YMAGIS: First Half-Year 2016 Earnings

Press Release
Paris (France) - 26 September 2016, 5:45 pm

First Half-Year 2016 Earnings

Half-year Revenue up 22.5%
Non-recurring depreciation charge of 7.9 M€

Ymagis Group (ISIN: FR0011471291, TICKER: MAGIS, PEA-PME eligible), the European specialist in digital technologies for the cinema industry, today reported its financial results for the first half year of 2016, as approved by the Group's Board of Directors following its meeting on the 26th of September.

Strong first half-year due primarily to the integration of Eclair

As of 30 June 2016, Ymagis Group's revenues are up 22.5% at €83.6M, driven primarily by growth within its services business units and the takeover of Eclair Group's activities.

The results are broken down as follows:

• The VPF business unit recorded, as anticipated, a slight 6.6% decrease in revenue at €34.3M due to the end of the VPF financial model in both Austria and Poland. The total number of screens deployed under VPF contracts by the Group for the first six months of 2016 is 6,036 compared to 6,401 for the prior year period. The business remains positively impacted, however, by a larger number of theatrical releases compared to 2015 resulting in greater turnover rates, and more invoicing, in France and Spain.
   
• The Exhibitor Services business unit's revenue is up +11.1% at €27.7M, driven primarily by the Sales and Installations activities and the revenue generated by the Group's latest acquisitions, R2D1 (France) and Proyecson (Spain). While the replacement of first-generation digital projection systems has not yet been implemented, revenue from equipment sales remains stable with sustained contracts for new cinema builds and investments made by cinema owners in new picture and sound technologies.
   
• The Content Services business unit's revenue has more than trebled (3.3x) during the first two quarters to €21.6M thanks to the integration of the Eclair Group's activities. Consolidated since the 1^st of August 2015, Eclair's activities have contributed a cumulative total of €13.8M in revenue in the first half of 2016.  The business unit has also benefited from the acquisitions of Cine-Logistics (Germany) and ST'501 (France), which has allowed the Group to grow its services offer for film distributors in German-speaking territories as well as television broadcasters in France.

Half-year results impacted by a non-recurring charge of €7.9M with no cash impact

As a result of both the evolution of sales during the first six months of 2016 and the ongoing rationalisation of Eclair's activities, EBITDA is down 10% to € 23.6M, representing 28% of revenue compared to 38% as of 30 June 2015.

Payroll costs have increased to €19.7M, compared to €10.2M during the first half of 2015, and purchases and external expenses are up €22.8M compared to €16.3 for the prior year period due essentially to external growth.

After taking into account the depreciation and amortization of €20.0M, income from operations are at € 3.6M compared to €5.0M as of 30 June 2015. €8.4M in non-recurring charges are due to the Group's decision to entirely depreciate the RBC technology used for the broadband delivery of content to cinemas to €7.9M in anticipation of its upcoming replacement. The remaining €0.5M is related to the charges incurred during the relocation of all French Content Services activities to its Vanves site. These exceptional non-recurring charges are all expected to have a positive impact on future earnings results.

Net financial expenses decreased significantly from -€4.9M to -€3.6M under the positive effect of the reduced debt related to VPF activities.

Income from operations before income taxes amount to a loss of €8.4M compared to a profit of €0.1M for the first two quarters of 2015.

The tax burden has increased to nearly €0.9M taking into account €0.5M in deferred taxes and a taxation of €0.4M. As a result, the Group's net result booked is a loss of €9.4M compared to €0.9M the first half of last year.

A healthy financial position

As of 30 June 2016, the Group's equity stands at €30.4M compared to €38.8M as of 31 December 2015.

The Group's net debt continues to decrease with the repayment of the debt allocated to VPF activities, even in light of recent acquisitions, and is at €92.6M as of 30 June 2016 compared to €99.7M at the end of December 2015.

Finally, its cash position is at €19.1M compared to €23.2M in the previous six-month period, €5.1M are assigned to future bank loan repayments and leases related to the VPF business.  

Outlook

Based on its premium services offer for the cinema industry, the Group's revenue growth in 2016 is expected to be generated by its Content Services and Exhibitor Services business units, with a slowdown in VPF activities due to upcoming recoupments.

After several years of successive acquisitions, the Group's management has implemented cost-saving measures and synergies between its various entities to create a new development model based around its two business units.

The Group will publish on 11 October the details of its strategic three-year plan "Perform 2020". Its main targets are to maintain its revenue level and reach pre-tax profits over 5% by 2020 despite the progressive decrease in VPF activities. With its solid basis of services activities, Ymagis also expects to continue its external growth.

First Half-Year 2016 Financial Statement Online

Ymagis Group's full first half-year 2016 financial statement will be available under "Publications" in the "Investors" section of its corporate website on Friday 30 September 2016.