2019 Third Quarter Revenues
November 5, 2019
2ATEME © 1991-2019
Disclaimer
This presentation does not constitute or form part of and should not be construed as any offer for sale of or solicitation of any offerto buy any securities of ATEME, nor should it, or any part of it, form the basis of or be relied on in connection with any contract orcommitment whatsoever concerning ATEME’s assets, activities or shares.
All statements other than historical facts included in this presentation, including without limitations, those regarding ATEME’sposition, business strategy, plans and objectives are forward-looking statements.
The forward-looking statements included herein are for illustrative purposes only and are based on management’s current views andassumptions. Such forward-looking statements involve known and unknown risks. For illustrative purposes only, such risks includebut are not limited to impact of external events on customers and suppliers; the effects of competing technologies competitiongenerally in main markets; profitability of the expansion strategy; litigation; ability to establish and maintain strategic relationshipsin major businesses; and the effect of future acquisitions and investments.
ATEME expressly disclaims any obligation or undertaking to update or revise any projections, forecasts or estimates contained in thispresentation to reflect any change in events, conditions, assumptions or circumstances on which any such statements are based,unless so required by applicable law. These materials are supplied to you solely for your information and may not be copied ordistributed to any other person (whether in or outside your organization) or published, in whole or in part, for any purpose.
3ATEME © 1991-2019
Presenters
Michel ArtièresFounder & Chief Executive Officer
Degree in Engineering from Supelec, Paris, with a specialization in signal processing and telecommunications
Fabrice Sana Chief Financial Officer
Degrees from the European Business School and ESSEC
4ATEME © 1991-2019
1.ATEME for beginners2. Market Trends
3. Q3 Revenues
4. Strategy
5ATEME © 1991-2019
ATEME Factsheet
36 Patents
250 people in 18 countries
700 clients in 100 countries
Public since 2014
56.5 M€ in 2018 (+16%)
ATEME designs software video compression solutions to enable innovative live or on demand video delivery
services while preserving picture quality.
Strategic partnerships
6ATEME © 1991-2019
A Complete Offer for the Complete Video Flow
Service Provider(Satellite, Cable, Telco)
Video Headend
Event
ContributionPrimary
DistributionDistribution
OTT / Multiscreen
Subscriber
CDNContent Provider
TV Network
Kyrion encoders in the trucks and decoders at the TV station
TITAN is a virtualized Video Headend software covering all Live and File needs
7ATEME © 1991-2019
1. ATEME for beginners
2.Market Trends3. Q3 Revenues
4. Strategy
8ATEME © 1991-2019
Sept 2015
$300-500M(5-7x Sales)
acquires
Sept 2015
$125M (4x Sales)
acquires
Dec 2015
€69M (1x Sales)
acquires
Consolidation Clearing the Way for ATEME
Essentially down from 7 to 4 Players
• Envivio partners are Ericsson competitors
• Redundant employees (Sales worldwide)
• Products end of life confusing clients
• Redundant employees (Rennes R&D) Ideal
Scenario
for ATEME
Jan 2018
acquires 51% of
and becomes
Oct 2018
acquires 100% of SPVTG
and becomes
• US service providers running away from their competitor (Amazon Prime Video)
9ATEME © 1991-2019
Growing Demand For UHD TV
4K TV
+38%CAGR 2017-2022
Source : Dataxis
Growing number of 4K Set-Top Boxes
4K STB
31 millionunits
in 2017
There are now 142 channels and services transmitting in 4K worldwide of which:• 85 coming from IPTV-based services (60%) ;• 55 coming from satellite (39%) ;• 2 coming from terrestrial channels that are making experimental broadcasts (1%).
Source : Eutelsat Report, Oct. 2018
Connected 4K TV sets
162
260
379
514
658
799
2017 2018 2019 2020 2021 2022
Source : CISCO VNI global IP traffic forecast 2017-2022
By 2022, nearly two-thirds
(62%) of connected flat panel
TVs will support 4K.
Un
its
-in
mill
ion
s
10ATEME © 1991-2019
ATEME Honored By Sinclair Broadcast Group
“ATSC 3.0 will be a huge opportunity for broadcasters specifically because of the data they will be able to collect within 3.0’s IP-based delivery system that establishes two-way communication between broadcasters and viewers.” - David Smith, chairman of the Sinclair Broadcast Group.
« Next Gen TV » is based on ATSC 3.0, the new standard for the terrestrial digital broadcasting system in the United States and Korea
Sinclair and its joint venture ONE Media announced 40 U.S. cities getting ATSC 3.0 next-generation TV by the end of 2020.
$6.7B 2018 REVENUE
191 TELEVISION STATIONS
607 CHANNELS
89 US MARKETS
11ATEME © 1991-2019
Others Trends We Monitor
Dec. 1st, 2018 :NHK launched the first 8K channel in the world with a broadcast of “2001: A Space Odyssey.”NHK to broadcast 2020 Olympic Games in 8K.
Numerous Content/Service Providers launch 5G trial5G promises higher quality/faster delivery of entertainmentMay accelerate cord-cutting effect and enable more app-type bundles to succeed
12ATEME © 1991-2019
1. ATEME for beginners
2. Market Trends
3.Q3 Revenues4. Strategy
13ATEME © 1991-2019
2011 2012 2013 2014 2015 2016 2017 2018 2019
Q1 Q2 Q3 Q4
Revenues Evolution by Quarter
€37.5m
€28.6m
€12.3m
€17.9m€20.6m
€24.8m
IPO
€48.6m
+18%Organicgrowth
for 9M 2019
+14%at constant
exchange rate
€56.5m
9.6
13.7
13.6
16.5
9M 2019 : €45.5m
+1%in Q3 2019
15.4
15.2
14ATEME © 1991-2019
9M 2019 Revenue Split and Growth by Region
EMEA34%
USA/Canada39%
LATAM15%
APAC13%
USA/CAN+14%
LATAM+48%
APAC+1%
9M 2019 REVENUE SPLIT BY REGION 9M 2019 REVENUE GROWTH BY REGION
-xx%at constant
exchange rate
+xx%at constant
exchange rate
+xx%at constant
exchange rate EMEA+22%
+7%at constant
exchange rate
+40%at constant
exchange rate
-4%at constant
exchange rate
Successful roll-out of multiyear engagements with key customers
15ATEME © 1991-2019
10 109
15 383 17 502
9M 2017 9M 2018 9M 2019
USA & Canada
In €
K
+14%
+7%at constant
exchange rate
16ATEME © 1991-2019
11 705 12 598 15 314
9M 2017 9M 2018 9M 2019
EMEA
In €
K
+22%
17ATEME © 1991-2019
6 012
4 477
6 638
9M 2017 9M 2018 9M 2019
LATAM
In €
K
+48%
+40%at constant
exchange rate
18ATEME © 1991-2019
4 219
5 946 6 006
9M 2017 9M 2018 9M 2019
APAC+1%
In €
K
-4%at constant
exchange rate
19ATEME © 1991-2019
IPO July 2014
20162015
2014
Evolution Since the IPO2017
50 hires in 12 months (R&D in France, Support engineers and Sales in all 4 regions)
€12.3m
€-2.5m
€15.0m
€-1.6m
€16.3m
€0.0m
€12.9m
€-1.1m
€11.9m
€-0.9m
Phase 2:Design of TITAN 4 and reorganization of international offices
Phase 3: Commercial launch
165
135
170
€22.5m
€3.6m
Growth acceleration in H2 2016: a 2 years ROI since the IPO
Revenues
Net Loss/Profit
220
€20.9m
€0.3m
Phase 1: 30 hires in 6 months (opened Rennes R&D office)
€27.7m
€3.5m
2018
€23.2m
€-3.2m
252
€33.3m
€4.9m
€30.1m
2019
€-1.2m
274
20ATEME © 1991-2019
1. ATEME for beginners
2. Market Trends
3. Q3 Revenues
4.Strategy
21ATEME © 1991-2019
The Media Landscape
Studios/Broadcasters/NetworksCreated string brands in the 80’s-90’s
Service Providers (MVPDs) Historically, got the broader access to customer
SVOD or Ad-Supported VOD ServiceImpose Binge Watching as the Way to consume video
Virtual Service Providers (vMVPDs)New content or Skinny cost-effective bundlesNew
Entrants
Digital Native
Traditional Players
TV/STB native
Content ProvidersCreate/Produce/License Content
Service ProvidersAggregate/Distribute Content
22ATEME © 1991-2019
Prepare Expanding to CPs and SPs OTT delivery
Service Provider(Satellite, Cable, Telco)
Video Headend
PrimaryDistribution
Traditional Distribution
SubscriberCDN
Content ProviderTV Network
CDN
2 Enable new decentralized
distribution workflow for SPs
1 Enable CPs’ direct access
to consumers
OTT
Most of ATEME business today
Playout Compression Distribution
23ATEME © 1991-2019
Playout Brings Video Contents To Home
Live Streams
Video Files
Subtitles
Playlist
Graphics
PLAYOUT
Source : ESPN User Interface
24ATEME © 1991-2019
TITAN Business Model
Industry standard : Project based business model New business model : Multi-year Engagement
• TITAN pay-up perpetual licenses (1 license per SD/HD/UHD channel)
• Recurring Annual support 15-20%
• Optionally some clients source the servers from ATEME
ATEME benefit: revenue predictability
Customer benefit: guarantee their move to a new video compression vendor is future proof
Year1 Year2 Year3 Year4 Year5
*
*Optionally some clients source the servers from ATEME
“Recurring CAPEX”:
• Most clients need additional licenses for extensions• Largest clients operate in multiple sites or countries
Each project includes: Largest clients operate multiple video headends
We offer these clients to “drive” ATEME software roadmap against multi-year commitment
25ATEME © 1991-2019
2020
2019Win the Video Head End market and prepare expanding to CPs and SPs OTT delivery
Gross Margin expected up(shift to software)
Increasing operating profit every year
Multi-year contracts leading to increasing predictability in topline growth (+20%), with contribution from all 4 regions
2 Year Plan
S&M investments to
keep developing our
international coverage, but will
not grow as fast as the topline
R&D investments to
develop innovative
Network solutions, but will
not grow as fast as the topline
26ATEME © 1991-2019
Investor Relations
Next investor dates
Market data
ISIN: FR0011992700 - Ticker: ATEME
Stock price: €11.98 (as of November 4, 2019)
Market cap: €125.4m (as of November 4, 2019)
Nov.14, 2019 TECH40 Investor Forum (Oddo),
Frankfurt
Dec.3, 2019 Technological Innovation Seminar
(Portzamparc BNP Paribas), Paris
Jan. 30, 2020 2019 Annual Revenues
Concert Artières
12%
Xavier Niel5%
Keren Finance
6%
Axa IM5%
Others < 5%72%
Liquidity contract: Gilbert Dupont
Source : Company, as of October 31, 2019
Shareholder structure Stock Price (€) Volume (€)
Number of shares: 10,463,938Potential dilution : 168,188
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