SEEKING FUNDING. The subsidiary of Techfoundries is studying a proposal from the British fund Blackwood, which is offering to inject 5 million euros in the set-top receiver and electronic program guide company.
Sergi Saborit. Barcelona
InOut TV is getting ready to enter the foreign market. The technology company, which manufactures set-top receivers and electronic program guides for digital terrestrial television (DTT) considers that it is ready to begin its international expansion and is targeting Europe and Asia as its main strategic markets. With this in mind, InOut TV has just opened an office in Hong Kong with the aim of analyzing business opportunities in China, where it may form an alliance with local partners.
As for the European market, it plans to concentrate on Germany and countries in which the majority of television is free to air, such as France and Italy, explains Eudald Domènech, CEO of InOut and President of the Techfoundries group, which owns 100% of the company.
InOut is beginning its international expansion having come into profit in financial year 2010, during which it achieved a sales figure of 20.3 million euros, an increase of 28.5%. To be exact, the company has recorded a pre-tax profit of 211,489 euros, after showing losses of 733,285 euros in 2009. The company's net profit was 148,042 euros.
Options
The company achieved earnings before interest, taxes, depreciation and amortization (EBITDA) of 1.9 million euros, showing strong growth of 144%. The accounts were approved yesterday by the company's board of shareholders, which analyzed the various options available to InOutTV for funding its growth and international expansion plan. The company may seek to bring an investment partner on board through a capital increase, although it is looking at other funding alternatives, such as the new credit facilities that the Catalan Finance Institute (ICF) has just launched.
"We have shown spectacular growth and need to strengthen our capital, which is why we are studying all the available options," states Domènech.
One of the most interesting alternatives on the table is the offer to enter an agreement with the British fund Blackwood, which is offering to inject 5 million euros through a loan that can be converted into shares of InOut TV. "As yet, we have not received a binding offer from Blackwood; negotiations remain ongoing but it is not our only option," states Domènech.
Over the last year, the Catalan technology company has already completed a number of funding operations to support its growth. In October 2010 it secured a participative loan from Fespyme, a capital risk fund of Axis Participaciones Industriales –of Spain's Official Credit Institute– for the amount of 2 million euros. Meanwhile, in November InOut secured an additional participative loan of 500,000 euros from the Spanish National Innovation Company (Enisa).
Prior to this, InOut had already received two other loans from Enisa (of 250,000 euros each) and a loan of one million euros from the ICF, repayable in 2016, for which InOut's shares were pledged as collateral. In total, the company's long-term debts with credit institutions amount to 3.74 million euros.
Forecasts
The President of InOut TV is Joan Majó, former Spanish Minister for Industry and former Director-General of the now defunct Catalan Radio and Television Corporation (CCRTV). Much of the growth shown in 2010 is due to the alliance agreement that the company signed in 2009 with the Japanese multinational OKI to incorporate its products in the latter's television sets, of which 500,000 units have been sold to date. Meanwhile, the agreement in place with Siemens has come to an end. According to Domènech, the company is looking at new alliances to drive it forward. The goal for 2011 is to obtain a turnover of 32 million euros and an EBITDA of 3.3 million euros. Forecasts indicate a pre-tax profit of 1.7 million euros.
Two million set-top receivers
InOut TV has taken off thanks to the roll-out of DTT, since the large number of TV channels makes it increasingly necessary to have tools such as real-time electronic program guides (EPG) that provide information on the array of available programs. Since it was founded in 2001 the company, which employs 70 people, has sold more than two million DTT set-top boxes, the fourth generation of which was launched on the market in 2010: iZapper and MediaCenter. These devices not only receive channels in high definition but also provide a recording feature and enable televisions to be connected to the Internet. InOut outsources production to Chinese companies, although part of the final assembly process takes place in Europe. The company's portfolio of customers includes Ono, Vodafone, Imagenio, Telecinco and TVE. In addition to its SincroGuía EPG, it offers products such as ButacaTV (online movie rentals) and InternetTV.
In a nutshell
InOut has become a market leader in interactive television services and program recording devices. It has forged an alliance with OKI and its customer portfolio includes Imagenio, Ono, TVE, Vodafone and Telecinco.
InOut has earned 148,000 euros in 2010 and has obtained a sales figure of 20.3 million euros, a 28% increase