Relevance of a pure player model in a crisis
context
New production volumes growing steadily,
securing future sales
Solid financial position
2020-21 guidance reiterated
Regulatory News:
Xilam Animation (Paris:XIL)(ISIN: FR0004034072, Ticker: XIL), an
independent producer and distributor of animated programmes, is
reporting its results for the first half of 2020, as approved by
its Board of Directors on 28 September 2020 at a meeting chaired by
Marc du Pontavice.
Marc du Pontavice, Xilam’s Chairman and Chief Executive Officer,
commented: “We are delighted with our solid performance amid the
unprecedented situation caused by the Covid-19 pandemic. This
performance again highlights the benefits of our pure-play
positioning underpinned by our resilient business model. We
maintained new production at a high level and have begun the
process of integrating and supporting Cube Creative’s first-class
teams to help meet the ever-growing demand from the world’s digital
streaming giants. We are taking bold action to unlock the full
value of our catalogue, by developing our strong brands and by
creating new series to sustain our success in the future. We are
confident in our future outlook and remain focused on achieving our
Scale 2023 plan objectives.”
(€ thousands)
H1 2020 (1) Consolidated
H1 2020 Comparable structure
(excluding Cube Creative)
H1 2019 (excluding Cube
Creative)
New productions revenue
5,263
4,245
2,987
Subsidies for new productions(2)
546
546
1,844
Total new productions revenue
5,809
4,791
4,831
Catalogue revenue
3,591
3,134
3,055
Catalogue subsidies(2)
402
402
-
Total catalogue revenue
3,993
3,536
3,055
Total revenue and other
income(2)
9,802
8,327
7,886
Other subsidies
32
1
6
Other recurring operating income(3)
733
675
642
Total operating revenue
10,567
9,003
8,534
Operating expenses
(9,056)
(7,033)
(5,760)
Recurring operating income
1,511
1,970
2,774
% of revenue
15.4%
23.7%
35.2%
Operating income
1,337
1,796
2,535
% of revenue
13.6%
21.6%
32.1%
Net income
734
1,224
1,613
% of revenue
7.5%
14.7%
20.5%
(1) The auditors’ limited review of the interim financial
reporting has been completed, and the interim financial report will
be available on Xilam’s website by 30 September 2020 at the latest
(2) This amount does not include audiovisual tax credits (3)
Including the audiovisual tax credit
Solid first-half 2020 top-line performance despite the
effects of the pandemic crisis
As already reported, the Group’s total revenue and other income
came to €9.8 million in the first six months of 2020, up 24% with
organic growth of 5.6% despite the unprecedented situation caused
by the pandemic. New productions revenue (€5.2 million, up 76%,
including organic growth of 42%) got a boost from the strong
contribution from deliveries of non-proprietary productions,
including Chip’n’Dale, and recorded a concomitant decline in
subsidies (€546 thousand vs. €1,844 thousand). The catalogue (€4
million, up 31% including organic growth of 16%) benefited from
lockdown effects and strong demand across all its titles.
Operating margins reflecting a smaller contribution from
non-proprietary production and Cube Creative’s temporarily negative
contribution
The highly atypical product mix during the first half with a
bigger-than-normal share of non-proprietary productions reflected
Chip‘n’Dale’s strong revenue contribution, leading to recognition
in full of the related expenses and thus a greater impact on
margins, whereas expenses incurred on proprietary productions are
amortised over several periods. First-half deliveries of
proprietary productions were relatively few and far between as a
result of the pandemic.
As anticipated, Cube Creative had a negative impact on Xilam’s
operating income during the first half of what is a transition year
as it switches over from a low-margin non-proprietary service model
to a more powerful proprietary production model. Its first major
deliveries are due in 2021 (Pfffirates (TF1) and Tangranimo (France
TV)). Xilam, which puts proprietary production at the heart of its
business model, possesses unique, transformative expertise that
represents a key success factor.
After the impact of operating expenses, Xilam’s recurring
operating income came to €1.5 million in H1 2020 (vs. €2.8 million
in H1 2019), its operating income to €1.3 million (vs. €2.5
million) and its net income to €734 thousand (vs. €1.6
million).
At comparable structure adjusted for Cube Creative, Xilam
recorded €1.97 million in recurring operating income and €1.22
million in net income.
Healthy and solid financial position
Xilam had €12.2 million in cash and cash equivalents at 30 June
2020, almost completely stable since H1 2019, despite the major
investments in production in the meantime and the payment of part
of the cost of acquiring Cube Creative. At 30 June 2020, net debt
stood at €7.6 million (vs. €7.2 million at 30 June 2019). Equity
totalled €56.2 million at 30 June 2020.
First-half highlights and subsequent events
- Finalisation in January of the acquisition of a majority stake
in Cube Creative, a French CGI animation production company.
- Announcement in September of a worldwide distribution agreement
with Netflix for Trico, a new CGI non-verbal slapstick comedy
series, with delivery scheduled for early 2022. Xilam retains
global linear television distribution and merchandising rights to
Trico.
- Confirmation in July by the French President that the
Audiovisual Media Services (AMS) reform will be enacted into French
law with effect from January 2021.
- Appointment in January of Caterina Gonnelli, the former head of
acquisitions and coproductions at Disney Channels EMEA, as EVP,
Content.
- Acquisition by DreamWorks Animation in January of exclusive TV,
video and VoD rights to Mr Magoo in the United States.
- Acquisition by Nickelodeon of two new series in July: worldwide
agreement covering the CGI series Athleticus and an agreement
covering the Mr Magoo series in the United Kingdom.
- Growing recognition of the Moka brand with the creation by the
Gulli channel of a new evening prime time slot at 8:15pm specially
for the series following its success. Gulli has also announced that
it had the best-ever Wednesday in its history on 23 September 2020,
as Moka made a highly spectacular contribution, achieving an
audience share of close to 50% of 4-10 year-olds.
Objectives and outlook unchanged
Despite several deliveries being put back from 2020 until 2021,
Xilam is reiterating its objectives of €78 million in total revenue
in 2020-21 and €110 million in 2022-23. These objectives include
the audiovisual tax credit and are calculated at comparable
structure (excluding M&A and merchandising) after Cube
Creative’s integration.
At 30 June 2020, Xilam held a record order book, with close to
250 half-hours in production and a dozen or so new programmes under
development. Lastly, to recap, production activities in France, and
Xilam’s in particular, stand to gain during 2021 from the enactment
into French law of the European Audiovisual Media Services (AMS)
directive. With VoD service subscription revenue set to exceed €3
billion by 2025, this segment will be a major source of new orders
for new programmes, especially animations.
Update on the global health crisis
Other than certain delivery delays caused by the impact of the
lockdown, Xilam has not to date identified any negative effects
attributable to the Covid-19 pandemic on its activities and
continues to protect its employees through appropriate
measures.
About Xilam
A major player in animation, Xilam is an integrated studio
founded in 1999 that creates, produces and distributes original
programmes in more than 190 countries for both children and adult
audiences. Xilam content is broadcast on television, and is also
available on SVoD platforms including Netflix, Disney+, Amazon and
NBC Universal, and ADVoD streaming platforms including YouTube and
Facebook. With its creativity and capacity for innovation
recognised worldwide, and editorial and commercial expertise at the
cutting edge of its industry, Xilam is positioned as a key player
in a fast-growing market. Each year, Xilam builds real successes
and capitalises on its powerful historical brands including Oggy
and the Cockroaches and Zig & Sharko, as well as new properties
such as Oggy Oggy for a preschool audience, Moka, Mr. Magoo, and
Academy Award® nominated adult feature film I Lost My Body. Xilam’s
expanding and strong catalogue now consists of over 2,200 episodes
and three feature films. In 2019, Xilam acquired Cube Creative, a
studio providing the company with unique expertise in 3D and
computer generated images. Xilam employs more than 500 individuals,
including 400 artists, across its studios in Paris, Lyon, Angoulême
and Ho Chi Minh in Vietnam. Xilam is listed on Euronext Paris
Compartment B – Eligible to PEA – SRD long.
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version on businesswire.com: https://www.businesswire.com/news/home/20200929005947/en/
Marc du Pontavice – Chairman and CEO Tel: 01 40 18 72 00
SHAN Agency - Florent Alba (Investor Relations) Tel : 01 44 50
51 71
www.xilam.com
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