Kudelski Group: Transformation continues
July 11, 2018
The Kudelski Group has provided a business update summarising key developments of the first half year.
The Group has said transformation continues in line with the previously announced shift of revenues from legacy digital TV to new growth initiatives. In this first half, the Group has implemented the transformation measures outlined in the last annual results presentation, aligning its digital TV operations with the new market realities and realising the initial cost reduction as planned while incurring material restructuring costs.
Conax and NAGRA organisations are now integrated. The two brands will maintain their specific go-to-market strategies, with NAGRA focusing on tailor-made solutions and complex integration projects for larger operators and Conax on lean, off-the-shelf standard solutions. The integration of the two organizations results in a stronger Group product portfolio and the elimination of duplicate positions.
Globally, the Group further streamlined its operations, with significant efficiencies realized, most notably in China, France, Norway, the US and Switzerland.
The Group said it continues to expand in the intellectual property licensing space. It announced today that it has entered into a comprehensive patent license agreement with NFL Enterprises. Financial terms were not disclosed.
With about 300 new installations in this first half year, SKIDATA continues to consolidate its market leadership with an installed base of over 10,000 sites. Headlines of this first half include large parking installations such as Detroit Airport, City of San Jose (CA) and the University of Arkansas. SKIDATA continues to experience positive momentum, but with higher seasonality than in previous years.
In parallel, the Group’s activities are increasingly expanding out of traditional pay-TV into cybersecurity and Internet of Things (IoT) security, addressing increasing market demand.
In addition to its strong US footprint, Kudelski Security is gaining traction in Europe as well. In light of the increased demand for cybersecurity services, the Group has opened a new office in Zurich, to better serve the Swiss German, Austrian and German markets, and established additional partnership with key players in the industry, such as for example Claroty, to extend its managed services offering.
Regarding IoT, an emerging high potential market for Kudelski, the Group continues to invest heavily in establishing its security platform ecosystem. In this first half, it entered into significant partnerships, including in particular with U-blox, to provide tailored security solutions in the consumer, automotive and industrial IoT verticals.
The combination of high seasonality and material restructuring costs resulted in an operating loss and net loss in line with expectations for the first half 2018. The Group confirms its 2018 full year guidance with operating income of $30 to 45 million before restructuring costs.