Earnings call transcript: Vantiva Q1 2025 shows broadband growth, stock stable

Vantiva reported a strong first quarter for 2025, with revenues reaching €46 million, marking a 13.5% increase year-over-year, driven by significant growth in its broadband business. The company’s recent performance shows promise, with InvestingPro data revealing a robust YTD return of 26.02%. Despite the positive revenue growth, the company’s stock remained relatively stable, with a minor increase of 1.17%, closing at €0.154. The company also projected an adjusted EBITDA of over €150 million for the year, indicating a positive outlook. According to InvestingPro’s analysis, the stock is currently trading below its Fair Value, suggesting potential upside opportunity.

Key Takeaways

• Revenue increased by 13.5% year-over-year to €46 million.
• Broadband segment grew by 24%, highlighting strong demand.
• Stock price showed a slight increase of 1.17%.
• Projected adjusted EBITDA for the year is over €150 million.

Company Performance

Vantiva’s performance in Q1 2025 was bolstered by its broadband segment, which saw a robust 24% growth compared to the same period last year. This growth reflects a recovering North American broadband market and strong demand in the Asia Pacific region for hybrid products. However, the video segment saw modest growth of 3.9%, and the diversification segment experienced a decline of 18.5%.

Financial Highlights

• Revenue: €46 million, up 13.5% year-over-year.
• Broadband growth: 24% year-over-year.
• Video segment growth: 3.9% year-over-year.
• Diversification segment decline: 18.5% year-over-year.
• Projected adjusted EBITDA: Over €150 million for the year.

Outlook & Guidance

Vantiva’s guidance for 2025 assumes a continued recovery in the North American broadband market, with expectations of anemic growth in the global video business. The company is also preparing for potential refinancing in the second half of the year. Future earnings are projected to be negative, with EPS forecasts of -0.32 USD for 2025 and -0.15 USD for 2026, alongside revenue forecasts of 2,658.8 USD and 2,652.47 USD, respectively.

Executive Commentary

Tim, the CEO, emphasized the importance of monitoring tariff regulations, stating, "We’re continuing to closely monitor that situation." He also reassured stakeholders of the company’s resilience, saying, "The company has a long history of working through supply chain crisis." Lars, a financial executive, highlighted the company’s commitment to its targets: "We want to make sure that we show the market that we are on track."

Risks and Challenges

• Tariff impacts remain uncertain, potentially affecting costs.
• The global video market is expected to remain weak.
• Supply chain disruptions could pose challenges.
• The company’s diversification segment is declining.
• Complex tariff scenarios could affect product importation from Asia.

Q&A

During the earnings call, analysts inquired about the impact of tariffs and the liquidity effects of the SCS divestiture. The company noted that tariffs remain a complex issue with uncertain impacts, and the SCS sale did not immediately change liquidity. Analysts also questioned the company’s strategy in light of potential trade regulation changes, highlighting the cautious approach of customers in current market conditions.

Full transcript - Vantiva SA (VANTI) Q1 2025:

Conference Moderator: Just to remind you all, this conference is being recorded.

We would like to inform you that this event is also available on our Ventevat website with synchronized slideshow. During this call, statements could be made that constitute forward looking statements based on management’s current expectations and beliefs, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the future results expressed, forecasted, implied by such forward looking statements. For a more complete list and description of such risks and uncertainties refers to Ventevat’s filing with the French authority, Demarche Financier. I would like now to hand over the call to Tim. Please go ahead.

Tim, CEO/Senior Executive, Vantiva: We’re going to move to slide four. Hello everyone and thanks for joining our Q1 call. I’d like to start by thanking all of our customers and all of employees for another positive quarter. We had a strong start to the year, a couple of key points to walk through. We saw demand pick up for the quarter.

We have several operators who are restarting orders. We’ve been staying ahead of the curve and delivering double digit growth. We launched some new WiFi seven gateways with key customers and started deliveries to some other additional customers. The success suggests that our strategy and plan are on the right track. We completed the sale of the Supply Chain Solutions business and we’re now completely focused on our core PPE business where we see some clear opportunity.

There’s been a lot of change happening in the world as all of you are familiar with. We still believe that our strategy of staying flexible will now allow us to efficiently serve our customers. We’ve continued our work on our cost structure to enable that flexible structure and our efficient service to customers. We’ve been watching the global trade and tariff regulations. The picture is still a bit uncertain.

It reminds me all the time that flexibility matters. Like most of the consumer electronic companies in the space, Vantiva has some exposure to Southeast Asian manufacturing and exposure to supply chains that could be impacted by tariffs. We’re continuing to closely monitor that situation and we’re working very closely especially with our U. S. Customers on all of the tariff topics.

Finally, I’m pleased to be able to confirm that we are still on guidance for the year assuming that there is no further market disruption from any of the global trade and tariff regulations. Overall, the company is extremely focused and we’re in a good place to keep building on our Q1 momentum. Next slide, Slide five. Let’s look into the specifics of Q1 revenue. Revenue grew by 13.5 year over year reaching $4.00 €6,000,000 The broadband business led the way up 24% year over year, thanks to new WiFi seven deals that are ramping up in North America and we saw some strong demand for our hybrid three point zero products in our Asia Pacific region.

The Video segment experienced slight growth rising by 3.9% despite weaker demand in the Latin American region. We updated our diversification activities. We’re now including our maintenance and support business and our commercial video services business, formerly known as MCS. We’re grouping all of that into diversification. It was previously grouped with broadband and video.

For clarity, we’ve adjusted the 24 numbers to reflect this change. The diversification segment saw revenue drop by 18.5%. This was mainly because large retailers cut back on their inventory levels due to softer market demand. With that said, several areas within diversification segment continue to show potential and we’re tracking them very closely. I’m also pleased to share that we received another gold medal for EcoVadis for our environmental performance.

We’ve had strong marks in this area for several years now and Ventiva continues to be completely committed to corporate sustainability efforts. Next slide please, slide number six. As I mentioned earlier, we’re on track to deliver over EUR 150,000,000 of adjusted EBITDA for the year and positive free cash flow. Again, this all assumes that there aren’t significant market disruptions from global trade and tariff regulations. That wraps up our prepared material.

Lars and I are happy to answer any Q and A.

Call Facilitator: Thank you. The first question is from Antoine Le Bourgeois of Bryan Garnier.

Antoine Le Bourgeois, Analyst, Bryan Garnier: Good evening. I have three questions. First, could you, I would say, clarify the key assumptions behind your 2025 guidance? Specifically, does it depend on the market recovery or specific seasonality patterns over the coming quarter? Secondly, just a bit more regarding the new tariffs announced at Liberation Day.

Can you just are you planning any pricing or supply chain adjustment investments at this stage? Or is it still too early? And lastly, following the divestiture of SCS, can you comment on your current cash and liquidity position? And more broadly, if you can share your priorities for refinancing and deleveraging going forward? Thank you.

Tim, CEO/Senior Executive, Vantiva: Thank you, Antoine. We’ll take those questions in order. I’ll cover number one and two. Lars can cover question number three. Question number one, our 2025 plan has always assumed some market recovery, especially related to broadband in North America.

Q1 is tracking to those assumed recoveries. The 2025 plan also assumed relatively anemic video business globally. I think Q1 is generally tracking to that, video assumption. We’re watching the diversification retail segment very closely right now. It has exposure mainly to The US market and we’re watching the retailer’s inventory position relative to that particular market.

On tariffs specifically, the company does have manufacturing and supply chain exposure as I mentioned in Southeast Asia. Right now, it’s too early to know how the tariffs will impact the company. We saw the original Liberation Day tariffs. We then saw a ninety day pause on the accelerated tariffs, and then we saw a exemption put in place for some of the import categories that Vantiva uses while the US government conducts some additional investigation. We just don’t know yet where tariffs end up.

We’re continuing to work with our large contract manufacturing partners, looking at different options from a manufacturing location standpoint. And we’re also working with the customers to make sure that we’re optimizing our supply chain with respect to the tariffs and the changing regulatory environment there. We’ll keep everyone updated throughout the year on the tariff situation. Lars, do you wanna tackle divestiture topic?

Lars, Financial Executive, Vantiva: Yep. So thanks a lot, Antoine, for this question. So yes, we disposed of the SES activity at the March. This will not give an immediate change in our liquidity situation. This division was burning cash over time.

So we will expect to see the liquidity increase over the years as we no longer have to focus on funding this. But immediately, there is no massive change to our liquidity. In terms of, the refinancing plans, so as we mentioned before, we want to make sure that we show the market that we are on track to reach our aggressive targets for 2020, ’20 ’20 ’5 and into 2026. So, we are starting to prepare the groundworks for this refinancing, but we believe this will be much easier towards the second half of the year when we can show the market or H1 performance and our continued progress towards the guidance.

Antoine Le Bourgeois, Analyst, Bryan Garnier: Thank you for your answers. Very helpful.

Call Facilitator: The next question is from David Sardan of Kepler.

David Sardan, Analyst, Kepler: Yeah. Good evening, gentlemen. I have only one question, but it’s a large question. It’s just to understand the mood of your client. I would like just to have your feedback from your discussion with your clients.

So as there are plenty uncertainties related to the tariffs, etcetera, so do you see your client to be in a wait and see position? And do you think that Q2 could be impacted by that?

Tim, CEO/Senior Executive, Vantiva: Yes, David. This is Tim. I can take that question. Obviously, we’ve had discussions with all the clients. I’d say, as you can imagine, the clients in Europe and Asia are monitoring the situation, thinking about any second order impact that you have as the supply chain shift related to the global trade and tariff policies.

We have not seen any quantifiable second order shifts from the tariff and trade. And then of course, The U. S. Service providers specifically, they have not shifted as you saw in many of the earnings that have happened recently that they have not shifted their strategy. They’re all pushing forward within The US market, and we’re continuing to move right along with them with respect to broadband and video business.

So this is why we’re holding guidance right now and everyone is really monitoring the tariff situation, waiting to see where all of the tariff levels end up at with respect to importation of goods into The US.

David Sardan, Analyst, Kepler: Maybe you could give an example. So imagine that there is now a product from Asia going to to The US. So there is a tax on this product or not today?

Tim, CEO/Senior Executive, Vantiva: Yeah. So it’s a it’s a complicated question today, and I think there’s a lot of uncertainty in the market. The reality of the situation is today, set tops are being treated differently than broadband devices. They come in under different, importation codes. There could potentially in the future be a tariff tax, and Vantiva will, you know, work with our customers to understand what we do with respect to that tariff tax if one eventually materializes in the future.

The timing of the tariff is critically important to customers and to Vantiva. And then we also look at just the global manufacturing footprint. We partner with two of the world’s largest contract three of the world’s largest contract manufacturers. And we do have some flexibility around how we can shift capacity between different regions. So we’re continuing to monitor that situation also.

So it’s really a wait and see approach right now from the customers and from Ventiva to understand where the administration lands specifically on the first order impact of importation tariffs to The United States.

David Sardan, Analyst, Kepler: My my question is maybe very simple, but I would like just to to check with you. So imagine there is a product, from Asia. Who will pay the the tariff? Is it you as an importer or your client?

Tim, CEO/Senior Executive, Vantiva: I think it it depends on the arrangement with the customer, and we can’t get into specifics on the call about any of the arrangements with the customers. The the reality is is that we are often the importers of record. And if there was a tariff, we are would pay physically making transaction to pay the government the tariff. But how the economics behind the pricing of the products and the tariffs all work will have to be worked out with the specific customers.

David Sardan, Analyst, Kepler: And is there any any clause in your contract to protect from this impossible to predict tariff or or not?

Tim, CEO/Senior Executive, Vantiva: Yeah. We we don’t we don’t comment on any of the specifics in customer contracts. So I I can’t get into that specifically on the call here. But needless to say, we’re continuing to monitor the situation, and and there are some slight differences from customer to customer. But right now, based on what we’re seeing in the marketplace, we’re holding the guidance for the year.

Call Facilitator: Okay.

Tim, CEO/Senior Executive, Vantiva: Thank you, David.

David Sardan, Analyst, Kepler: I think that yeah. I think that’s very difficult to to manage this kind of situation for any group, and it should not be easy for you.

Tim, CEO/Senior Executive, Vantiva: It it can be a challenge. Look. The company has a long history and so do the customers of working through the supply chain crisis and the COVID crisis, and we had tariffs before, and we’ve had, you know, hard drives in Thailand in the past and memory and MLCC challenges in the marketplace. There’s a long history of partnership between the customers and Vantiva, and, you know, we’ll we’ll continue to work with them as the regulatory environment shifts.

David Sardan, Analyst, Kepler: I have a last question, not for sure. Do do you do you give a name of your subcontractor? I

Tim, CEO/Senior Executive, Vantiva: don’t think we have specifically shared in the past who those three major contract manufacturers are. I can tell you that they are three of the absolute largest contract manufacturers globally.

Conference Moderator: Okay. So, David, I think that you can find them by yourself, but it’s not our role to comment on that.

Antoine Le Bourgeois, Analyst, Bryan Garnier: Okay. Okay.

David Sardan, Analyst, Kepler: Thank you very much.

Tim, CEO/Senior Executive, Vantiva: Thank you, David.

Call Facilitator: As a reminder, if you wish Gentlemen, there are

Conference Moderator: So, if there is no more questions, ladies and gentlemen, this concludes this conference call and webcast. Thank you for your participation tonight. And if you have any further questions, feel free to contact me whenever you want. Goodbye now.

Tim, CEO/Senior Executive, Vantiva: Thank you.

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