EUROPACORP (EPA:ECP) - Financial results 2016/2017

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28/06/2017 07:00

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                       Financial results 2016/2017

    During a year marked by substantial loss, company has taken measures to
          reinforce financial strength and realign content strategy

* Consolidated revenue of EUR151.7 million
* Full year loss of EUR119.9 million, considerably higher than past years, as
  per prior warning, driven by underperforming slate
* Entered new multi-year US theatrical distribution agreement
* Focusing future slate to more closely align with company's historic
  successes
* 17/18 line-up led by three major global franchises : Valerian and the City of
  a Thousand Planets, Taxi 5 and the second season of the TV series, Taken
* Closed multiple transactions including debt restructure, capital increase
  and sale of non-strategic assets to strengthen treasury

Saint-Denis, June 28th 2017 - EuropaCorp, one of the leading independent film
studios in Europe, film  producer and distributor, reports its annual
consolidated income, which ended on March 31st, 2017, as approved by the Board
of Directors at its meeting on June 26th, 2017.

EUR million          FY IFRS 5      FY 2016/2017  FY 2015/2016  Var. 12 months
                   2016/2017(1)

Revenue              144.2             151.7         147.3          +4.4
Cost of sales       -217.1            -221.4        -110.0        -111.4
Operating margin
(before overhead)    -72.9             -69.7          37.3        -107.0
% of revenue            -50,6%           -45,9%         25,3%
Operating profit    -122.6            -122.2         -22.3         -99.9
% of revenue            -85,0%           -80,6%        -15,1%
Net income - Group
share               -119.9            -119.9         -27.7         -92.2
Equity                96.7              96.7         155.2         -58.5

(1) To be compliant with IFRS 5, the multiplex and music publishing activities
- sold or held for sale - have been restated within the consolidated 2016-2017
financial statement above. The net income for that specific lines of business
(-0.3 MEUR) has been booked directly in
" Net Income - Group Share ".

> Consolidated revenue of EUR151,7 million, an increase of 3.0%, driven by
  foreign sales and SVOD and free TV sales in the United States, breaks down as
  follows:

Revenue from International Sales was EUR48.8 million or 32.2% of total
revenue.
Revenue from Theatrical distribution in France and the United States was
EUR13.7 million, up 40.1% thanks to a larger volume of films, representing 9%
of total revenue.
Revenue from Video & VOD in France and the United States was EUR17.4 million,
up almost 15%, representing 11.5% of total revenue.
Revenue from Television sales & SVOD in France and the United States was
EUR29.9 million, up more than 25% thanks to the SVOD sales in the United
States, representing 19.7% of total revenue.
Revenue from TV Series productions was EUR23.6 million, up more than 8%, or
15.5% of total revenue. Revenue from Subsidies was EUR3.9 million.
Revenue from Multiplexes, sold in December 2016, was EUR5.2 million.
Revenue from other activities of the Group (licenses, partnerships, music
publishing and post-production, etc.) was EUR8.2 million.

> Annual loss of EUR119.9 million due to:

* Poor performance of English language slate, including losses from 9 Lives,
  Shut In, Miss Sloane and The Circle.
* Disappointing box-office revenues that failed to offset distribution costs to
  support wide releases.
   - More than EUR100 million of US distribution costs

In response to this significant underperformance, company has made dramatic
changes to its US distribution strategy, downsizing distribution and marketing
overhead and entering into a multi-year agreement for STX Motion Pictures Group
to provide theatrical marketing and distribution services for future releases.
Management believes these changes will lead to superior box-office performance,
more efficient P&A spend, and will ultimately result in a lower distribution
costs to release films in the US.

Further in response to these issues, company is refocusing development and
production to more closely reflect core strengths in action, sci-fi genres and
with greater emphasis on productions written and directed by company founder
Luc Besson.

> Net operating cash flows

The net operating cash flows amount to EUR2.4 million for FY 2016/2017, down
from EUR81.7 million for the previous financial year. This decrease can be
explained by the significant amount of P&A costs disbursed during the fiscal
year for the release of the films in the United States, while the total amount
of corresponding revenues on those films has not yet been recognized nor
collected.

In response to the company's recent underperformance, EuropaCorp closed
multiple transactions during the fiscal year to provide additional financial
strength. These include restructuring the company's first and second lien debt,
raising EUR60 million in equity from FF Motion Invest (a subsidiary of
Fundamental Films) and sale of the multiplex activities to Cinemas
Gaumont-Pathé for more than EUR20 million.

> Investments for the future

The 2016/2017 financial year was marked by a high level of investment in
world-class films and TV series. The company invested EUR133.7 million with the
largest investments being the movie Valerian and the City of a Thousand
Planets, and the first season of the TV series, Taken.

> Perspectives

In responses to FY 2016/2017 results, the Group has set the following priority
objectives for the coming year:
- Making the sci-fi epic Valerian and the City of a Thousand Planets a
  successful new franchise;
- Expanding existing franchises (i.e. Taxi 5 film, second season of Taken TV);
- Refocusing the future slate to better align with company's historical
  successes;
- Returning to historical levels of French-language productions; and
- Reducing activities in non-core businesses.

* Films

Five English-language films and seven French-language films, either produced or
acquired by EuropaCorp, are currently in post-production or completed:
- Valerian and the City of a Thousand Planets, directed by Luc Besson, starring
  Cara Delevingne and Dane DeHaan. The film is completed. The film will be
  released on the 21st of July, 2017, in the United States, and on the 26th  of
  July in France;
- Sous le même toit, directed by Dominique Farrugia, starring Louise Bourgoin
  and Gilles Lellouche and produced by EuropaCorp. The film was released in
  France on April 19th 2017 and has had more than 650 thousand admissions to
  date;
- Their Finest, directed by Lone Scherfig, starring Gemma Arterton and Sam
  Claflin. EuropaCorp acquired the US distribution rights. The film was
  released in theaters in the United States in April 2017 and has earned
  $3,6 million in Domestic Box Office (US & Canada) to date;
- The Circle, directed by James Ponsoldt, starring Emma Watson and Tom Hanks.
  EuropaCorp acquired the US distribution rights. The film was released in
  theaters in the United States in April 2017 and has earned $20.5 million in
  Domestic Box Office to date;
- Bad Buzz, directed by Stéphane Kazandjian, starring Eric Metzger and Quentin
  Margot, and coproduced by EuropaCorp. The film has been released in France on
  June 21st;
- CoeXister, comedy by and starring Fabrice Eboué. Ramzy Bedia, co-starring
  Guillaume de Tonquédec and Audrey Lamy, and produced by EuropaCorp. The film
  is completed and is scheduled for release in France on the 11th  of October,
  2017;
- Eva, directed by Benoît Jacquot, starring Isabelle Huppert, Gaspard Ulliel
  and Richard Berry. The film is coproduced by EuropaCorp and is currently in
  post-production;
- Carbone, directed by Olivier Marchal, starring Benoît Magimel and Laura
  Smet, and coproduced by EuropaCorp. The film is in post-production;
- Renegades, directed by Steven Quale, starring J.K. Simmons and Sullivan
  Stapleton, and produced by EuropaCorp. The film is completed;
- Sparring, directed by Samuel Jouy, starring Mathieu Kassovitz, and coproduced
  by EuropaCorp. The film is completed; and
- Je vais mieux, directed by Jean-Pierre Améris, starring Eric Elmosnino,
  Alice Pol and Ary Abittan. The film is produced by EuropaCorp and is
  completed.

EuropaCorp also acquired the French distribution rights of The Old Man and the
Gun, directed by David Lowery, with Robert Redford and Casey Affleck. The film
is currently in post-production.

Taxi 5, the new installment of the successful film series, will start shooting
July 2017. The film will be directed by Franck Gastambide, starring Franck
Gastambide and Malik Bentalha.

* TV series

In May 2017, NBC picked-up Taken for a second season. The 16 episodes of season
two will be coproduced by EuropaCorp Television and Universal Television for
the NBC network in the United States and the SVOD platform SFR Play in France.
Production will start July 2017 and episodes are scheduled to air January
2018.

On the French-language productions side, EuropaCorp Television will be
delivering a diversified set of fictions during the fiscal year 2017/2018,
including:
- A new 90' series from the Mary Higgins Clark for France 3: Rien ne vaut la
  douceur du foyer;
- The Aux Animaux la Guerre for France 3 (6 episodes x 52' minutes);
- The animated series Arthur and the Minimoys, in coproduction with Studio 100
  Animation (Maya l'Abeille, Vic le Viking...);
- A TV film for Arte: Je sais tomber;

EuropaCorp Television is also developing other projects such as the series Les
Rivières Pourpres (8x52') for France 2, the French adaptation of the British
series Doctor Foster (from Drama Republic) for TF1 in coproduction with BBC
Worldwide France, as well as the TV fiction Traqués for TF1. EuropaCorp also
works for France 2 on the series No Futur, by Fabrice Eboué, planned as a late
night program, and for France 3 on the series Sous la peau.

In sum, EuropaCorp Television is collaborating with a diverse array of French
and international broadcasters across multiple genres.

Financial calendar

* Annual General Meeting : September 2017
* Revenue and consolidated financial statements for the 1st semester : December
2017
* Annual revenue : May 2018
* Annual consolidated financial statements : June 2018

ABOUT EUROPACORP

One of Europe's leading film studios, EuropaCorp was founded in 1999 and has
operations spanning production, theatrical distribution, video and VOD, and
French TV sales. With a line-up of films in French and English language and a
strong foothold in international markets, the Group has produced France's
biggest international hits in recent years. In 2014, EuropaCorp entered direct
distribution for its films in the United States. EuropaCorp also has
international rights, partnerships and licensing, production and soundtrack
publishing activities. The Group has been producing TV series since 2010.
EuropaCorp's integrated business model allows it to benefit from diversified
sources of revenue. EuropaCorp was founded by French filmmaker, screenwriter
and producer Luc Besson. The Group owns a catalogue of around 500 movies.
For more information, go to www.europacorp-corporate.com

Contacts

EuropaCorp Group
Lisa Reynaud / Investors Relations / investors@europacorp.com
Régis Lefèbvre / Communication / rlefebvre@europacorp.com
Tel : 01 55 99 50 00

NewCap
Pierre Laurent / NewCap
plaurent@newcap.fr / Tel : 01 44 71 94 94

EuropaCorp is listed in Compartment C of Euronext Paris
ISIN code: FR0010490920 - Ticker: ECP

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