Myriad Group AG Announces Half Year 2014 Results

ZURICH, Switzerland - 22nd September 2014 - Myriad Group AG (SIX Swiss Exchange: MYRN) today reported revenues of USD 21.8 million and an adjusted EBITDA1 USD 2.8 million for the first half of 2014.

Stephen Dunford, CEO of Myriad Group AG, commented: "Our financial performance continues to improve as we benefit from the restructuring process we announced at the end of 2013. We have made significant progress, in line with our strategy, across all our product portfolios. msngr has shown significant growth and we are encouraged by user interactions with the service. Both our Device Solutions and Mobile Services Divisions have been streamlined and are operating efficiently."

The first half of 2014 has seen the Group successfully execute on operating strategies across its entire product portfolio as well as complete significant restructuring projects to ensure the business is fit-for-purpose to strive for growth in the future.

Mobile Services Division

Following investment in our new research and development team based in London, we have continued to invest in upgrading our msngr service culminating in the launch, in June, of a new user interface and a new back end for increased stability and scalability ensuring the platform is able to support viral growth. The enhancements bring additional functionality and features to further develop user engagement, particularly around group chat, but also ensuring that the fundamentals of an excellent messaging service are maintained. Having achieved 38m registered users by the end of December 2013, msngr has continued to grow successfully into 2014 achieving a registered user base of 67m at the end of June 2014. With the support of network operator partners in key target markets in Latin America, msngr uniquely allows communication between both feature phone and smart phone users, ensuring msngr is available for the broadest possible addressable user base.

The new Sub Data operational structure set in place at the end of FY 2013 has quickly delivered on building new technology roadmaps and sales pipelines across both USSD core and Myriad Updates. We continue to invest in new value-added services for network operators, which will see returns in the form of increased licence revenues in the near future. Updates has attracted 24 million unique visitors to the end of June, delivering social media through a text-based interface for basic phone users who do not have a data plan. We are Facebook's partner of choice for USSD services with 41 deployment agreements signed with operators across Latin America, Africa, India and South-East Asia. The breadth of complementary services offered over USSD has been further enhanced with the announcement of Myriad as a certified partner with Twitter and the only Yahoo! partner to deliver services to basic and feature phones in emerging markets.

Device Solutions Division

The Device Solutions Division has seen growth in licence revenues as we leverage Myriad's position within the North American pay TV and Blu-ray player markets through royalties from organisations such as Comcast, Cisco, Pace, Arris and Samsung. The increasing proportion of licence revenues reflects the development of a strong royalty-based business and is a key element of the overall Group strategy to move from pure professional services engagements towards higher margin licence deals. The Group continues to develop its value proposition to address opportunities in the "internet of things" market.

Managing Costs

The extensive restructuring projects announced at the end of FY 2013 have been completed on plan in 2014. We continue to invest in research and development, marketing and sales to support the Group's key messaging products, msngr and Updates.

Half-Year financial results in brief

Led by the increasing proportion of licence revenue at 58% of total revenue (H1 2013: 53%) and restructuring activity completed in the period, the Group has achieved a significant improvement in profitability. This is best exemplified by the increase in gross profit to USD 13.8 million (H1 2013: USD 5.3 million), representing a gross margin of 63.3% (H1 2013: 24.5%). The Group also achieved an EBITDA (pre restructuring and exceptional costs) of USD 2.8 million (H1 2013: loss of USD 2.3 million), representing a very encouraging improvement year on year. This demonstrates that the underlying business has returned to a sustainable level.

Summary Financial Information

1 EBITDA adjusted for non-recurring items and restructuring costs.

2 Gross profit adjusted for amortisation, impairment and restructuring costs.

Outlook

We left H1 2014 with an efficient structure leaving us well placed to execute our business plans. H1 revenues included msngr user fees that we have now discontinued in order to help drive users to the product. We plan to monetise msngr over the course of 2015. H1 2014 also includes revenues from legacy Synchronica products that will be end-of-lifed as well as revenues from one-time transactions in our Device Solutions Division. For these reasons we do not expect to achieve H2 2014 revenues at the same level as H1 2014.

H2 will also see significant investments in product features and services, and will see marketing activities to support the ramp up of msngr, which will give us a stronger user platform for 2015. Thus we do not expect H2 2014 to be operationally profitable.

Fundraising

On 9 September 2014 the Group announced that it had issued 9,400,000 shares out of authorised capital, raising USD 30.2 million. These funds are allocated to fuel growth and further development of the Group's major product lines. The level of investment to develop monetisation and to significantly grow the user population in msngr will increase in H2 2014.

msngr user numbers

Myriad expects to announce its latest msngr user numbers in the first half of October 2014.

Information on Myriad's H1 Earnings call

Myriad will present its Half Year 2014 results to members of the media, investors and analysts today at 18:30 CET. There will be a presentation by Stephen Dunford (CEO) and Richard Francis (CFO), followed by a Q&A session with Management.

Details of how to join the call are below:

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