Artilium plc

("Artilium" or the "Company" or the "Group")

Half yearly results for the six months ended 31 December 2016

Artilium plc (LSE/AIM: ARTA), the AIM quoted provider of innovative telecommunication software and solutions, announces its unaudited half yearly results for the six months ended 31 December 2016.

Highlights

§ Revenue for the six months to 31 December 2016 was € 5.1 million (2015: € 4.3 million)

§ Adjusted EBITDA of € 0.1 million (2015: € -0.2 million)

§ Net loss after tax of € 0.9 million (2015: net loss after tax of € 0.8 million)

§ Several new MVNOs activated and new large customers won on cloud PBX

§ Successful integration of Ello Mobile, acquired in December 2016

Post Period End

§ Telenet licence renewed in February 2017 for € 5.3m for services over the next five years

Commenting on the results and outlook, Jan-Paul Menke, Non-Executive Chairman of Artilium said: 

"Artilium has made strong progress in the last six months with increasing volumes of our ARTA® software delivered as well as building a healthy order book."

"The telecommunication market continues to move towards innovative software and consequently we are benefiting from this as a leading provider of these services. Our cloud and datacentre telecom solutions make us attractive on a worldwide scale, particularly in emerging markets.  We are now active in numerous countries and additional business growth is expected, especially from new markets such as Africa."

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

For further information please contact: 

About Artilium  

Artilium is a demonstrated leader in the development of next generation communication technologies. Artilium's strategy focuses on supporting its customers to successfully grow their business by providing flexible, cost effective and innovative solutions.

Artilium's innovation-driven strategy empowers telecom operators around the globe to face the tremendous challenges ahead. We combine next-generation technology with traditional telecom environments to create exciting new business opportunities for our customers. This ensures that our customers are able to keep up with rapidly evolving market demands while simultaneously growing their businesses.

ARTA® is the real-time Authentication, Authorization and Accounting (AAA) software that brings a full suite of new functionalities to telecom Operators and virtual Operators. Thanks to ARTA® value-added services portfolio, including for instance AAA of voice, text and data services, VoIP, 3G and 4G compliance, mobile payments and location-based services, our partners are more than ready to meet future customer needs.

Today, multiple renowned national and international telecommunication companies rely on Artilium to deliver voice, text and data services to about 1.5 million end users every day.

Artilium's "Pay-As-You-Grow" model allows us to scale our solutions to the exact needs of our customers. As a latest innovation, Artilium offers its product suite from the Cloud as a PAAS (Platform As A Service), yielding ARTA's scalability, flexibility and proven stability.

Artilium plc is a publicly listed software company on the London Stock Exchange (LSE/AIM: ARTA).

Forward Looking Statements

This report contains certain "forward looking" statements and information relating to the Company that are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. When used in this report, the words "anticipate", "believe", "estimate", "expect", and "intend" and words or phrases of similar import, as they relate to the Company or its subsidiaries or Company management, are intended to identify forward-looking statements. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitation, competitive factors, general economic conditions, customer relations, relationships with vendors, borrowing arrangements, interest rates, foreign exchange rates, litigation, governmental regulation and supervision, seasonality, product introductions and acceptance, technological change, changes in industry practices, one-time events and other factors described herein and in other announcements made by the Company. Based upon changing conditions, should any one or more of these risks or uncertainties materialise, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The Company does not intend to update these forward-looking statements.

Chief Executive's Statement

Introduction

We have made strong progress in the last six months with the delivery of increasing volumes of new software and building a healthy order book. Our international list of prospects for our products and services is growing, giving us confidence in expanding our international customer base.

Financial results

Reported revenue for the six months to 31 December 2016 of € 5.1 million (2015: € 4.3 million) was generated primarily from maintenance and professional services rendered to existing customers and by United Telecom fixed calling, broadband and mobile services.  The Group generated a gross profit of € 3.8 million or 74.3 per cent. of reported revenue (2015: € 2.8 million or 65.3 per cent. of reported revenue) and generated an adjusted EBITDA of € 0.1 million (2015: € -0.2 million).

The Group reported a net loss after tax of € 0.9 million (2015: net loss after tax of € 0.8 million).

Business overview

The Artilium business delivered a successful release of its billing and activation software to its fast growing strategic partner in datacentre technology Green IT Globe ("GIG"). The business also secured a strategic alliance with GIG to successfully launch the OneApp, which is capturing the mobile data cloud market. The agreement with GIG is aimed at the rapidly growing African and Asian markets where consumption and the need for mobile storage and cloud services are rapidly increasing.  According to Cisco Global Cloud Index ("GCI"), global storage requirements are expected to grow from 14 exabyte ("EB") annually in 2014 to 39 EB by 2019 at a compound annual growth rate of 23 per cent, which presents significant future opportunity for the Group.  We are pleased to confirm that Artilium has signed its first customer within the Africa region, and hope to sign more within our target emerging markets.

At United Telecom ("United"), several new MVNOs were activated and new large customers won on cloud PBX. Ello Mobile, acquired in December 2016, is an excellent mobile brand with a loyal following to United's offering and has been successfully integrated. United has returned to growth as its product capabilities and pricing of its offering have been strengthened.     

At Comsys, our specialist interactive telephony services business, performance was solid during the first half and integration with the Artilium platform is going well, allowing the business to sell additional value added services to both existing and new customers. We are particularly encouraged by the integration of Livecom into Comsys and the wider Artilium group.  The Group can now offer customers and potential customers with a multi-channel call centre solution, and through these Group synergies we can offer clients the full range of services, which positions us well for future growth.

The telecommunications market continues to move towards innovative software and consequently we are benefiting from this as a leading provider of these services. Our cloud and datacentre telecom solutions make us attractive on a worldwide scale. We are now active in numerous countries and additional business growth is expected, especially from Africa.

I would like to thank all employees and shareholders for their efforts and trust in the management team as we continue to build momentum and add further value to our customers.

Current trading

In January 2017, we secured an expanded MVNE platform agreement with our largest customer, Telenet Group BVBA ("Telenet"), securing the relationship for the next five years. Telenet has decided, given the importance of the partnership and their overall satisfaction with our solutions, to make a commitment to us for the services it is due to receive over the next five years. As part of the extension, we have received cash of €5.3 million, comprising revenue which will be recognised in equal instalments over the next five years.  New opportunities are also developing in the Internet of Things ("IoT") market and from this we are developing billing and invoicing software as well as cloud services from which we expect further growth going forward. We are investing in additional platform capabilities to capture this growing market in the future. 

Bart Weijermars

28 March 2017

CONDENSED CONSOLIDATED INCOME STATEMENT

A key performance indicator for the Group is adjusted EBITDA. This was € 0.1 million for the six months to December 2016 (2015: € -0.2 million). The reconciliation of adjusted EBITDA to the income statement is disclosed below.

Reconciling table operating result-adjusted EBITDA

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)