Badly treated since the start of the year, in the wake of tech stocks, the Netgem title has fallen by 21%, to 1.30 euros. Looking more closely at the file, it appears that the company presents a mixed profile, both tech and services. ” Netgem was created more than twenty years ago on a ‘pure tech’ axisrecalls Mathias Hautefort, the company’s general manager. 6 or 7 years ago, we were still supplying boxes to telecom operators. We now operate television services for operators such as TalkTalk in the UK, Elisa in Northern Europe and Zeop in Reunion.. Netgem has also just strengthened its partnership with Zeop, which belongs to the family industrial group Océinde, well known on the island. ” From the fourth quarter, we will operate under the brand ZeopTV powered by Netgem the television offers intended for the 100,000 very high speed subscribers of Zeop and for its commercial conquest, details Mathias Hautefort. The impact on 2023 revenue will be significantly positive. »
At the same time, the group strengthened its OTT offer (apart from the Internet access provider, English over-the-top service) with the launch, in May, of the first subscription video-on-demand service entirely dedicated to black and white films from the Gaumont Classic catalog. He has also entered into agreements with Amazon Prime or even Netflix.
Supply
Mathias Hautefort summarizes Netgem’s business as follows: ” we provide a complete service: the box and the mobile applications, the management platform, negotiate the rights with the channels, integrate them into the service, ensure its quality and the operator distributes it to its customers. » The company is paid by the number of subscribers. At the end of June, it had 411,000, against 363,000 in December… and soon, it will have half a million. This is the goal for the end of the year. Its model provides Netgem with a fixed management income, in addition to variable income depending on the number of subscribers and, sometimes, up-front payments when the company launches a new client. The gross margin is thus recurring at 80%. At June 30, it amounted to 9.6 million euros, up 7%, for a turnover up 11%, to 16.3 million. Thanks to good cost control, gross operating profit jumped 60% to 3.2 million. Due to amortizations, the operating result remains in deficit, but less than a year ago. It comes out at -1.3 million. And the net loss group share amounted to 0.5 million, halved compared to June 30, 2021. ” Without the depreciation of assets identified as part of the full integration of Vitis at the start of 2020, the loss would only be 0.3 million “says Mathias Hautefort.
The shortage of semiconductors does not affect it too much even if one of its box suppliers, based in Shanghai, has been affected by the confinement. In the end, this only resulted in a one-month delay for one client. ” We could perhaps have had 20,000 more subscribers by the end of 2021, they simply shiftedexplains Mathias Hautefort, before adding: “In the first half of 2022, we bought the components in advance and paid $1 million for it. We have also renegotiated part of the prices with operator customers. This procurement policy is temporarily weighing on cash generation, but it will become positive again in the second half. Between July and September, turnover and gross margin will also accelerate, says the manager.
CP