XILAM (EPA:XIL) Xilam - First-Half 2018 Results

Transparency directive : regulatory news

26/09/2018 18:11

Press release                                        Paris, 26 September 2018

                                  First-Half 2018
                      Change in dimension gaining traction

                                   Revenue: +50%
                     Reported current operating income: +51%
             (+67% after restatement for the bonus share award plan)

The Board of Directors of Xilam Animation S.A. convened on 25 September 2018.
The meeting, chaired by Marc du Pontavice, was held to approve the interim
financial statements as at 30 June 2018.

Consolidated income statement                    30/06/2018                %
(in EUR thousands)              30/06/2018(1)(3) restated(2)  30/06/2017  chg.

New productions                        8,465                       4,571  +85%
Catalogue                              5,385                       4,652  +16%
Other                                     16                          16    -
Revenue and subsidies                 13,866                       9,239  +50%
Other current operating income         1,081                         594  +82%
Total operating income                14,947                       9,833  +52%
Operating expenses                  (10,660)                      (6,997) +53%
Current operating income               4,287          5,366        2,836  +51%
Current operating margin                 31%            39%          31%
Other non-current operating
income and (expenses)                  (542)           (542)           -
Operating income                       3,745           4,824       2,836  +32%
Operating margin                         27%             35%         31%
Net income                             2,603           3,426       2,351  +11%
Net margin                               19%             25%         25%

(1) The limited audit of interim financial information has been finalised and
the interim financial report will be available on Xilam's corporate website by
28 September 2018 at the latest.
(2) Restated current operating income corresponds to current operating income
after restatement for the impact of the bonus share award plan
(3) The impact of the application of IFRS 15 is detailed at the end of the
press release

Growth of 50% driven by the success of new productions

Xilam achieved revenue growth of 50%, of which 85% growth in new productions,
having delivered 37 half-hour programmes, thus confirming an excellent outlook
for deliveries over the current year.

Solid catalogue revenue

After growth in catalogue revenue of 77% in 2017, Xilam recorded further
double-digit growth in this revenue of +16%, reaching a new record of EUR5.4
million.

Excellent exposure from Xilam's programmes on YouTube, with nearly 1.9 billion
video views over the period, contributed to this record performance, driven by
the success of Oggy and the Cockroaches and Zig & Sharko, with the number of
videos viewed on the latter now equalling that of Oggy and the Cockroaches.

Sales to television channels, notably of the Oggy and the Cockroaches and The
Dalton series, which are in high demand in both Europe and Asia, made a
significant contribution to growth in H1 revenue.

A robust business model

After restatement for the impact of the bonus share award plans in the amount
of EUR1.1 million and the cost of relocation of the head office in the amount
of EUR0.5 million, Group current operating income came out at EUR5.4 million
compared with EUR3.2 million in the first half of 2017, representing growth of
67%. The restated operating margin stands at 39% versus 35% in the first half
of 2017.

Xilam's profitability confirms the robustness of its business model:
- As new productions are largely pre-sold, a gross margin on productions can be
  generated from the time of delivery;
- Growth in the catalogue is largely reflected in income since the carrying
  value has already been substantially amortised;
- General expenses were strictly managed, and grew less quickly than the
  business activity.

The Group's general expenses (purchases, personnel expenses, other current net
operating expenses), after restatement for the impact of the bonus share award
plan, remained stable in relation to the same period in 2017, and now account
for 14% of revenue for the period, versus 17% in the first half of 2017.

The financial loss of EUR320 thousand compares with a profit of EUR246 thousand
in the first half of 2017. This difference can be attributed to the recognition
of foreign exchange effects linked to production credit denominated in other
currencies.

Net income increased by 11% to EUR2.6 million.

A stronger financial position

Shareholders' equity, incorporating the EUR22.3 million capital increase of 29
June 2018, rose by 98% to 45.6 million.
Following that capital increase, Xilam has a surplus cash position of EUR17.8
million after deduction of its debt. Xilam also has available draw-down
resources of EUR13 million related to the privately placed euro bond finalised
on 27 July 2017.

Compared with H1 2017, self-financing capacity was up by more than 50% to
EUR11.2 million.

Xilam therefore boasts a robust financial position, serving as a solid
foundation to pursue organic and external growth.

Outlook: Five growth drivers

Xilam enjoys renewed confidence and very good visibility for the months ahead
on foot of the anticipated ramp-up in activity of its five growth drivers:

Concerning New productions, having successfully concluded the delivery of four
series over the period, Xilam is currently producing four series with scheduled
deliveries over the coming months, including Mr. Magoo, the third season of Zig
& Sharko, Coach me if you can and The Fabulous Adventures of Prince Moka.

Xilam confirmed its target to deliver 70 half-hour programmes over full-year
2018 and is confident in its capacity to generate a record level of operating
income.

In parallel, Xilam is working on the development of several series which it
plans to bring into production in the coming months, further confirming its
target to deliver 100 half-hour programmes a year starting in 2020.

Its ongoing productions and developments will also add successful programme
series to the Catalogue. This amounts to a net book value in the balance sheet
of EUR22.7 million, a relatively low value in relation to the annual net
revenue from the catalogue (EUR8.4 million in full-year 2017).

International activity represents a major growth driver. After India, where
Oggy and the Cockroaches has been remarkably successful over the last number of
years, Xilam is gaining traction in new territories, notably China where 11
series from the catalogue have already been sold.

The Group is pursuing the development of its digital activities, drawing on the
excellent exposure obtained through the Xilam brands, notably in the United
States. In this regard, Xilam's catalogue is expected to surpass four billion
video views on YouTube in 2018.

Finally, by diversifying its editorial line with Paprika and Tiny Bad Wolf,
Xilam is focusing on investment in the pre-school segment, a major driver of
future growth in merchandising revenue.

External growth: a change in dimension in sight

Thanks to the privately placed euro bond and its capital increase, Xilam
currently has fire power of more than EUR35 million for targeted and accretive
acquisitions. It is already in talks with several animation studios in Europe
and the Group hopes to finalise the first of these in the coming months.

Chairman and CEO of Xilam, Marc du Pontavice, commented, "This record earnings
publication rubber stamps the relevance of Xilam's business model. Since the
European production market is particularly dispersed, nuggets of creativity and
technological know-how are to be found. Xilam's editorial and commercial
expertise may be the key advantage that transforms the value of these studios".

NB: The Group has adopted IFRS 15 - Revenue from Contracts with Customers, and
this document therefore presents 2018 revenue after the application of this new
standard. Using the same revenue recognition method as in 2017, H1 2018 revenue
would have been EUR 12,881 thousand, operating income would have been EUR3,432
thousand and net income would have been EUR2,365 thousand. As the Group has
opted for the cumulative recovery method, H1 2018 and FY 2018 financial
statements will be restated in the notes to the financial statements for the
effects of the application of this new standard.

About Xilam

Xilam is one of Europe's leading animation companies, creating, producing and
distributing original children's and family entertainment content across TV,
film and digital media platforms.

Founded in 1999 by Marc du Pontavice, Xilam owns a catalogue of more than 2,000
animated episodes and three feature films including strong brands such as Oggy
& the Cockroaches, Zig & Sharko, The Daltons and its first pre- school series,
Paprika.

Broadcast in over 190 countries on all the major TV networks and digital
platforms, including YouTube with over 300 million video views monthly, Xilam's
programme catalogue makes the company one of the top global content providers
in animation.

Xilam employs more than 400 people, including 300 artists, who are based across
its four studios located in Paris, Lyon, Angoulême and Ho-Chi-Minh City in
Vietnam.

Xilam is listed on Compartment B of Euronext Paris
PEA-eligible
SRD long-eligible
ISIN code: FR0004034072 / Ticker: XIL

Contacts at Xilam

Marc du Pontavice - Chairman and CEO
François Bardoux - CFO
Tel: +33 1 40 18 72 00

    57 boulevard de la Villette - 75010 PARIS - Tel: (33) 01 40 18 72 00
A société anonyme (public limited company) with share capital of EUR491,150

            Paris Trade and Companies Register (RCS): 423 784 610 -
                       SIRET: 423 784 610 00044 - APE 921 A

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