KERLINK (EPA:ALKLK) - Second-quarter 2019 revenue: €3.4M; -12%

Transparency directive : regulatory news

23/07/2019 17:40

Second-quarter 2019 revenue: EUR3.4M; -12%
Revenue still impacted by the wait-and-see approach of telecom carriers
Initial impact of the strategy rolled out with private carriers

PRESS RELEASE
Thorigné-Fouillard, 23 July 2019, 5.45 p.m.

Thorigné-Fouillard, France - Kerlink (ALKLK - FR0013156007), specialising in
network and IoT solutions, published its second-quarter 2019 revenue today.

Revenue by activity
In thousands of euros
                     Q2 2019  Q2 2018 Change H1 2019 H1 2018 Change
Historic and
alternative
telecom operators      561     1,303   -57%    1,103  3,386  -67%
Private operators    2,852     2,477  + 15%    5,181  4,940   +5%
Reference design        60       148   -59%      178    193   -8%
Total                3,473     3,928   -12%    6,462  8,520  -24%
IFRS - Unaudited figures

The Group's second quarter 2019 results reflect the initial benefits of the
strategy rolled out with private carriers. In this segment, sales over the
period were up 15% compared with Q2 2018. Sales in the same segment saw an
increase of 22% on Q1 2019.

Overall, Q2 2019 results came to EUR3.5m versus EUR3.9m in 2018.

As expected, weak business momentum in the historic and alternative telecom
carriers segment had an impact on first-half revenue, which fell 24% to EUR6.5m
compared with EUR8.5m a year earlier. It should be noted that Q1 2018 revenue
in this customer segment was particularly robust. Restating this period of two
major contracts with Tier 1 carriers (Tata Communications and a historic French
carrier), revenue for the first half of 2019 remained stable overall at EUR6.3m
(-1%).

Initial impact of the strategy aimed at private carriers

In the face of the continued wait-and-see approach of telecom carriers, market
growth is expected to be based mainly on private carriers which will give
priority to the implementation of their own IoT network. Against this backdrop,
Kerlink has embarked on a deliberate strategy aimed at establishing an
ecosystem of partners in order to offer end-to-end vertical solutions.

The growth of sales in the private carriers segment in Q2 offset the 5% decline
seen in Q1 2019. Overall, measures taken to increase sales in this priority
segment over the quarter allowed the Group to boost revenue by 5%. These
encouraging initial effects should gradually carry forward over the next few
months to become real growth drivers in 2020.

Stability of revenue in value-added services

Revenue by business unit
In thousands of euros
                      Q2 2019 Q2 2018 Change H1 2019 H1 2018  Change
Kerlink
Infrastructure
Solutions              2,361   2,799  -16%    4,503   5,856    -23%
Kerlink Advanced
Services               1,112   1,128   -1%    1,959   2,663    -26%
Total                  3,473   3,928  -12%    6,462   8,520    -24%
IFRS - Unaudited figures

Revenue for the Kerlink Advanced Services business unit remained stable in Q2
2019, at EUR1.1m. Note that in Q1, the Group continued to be impacted by a
slowdown in the pace of rolling out major IoT projects at historic telecom
carriers, which started in 2018. Revenues from this Business Unit in H1 2019
are stable overall, accounting for 30% of the product mix. Sales over the
period, amount to EUR2.0m.

In the infrastructure segment (Kerlink Infrastructure Solutions), results for
the quarter were down as anticipated, falling 16% to EUR2.4m compared with the
same period in 2018.

Revenue growth in Europe, decline in other regions

Revenue by geographical region
In thousands of euros
                       Q2 2019  Q2 2018 Change H1 2019 H1 2018  Change
NCSA (Americas)             87      126   -31%     112     183    -39%
APAC (Asia-Pacific)         68      608   -89%     343   1,589    -78%
EMEA, excl. France       1,141      418  +173%   1,986   1,444    +38%
International            1,297    1,152   +13%   2,441   3,216    -24%
France                   2,177    2,776   -22%   4,022   5,304    -24%
Total                    3,473    3,928   -12%   6,462   8,520    -24%
IFRS - Unaudited figures

Quarterly sales in the NCSA region were down 31%. This includes the signature,
over the course of the period, of a multi-year NaaS (Network as a Service)
contract signed with IoT America, as a result of which revenue is automatically
reported for the duration of the contract. This type of contract allows the
Group to recognise recurring revenue and to provide both infrastructures and
high value-added services in the context of an all-in-one offer.

In the France and APAC regions, Kerlink benefited from two major contracts
signed with Tier 1 carriers (Tata Communications and a historic French
carrier). The delivery of these two contracts in 2018, and the absence of
equivalent projects in 2019, explains the decline in revenue in these two
regions. In Asia, the Group will adapt the structure of its subsidiary in what
is still considered a high-potential market.

Measures to stimulate growth in the APAC region will be overseen by René
ARBEFEUILLE, recently appointed Vice President of the Asia-Pacific subsidiary.
He brings to Kerlink more than 25 years of international experience in the
telecoms and IoT industries, including more than 15 years in Asia.

Finally, in the EMEA region (excl. France), sales were up sharply as a result
of the various partnerships signed over the past few months.

Revision of 2019 objectives
Over the next few months, Kerlink anticipates an increase in revenue compared
with the first part of the year. However, this improvement will not allow the
Group to reach the objective of a return to growth that had been set for the
year.

About Kerlink Group
Kerlink Group is a leading global provider of end-to-end network solutions for
the Internet of Things (IoT), serving telecom operators, businesses and public
authorities worldwide. Based in Thorigne- Fouillard, France, with a U.S.
subsidiary in Chicago, Kerlink is a leading global provider of LoRaWAN network
equipment, software and services. Its growing suite of turnkey IoT services
includes network planning, design and operational management that maximizes
performance of its market-leading, carrier-grade infrastructure offering. The
Group, widely recognized for its IoT expertise, also continually introduces
innovative value-added services, such as network-based geolocation, remote
end-device management and low-power IoT reference design, which allows its
customers to quickly bring to market IoT-ready devices and to imagine
innovative business models to monetize their deployments. Most recently,
Kerlink introduced an expanded service, solution design, as part of its growing
suite of services for companies and smart cities.

In just over 10 years, more than 100,000 Kerlink installations have been
deployed in more than 69 countries. In 2018 Kerlink supplied more than 330
customers, including major telecom operators such as Tata Communications, and
service providers such as GrDF and Suez. The company's solutions are enabling
IoT networks worldwide with major deployments in Europe, South Asia, South
America and Oceania. Kerlink, a co-founder and board member of the LoRa
AllianceTM, has invested more than EUR15 million in research in the past three
years. It has been listed on Euronext Growth Paris since May 2016 and was added
to the EnterNext PEA-PME 150, an index of 150 fast-growing French SMEs, in
2017.

For more information, visit www.kerlink.com or follow us on Twitter
@kerlink_news.

                              Upcoming events

                              H1 2019 Results
                    26 September 2019, after market close

                             Q3 2019 revenue
                   22 October 2019, after market close

www.kerlink.fr

Investor contact:
Actifin
Benjamin Lehari
+33 (0)1 56 88 11 25
blehari@actifin.fr

Financial Press contact:
Actifin
Isabelle Dray
+33 (0)1 56 88 11 29
idray@actifin.fr

Press and Market Analysts contact:
Mahoney Lyle
Sarah Lyle
+33 (0)6 75 85 60 42
slyle@mahoneylyle.com

www.kerlink.com          fr.linkedin.com/company/kerlink   @kerlink_news

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KERLINK (EPA:ALKLK) - Second-quarter 2019 revenue: €3.4M; -12%

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