EUROPACORP (EPA:ECP) - Financial results 2017/2018

Transparency directive : regulatory news

27/06/2018 18:00

PRESS RELEASE

                          Financial results 2017/2018

* As previously announced, the year was marked by a loss, with a net income of
  -EUR82.5 M
* Significant increase of +EUR105 M in operating cash flows, mainly due to the
  collection of revenues from the film Valerian and the City of a Thousand
  Planets
* First results of the measures implemented to cut overheads: savings of
  EUR15.9 M or -30%, before impact of the redundancy scheme which will occur
  for FY 2018/2019
* Revised content strategy, with productions more closely aligned with
  company's historic successes: effects on the next financial years, beginning
  with 2018/2019

Saint-Denis, June 27th, 2018 - EuropaCorp, one of the leading independent film
studios in Europe, film producer and distributor, reports its annual
consolidated income, which ended on March 31st, 2018, as approved by the Board
of Directors at its meeting on June 26th, 2018.

                     FY         FY             FY IFRS 5(1)  FY IFRS 5(1)
EUR million      2016/2017   2017/2018   VAR.   2016/2017     2017/2018
VAR.

Revenue            151.7       226.5    +74.8     139.8         223.7     +83.8
Cost of sales     -221.4      -246.8    -25.4    -212.4        -245.6     -33.2
Operating margin
(before overheads) -69.7       -20.3    +49.4     -72.5         -21.9     +50.6
% of revenue       -45.9%       -9.0%             -51.9%         -9.8%
Operating result  -122.2       -68.7    +53.5    -119.5         -74.0     +45.5
% of revenue       -80.6%      -30.3%             -85.5%        -33.1%
Net income        -119.9       -82.5    +37.4    -119.9         -82.5     +37.4
% of revenue       -79.0%      -36.4%             -85.7%        -36.9%

(1) To be compliant with IFRS 5, the Multiplex, Music Publishing and
French-speaking TV Series activities - sold - have been restated within  the
consolidated 2017/2018 financial statements above, and within the consolidated
2016/2017's too, to offer a better comparison. The Net Income for that specific
lines of business for 2017/2018 (+EUR5.3 M) and for 2016/2017 (-EUR2.7 M) has
been booked directly in Net Income.

> Consolidated revenue of EUR226.5 million, an increase of 49%, driven by
  Valerian and the City of a Thousand Planets' all types of sales

Revenue from International Sales was EUR76.7 million, i.e. 34% of total
revenue.
Revenue from Television & SVOD in France and the United States was EUR40.9
million (18% of total revenue), up from EUR29.9 million in 2016/2017, thanks to
the SVOD sales in the United States (Valerian and the City of a Thousand
Planets, The Circle, Miss Sloane).

Revenue from Theatrical distribution in France and the United States was
EUR39.6 million, i.e. 17% of total revenue, increasing highly thanks to
Valerian and the City of a Thousand Planets ($41.2 million at the domestic box
office

- United States and Canada - and 4.1 million admissions in France).
  Revenue from Video & VOD in France and the United States was EUR33.2 million,
  up from EUR17.4 million last year, representing 15% of total revenue.
  Revenue from TV Series was EUR24.6 million, or 11% of total revenue. It was
  mostly driven by the delivery, in the United States, of the first ten
  episodes of Taken season 2.
  Revenue from Subsidies was EUR4.4 million.
  Revenue from other activities of the Group (licenses, partnerships, music
  publishing and post-production, etc.) was EUR7.1 million.

> Annual loss of EUR82.5 million versus a loss of EUR119.9 million last year

  In FY 2017/2018, the operating loss was -EUR68.7 million versus -EUR122.2
  million in 2016/2017 (+EUR53.5 M), due to:

* Poor performance of English-language slate in the United States: US box
  office revenues failed to offset the distribution costs necessary to release
  the films;
* The depreciation of the US distribution intangible asset, for EUR13 million,
  considering the revision of the estimated future net receipts from this
  activity. As previously announced, the number of English- speaking films to
  be distributed in the United States each year was revised downwards (2 to 3
  films per year), which mechanically drives down the estimated future net
  receipts.

The financial result was -EUR8.1 million, versus -EUR18.2 million last year,
reflecting mostly the interest expense, especially on the Mezzanine credit
line, as well as the unrealized foreign exchange gains as of March 31st 2018.

After the tax impact of -EUR4.8 million (mostly due to a depreciation of the US
deferred tax asset consequently to the decrease of the tax rate notably), the
net income was -EUR82.5 million versus -EUR119.9 million last year.

> Net operating cash flows

The net operating cash flows amounted to EUR107.4 million versus EUR2.4 million
in FY 2016/2017. This EUR105 million rise is due to:
* Collection of Valerian and the City of a Thousand Planets' international
  sales and TV sales;
* Less P&A costs disbursed in the United States than last year.

> CAPEX

During FY 2017/2018, the Group invested EUR90.2 million in international films
and TV series, compared to EUR133.7 million in FY 2016/2017. This decrease is
explained by the historic high amount from last year due to the production of
Valerian and the City of a Thousand Planets.

During FY 2017/2018, the Group also sold two non-strategic assets:
* The music publishing activity for EUR14.5 million;
* The French-speaking TV series activity for EUR11 million.

> Perspectives

The Group has set the following priority objectives for the coming year:
* Keeping on the development of content more closely aligned with the company's
  historic successes:
  o Production of action/sci-fi films directly supervised by Luc Besson;
  o Development of existing and/or new franchises (sequels and/or prequels, as
    well as adaptations for TV of EuropaCorp's film successes);
* Reducing activities in non-core businesses;
* Reducing the US P&A related risk.

During FY 2017/2018, following the strategy announced, the Group launched the
production of films more closely aligned with its historic successes. They will
be released from FY 2018/2019.

* Films

Two English-language films and three French-language films, either produced,
coproduced or acquired by EuropaCorp, are currently shooting, in
post-production or completed:

- Taxi 5, directed by Franck Gastambide, starring Franck Gastambide and Malik
  Bentalha and produced by EuropaCorp. The film was released in France on April
  11th 2018 and has had more than 3.6 million admissions to date;
- Je vais mieux, directed by Jean-Pierre Améris, starring Eric Elmosnino,
  Alice Pol, Ary Abittan and produced by EuropaCorp. The film was released in
  France on May 30th 2018 and has had more than 120 thousand admissions to
  date;
- Anna, directed by Luc Besson, starring Sasha Luss, Luke Evans, Helen Mirren,
  Cillian Murphy and produced by EuropaCorp. The film is currently in
  post-production.
- Kursk, directed by par Thomas Vinterberg, starring Matthias Schoenaerts,
  Colin Firth and Léa Seydoux. The film is completed.
- Nous finirons ensemble (Little White Lies 2), written and directed by par
  Guillaume Canet, starring François Cluzet, Marion Cotillard and Gilles
  Lellouche. The film is currently in post-production and is set to be released
  on March 27th, 2019.

* TV series

Concerning the TV series activity, the company's aim is to keep on developing
the production of English- language projects with strong international
potential such as the Taken series.

Among the projects currently in development, there are:
- AI (Artificial Intelligence), based on an original idea by Luc Besson;
- Gray, based on an original idea by world-renowned bestselling novelist David
  Baldacci;
- The Extraordinary Adventures of Adele Blanc Sec, based on the French graphic
  novel by Jacques Tardi;
- American Flagg!, based on the US graphic novel by Howard Chaykin.

Financial calendar

* Annual General Meeting: September 2018
* Revenue and consolidated financial statements for the 1st semester: December
  2018
* Annual revenue: May 2019
* Annual consolidated financial statements: June 2019

ABOUT EUROPACORP

Founded in 1999, EuropaCorp has become one of Europe's leading film and
television studios.
The company's global activities span the entire film value chain with expertise
in production, theatrical distribution, video and VOD sales, international
sales, soundtrack publishing, and television sales. By directly managing the
production and distribution process, EuropaCorp is able to maintain quality and
creativity throughout the lifecycle of a film or television project. The
company has produced or coproduced over 110 films, distributed nearly 160 films
in French cinemas, and owns a catalogue of more than 500 French and English
language titles. Since 2000, the company has produced 8 of France's 20 highest
grossing films based on worldwide box-office. Starting in 2010, the company has
been active in producing television movies and episodic television series for
platforms around the world.
EuropaCorp was founded by French director, screenwriter and producer Luc
Besson. For more information, go to http://www.europacorp.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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