year	-		-		-	-		(12,183,886	)	-		(12,183,886	)
Other comprehensive income	-		-		-	608,612		-		-		608,612
Total comprehensive income	-		-		-	608,612		(12,183,886	)	-		(11,575,274	)

Reclassification	-		-		-	444,639		(444,639	)	-		-
Credit of deferred tax on reclassification						(45,738	)					(45,738	)
Reduction of liability of put option issued pursuant to acquisition	-		-		-	4,933,152		-		(3,882,965	)	1,050,187
Payment of dividend	-		(6,414,678	)	-	-		-		-		(6,414,678	)
Sale of treasury shares pursuant to exercise of stock options	-		-		-	-		-		81,567		81,567
Losses on sale of treasury shares	-		-		-	-		(630,487)		436,839		(193,648	)
Share-based payments	-		-		22,666	-		330,010		-		352,676

Balance at 31 December 2011	1,193,563		53,371,617		4,608,964	(7,161,793	)	6,701,342		(6,734,954	)	51,978,739