Myriad Group Fiscal Year 2009 Results

DUEBENDORF-ZURICH, Switzerland – 28 April 2010 – Myriad Group AG (SIX: MYRN), a global leader in mobile technology with software in over
2 billion phones, today reported pro forma revenue of USD 125.8 million, and underlying operating profit ⁽¹⁾ of USD 25.0 million, corresponding to 19.9% margin for fiscal year 2009.

 

 

“Myriad closed fiscal year 2009 with its targeted revenue and significantly improved its gross profit and EBITDA, which reflects the contribution of the former Purple Labs business along with economies of scale across our Group,” said Simon Wilkinson, CEO of Myriad. “We strengthened our market position and have invested substantially in the development of future products and services. However, our bottom line results have been impacted by the need for an impairment on goodwill and other intangible assets and by restructuring charges. We are convinced though, that this was a necessary step to ensure our long-term growth and positive development of the company.”

 

 

Revenue for fiscal year 2009 reached USD 125.8 million, an increase of 205% compared to USD 41.3 million for 2008.

 

The Device Solutions segment – which provides software and engineering services to leading manufacturers of mobile phones and other devices – reported revenue of USD 112.8 million for 2009, compared to USD 24.7 million in 2008. Revenue growth primarily resulted from the acquisition of Sagem Mobiles software activities and Purple Labs, and from new contracts with leading mobile phone manufacturers that were signed throughout 2009.

The Mobile Services segment – which provides self-care services and other solutions for mobile network operators – reported revenue of USD 13.0 million in 2009, compared to USD 16.6 million in 2008. The decline mainly reflects reduced demand from Mobile Network Operators that were reducing investment in response to the economic downturn. In October 2009, the divisional management and sales team of the Division were reorganized as part of the effort to deliver a recovery in sales growth, which Myriad management is confident can be achieved in 2010.

Gross Profit increased by 279% to USD 86.4 million for 2009, from USD 22.8 million in 2008. Increased scale and improved efficiencies of the combined company allowed the gross margin to reach 68.7% compared to 55.2% in the prior year.

 

EBITDA (before restructuring charges) increased to USD 25.0 million, reflecting an EBITDA margin of 19.9%, compared to USD 2.5 million and 6.0% margin in 2008.

 

Research & Development costs, gross, rose to USD 39.1 million compared to USD 8.2 million in the previous year (net of capitalisation USD 34.6 million and USD 3.9 million, respectively). Gross R&D as a percentage of revenue amounted to 31.1% in 2009 compared with 19.8% in 2008. Myriad believes that this investment into new applications, products and customer services is critical to the future growth of the company.

 

Sales and marketing (S&M) expenses increased only marginally to USD 9.4 million from USD 9.1 million in 2008. This reflects the substantial synergy effects delivered through the combination of the former Esmertec and Purple Labs businesses, and the elimination of duplication of sales and marketing roles within the combined group. As a percentage of revenue, S&M declined by 14.6 percentage points to 7.5% in 2009.

 

General and administrative (G&A) expenses grew to USD 24.0 million from 8.3 million in 2008, reflecting the increased number of sites and infrastructure acquired through the acquisition of Purple Labs and Sagem Mobiles. G&A expenses as a percentage of revenues declined by 1.1 percentage points to 19.1%. Myriad continues to be focussed on driving cost savings in 2010 through back office rationalisation and tighter day-to-day cost management.

 

Restructuring expenses, amortisation/impairment of intangible assets As a result of the Purple Labs acquisition, restructuring expenses and provisions in a total amount of USD 9.3 million were charged for 2009, to account for one off charges with combining the businesses. The amortisation of intangible assets amounted to USD 26.9 million compared to USD 5.2 million in 2008. Myriad recorded a non-cash impairment on goodwill and other intangible assets in a total amount of USD 35.5 million in 2009 to reduce the carrying value of goodwill and intangible assets.

 

Net loss for 2009 came to USD 51.4 million. Excluding the restructuring charges and impairment on intangible assets, net loss would have amounted to USD 6.6 million. Net loss in 2008 was USD 7.7 million.

 

Cash flow from operating activities reached USD 24.0 million for fiscal year 2009 compared to USD 0.9 million in 2008. The key driver for the increase was strong profit conversion and tight working capital management.

Balance sheet Cash & cash equivalents, including short-term investments and marketable securities, increased by over USD 34 million to USD 38.0 million as of December 31, 2009 (USD 3.7 million as of Dec. 31, 2008). Myriad remains well capitalised with USD 96.6 million of equity and an equity ratio of 56.2% as of year end 2009.

 

Outlook 2010
As of December 31, 2009, Myriad also has a strong order backlog of over USD 127 million, which provides a solid base for revenues in 2010. Overall, the company expects to achieve stable revenues and an EBITDA margin of 15-18% in fiscal year 2010. Major product releases are planned for the second half of 2010 and first half of 2011, which will lead to stronger revenue growth in the upcoming years. For 2011 / 2012 Myriad targets revenue growth in the range of 15 to 20%.

 

Information on Myriad’s Media and Analyst Briefing

 

Myriad will present its FY 2009 results to members of the media, investors and analysts.

 

Media & Analyst conference – 28 April 2010 at 09:00 a.m. CET

ConventionPoint, SIX Swiss Exchange, Zurich, Switzerland

 

For more information please contact investor­_relations@myriadgroup.com

 

A preliminary version of the Annual Report 2009, including Corporate Governance and Consolidated Financial Statements, as well as the presentation slides for the Media & Analyst conference are available on the company’s website:

http://www.myriadgroup.com/Investors/Financial-Publications.aspx

 

The full Annual Report 2009 will be published on 30 April 2010.

 

 

 

Investor Calendar

Q1 2010 Results (via conference call) 20 May 2010

Annual General Meeting 25 May 2010

 

Consolidated statements of operations

 

Note:
(1) Restated
(2) Pro forma reflects the FY 2009 results including Purple Labs contribution for the entire 12 months period. Operating expenses include deprecation costs of USD 0.490m, USD 1.212m and USD 1.405m for IFRS 2008, 2009 and pro forma 2009.

 

Segment information FY 2009 pro forma

 

Balance sheet information as of 31 December

About Myriad

Myriad Group AG is a global leader in mobile technology and has shipped over 3.2 billion software applications in more than 2 billion mobile phones. Its comprehensive portfolio includes browsers, messaging, Java, social networking, user interfaces and middleware for all types of mobile phones, from ultra-low cost handsets to advanced smartphones.

The company provides both individual components and complete solutions, which enable handset manufacturers and operators to deliver amazing experiences on mobile phones. Myriad also develops USSD-based customer self-care platforms that deliver over 10 billion messages a year to 220 million mobile users across more than 30 mobile operators worldwide.

Myriad was created from the combination of industry-leading companies, Esmertec and Purple Labs. It operates worldwide, with offices in Switzerland, France, UK, USA, Mexico, China, South Korea, Taiwan, Japan and Australia. Headquartered in Dübendorf-Zürich Switzerland, Myriad is listed on the SIX Swiss Exchange (SIX Symbol: MYRN).

 

Contacts
James Bodha - Chief Financial Officer/ Richard Hornby - Investor Relations
+41 44 823 8900
investor_relations@myriadgroup.com