EUROPACORP (EPA:ECP) - 2019/2020 half-year results

Transparency directive : regulatory news

13/12/2019 18:00

PRESS RELEASE

                          2019/2020 half-year results

> Positive operating margin of EUR13.2 M, increasing by 40% compared to H1
  2018/2019
> Continued overhead cost reduction, in decrease by 29% compared to H1
  2018/2019
> Net result however in deficit, hampered by non-recurring expenses related
  to restructuring and by negative financial result

Saint-Denis, 13 December 2019 - EuropaCorp, producer and distributor of films
and TV series, announces today its revenue and consolidated half-year results
as at 30 September 2019.

Half-yearly results - H1 2019/2020

                                                          Presentation IFRS 5*
                         30 Sept.     30 Sept.             30 Sept.
Consolidated income        2019        2018    Variation     2018     Variation
(EUR million)           (6 months)  (6 months)   (EURM)   (6 months)    (EURM)

Revenue                    40,7        81,4      -40,7       80,8       -40,1
Cost of sales             -27,5       -71,8       44,3      -71,4        43,9
Operating margin           13,2         9,6        3,6        9,4         3,8
% of Revenue              32,4%       11,8%                 11,7%
Operating income           -1,7       -62,7       61,0      -55,1        53,4
% of Revenue              -4,2%      -77,0%                -68,2%
Financial income          -16,5       -16,2       -0,3      -16,2        -0,3
Net Income (Group share)  -22,7       -88,9       66,2      -88,9        66,2
% of Revenue             -55,9%     -109,2%               -110,0%

* To be compliant with IFRS 5, the activity related to the catalogue Roissy
Films, held for sale as of 30 September 2018, had been restated within the
consolidated H1 2018/19 financial statements and booked directly in "Net
Income - Group Share". This business line was sold in March 2019.

> Revenues of EUR40.7 M, in decrease by EUR(40.1) M compared with the first
semester of last fiscal year linked notably to the significant revenues from
TV series during H1 2018/2019 (delivery of the last episodes of Taken
season 2) as well as revenues from line production and coproduction as of
30 September 2018.

Foreign Sales amounted to EUR9.3 M, or about 23% of total revenue. They are
down by EUR(2.5) M compared to N-1. They included notably the last deliveries
of Kursk, the ones of Nous finirons ensemble (Little White Lies 2), as well as
overages collected on the films Lucy and Taken 3.

Revenue from Theatrical Distribution stood at EUR6.6 M against EUR5.7 M during
2018/2019. The semester was marked by the theatrical release of Nous finirons
ensemble (Little White Lies 2) with 2.8 million admissions in France.

The Video & VOD segment in France and the United States came in at EUR3.0 M,
versus EUR8.8 M last year. The main sales were for films from the catalogue,
Valerian and the City of a Thousand Planets and Renegades in the
United States, and Taxi 5 in France.

Television sales & SVOD in France and the United States were at EUR16.7 M for
2019/2020, down by EUR(1.6) M (-9%) compared to N-1. In France, revenue for
the period is linked to the opening of new broadcasting rights windows,
notably for Renegades and I Feel Better, and in the United States to cable TV
network sales for Valerian and the City of a Thousand Planets.

Revenue for the TV Series production activity amounted to EUR3.1 M (overages
for Taken series), compared to EUR19.8 M in H1 2018/2019, given the delivery
to NBC of the last six episodes of Taken season 2 during H1 2018/2019.

Other activities recorded revenue of EUR1.1 M or a decrease of EUR(13.1) M
compared to H1 2018/2019, due to the significant line production receipts
(Kursk) and those of coproduction (Taxi 5) as of 30 September 2018.

> Positive operating margin of EUR13.2 M (32% of revenues), increasing by 40%
compared to H1 2018/2019

Consolidated net result was EUR(22.7) M, versus EUR(88.9) M during the first
semester of the previous financial year which was marked by non-recurring
impairments for EUR(80.7) M, notably of the intangible asset relating to the
distribution of films in the United States. Net result of EUR(22.7) M as of
30 September 2019 is principally impacted by the negative financial result
(cf. below) and by the non-recurring result of EUR(5.2) M which mostly
fees linked to the debt restructuring currently being finalized.

The operating margin stood at EUR13.2 M for H1 2019/2020 (or an operating
margin of 32%), versus EUR9.4 M in H1 2018/2019 (or 12% of revenues). This
profit margin can be mainly explained by a high margin on the catalogue
exploitation.

Overheads were at EUR(9.6) M, or a decrease of EUR4.0 M compared to N-1
(-29%), confirming the effectiveness of the measures implemented by the Group
to reduce general expenses, which had already decreased by EUR7.2 M (- 20%) at
31 March 2019.

Half-year financial income was EUR(16.5) M, versus EUR(16.2) M in N-1. The
negative financial result is mainly explained by a significant cost of debt,
around EUR(11) M, and by foreign exchange loss of around EUR(4) M linked to
the EUR/$ rate evolution since 31 March 2019.

After taking into account taxes for EUR(4.0) M (against EUR(9.3) M in N-1),
half-year Net income (Group share) was EUR(22.7) M.

> Positive cash flows

The net operating cash flows of the semester amounted to +EUR10.8 M, versus
+EUR35.6 M for the first semester of last financial year. The decrease is
linked notably to the cashing of theatrical receipts concentrated on the first
month of the 2nd semester 2019/2020 and to a limited number of films released
in France and/or delivered internationally during the 1st semester of
financial year 2019/2020. Given the current debt restructuring, there was
almost no investment during H1 2019/2020.

> Financial structure

As of 30 September 2019, net debt was EUR164 M versus EUR221 M as of 30
September 2018. This decrease compared to the first semester 2018/2019 is
principally due to the reimbursement of production debts.

> Perspectives

During the first semester of FY 2019/2020, the Company has continued the
discussions initiated with its lenders to restructure the debts, with various
positive advances. The discussions have also focused on the rationalization
of the leased area at the Cité du Cinéma and the corresponding rent. A project
of safeguard plan could not be finalized during the initial 6-month period.
The Company has then asked the Commercial Court of Bobigny and obtained, in
its ruling of 29 October 2019, the extension of the observation period of the
safeguard proceeding for another 6 months, or until 13 May 2020. It will
allow the Company to continue the discussions with the various stakeholders
in order to finalize a safeguard plan enabling the group to continue its
activity with a lightened debt structure. In due time, the Company will
inform the market of the outcome of the discussions and the current safeguard
proceeding.

Considering, notably, the loss recorded on the first semester, EuropaCorp
will recognize a financial year 2019/2020 in deficit.

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 and
distributed over 160 films in French cinemas. Since 1999, the company has
produced 10 of France's 20 highest grossing films internationally and 22
films among the 70 French productions with the most admissions
internationally (source Le film français - May 17 2019).
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 / Investor 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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