CEO Statement Q2 2021

Strategic initiatives ensure continued growth
We are delivering according to plan and our measures are starting to yield results

After a cautious start to the year, sales and operating earnings are now increasing year-on-year. The successful integration of Aperi has broadened our customer offering. We increased our patent protection for time synchronization over existing IP networks and further strengthened our position. We are seeing an increase in our customers’ investment appetite, even if the market still remains affected by Covid-19.

We are delivering on our strategy which is focused on building a more competitive portfolio and improved commercialization. The strategy is now starting to yield results in the form of increased growth.

Our strengthened offering has attracted a positive market response. Our clear shift towards the cloud and IP–including through our platform Nimbra Edge and the acquisition of Aperi–has ensured a clearer and more future-proof roadmap.

Towards the end of the first quarter, we ended all furloughs in Sweden. Although we have increased our activity internally, efficiency gains have reduced our costs and improved profit. As part of our continued streamlining of the operations we divested ScheduALL on March 31.

We are currently in talks with operators and partners regarding time synchronization, which is becoming increasingly important in IP media and 5G. We have carried out customer tests in operator networks, improved our solutions over existing IP networks and increased our patent protection.

Covid-19 has led to a continued shortage of components. The situation is currently stable and we carefully monitor developments and proactively try to limit the impact.

Good roadmap leads to increased sales
Our clear roadmap and the accelerated development of Nimbra have been well received by the market, yielding several important deals with existing customers such as Arqiva, The Switch, Globecast UK, NEP Connect and RTVE.

Many of our customers have significant installations of our products for Euro 2020 and the summer Olympics, although revenue remained limited for the quarter seen in isolation.

The entire sector is now moving to IP-based workflows. Our broad product portfolio allows us to offer a seamless transition to IP and makes it easier for customers to upgrade their networks. This allows businesses to avoid major investments, and means that they can easily add capacity, new functionality and services as their needs increase. It is great to see that our installation of a virtualized IP media network to Shanghai Media Group has attracted the market’s and our customers’ attention in Q2.

Investment in the Aperi portfolio
In line with our earlier decision, our Nimbra products will use JPEG-XS and ST 2110. We have now also decided to introduce these new standards in our Aperi portfolio. The ST 2110 technology ensures more flexible management of video, audio and other media flows in remote and live production. An increasing number of TV companies are investing in this technology for their new studios. JPEG-XS is a new standard for video compression that has been adapted for high quality and low latency, a pre-requisite for efficient remote production.

The investment is part of our strategy to offer open, automated and standardized IP solutions for all kinds of network, including cloud-based networks.

Our growth journey continues
We are continuing our journey towards strengthening Net Insight through rationalizations and clearer priorities. We have clarified our offering of IP and cloud-based services and further sharpened our focus on product development. In the period, we entered into several new strategic partnerships and won important key business.

Our performance in Q2 is the result of our employees’ extensive commitment and capacity for securing deliveries. I look forward to an exciting fall.

Solna, Sweden, July 16, 2021
Crister Fritzson, CEO

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