Annual Report 2021

POWERING THE GROWTH OF STREAMING

Aferian plc is a software-led, B2B video streaming solutions company that powers the growth of streaming. Every day, around the world, millions of people watch the TV and video of their choice thanks to Aferian. Previously known as Amino Technologies plc, in June 2021, at minimal cost, we changed our name to Aferian plc to better articulate the full breadth of our business and addressable market.

Aferian's forward-thinking software and services make it easier for our customers to deliver the modern viewing experiences their consumers demand. Our solutions for Pay TV operators, broadcasters and streaming services bring live and on-demand video to life on every kind of device, from mobile phones and laptops to Smart TVs and set-top boxes (STBs). This watch- anywhere convenience drives audience satisfaction, engagement and revenue growth for our expanding customer base of around 500 companies that provide video streaming services to consumers.

Our solutions reduce operational complexity and costs, enabling companies of all sizes to effectively compete for a slice of the expanding global streaming market.

Aferian plc has two operating companies: 24i and Amino. 24i's modular software platform and managed services solve the key challenges involved in both preparing content for streaming and presenting it to consumers. Amino's streaming devices, software and SaaS device management platform give Pay TV operators and other video streaming service providers full control over the consumer viewing experience.

Together, these complementary companies put Aferian in a unique position: we are the only company to offer every part of the streaming value chain, from behind-the-scenes video processing solutions and front-end applications right up to the devices on which the content is consumed.

Aferian plc is listed on the London Stock Exchange Alternative Investment Market (AIM: symbol AFRN). Headquartered in Cambridge, UK, the company has over 350 staff located in offices in San Francisco, Amsterdam, Helsinki, Copenhagen, Madrid, Porto, Brno, Buenos Aires and Hong Kong.

For more information, please visit aferian.com

TABLE OF

CONTENTS

STRATEGIC REPORT

  1. Highlights
  2. What we do
  1. Our offering to the market
  2. Where and how we operate
  3. Strategy to 2025
  4. ESG at the heart of our company
  5. Non-ExecutiveChairman report
  6. Group Chief Executive Officer report
  1. Group Chief Financial Officer report
  1. Principal risks and uncertainties
  2. Section 172 statement
  3. Board of Directors

GOVERNANCE

  1. Chairman's Governance report
  1. Remuneration Committee report
  1. Audit committee report
  1. Directors' report

FINANCIAL STATEMENTS

39 Independent auditor's report to the members of Aferian plc

  1. Consolidated income statement
  2. Consolidated statement of comprehensive income
  3. Consolidated statement of financial position
  4. Consolidated statement of cash flows
  5. Consolidated statement of changes in equity

54 Notes to the consolidated financial statements

  1. Company balance sheet
  2. Company statement of changes in equity
  3. Notes to the parent company financial statements

OUR VISION

To make it easy for people to connect to the TV and video they love. We simplify the complex to enable greater viewer choice, usability and convenience. This means our customers can provide smarter, more cost-effective ways of delivering modern TV and video experiences to their customers.

Aferian plc - Annual Report 2021

SOFTWARE SHIFT CONTINUES TO BRING REWARDS

The Group has delivered a strong performance in the first full year of executing and innovating against the 2025 strategy. The Group has delivered double digit growth across the majority of its key performance metrics and significantly improved the quality of earnings and revenue visibility.

  • Total revenue grew 12% to $92.9m (2020: $82.7m);
  • Adjusted operating profit of $11.8m (2020: $10.5m), a 12% increase;
  • Improved quality of earnings with higher margin software and services revenue growing 15% to $22.4m (2020: $19.5m). This includes recurring revenue of $12.9m, an increase of 21% on the prior year (2020: $10.7m), delivering on the key strategic objectives of the business;
  • Enhanced visibility with exit run rate Annual Recurring Revenue ("ARR")(5) growing by 43% to $15.2m (2020: $10.6m);
  • Adjusted gross profit from software and services accounts for 41% of group total (2020: 40%);
  • Adjusted operating cash flows before tax of $16.7m (2020: $18.2m), representing 91% (2020: 109%) of adjusted EBITDA;
  • Strengthened net cash position of $14.2m (2020: $9.5m) and no debt at 30 November 2021, providing a solid platform to execute on targeted acquisitions.

FINANCIAL HIGHLIGHTS

2020

2021

$82.7m $92.9m

$16.7m

$18.4m

$11.8m

$10.5m

Revenue

Adjusted EBITDA(1)

Adjusted

12%

10%

operating profit(2)

$18.2m

$16.7m

12%

$9.7m

$3.8m

1.87 pence

3.09 pence

(2.39 US cents)

(4.25 US cents)(6)

Adjusted cash flow from

Adjusted free

Dividend per share

operations before tax(3)

cash flow(4)

65%

8%

61%

  1. Adjusted EBITDA is a non-GAAP measure and excludes depreciation, amortisation, interest, tax, exceptional items and share-based payment charges.
  2. Adjusted operating profit is a non-GAAP measures and excludes amortisation of acquired intangibles assets, exceptional items and share-based payment charges.
  3. Adjusted cash flow from operations before tax is a non-GAAP measure and excludes exceptional items.
  4. Adjusted free cash flow is a non-GAAP measure and is adjusted cash flow from operations, less capital expenditure, IFRS 16 lease payments, taxation and net interest.
  5. Exit run rate ARR is annual run-rate recurring revenue as at 30 November 2021.
  6. £1 = $1.37528

Aferian plc - Annual Report 2021

3

WHAT WE DO

We make it easy for content owners to stay ahead of the market and delight their viewers with high-quality TV and video experiences on the screens of their choice.

The technology requirements for streaming video to multiple types of devices are complex and constantly shifting. Aferian has invested in developing and maintaining end-to-end,pre-integrated solutions, so our customers don't have to.

We simplify the complex with configurable, turnkey solutions including white-label applications for all consumer devices.

Multi-tenant SaaS and TVaaS (TV as a service) options and Aferian's full roadmap of features reduce the cost and time to market for our customers as they launch attractive new and upgraded streaming services that delight their demanding consumers and increase their own revenue.

STREAMING IS NOW MASS MARKET

Demand for streamed content continues to grow significantly, accelerated by changes in viewing habits during the Covid-19 pandemic. Baby boomers are now just as likely to binge-watch streamed content as their grandchildren.

Consumers are shopping around, driving increased diversity in the streaming market

The average US household now

4 subscribes to four different streaming services (up one since 2020)

The average US household spends $47 $47 on streaming services per month

(up from $38 since 2020)

More than 1-in-10 US households is

13% signed-up to seven or more different streaming services

Source: Cordcuttersnews.com

Big screen viewing is on the rise

Big screen devices (Smart TVs,

73% Connected devices and Games consoles) now account for 73% of all viewing time of streamed content

36%

Viewing on big screen devices rose by

36% in Q1 of 2021

Source: Conviva State of Streaming report, Q1 2021

Aferian plc - Annual Report 2021

THE INDUSTRY CHALLENGE: FINDING A COST-EFFECTIVE ROUTE TO EVERY SCREEN

Aferian's end-to-end solutions support this goal by offering our customers a cost-effective and time-efficient way to bring their content to all kinds of devices - both managed and unmanaged. We deliver:

Choice

Usability

Convenience

Solutions for all types of content

Engaging and data-driven

Ease of content discovery and

with flexible pricing options

user experiences

consumption on any screen

at any time

AFERIAN SERVES A RANGE OF MARKET VERTICALS

Pay TV

Enterprise

Content Owners

Sports

Broadcasters

90% of operators

The Global

Gross revenue

Sports rights

Advertisers are

in EMEA and 74%

enterprise market

from streamed TV

holders worldwide

shifting from

of operators in

is set to grow at

and movies to

now spend 15% of

traditional TV to

North America

CAGR +8% to

reach $210bn

their total budgets

streaming TV.

are integrating

$2.1bn by 2025.

on 1.5bn

on streaming tech

Ad-supported

streaming with

subscriptions

stack. ($6.8bn in

video spend set

their linear

by 2026.

North America

to rise to $25bn

channels.

alone).

by 2025.

Source: SPGMI

Source: Mordor Intelligence 2021

Source: Digital TV Research

Source: Delatre 2019

Source: Broadcast Pro/Amagi

AFERIAN'S TOTAL ADDRESSABLE MARKET:

A MULTI-BILLION DOLLAR MARKET IN TRANSITION

The revenues generated through streaming video over the internet are growing fast. Digital TV Research predicts the total global market will be worth $167bn by 2025.

A large proportion of this will go to the industry giants like Amazon, Disney and Netflix, but that leaves significant revenue shared between the companies that make up Aferian's target market: smaller telecom operators, streaming services and enterprise video providers.

Together, Aferian's solutions service a total addressable market worth over $8.6bn.

Streaming

Streaming

Video Platforms

Devices

End-to-end

OS & Devices

platform

$1.1bn

$7.5bn

7% CAGR

8% CAGR

10% RR* CAGR

Source: Media Asset Capital, November 2021

*Recurring revenue growth of 10% CAGR due to transition from perpetual licences to SaaS

Aferian plc - Annual Report 2021

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Amino Technologies plc published this content on 10 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 February 2022 07:09:28 UTC.