TIDMCYAN
RNS Number : 2113R
CyanConnode Holdings PLC
20 September 2017
CyanConnode Holdings plc
("CyanConnode" or the "Company")
$29 million purchase order for smart metering in Ukraine
Largest Order to Date Successfully Expanding Geographic
Reach
CyanConnode, the world leader in narrowband radio mesh networks,
has received a purchase order worth $29 million from its strategic
partner NIK LLC ("NIK") for a smart metering contract in
Ukraine.
The purchase order is significantly larger than any received to
date by CyanConnode and marks a further step change in the
Company's commercial progress.
As a result of this new contract, the order book, representing
the value of purchase orders received but not yet delivered, will
be $100 million, which includes $33million of expected software
licence and support revenue from the UK smart metering
contract.
Purchase Order
The purchase order is for the supply of CyanConnode's hardware
and software advanced metering infrastructure solution for a 1
million unit smart metering deployment to be delivered over the
next three years.
CyanConnode will receive $13 million for the provision of
hardware with the majority of deliveries expected to be weighted
towards years two and three.
Once each meter has been installed and is operational, the Head
End Server software ("HES") licence payments (to be made on a per
meter per year basis) will commence. The HES payments will be made
over the 10-year period post installation and will be worth $16
million, providing the company with a recurring revenue stream.
NIK, an energy management system company based in Ukraine,
currently manufactures circa. 1.5 million utility meters per year
and will integrate CyanConnode's hardware with its meters at their
production facility. The NIK smart meters, enabled by CyanConnode's
narrowband radio mesh network technology, will be part of NIK's
'smart meter' product offering and will replace their existing
ZigBee-based smart meter offering.
This is the Company's first order from NIK for a utility
customer in Eastern Europe, and the order size and revenue
visibility provided by this contract reflects the Company's ability
to win and service large scale contracts providing increasing
levels of high margin recurring software revenues.
Furthermore, this order further demonstrates the Company's
growing geographical sales footprint in addition to highlighting
the advantages of CyanConnode's radio mesh network technology over
conventional ZigBee-based solutions.
Strategic Partnership
CyanConnode and NIK have also signed a non-exclusive, strategic
partnership agreement to collaborate on the supply of all aspects
of smart metering technology for gas and electricity meters,
initially in Ukraine. As part of the agreement, NIK will be
responsible for all certification of CyanConnode's hardware in
Ukraine and when NIK have sold an agreed number of units, it will
take over local manufacture of the Company's hardware, under a
licensing model.
The Large Market Opportunity in Eastern Europe
A recent report by Northeast Group, a well-respected market
intelligence firm based in Washington, DC, highlighted that Central
and Eastern European countries are forging ahead with investment in
smart grid infrastructure with a reported US$25.2 billion to be
invested over the next ten years.(1) The overall number of
electricity consumers in Ukraine is circa. 16.5 million, providing
scope for further significant follow-on orders.
John Cronin, CyanConnode Executive Chairman, commented: "We are
pleased to announce such a significant order from our partner, in a
new geographic region. This latest contract win further
demonstrates the suitability of CyanConnode's award-winning
technology for smart metering implementations and the scalability
of its collaborative business model.
"NIK has the skills and experience to deliver integrated smart
metering deployments in Eastern Europe as well as other markets
including Russia and South Asia. We look forward to working with
NIK to implement existing contracts as well as win new
opportunities."
Sergiy Bokoch, Chief Executive Officer, NIK, commented: "As a
leading smart grid solution provider we are seeing more
opportunities for narrowband RF mesh networks as the technology
offers resilient, feature-rich and cost-effective solutions. NIK
selected CyanConnode, to replace its existing ZigBee solution,
based on the performance, reliability and the total cost of
ownership of CyanConnode's technology. Furthermore, being part of
CyanConnode's partner eco-system provides NIK with world class
support for the integration and deployment of narrowband
networks."
(1)
https://www.metering.com/eastern-europe-to-meet-eu-smart-meter-targets-says-report/
Enquiries:
CyanConnode Holdings plc Tel: +44 (0) 1223 225
060
John Cronin, Executive Chairman www.cyanconnode.com
FinnCap Ltd (Nomad and Broker) Tel: +44 (0) 20 7220
0500
Adrian Hargrave/Giles Rolls (Corporate
Finance)
Alice Lane (Corporate Broking)
Walbrook PR (Financial PR) Tel: +44 (0) 20 7933
8780
Paul Cornelius / Nick Rome cyanconnode@walbrookpr.com
About CyanConnode
CyanConnode is a world leader in narrowband RF mesh networks
that enable Omni Internet of Things (IoT) communications. Its
innovative solutions use sub GHz frequencies and are optimised for
exceptional performance. Ultimesh solutions provide end-to-end
quality of service and total cost of ownership and Panmesh delivers
standards-based IPv6 solutions, enabling rapid innovation for the
implementation of 3(rd) party applications. Through its global
partner eco-system, CyanConnode provides customers with the
flexibility and choice required to converge networks for
applications in smart cities and IoT, delivering increased customer
value. For more information, please visit www.cyanconnode.com.
About NIK LLC
NIK LLC is one of the largest manufacturers of energy metering
devices, smart energy management systems and a leading provider of
energy consulting and engineering services in the Eastern European
market. Since 1996 NIK has grown into a large successful
manufacturing company, employing approximately 500 employees. For
more information, please visit www.nik.net.ua.
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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