Half Year Results 2022

Ad hoc announcement pursuant to Art. 53 LR

Highlights:

Total Group revenues and OOI reached USD 333.4 million

In constant currency, the Group's net revenues increased by 3.3% compared to the same period in 2021

3 of the 4 business segments with double digit growth in constant currency

In a fast-changing business environment, the Group's flagship initiatives and solutions in all 4 of its business segments gain momentum

Digital TV revenues are 8.9% lower in constant currency compared to first half 2021

Cybersecurity continued to deliver strong performance, with a 15.4% net revenue growth in constant currency and a progression of the gross margin, in value, by 34.2%

IoT revenues more than doubled to USD 7.2 million, with strong growth from all product lines

Public Access progressively recovering with a 11.8% net revenue growth in constant currency driven by EMEA performance

Positive first half EBITDA due to ongoing cost control and despite weak EUR exchange rate

KEY FIGURES HALF YEAR 2022:

(in million USD)

1H2022 1H2021

Revenues & Other Operating Income

333.4 340.5

EBITDA 0.5 15.0

Cheseaux-sur-Lausanne, Switzerland and Phoenix (AZ), USA - August 25th, 2022 - The Kudelski Group (SIX: KUD.S), the world leader in digital security, announced today its results for the first half of 2022.

Total revenues and other operating income were USD 333.4 million, compared to USD 340.5 million in the first half 2021. In constant currency, the Group's net revenues increased by 3.3% compared to the same period in 2021. In the first half 2022, the Group generated USD 0.5 million of operating income before depreciation and amortization, compared to USD 15.0 million in the previous first half.

Digital TV revenues reached USD 144.5 million, representing a constant currency decline of 8.9%, as compared with the prior year period. In addition to foreign exchange factors, the base effect of strong 2021 Digital TV revenues drove this year-on-year development. The segment's operating expenses were USD 0.4 million lower than in the prior first half. Digital TV's operating income before depreciation and amortization declined by USD 16.4 million to USD 26.2 million.

The Group's cybersecurity business delivered a strong first half and posted USD 79.6 millions of gross revenues. Net revenues were at USD 51.0 million, representing a growth of 15.4% in constant currency. As a result of the Group's continued investments, in the first half 2022, the cybersecurity business posted a USD 9.8 million operating loss before depreciation and amortization, comparable with the USD 9.5 million loss booked in the first half 2021.

The strong momentum of the Group's IoT segment drove first half revenue growth by a factor of 2.7. In the first half 2022, IoT generated USD 7.2 million of revenues, compared to USD 2.6 million in the first half 2021 and reduced its operating loss before depreciation and amortization by USD 2.1 million to USD 9.5 million.

In Public Access, investments in access control infrastructure for parking, ski and events started to recover in the first half 2022. As a result, Public Access revenues grew by 11.8% in constant currency and reached USD 125.7 million, as compared to the prior first half period. Overall, Public Access generated a positive EBITDA of USD 0.5 million, compared to USD 0.7 million in last year's period.

On August 12th, 2022, the Group fully repaid its 2022 bond.

DIGITAL TV: SECURING THE DIGITAL FUTURE AND STRENGTHENING RELATIONS WITH MAJOR OPERATORS

While revenues generated by the Group's Digital TV segment declined during the first half 2022, targeted solution initiatives, designed to respond to the challenges of the Digital TV industry, are gaining momentum:

A focus on Nagravision's anti-piracy solutions was important during the first half of the year as rising piracy concerns are driving additional demand from operators for intelligence-led solutions. Streaming protection through the Nagravision Active Streaming Protection framework is playing a key role for video service operators of all sizes in the fight against piracy.

NAGRA Insight is expanding its customer base by introducing its smart pricing solution, which utilizes artificial intelligence to better analyze consumer behavior and drive business performance. Creating a personalized digital twin for each individual subscriber, the system simulates scenarios of actions for every subscriber, predicting the impact on churn and revenues.

Among the highlights of the first half, Digital TV expanded partnerships and won new contracts with large pay-TV operators worldwide:

United Cloud, the technology arm of the United Group, the leading multi-play telecoms and media provider in south-eastern Europe, has selected Nagravision's NexGuard watermarking to expand its security solution.

As part of a continued partnership with Nagravision, Radiotelevisione italiana (RAI) has selected the multi-DRM solution from the Nagravision Active Streaming Protection framework. This complements their previous investments in watermarking and anti-piracy services.

VTVCab, one of Vietnam's largest pay-TV players, has selected Nagravision's TVkey Cloud to deploy its direct-to-TV service on Samsung UHD TVs.

In Indonesia, PT Linknet has selected Nagravision to migrate their OTT solution to OpenTV Video Platform.

CYBERSECURITY CONTINUES TO DELIVER STRONG PERFORMANCE IN BOTH THE US AND EMEA WITH EXPANDED ACTIVITIES

The Group's cybersecurity business delivered a strong performance in both of its main regions during the first half of the year. In Europe, net revenues grew by 38.7% in constant currency to USD 18.8 million, while the Americas grew by 2.7% to USD 31.5 million. In the Americas, the shift to high margin solutions has accelerated compared to first half 2021.

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