Kudelski adapts to pandemic reality
February 25, 2021
The Kudelski Group, a specialist in digital security, has announced its 2020 annual results.
In 2020, total revenues and other operating income decreased to $741.5 million from $827.3 million in 2019. After a weak first half, Group sales strongly recovered in the second half producing a marginal decline of $5.3 million from the second half 2019, with cybersecurity and IoT revenues improving and Digital TV materially stable. Compared to the first half 2020, second half 2020 total Group revenues increased by $101.3 million, driven by higher sales in all segments.
The Group generated EBITDA of $64.3 million, a 58.5 per cent or $23.7 million improvement from the previous year. This improvement reflects a strong second half where the Group generated $59.4 million, a $34.3 million improvement compared to the second half 2019. Overall, the Group generated an operating income of $16.1 million, compared to a loss of $15.3 million in 2019.
With the onset of the pandemic, the Group said it has implemented a set of measures aimed at temporarily reducing its cost base to mitigate the business impact of Covid-19.
While the first half was materially impacted by strains related to the pandemic, including reduced levels of demand in the Public Access and Digital TV segments of the business, the Group swiftly adapted its structure and operations to integrate learnings from the first Covid-19 wave and ensure full business continuity in spite of extended lockdowns. In addition, the Group adjusted its marketing and sales approach to increasingly leverage digital channels to accommodate the changing needs of customers.
As a result, the second half showed more resilience than anticipated across the Group’s four business segments.
Digital TV delivered a strong 2020, with $345.4 million in net revenues and $96.9 million of EBITDA, a $5.9 million increase from 2019. Following a slow first half, second half segment revenues were in line with the second half 2019 and increased by $36 million from the first half 2020. In relative terms, EBITDA margin increased from 23.8 per cent in 2019 to 28.1 per cent in 2020.
In 2020, the Group’s cybersecurity business posted $139.9 million of gross revenues, a 2 per cent increase from 2019. 2020 net revenues were $85.3 million, and gross profits increased by 22.6 per cent to $48.4 million.
Full year revenues for the Group’s IoT business increased by $0.9 million to $3.7 million. Second half revenues more than doubled compared to the first half, still mainly driven by the IoT Services business.
Covid-19 significantly affected 2020 Public Access results, with revenues decreasing by 13 per cent year-on-year to $295.1 million. In the second half business partially recovered, posting a marginal 4.5 per cent decline compared to the second half 2019 in spite of the pandemic. Public Access reduced 2020 operating expenses by $28.9 million compared to the previous year. In addition to temporary Covid-related actions, structural headcount reduction measures enabled these cost savings. Overall, Public Access generated an EBITDA of $16.5 million, representing a $8.5 million improvement compared to the prior year.