SOURCE: EVS Broadcast Equipment S.A.

November 08, 2007 03:57 ET

EVS - 3Q07 Sales of 24,4m, +1%, Record Autumn Orderbook of 31,4m, up +79%, Interim Dividend of 0,80 EUR

LIÈGE, BELGIUM--(Marketwire - November 8, 2007) - EVS Broadcast Equipment S.A. (ISIN BE0003820371, Euronext EVS.BR, Bloomberg EVS BB, Reuters EVSB.BR, OTC Pinksheets EVBEF), the leader in Professional Digital Video applications for Live, Near-Live and Studio TV Production, today reports its results for the third quarter 2007 ("3Q07") and first nine months of 2007 ("9M07"):

Highlights:

- RECORD 3Q07 SALES 24,4 MILLION EUR, +1% vs. 3Q06
- 9M07 SALES OF 67,5 MILLION EUR, +9% EXCL 2006 EVENTS RENTALS
- ASIA & PACIFIC UP 48%, AMERICA'S UP 41%, COMPENSATE EUROPE DOWN 30%
- 3Q07 EBIT OF 15,8 MILLION EUR, OR 65% OF SALES
- 3Q07 EPS OF 0,73 EUR, DOWN 9%
- VERY STRONG AUTUMN ORDERBOOK OF 31,4 MILLION EUR , OR +79%
- STUDIO REPRESENTS 40% OF THAT ORDERBOOK
- REVISED GUIDANCE: 2007 SALES TO EXCEED 94 MILLION EUR
- 2007 TURNS OUT TO BE A GOOD YEAR THAT ANTICIPATES ON 2008
- INTERIM DIVIDEND OF 0,80 EUR PER SHARE NEXT NOVEMBER 21, 2007.

Group Revenue and Performance

Pierre L'Hoest, CEO of EVS said: "Following a good first half driven by tapeless replacement and HDTV transition inside outside broadcast trucks and TV production studios, the third quarter reaches another record quarter with 24,4 million EUR revenues, up 1% compared to the third quarter of last year. Over the first nine months, this increase represents +2% or even +12% at constant exchange rate and excluding 2006 big events rentals. As of today, we know that 2007 sales should be at least +10% higher than 2006. Our customers, our partners and our teams all over the globe are making an impressive job to deploy EVS solutions for many leading TV productions. This great performance is explained by the overall successes of our key digital products XT[2]® and [IP]Director® in all territories".

Commenting on the results, Jacques Galloy, CFO said: "The group pursues its international expansion with new local partnerships or new offices. EVS does also reinforce future products creation and builds up R&D teams with new skills around systems integration, mass storage, telecom expertise, bandwidth optimisation, high end user applications, low bitrate deliveries like web or 3G interfaces. This translates into 28% growth in operating expenses over the 9M07 to 14,7 million EUR, representing 22% of sales while the EBIT margin over the same period represents 64% of sales".

Revenues - in million EUR
 TV Systems (Broadcast)             % 3Q07 /             % 9M07 /
 (1)                      3Q06 3Q07   3Q06     9M06 9M07   9M06
                          ---- ---- ---------  ---- ---- ---------
Total reported            24,1 24,4        +1% 66,1 67,5        +2%
                          ---- ---- ---------  ---- ---- ---------
Total at constant
 exchange rate            24,1 25,0        +4% 66,1 69,6        +5%
                          ---- ---- ---------  ---- ---- ---------
Total at constant
 exchange rate excluding
 big events rentals       23,2 24,7        +7% 61,6 69,3       +12%
                          ---- ---- ---------  ---- ---- ---------


(1) Refer to the geographical segmentation in annex 2.

EVS Broadcast sales reached 67,5 million EUR over the first nine months, which is a +5% growth at constant exchange rate. Ahead of the new TV season and program grids starting September, EVS delivered record volumes to broadcasters during summer, partly to fixed studio production environments. This evidences EVS equipment lower and lower dependency on large worldwide sporting events.

Geographically, EVS Broadcast sales grew by +48% in Asia & Pacific ("APAC") to 15,9 million EUR. Ahead of the Beijing Olympics, HD systems have been sold to OB (Outside Broadcast) vans that shall first be used for Chinese sports coverage before being used during the summer Olympics 2008.

The major one to TVB in Hong-Kong for about 1,5 million EUR. TVB is the leader of Chinese language dramas production and the TV backstage workflow shall shift from tape to EVS' XT[2]'s, [IP]Directors, Xhubs, and Xstore[2].

Geographically, EVS Broadcast sales grew by +48% in Asia & Pacific ("APAC") to 15,9 million EUR. HD systems have been sold to several Chinese TV stations and OB (Outside Broadcast) vans have been constructed ahead of Beijing Olympics 2008. Major steps have been done to enter the studio production market. EVS sold studio systems in various countries: Japan, China, Korea, Hong Kong, etc. TVB in Hong-Kong was a major milestone with the implementation of the first complete HD tapeless production and post- production environment in Asia Pacific. TVB is the leader of Chinese language dramas production." Second, America's revenues ("NALA") increased by +41% but by +52% at constant exchange rate thanks to the replacement cycle of outside broadcast trucks migrating to HDTV but also to major studio projects wins within premium customers. The seamless video and audio files transfer between EVS products and leading post-production applications helps improving our customers' efficiency, thus allowing more valuable time for the creative process. CBC/Radio-Canada, Canada's national public broadcaster, chose to install EVS equipment in its Canadian Broadcasting Centre to ensure successful and easy recording and playback of this year's NHL Playoff Games in HD. America's represent 38% of group sales for 9M07. As expected, Europe, Middle-East and Africa ("EMEA") sales over 9M07 are 30% lower than last year but the strong order intake of September and October over that region shall boost its 4Q level. In October, leading HDTV outside production group Alfacam NV has ordered more than 30 XT[2]® HD's in order to equip more than 8 new trucks for about 5,6 million EUR and RTBF has placed a 3 million EUR order to migrate its studio production towards a cutting edge tapeless and HD compatible system. EMEA is also confirming good penetration inside studio infrastructure with major customers wins like for instance Telecinco in Spain or BBC Post Production, part of BBC Resources Ltd. that produces for example "Match of the Day". Many HDTV initiatives are being announced by many broadcasters, IPTV, cable or satellite players accross Europe, what means the real take-off of HD in EMEA, for which Beijing 2008 shall be an attraction point.

40% of 3Q07 or 30% of 9M07's sales relate to studio networked systems designed for talk shows, entertainment shows, news or automated play-out, for which "speed to air" is a key success factor. Sales for near-live studio solutions amount to 19,9 million EUR, +15% compared to 2006 but the strong order intake of September and October shall translate into studio sales growth of more than 25% year-on-year. EVS presented successfully its latest line up of products at IBC2007 Tradeshow in Amsterdam last September. Customers warmly welcomed EVS integrated tapeless solutions for the critical near-live environment and much appreciated the demonstrations in the new Partners' Village area to interchange seamlessly high-end video content between EVS servers and the most popular post production solutions like AVID, Apple, Vizrt/Ardendo, Dalet etc. EVS favours an open architecture policy.

Operations, margins and result

Consolidated gross profit margin reached 87% for 3Q07 and 88% for 9M07, up from 86% over 9M06 where margins were lower due to the contribution of less profitable big event rentals. Thanks to higher sales combined with operating expenses increase of 28%, the 3Q07 EBIT margin reached 65% while 9M07 EBIT margin has been 64%, compared to 68% in 9M06 and 60% for 9M05, excl. XDC. As explained earlier, the group currently invests for future opportunities and strenghtens its organisation. The Amsterdam IBC trade fair in September has also been slightly less expensive than the USA NAB trade fair in April. The weakening USD had a 2 million EUR impact on the revenues but thanks to natural hedging and the group hedging policy, the EBIT margin decreased by only 1 percent point. The group's staffing as of 30 September 2007 was 184 (excluding XDC), averaging 174 over 9M07, up 21% versus 9M06.

The 47,2% affiliate XDC (pioneer in Digital Cinema) is deploying the 3rd generation of dedicated Digital Cinema Advanced servers and negotiating with distributors and exhibitors for the massive roll-out of digital screens. XDC contributed an operating loss of 0,7 million EUR at equity to EVS for 3Q07 and 1,5 million EUR for 9M07. In order to speed up its deployment, XDC is currently preparing the raising of around 10 million EUR of which most funds shall come from existing shareholders.

Net profit for 3Q07 amounts 9,9 million EUR, or 9% lower than 3Q06, while net profit from operations is 10,0 million EUR. Basic net profit from operations per share reaches 0,73 EUR over 3Q07, down 9% compared to 0,81 EUR for 3Q06. Excluding the negative contribution from affiliate XDC, the basic net earnings per share is 0,78 EUR for 3Q07 and 2,18 EUR for 9M07.

Net Cash and Capital

The net current cash-flow from TV operations reaches 44 million EUR over 9M07. On September 30, 2007, the group balance sheet shows 38,8 million EUR in cash at the bank and 2,5 million EUR in bank debts. At the end of the quarter, there is 13.583.129 EVS outstanding shares, i.e. 13.875.000 subscribed shares out of which 291.871 are owned by the company. At the same date, 171.650 warrants are outstanding.

                                     3Q06    3Q07    9M06    9M07
                                    Unaud-  Unaud-  Unaud-  Unaud-  9M07 /
Profit & Loss                        ited    ited    ited    ited    9M06
                                    ------  ------  ------  ------  ------
Key Consolidated figures - IFRS in
 million EUR
                                    ------  ------  ------  ------  ------
Revenue                               24,1    24,4    66,1    67,5       2%
                                    ------  ------  ------  ------  ------
Gross Profit %                          88%     87%     86%     88% +2 pct
                                    ------  ------  ------  ------  ------
Operating result - EBIT               17,0    15,8    44,6    43,5      -3%
                                    ------  ------  ------  ------  ------
EBIT margin %                           71%     65%     68%     64% -4 pct
                                    ------  ------  ------  ------  ------
Profit before taxes and exceptional
 XDC dilution profit                  16,5    15,0    40,8    42,0       3%
                                    ------  ------  ------  ------  ------
Contribution from 47% XDC affiliate   -0,6    -0,7     1,0    -1,7    -270%
                                    ------  ------  ------  ------  ------
Exceptional XDC dilution profit (1)      -       -     3,4       -    n.a.
                                    ------  ------  ------  ------  ------
Income taxes                          -5,6    -5,1   -14,7   -14,0      -5%
                                    ------  ------  ------  ------  ------
Net profit - Group share              10,9     9,9    31,0    28,0     -10%
                                    ------  ------  ------  ------  ------
Net profit from operations - Group
 share (2)                            11,0    10,0    28,3    28,9       2%
                                    ------  ------  ------  ------  ------
Net profit margin %                     46%     41%     43%     43%  0 pct
                                    ------  ------  ------  ------  ------

                                    ------  ------  ------  ------  ------
                                     3Q06    3Q07    9M06    9M07
                                    Unaud-  Unaud-  Unaud-  Unaud-  9M07 /
Per share in EUR                      ited    ited    ited    ited    9M06
                                    ------  ------  ------  ------  ------
Weighted average number of
 subscribed shares for the period   13.58-  13.58   13.64   13.59
 less treasury shares                1.951   3.129   5.576   0.352
                                    ------  ------  ------  ------  ------
Weighted average number of fully    13.77-  13.75   13.80   13.76 
 diluted number of shares            9.637   4.779   9.657   1.707
                                    ------  ------  ------  ------  ------
Basic earnings - share of the Group
 per share                            0,80    0,73    2,27    2,06      -9%
                                    ------  ------  ------  ------  ------
Fully diluted earnings - share of
 the Group per share                  0,79    0,72    2,25    2,04      -9%
                                    ------  ------  ------  ------  ------
Basic net profit from operations -
 share of the Group per share         0,81    0,73    2,08    2,13       2%
                                    ------  ------  ------  ------  ------


(1) EVS share in XDC has decreased to 47,20% from 60,17% in June 2006, leading to a dilution profit and a change in the consolidation method of XDC stake in the consolidated accounts of EVS: XDC 47,20% stake is booked at equity method.

(2) The net profit from operations is the net profit (share of the group) excluding non-recurring exceptional results, taking into account tax items.

Outlook 2007

Executing the "Speed to Air" strategy, EVS serves hundreds of TV stations worldwide with its high-end digital video and audio applications, especially in the field of live sports and near-live studio production where the company has developed leadership positions on niche markets. The migration from tape-based operations towards integrated tapeless workflows is underway and will last during the next decade. This process is accelerated by the transition from Standard Television to High Definition Television because new equipment needs to interoperate with digital solutions which shall be High Definition.

Hence, EVS directly benefits from the following long term growth drivers: increasing number video distribution channels like IPTV, transition to tapeless workflows from 70% tapebased penetration today, replacement market due to HD format conversion, launch of new products to address the near- live studio production needs, demand of new "speedclipping" tools to fragment the content to multimedia environments, and an increased focus of broadcasters / IPTV and advertisers on large popular sports to gain new viewers. EVS currently benefits from this strong momentum due to all of these drivers. The Board and the teams believe that the underlying demand for EVS products will continue to be supported by the transition to HDTV which shall impact the business over a long period of time and shall follow usual equipment acquisition wave patterns.

The global autumn book reaches 31,4 million EUR compared to 17,5 million EUR on the same date one year ago, that is +79%. The autumn order book is made first of the open order book as of 1 October 2007 to be invoiced over the current fiscal year amounted to 13,8 million EUR (vs. 9,9 million in 2006, incl. 1,1 million EUR big events rentals) and secondly of (record) 10,2 million EUR orders received in October for sales to be invoiced in 2007 (vs. 4,9 million in 2006). Third, as at the end of October, 7,3 million EUR orders are to be delivered during the next calendar year (vs 2,7 million in 2006). In other words, secured sales for 2007 as at November 1, 2007 amount 91,6 million EUR. Studio sales represents 40% of the orderbook and shall be around 30% of annual sales.

Even if visibility remains limited as usual and the weakening dollar is not a favourable factor, based on current market conditions, the Board expects 2007 to be a new record year with sales growing by slightly more than 10% above 2006, or above 94 million EUR, despite the lack of big sporting events. One should note that some 2007 equipment sales, e.g. HD vans in China, are anticipating on some big events of 2008. Next year should be a new growth year with a stronger first half. The worldwide traction of Beijing Olympics, the launch of HDTV in Europe and the growing presence of EVS inside TV studios are the main growth drivers for 2008.

Interim Dividend

Given the strong performance of the current year and after a limited review of the figures as of 30 September 2007 by the Group auditors, the Board has decided to distribute an interim dividend of 0,80 EUR per share, except for own shares. The declaration date (ex-date) is Wednesday November 21 and payment date is Tuesday November 27, 2007.

Analyst & Press meeting and Conference Call

EVS will hold today an analyst and journalist meeting in Liège at 10:30 CET, with Pierre L'Hoest, CEO EVS Broadcast and Jacques Galloy, Group CFO. A conference call in English will be held at 4:00 PM (CET) to offer another opportunity to discuss the results and recent developments. Please contact corpcom@evs.tv to receive the dial-in number and the presentation.

Corporate Calendar:

- Wednesday 21 November 2007: Declaration date (ex-date) of coupon # 5
- Tuesday 27 November 2007: Payment date of coupon # 5
- Thursday 21 February 2008: FY07 sales & earnings
- Thursday 15 May 2008: 1Q08 sales & earnings
- Tuesday 20 May 2008: Annual Shareholders Meeting

For more information, please contact:

Jacques GALLOY, Director & CFO, EVS Broadcast Equipment
Liege Science Park, 16 rue du Bois Saint-Jean, B-4102 Liège-Ougree, Belgium
Tel : +32 4 361 7014. E-mail : corpcom@evs.tv; www.evs-global.com
Forward Looking Statements

This press release contains forward-looking statements with respect to the business, financial condition, and results of operations of EVS and its affiliates. These statements are based on the current expectations or beliefs of EVS's management and are subject to a number of risks and uncertainties that could cause actual results or performance of the Company to differ materially from those contemplated in such forward-looking statements. These risks and uncertainties relate to changes in technology and market requirements, the company's concentration on one industry, decline in demand for the company's products and those of its affiliates, inability to timely develop and introduce new technologies, products and applications, and loss of market share and pressure on pricing resulting from competition which could cause the actual results or performance of the company to differ materially from those contemplated in such forward- looking statements. EVS undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

About EVS Group

EVS Group designs, develops and markets professional digital equipment for Television (EVS Broadcast) and Cinema (XDC). The Group employs over 170 persons for broadcast equipment in 11 countries and sells its products to professionals of the video and audio sectors in more than 80 countries. EVS is a public company traded on Euronext Brussels: EVS, ISIN: BE0003820371. For more information, refer to www.evs-global.com

EVS Broadcast is the world leader for Live TV Production Digital Disk Recorders and Related Software Applications, especially in the field of sports. The company's dedicated hardware and software suite offer a complete production platform: live slow motion (LSM), high speed slow motion, replay only, clips generation, quick clips editing, real-time SD/HD video files transfer, time delay, multi-camera recording, metadata association, graphics storage and play-out, digital transmission, multi- format ingest and play-back, audio record & edit, webcasting, mobile phone clipping. Main software applications like the "IP Director®" are running on the dedicated robust and flexible hardware the "XT[2]® Platform". The world's leading broadcasters, such as NBC, BSkyB, FOX, RTL, NHK, CANAL+, ABC, ESPN, TF1, CCTV, PBS, CBS, BBC, ZDF, TVE and many others use EVS' solutions.

EVS 47,20% affiliate XDC is pioneering Digital Cinema Logistics and Play- out and operates between the movies distributors and exhibitors. XDC has installed more than 250 digital screens in Europe where it is market leader for end-to-end digital cinema solutions.

ANNEX 1: EVS GROUP - IFRS CONSOLIDATED INCOME STATEMENT

                                             3Q06    3Q07    9M06    9M07
                                            Unaud-  Unaud-  Unaud-  Unaud-
(in thousands EUR)                   Annex   ited    ited    ited    ited
                                     ------ ------  ------  ------  ------
Revenue                                   2 24.073  24.359  66.128  67.524
                                     ------ ------  ------  ------  ------
Costs of sales                              -2.944  -3.071  -9.400  -8.365
                                     ------ ------  ------  ------  ------

                                     ------ ------  ------  ------  ------
Gross Profit %                                  88%     87%     86%     88%
                                     ------ ------  ------  ------  ------
Selling and administrative expenses         -2.501  -3.425  -7.537  -9.917
                                     ------ ------  ------  ------  ------
Research and development expenses           -1.461  -1.783  -4.011  -4.780
                                     ------ ------  ------  ------  ------
Other revenue                                   84     153     271     336
                                     ------ ------  ------  ------  ------
Other expenses                                 -98    -344    -179    -397
                                     ------ ------  ------  ------  ------
Stock based compensation and ESOP
 plan                                          -76      -8    -450    -622
                                     ------ ------  ------  ------  ------
Depreciation on Tax Shelter rights
 assets                                        -58     -84    -176    -252
                                     ------ ------  ------  ------  ------

                                     ------ ------  ------  ------  ------
EBITDA                                      17.494  16.171  46.036  44.970
                                     ------ ------  ------  ------  ------
Operating Profit (EBIT)                     17.019  15.797  44.647  43.527
                                     ------ ------  ------  ------  ------
Operating Margin %                              71%     65%     68%     64%
                                     ------ ------  ------  ------  ------

                                     ------ ------  ------  ------  ------
Net interest                                   138     245     413     770
                                     ------ ------  ------  ------  ------
Other net financial income /
 (expenses)                                    -51    -393    -332    -749
                                     ------ ------  ------  ------  ------
Share in the result of the enterp.
 accounted for using the equity
 method                                 7.7   -596    -694    -526  -1.548
                                     ------ ------  ------  ------  ------
Profit before taxes (PBT)                   16.509  14.954  44.202  42.000
                                     ------ ------  ------  ------  ------
                                                            -14.7   -13.9
Income taxes                            7.6 -5.615  -5.065      48      90
                                     ------ ------  ------  ------  ------
Net profit from continuing
 operations                                 10.894   9.889  29.454  28.010
                                     ------ ------  ------  ------  ------
Net gain/(loss) associated with the
 discontinued operations : (1)
                                     ------ ------  ------  ------  ------
XDC operations contribution to
 cons'd accounts                        7.7      -       -  -2.976       -
                                     ------ ------  ------  ------  ------
Dilution profit on XDC refinancing      7.7      -       -   3.368       -
                                     ------ ------  ------  ------  ------

                                     ------ ------  ------  ------  ------
Net profit                                  10.894   9.889  29.846  28.010
                                     ------ ------  ------  ------  ------
Attibutable to :
                                     ------ ------  ------  ------  ------
Minority interests (XDC)                7.7      -       -   1.180       -
                                     ------ ------  ------  ------  ------
Equity holders of the parent company        10.894   9.889  31.025  28.010
                                     ------ ------  ------  ------  ------
Net profit from operations - share
 of the group (2)                       7.9 11.027   9.981  28.328  28.884
                                     ------ ------  ------  ------  ------

                                     ------ ------  ------  ------  ------
                                             3Q06    3Q07    9M06    9M07
                                            Unaud-  Unaud-  Unaud-  Unaud-
RESULT PER SHARE                        7.5   ited    ited    ited    ited
                                     ------ ------  ------  ------  ------
(in number of shares and in EUR)
                                     ------ ------  ------  ------  ------
Weighted average number of
 subscribed shares for the period           13.58-  13.58-  13.64-  13.59
 less treasury shares                        1.951   3.129   5.576   0.352
                                     ------ ------  ------  ------  ------
Weighted average number of fully            13.77-  13.75-  13.80-  13.76
 diluted number of shares                    9.637   4.779   9.657   1.707
                                     ------ ------  ------  ------  ------
Basic earnings - share of the group
 per share                                    0,80    0,73    2,27    2,06
                                     ------ ------  ------  ------  ------
Fully diluted earnings - share of
 the group per share                          0,79    0,72    2,25    2,04
                                     ------ ------  ------  ------  ------
Basic net profit from operations -
 share of the group per share                 0,81    0,73    2,08    2,13
                                     ------ ------  ------  ------  ------


(1) Until June 27, 2006, XDC was a 60,17% EVS affiliate. From June 27, 2006, XDC has been a 47,20% EVS affiliate and therefore accounted for at equity. 2006 and 2007 accounts are presented accordingly.

(2) The net profit from operations is the net profit (share of the group) excluding non-recurring exceptional results, taking into account tax items. Refer to annex 7, note 9.

ANNEX 2: EVS GROUP - SEGMENT REPORTING

The TV activities are split over 3 regions: Asia Pacific ("APAC"), Europe, Middle-East and Africa ("EMEA") and North America and Latin America ("NALA").

(in thousands EUR)             APAC        EMEA        NALA     TOTAL 9M07
                            ----------  ----------  ----------  ----------
TV sales 9M07                   15.879      26.046      25.599      67.524
                            ----------  ----------  ----------  ----------
Evolution versus 2006 - %           48%        -30%         41%          2%
                            ----------  ----------  ----------  ----------
Segment Revenue at constant
 exchange rate                  15.879      26.046      27.651      69.576
                            ----------  ----------  ----------  ----------
Evolution versus 2006 - %
 at constant exchange rate          48%        -30%         52%          5%
                            ----------  ----------  ----------  ----------

                            ----------  ----------  ----------  ----------
(in thousands EUR)                APAC        EMEA        NALA  TOTAL 9M06
                            ----------  ----------  ----------  ----------
TV sales 9M06                   10.707      37.280      18.141      66.128
                            ----------  ----------  ----------  ----------


The EVS Group has a strong vertical integration located mainly in Belgium. Foreign subsidiaries are distribution and representation subsidiaries, which explains why most of investments and investment expenditure are concentrated in the parent company EVS Broadcast Equipment S.A..

We should also note that the EVS Group has a centralised cash management within Belgium and that only the subsidiaries based in the USA and in Hong Kong directly invoice the end customers for commercial reasons. All customers are invoiced in EUR except the United States of America, in US Dollar.

Segmenting the operating profit (EBIT) by region would not fundamentally change the understanding of the company. Indeed, according to the strong vertical integration of the group and its worldwide sale policy, that margin is quite similar over the 3 regions.

ANNEX 3: EVS GROUP - IFRS CONSOLIDATED BALANCE SHEET - ASSETS

                                           31.12.06   30.09.07
ASSETS (in thousands EUR)           Annex   Audited   Unaudited
                                    ------ ---------- ----------

                                    ------ ---------- ----------
Non-current assets :
                                    ------ ---------- ----------
Intangible assets                                 715        685
                                    ------ ---------- ----------
Lands and buildings                             5.429      5.359
                                    ------ ---------- ----------
Other tangible assets                           1.099      1.818
                                    ------ ---------- ----------
Investment accounted for using
 equity method                         7.7      6.174      5.959
                                    ------ ---------- ----------
Other financial assets                            258        295
                                    ------ ---------- ----------
Total non-current assets                       13.675     14.116
                                    ------ ---------- ----------

                                    ------ ---------- ----------
Current assets :
                                    ------ ---------- ----------
Inventories                                     7.955      8.800
                                    ------ ---------- ----------
Trade receivables                              11.601     15.858
                                    ------ ---------- ----------
Deferred tax assets                               160        124
                                    ------ ---------- ----------
Other amounts receivable, deferred
 charges and accrued income                     2.149      1.775
                                    ------ ---------- ----------
Cash and cash equivalents                      28.935     38.766
                                    ------ ---------- ----------
Total current assets                           50.799     65.322
                                    ------ ---------- ----------

                                    ------ ---------- ----------
Total assets                                   64.474     79.438
                                    ------ ---------- ----------


ANNEX 4: EVS GROUP - IFRS CONSOLIDATED BALANCE SHEET - LIABILITIES

                                                      31.12.06   30.09.07
EQUITY AND LIABILITIES                         Annex   Audited   Unaudited
                                               ------ ---------- ----------
(in thousands EUR)
                                               ------ ---------- ----------

                                               ------ ---------- ----------

                                               ------ ---------- ----------
Equity :
                                               ------ ---------- ----------
Capital                                                    8.342      8.342
                                               ------ ---------- ----------
Reserves                                                  54.402     59.934
                                               ------ ---------- ----------
Interim dividend 2006                             7.3     -6.519          -
                                               ------ ---------- ----------
Treasury shares                                           -5.985     -7.091
                                               ------ ---------- ----------
Total consolidated reserves                               41.898     52.842
                                               ------ ---------- ----------
Translation differences                                     -112       -211
                                               ------ ---------- ----------
Equity attributable to equity holders of the
 parent company                                           50.128     60.973
                                               ------ ---------- ----------

                                               ------ ---------- ----------
Minority interests                                             4          5
                                               ------ ---------- ----------

                                               ------ ---------- ----------
Total equity                                              50.133     60.978
                                               ------ ---------- ----------

                                               ------ ---------- ----------
Long term provisions                                         361        461
                                               ------ ---------- ----------
Deferred taxes                                               266        229
                                               ------ ---------- ----------
Financial long term debts                                  2.323      2.086
                                               ------ ---------- ----------
Government recoverable loans                                 834        546
                                               ------ ---------- ----------
Non-current liabilities                                    3.784      3.323
                                               ------ ---------- ----------

                                               ------ ---------- ----------
Short term portion of long term financial
 debts                                                       364        364
                                               ------ ---------- ----------
Trade payables                                             1.964      2.468
                                               ------ ---------- ----------
Amounts payable regarding remuneration and
 social security                                           2.765      2.957
                                               ------ ---------- ----------
Income tax payable                                         2.214      5.236
                                               ------ ---------- ----------
Other amounts payable, advances received,
 accrued charges and deferred income                       3.250      4.111
                                               ------ ---------- ----------
Current liabilities                                       10.558     15.137
                                               ------ ---------- ----------
Total equity and liabilities                              64.474     79.438
                                               ------ ---------- ----------


ANNEX 5: EVS GROUP - IFRS CONSOLIDATED CASH FLOW STATEMENT

                                                      9M06
                                                    Proforma
                                           9M06     EVS TV (1)   9M07
(in thousands EUR)                       Unaudited  Unaudited  Unaudited
                                         ---------- ---------- ----------
Cash flows from operating activities
                                         ---------- ---------- ----------
Profit before taxation                       44.202     44.202     42.000
                                         ---------- ---------- ----------

                                         ---------- ---------- ----------
Adjustment for non cash items :
                                         ---------- ---------- ----------
 Share in the result of the enterp.
  accounted for using the equity Method         526        526      1.548
                                         ---------- ---------- ----------
 Depreciation on fixed assets                   905        905        959
                                         ---------- ---------- ----------
- Foreign exchange result                      -291       -291       -713
                                         ---------- ---------- ----------
 Stock based compensation                       289        289        347
                                         ---------- ---------- ----------
- Provisions and deferred taxes
 increase/(decrease)                             83         83        100
                                         ---------- ---------- ----------
                                             45.714     45.714     44.241
                                         ---------- ---------- ----------
Increase (+)/decrease (-)
                                         ---------- ---------- ----------
 Amounts receivable                          -1.091       -819     -3.344
                                         ---------- ---------- ----------
 Accruals                                      -292        -54      1.064
                                         ---------- ---------- ----------
- Trade debts and prepayments                   226       -414        462
                                         ---------- ---------- ----------
- Taxes, remuneration and social
 security debts                               8.111      8.092      3.214
                                         ---------- ---------- ----------
- Other amounts payable                        -363       -533       -830
                                         ---------- ---------- ----------
- Inventories                                -1.485     -1.669       -844
                                         ---------- ---------- ----------
Cash generated from operations               50.821     50.316     43.963
                                         ---------- ---------- ----------

                                         ---------- ---------- ----------
Interest received                               557        557        914
                                         ---------- ---------- ----------
Income taxes                                -14.748    -14.748    -13.990
                                         ---------- ---------- ----------
Net cash from operating activities           36.630     36.125     30.887
                                         ---------- ---------- ----------

                                         ---------- ---------- ----------
Cash flows from investing activities
                                         ---------- ---------- ----------
Purchase/disposal of intangible assets
 (including Tax Shelter investments)            -18        -10       -260
                                         ---------- ---------- ----------
Purchase/disposal of property, plant and
 equipment                                   -3.033       -671     -1.317
                                         ---------- ---------- ----------
Purchase/disposal of leasing equipment       -3.738          -          -
                                         ---------- ---------- ----------
Purchase/disposal of other financial
 assets                                         229       -381     -1.370
                                         ---------- ---------- ----------
XDC dilution impact in investing
 activities                                  -7.665          -          -
                                         ---------- ---------- ----------
Net cash used in investing activities       -14.225     -1.062     -2.947
                                         ---------- ---------- ----------

                                         ---------- ---------- ----------
Cash flows from financing activities
                                         ---------- ---------- ----------
Operations with treasury shares              -1.394     -1.440     -1.106
                                         ---------- ---------- ----------
Other net equity variations                    -364        -94        -82
                                         ---------- ---------- ----------
Interest paid                                  -152       -152       -143
                                         ---------- ---------- ----------
Proceeds from long-term borrowings            3.050       -236       -524
                                         ---------- ---------- ----------
Dividend paid                               -16.040    -16.040    -16.253
                                         ---------- ---------- ----------
Net cash used in financing activities       -14.899    -17.961    -18.108
                                         ---------- ---------- ----------

                                         ---------- ---------- ----------
Cash from XDC operations up to June 27,
 2007
                                         ---------- ---------- ----------
EVS contribution to XDC share capital
 increases as of June 27, 2006                    -     -4.097          -
                                         ---------- ---------- ----------
Fully consolidated XDC loss as of June
 27, 2006                                         -      2.977          -
                                         ---------- ---------- ----------
Minorities share in XDC loss as of June
 27, 2006                                         -     -1.180          -
                                         ---------- ---------- ----------
EVS 60,17% down to 47,20% dilution
 profit as of June 27, 2006                       -     -3.368          -
                                         ---------- ---------- ----------
Net cash from XDC operations up to June
 27, 2007                                         -     -5.668          -
                                         ---------- ---------- ----------

                                         ---------- ---------- ----------
Net increase in cash and cash
 equivalents                                  7.506     11.434      9.831
                                         ---------- ---------- ----------

                                         ---------- ---------- ----------
Cash and cash equivalents at beginning
 of period                                   26.227     22.299     28.935
                                         ---------- ---------- ----------
Cash and cash equivalents at end of
 period                                      33.733     33.733     38.766
                                         ---------- ---------- ----------


(1) For comparison purposes, assuming that XDC was accounted for using equity method as of December 31, 2005.

ANNEX 6: EVS GROUP - IFRS CONSOLIDATED STATEMENT OF CHANGES IN NET EQUITY

                                                    Equity
                                                    attrib-
                                                    utable
                                            Curren-   to
                                            cy tra- shareh-
                                            nslati- olders
                            Availa- Treasu- on dif- of the  Minori- Total
                    Issued  ble re- ry sha- ferenc- parent  ty int-   Net
(in thousands EUR)  capital serves    res     es    company erest   Equity
                    ------- ------- ------- ------- ------- ------- -------
Balance as per 31
 December 2005        8.342  34.094  -4.220     -36  38.179   2.213  40.392
                    ------- ------- ------- ------- ------- ------- -------
Increase (decrease)
 of equity capital
 resulting from
 company regrouping          -2.908                  -2.908  -2.208  -5.116
                    ------- ------- ------- ------- ------- ------- -------
Net profit of the
 year attributable
 to the
 shareholders of
 the parent company          29.846                  29.846          29.846
                    ------- ------- ------- ------- ------- ------- -------
Operations with
 treasury shares                290  -1.683          -1.393          -1.393
                    ------- ------- ------- ------- ------- ------- -------
Dividends                   -16.462                 -16.462         -16.462
                    ------- ------- ------- ------- ------- ------- -------
Currency
 translation
 differences                                    -42     -42             -42
                    ------- ------- ------- ------- ------- ------- -------
Net profit of the
 year attributable
 to the minority
 interest                     1.180                   1.180           1.180
                    ------- ------- ------- ------- ------- ------- -------
Other increase
 (decrease)                     -36                     -36             -36
                    ------- ------- ------- ------- ------- ------- -------
Balance as per 30
 September 2006       8.342  46.004  -5.903     -78  48.364       5  48.369
                    ------- ------- ------- ------- ------- ------- -------


                                                    Equity
                                                    attrib-
                                                    utable
                                            Curren-   to
                                            cy tra- shareh-
                                            nslati- olders
                            Availa- Treasu- on dif- of the  Minori- Total
                    Issued  ble re- ry sha- ferenc- parent  ty int-   Net
(in thousands EUR)  capital serves    res     es    company erest   Equity
                    ------- ------- ------- ------- ------- ------- -------
Balance as per 31
 December 2006        8.342  47.884  -5.985    -112  50.129       4  50.133
                    ------- ------- ------- ------- ------- ------- -------
Increase (decrease)
 of equity capital
 resulting from
 company regrouping                                       -       1       1
                    ------- ------- ------- ------- ------- ------- -------
Net profit of the
 year attributable
 to the
 shareholders of
 the parent company          28.010                  28.010          28.010
                    ------- ------- ------- ------- ------- ------- -------
Operations with
 treasury shares                347  -1.106            -759            -759
                    ------- ------- ------- ------- ------- ------- -------
Dividends                   -16.323                 -16.323         -16.323
                    ------- ------- ------- ------- ------- ------- -------
Currency
 translation
 differences                                    -99     -99             -99
                    ------- ------- ------- ------- ------- ------- -------
Other increase
 (decrease)                      15                      15              15
                    ------- ------- ------- ------- ------- ------- -------
Balance as per 30
 September 2007       8.342  59.933  -7.091    -211  60.973       5  60.978
                    ------- ------- ------- ------- ------- ------- -------


ANNEX 7: EVS GROUP - NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2007

NOTE 1: BASIS OF PREPARATION

The consolidated financial statements of EVS group for the 9 months period ended 30 September 2007 are established under International Financial Reporting Standards (IFRS), as adopted for use in the European Union.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES AND METHODS

The accounting policies and methods adopted for the preparation of the Company's IFRS consolidated financial statements are consistent with those applied in the 31 December 2006 consolidated financial statements. The Company's IFRS accounting policies and methods are available in the annual report 2006 on www.evs-global.com

NOTE 3: DIVIDENDS PROPOSED AND PAID

The Board of Directors of November 6, 2007 has decided to distribute an gross interim dividend of 0,80 EUR per share for the accounting year 2007 which due date is November 21 and pay date is November 27.

(in thousands EUR)                                            2006   2007
                                                              ------ ------

                                                              ------ ------
- Final dividend for 2005 (1,20 EUR per share less treasury
 shares)                                                      16.462
                                                              ------ ------
- Interim dividend for 2006 (0,48 EUR per share less treasury
 shares)                                                       6.519
                                                              ------ ------
- Final dividend for 2006 (1,20 EUR per share less treasury
 shares)                                                             16.323
                                                              ------ ------
- Interim dividend for 2007 (0,80 EUR per share less treasury
 shares)                                                             10.867
                                                              ------ ------
                                                              22.981 27.190
                                                              ------ ------


NOTE 4: EQUITY SECURITIES

The number of treasury shares has changed as follows during the period:

                                                            2006     2007
                                                          -------- --------
Number of own shares at 1 January                          356.655  272.209
                                                          -------- --------
Acquisition of own shares on the market                    144.000   24.775
                                                          -------- --------
Sale of own shares on the market                                 -        -
                                                          -------- --------
Allocation to Employees Profit Sharing Plan                 -7.253   -5.113
                                                          -------- --------
Sales related to Employee Stock Option Plan (ESOP)          -2.500        -
                                                          -------- --------
Own shares cancellation                                   -200.000        -
                                                          -------- --------
Number of own shares at 30 September                       290.902  291.871
                                                          -------- --------

                                                          -------- --------
Outstanding warrants at 30 September                       199.100  171.650
                                                          -------- --------


Over 2007, the Board has decided to repurchase 24.775 own shares on the stock market for a global value of 1,2 million EUR, representing an average acquisition price of 49,41 EUR per share. The Ordinary General Meeting of Shareholders of May 15, 2007 has decided to allocate between 25 and 50 shares to any EVS Broadcast Equipment S.A. employee under certain conditions, representing 5.113 shares.

As of September 30, 2007, 171.650 warrants are outstanding with an average strike price of 20,68 EUR and an average maturity of 1,6 year.

NOTE 5: EARNINGS PER SHARE (EPS)

The group calculates both the basic earnings per share and the diluted earnings per share in accordance with IAS 33. The basic earnings per share are calculated on the basis of the weighted average number of ordinary shares in circulation during the period less treasury shares. The diluted earnings per share are calculated on the basis of the average number of ordinary shares in circulation during the period plus the potential dilutive effect of the warrants and stock options in circulation during the period less treasury shares.

NOTE 6: INCOME TAX

6.1. Reconciliation of the tax charge

The effective tax charge of the group obtained by applying the effective tax rate to the pre-tax profit of the group, has been reconciled for the nine first months of 2006 and 2007 with the theoretical tax charge obtained by applying the theoretical tax rate:

(in thousands EUR)                                          9M06     9M07
                                                          -------  -------

                                                          -------  -------
Reconciliation between the effective tax rate and the
 theoretical tax rate
                                                          -------  -------
Reported profit before taxes                               44.202   42.000
                                                          -------  -------
Reported tax charge based on the effective tax rate       -14.748  -13.990
                                                          -------  -------
Effective tax rate                                             33%      33%
                                                          -------  -------

                                                          -------  -------
Reconciliation items for the theoretical tax charge
                                                          -------  -------
Tax effect of tax-exempt incomes and capital gains            -10        -
                                                          -------  -------
Tax effect of Tax Shelter                                    -191     -191
                                                          -------  -------
Tax effect of deduction for notional interests               -107     -130
                                                          -------  -------
Tax effect of non deductible expenditures                      93      136
                                                          -------  -------
Tax effect of overvaluations and undervaluations related
 to prior years                                               240        -
                                                          -------  -------
Other increase (decrease)                                     579      735
                                                          -------  -------
Total tax charge of the group entities computed on the
 basis of the respective local nominal rates              -14.145  -13.440
                                                          -------  -------
Theoretical tax rate (relating to EVS TV)                      32%      32%
                                                          -------  -------


NOTE 7: DISCONTINUED OPERATIONS

On June 27, 2006, EVS diluted in XDC S.A. from 60,17% down to 47,20% following a non proportional share capital increase of 12,5 million EUR to which EVS contributed 2 million EUR. Based on the amended shareholders agreement, EVS lost its majority in the XDC Board of Directors and does not control XDC anymore as such. The share capital subscription has been fully paid. This led to a change in the way XDC is reported in EVS accounts since June 27, 2006. However, for comparison purposes, the 9M06 group accounts present XDC figures that are accounted for according to the net equity method. In 2006, following the 13% dilution, EVS has booked a dilution profit of 3,4 million EUR.

The XDC contribution breaks down as follows:

                                   1st        3rd
                                half-year   quarter
(in thousands EUR)                2006       2006       9M06       9M07
                                ---------  ---------  ---------  ---------
Revenue                               907        634      1.541      1.912
                                ---------  ---------  ---------  ---------
Gross Profit                       -1.161       -503     -1.664     -1.836
                                ---------  ---------  ---------  ---------
Operating Profit (EBIT)            -2.898     -1.346     -4.244     -3.421
                                ---------  ---------  ---------  ---------
Net profit for the period          -2.977     -1.316     -4.293     -3.612
                                ---------  ---------  ---------  ---------
Part of XDC capital held            60,17%     47,20% (1) 47,20%     47,20%
                                ---------  ---------  ---------  ---------
Net profit - share of the Group    -1.796       -621     -2.417     -1.705
                                ---------  ---------  ---------  ---------
Dilution profit on XDC
 refinancing                        3.368          -      3.368          -
                                ---------  ---------  ---------  ---------
Total contribution                  1.572       -621        951     -1.705
                                ---------  ---------  ---------  ---------


(1) 60.17% until June 27, 2006 and 47,20% thereafter.

No deferred tax asset relating to these losses has yet been recognised. The cumulated Tax Loss Carry Forward of XDC S.A. amounts to 13,9 million EUR on September 30, 2007.

NOTE 8: SEGMENT REPORTING

The primary reporting format is set by geographical area. Even though the Company is managed on a worldwide basis, it operates in three main geographical areas, as follows: EMEA (Europe, Middle-East and Africa), APAC (Asia and Pacific) and NALA (North America and Latin America). Given the centralisation of main corporate resources (R&D, Production, Marketing, Finance & Administration) in one central location, given the nature of the business, given the strong vertical integration of both group organisation and product design, the EBIT margin by geographical segment does not differ significantly from the consolidated group EBIT margin.

NOTE 9: NET PROFIT FROM OPERATIONS

The reconciliation between the net profit for the period and the net profit from operations is as follows:

(in thousands EUR)                                            9M06   9M07
                                                              ------ ------
Net profit for the year                                       31.025 28.010
                                                              ------ ------
Allocation to Employees Profit Sharing Plan (including XDC
 Plan)                                                           405    491
                                                              ------ ------
Stock Option Plan (including XDC Plan)                            90    131
                                                              ------ ------
Depreciation on Tax Shelter rights assets                        176    252
                                                              ------ ------
Dilution profit on XDC refinancing                            -3.368      -
                                                              ------ ------
Net profit from operations                                    28.328 28.884
                                                              ------ ------


NOTE 10: HEADCOUNT

(in Full Time Equivalents)                                     EVS TV
                                                             ---------
Average 9M06                                                       144
                                                             ---------
Average 9M07                                                       174
                                                             ---------
Variation                                                           21%
                                                             ---------
As at September 30, 2007                                           184
                                                             ---------


The group has recruited additional staff to reinforce R&D, Sales & Marketing, Training and Field Engineers to pursue its growth.

NOTE 11: EXCHANGE RATES

The main exchange rate that influences the consolidated financial accounts is USD / EUR which has been taken into account as follows:

- Average exchange rate over the first nin, e months of 2006 : 1,2444
- At 30 September 2006 : 1,2660
- Average exchange rate over the first nine months of 2007 : 1,3442
- At 30 September 2007 : 1,4179

NOTE 12: FINANCIAL INSTRUMENTS

Periodically, EVS measures the group's anticipated exposure to transactional exchange risk over one year, mainly relating to the EUR/USD risk. Given the group has a "long" position in USD and based on sales forecasts, EVS hedges future USD net in-flows by forward foreign exchange contracts. The relevant hedging results are booked as financial results.

On September 30, 2007, the group held 6,5 million dollars in forward exchange contracts earmarked to hedge 50% of the net future cash-flows in dollars with an average maturity date of January 29, 2008 and with an average exchange rate EUR/USD of 1,3096.

NOTE 13: SUBSEQUENT EVENTS

There is no significant subsequent event.

Contact Information

  • For more information, please contact:
    Jacques GALLOY
    Director & CFO
    EVS Broadcast Equipment
    Liege Science Park
    16 rue du Bois Saint-Jean
    B-4102 Liège-Ougree, Belgium
    Tel : +32 4 361 7014
    E-mail : Email Contact; www.evs-global.com