The quarter was dominated by several new product launches, continued success for Sye and streamlining. Revenues of SEK 111 million were in line with the previous year. Operating earnings excluding items affecting comparability totaled SEK -6 million.
Key agreement for Sye with a US Fortune 500 company
As previously communicated, we have implemented a number of measures aimed at improving profitability and efficiency. At the beginning of the quarter, we announced organizational changes and a savings program. The savings program, which generates an annual cost saving of some SEK 25 million, has now largely been completed, and gave rise to non-recurring costs burdening operating earnings with some SEK -6 million in the quarter. The continued restructuring mainly relates to moving closer to customers and developing our product portfolios to ensure competitiveness.
In the quarter, SVT (Swedish national TV) carried out the world’s largest remote TV production in connection with the Alpine World Ski Championships in Åre and the Biathlon World Championships in Östersund, both in Sweden. Production was enabled by Net Insight’s staff and technology, including Nimbra 1060. Remote production normally uses 6-24 cameras. The Alpine World Ski Championships in Åre was a more demanding event, with close to 80 cameras broadcasting to around 700 million viewers around the world. This meant that SVT and Net Insight have set a new benchmark in remote production for major sporting events. SVT and Net Insight have collaborated on remote production for a number of years, and while this new production method certainly has a bright future, we need to have respect for the time it will take broadcasters to adopt the new working methods. Other positive Nimbra
news in the quarter included a major US broadcaster choosing to continue to upgrade its national studio network based on Nimbra 1060, Nimbra being selected for the Pan American Games in Peru, and by LinkedIn Corp for remote production. I would also like to highlight Nimbra Edge, a cloud-based live media transport solution launched at the annual NAB trade show in Las Vegas at the beginning of April.
In February, we signed a key agreement relating to Sye with a US Fortune 500 company for their live video streaming service. The customer roll-out of Sye has started, albeit on a limited scale and does not yet affect revenue. This contract made a significant impression on the market, and we have seen significant interest in Sye from several very interesting operators. Volumes for the Sye Streaming Service, where the largest customer is the live quiz app Primetime, have increased significantly since launch a year ago. The Primetime concept, based on Sye, has now been licensed to five countries. Securing the Fortune 500 agreement and the Primetime successes are clear evidence that Sye provides world-class performance advantages within a highly relevant area of the media market place. There is a possibility to achieve a good return on an increased investment in order to approach a larger number of customers faster.
The previously communicated modernization of the ScheduALL solution continued at a high pace. The modernization process, which is based on an evolutionary process of adding cloud services as well as mobile, social and analytics functionality, was introduced to selected customers in the quarter. The response has been very positive to date, with initial launch taking place at the NAB show. The roll-out will start from year end. Revenues in the quarter totaled SEK 111 million, in line with the previous year. Operating earnings excluding items affecting comparability totaled SEK -6 million. Sye contributed SEK -10 million, generating operating earnings excluding Sye and items affecting comparability of a positive SEK 4 million. My main impressions from the recently concluded NAB Show include positive customer feedback and rapid technological progress, generating both opportunities and challenges for Net Insight. To conclude, this was an eventful quarter where we completed measures aimed at improving profitability, streamlining operations and generating scope for continued investments.
Solna, April 25, 2019
Henrik Sund, CEO