Avemio AG remains on course for growth after forecast adjustment for 2023 – market weakness opens up attractive opportunities for M&A activities

Avemio AG remains on course for growth after forecast adjustment for 2023 – market weakness opens up attractive opportunities for M&A activities

Frankfurt/Main, 22 January 2024 – Avemio AG (ISIN DE000A2LQ1P6, WKN A2LQ1P), a leading system supplier for hardware and software in the field of broadcast as well as professional media, audio and video solutions, today adjusted its forecast for the 2023 financial year, in particular as a result of an unexpectedly weak final quarter in the trading business. For this reason, the realization of already planned synergies from the acquisitions made and the integration of existing subsidiaries will now be accelerated. The aim here is to strengthen profitability in view of the changed market environment. The Executive Board emphasizes that the current market weakness, as part of a normal industry cycle, also offers opportunities given the impact on smaller competitors. The Company's growth strategy will continue to be driven forward.

Fourth quarter of 2023 characterized by economic investment restraint after strong coronavirus years

The unexpectedly weak final quarter in the trading business is a consequence of the previously strong investments by customers in the coronavirus years and the persistent weakness of the economy as a whole, which, contrary to expectations, did not dissipate in the second half of the past financial year. At the subsidiary BPM Broadcast & Professional Media GmbH, which specializes in high-priced capital goods and project business with complete production, post-production and broadcasting systems, corporate customers' spending propensity was temporarily dampened by increased financing costs and a lack of innovations for professional film and television technology. The performance of the subsidiary VDH Video Data Handels GmbH, which specializes in consumer and semi-professional products, was impacted not only by higher inflation but also by the declining investment propensity of content providers, many of whom are financed by advertising.

In contrast, Teltec AG's business performance was robust thanks to its diversified product portfolio. The Avemio Group's largest trading company was able to prevent a significant drop in revenue, but not a fall in gross margins. Market prices were under increased pressure on margins in all areas last year. The digitization business with the planning, creation and system integration of media technology workflows with proprietary software products and cloud offerings continues to open up great opportunities for the future. The technical equipment for the European Football Championships taking place in Germany in summer 2024 and the 2024 Summer Olympics in Paris are particularly promising.

Solid financing for a targeted growth strategy

With equity of around EUR 12.5 million, corresponding to an equity ratio of around 35%, Avemio AG has a stable balance sheet structure as at 31 December 2023 based on preliminary figures. Cash and cash equivalents of EUR 5.8 million and additional free credit lines of around EUR 2.6 million form a solid foundation and also provide for further company growth. In addition, there is a commitment from the state of Hesse for mezzanine financing of EUR 5 million to support planned acquisitions in an equity-friendly manner.

Notwithstanding the current challenging market conditions, the Executive Board believes that Avemio AG is in a stable market position to benefit from the growth potential and the usual catch-up effects of the trading business in conjunction with the high-margin digitization business when the economy recovers.

Ralf P. Pfeffer, CEO of Avemio AG: “I am no stranger to difficult situations and overcoming them in my thirty years as an entrepreneur. Without crises in recent years, it would never have been possible for us to unite all major competitors in Germany and Austria under one roof and thus lead the German-speaking market unchallenged today. Our goal is and remains to expand our ambitions and experience in this area to the European market environment. This is just as highly fragmented today as the German-speaking market was just a few years ago. In this respect, Winston Churchill's motto also applies to us in this phase: Never let a good crisis go to waste.”

Forecast adjustment reflects adjustment to current market environment

Based on the preliminary figures for the fourth quarter of 2023, the Executive Board now expects revenue of around EUR 103 million for the 2023 financial year (previously: EUR 120 million; 2022: EUR 108.7 million) and, taking into account preparations of further acquisitions, earnings before interest, taxes, depreciation and amortization (EBITDA) of around EUR 0.8 million (previously: EUR 5.0 million; 2022: EUR 4.4 million). According to preliminary calculations, cash flow from operating activities will amount to around EUR 1 million in the past financial year.

Webcast/Conference Call:

CEO Ralf P. Pfeffer and CFO Norbert Gunkler will explain the current development in a webcast presentation tomorrow, 23 January 2024, at 13.00 CET. The presentation will be held in German.

Please register in good time for participation at:

Avemio AG – Webcast/Conference Call.

About Avemio AG

Avemio AG is a media technology group with a focus on professional film and television technology. The trading group, which has been growing strongly for many years and has the highest turnover in the German-speaking B2B market with more than EUR 100 million, supplies content producers as a manufacturer-independent provider with products from all major manufacturers. This also includes consulting and technical support for complete production, post-production, and broadcast systems as well as the planning, creation and system integration of media technology workflows with its own software products and cloud offerings.

The share capital of Avemio AG is divided into 3,832,150 no-par bearer shares and listed on the primary market of the Düsseldorf Stock Exchange.

At the beginning of the year 2023, the stock market listing took place as part of a reverse IPO. Here, after 30 years of existence, Teltec AG took over the shell company Palgon AG, which was listed on the Düsseldorf Stock Exchange, and changed its name to Avemio AG. The Company was promoted to the primary market and admitted to the Xetra trading platform and relocated from Düsseldorf to Frankfurt.

Avemio AG is planning internationalization as part of a buy-and-build strategy with already identified target companies as well as the expansion of the high-margin software offering.

Investor Relations

Lindsay Lorent
ir@avemio.com
Avemio AG
Schaumainkai 91
60596 Frankfurt
Germany

Press Contact

CROSS ALLIANCE communication GmbH
Susan Hoffmeister
Bahnhofstr. 98
82166 Graefelfing/Munich
Germany
Phone: +49 89 125 09 03-30
Mail: sh@crossalliance.de
www.crossalliance.de