ADB Group reports first half 2010 financial results

As expected, the first half of 2010 marked the return of the more typical seasonality pattern of the business and thus the revenue remained at a lower level of US$ 141 million, compared to US$ 183 million for the same period last year when the revenue distribution was unusually even. This revenue development was caused primarily by three factors: large customers returning to normal seasonality pattern, component shortage, and a slight delay in introducing new products to the market. All this pushed certain amount ofsales from first half to the second half.

Gross profit amounted to US$ 49.0 million, or 34.7% of revenue, which is within management’s long-term expectations and in the upper range for this industry. The 2010 first half Earnings Before Interest and axes amounted to US$ 3.7 million or 2.6% of revenue, compared to US$ 12.4 million for the same period in 2009. This is a direct result of lower revenue and gross margin levels, which were successfully compensated by business model scalability and strict cost control. Earnings per share were US$ 0.50. The Group closed the semester with a strong net cash position of US$ 44.4 million and with a gross cash position totaling US$ 75.0 million, after repurchasing shares for US$ 8.3 million.

During the first half of 2010, the Group invested significantly in developing and launching new products. Some 12% of the period revenue was already generated by new products, and more is scheduled for the latter part of the year. By the end of the year, the Group will have an entirely renewed product portfolio, delivering unprecedented performance and features, such as highly acclaimed Carbo User Interface (including its 3D version), WiFi-enabled hybrid satellite PVR products and its next generation DVR- Lite™ connected Set-Back Box.

Outlook for 2010
The Group has carefully reviewed the outlook for 2010, in particular the component shortage situation, which is now expected to stretch well into 2011. This situation limits upside opportunities while creating a higher than normal level of risk. The order pipeline is solid and the demand remains strong. Thus, the Group sharpens the guidance for the full year as follows: · Revenue growth around 10% for the full year 2010 · EBIT percentage around mid single digits

Business overview
The early part of the year was particularly strong for the satellite business, due to the demand in both Eastern and Western Europe. Satellite segment increased to a record level of 32% of the Group revenue, compared to 29% in 2009. The IPTV segment enjoyed a growth spur as well, bouncing back to 27% of the Group revenue from the last year’s 19%. Cable business declined temporarily, accounting for 29% of the Group revenue, compared to 39% in 2009. Terrestrial business in terms of Group revenue stayed stable at 11% compared to 12% in 2009. It needs to be noted that the products sold to retailers include both terrestrial and satellite products of the Group.

The Group’s positioning on high-end products remains widely unchanged. High-Definition TV products accounted for 74% of product sales revenue, and Personal Video Recorders (both high and standard definition) represented 52% of the revenue. The sales of our hybrid products represented 62% of the product sales, reflecting the demand from retail product line which is only starting to benefit from hybrid capabilities. As a total, the high-end products constituted 84% of the Group overall product sales, in line with the 85% of full year 2009.

The Group opened three strategically important new markets during the first half of 2010: UK Freeview HD market with embedded BBC iPlayer, and the expansion of our Eastern European presence to Bulgaria with CableTel. Furthermore, during the first half of this year the Group also established its presence in India with two cable customers already won, and in Indonesia with one new customer win. ADB will deliver a full solution to these customers, including head-end technology, MHP middleware, set-top boxes and Carbo UI. The IPTV business expanded to Caribbean Islands with a new customer Telecommunications Service of Trinidad and Tobago.

Geographically, Western Europe brought the majority of the Group revenue with 54% contribution, (56% in 2009). Eastern Europe accounted for 23% of the Group revenue, whilst Middle East and Africa grew to 16% of the revenue. Americas brought in 5% and Asia Pacific 2%. The top ten customers amounted to a total of 89% of the revenue, which is comparable to the previous years.

Dividend distribution
In June 2010, the Annual General Meeting of the Shareholders approved the Board’s recommendation to pay the first dividend in the history of ADB Group for a total gross amount of CHF 3.00 per share. The dividend was paid out on 15 July 2010.

Conference call
ADB Group management will hold a telephone conference to discuss the 2009 financial results and outlook for the year 2010, today, at 15.00 CET. To connect to the conference call, participants should dial the following number: +41 (0) 44 580 64 03 During the presentation, please press "01" on your telephone keypad if you wish to ask a question.

Contact
Tina Nyfors Executive Vice President Corporate Development Tel: +41 22 592 8433 Fax: +41 22 592 8432 t.nyfors@adbglobal.com

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