Ymagis Posts Third-Quarter 2015 Revenue at €37.9M + 12%

12 November 2015

YMAGIS (ISIN: FR0011471291, TICKER: MAGIS), the specialist in digital technologies for the motion picture industry, today reported its consolidated revenue figures for the third quarter of 2015. In the third quarter of 2015, the Group’s revenue amounted to €37.9m, an increase of 321% compared to the third quarter of 2014 on a reported basis and an increase of 12% compared to the third quarter of 2014 pro forma (1). During the first nine months of this year, the company generated cumulated revenue of €106m, an increase of 253% compared with the first nine months of 2014 on a reported basis and a slight decrease of 3% compared to the first nine months of 2014 pro forma (1).

As a reminder, since 1 August 2015 YMAGIS has taken over the businesses and certain assets of Éclair Group following a decision made by the Nanterre Commercial Court and as part of Éclair Group’s rehabilitation proceedings, which began on 12 June 2015. This operation gave YMAGIS the opportunity to reorganize the Content Services business unit into three different reporting divisions for better readability: (1) Distribution/Preservation, (2) Post production/restoration, and (3) Adaptation. Revenue for Éclair has been consolidated since 1 August 2015 and largely contributed to the increase in YMAGIS revenue during the third quarter of 2015.

The Group reminds that the 2014 fiscal year was marked by its merger with Belgium-based company dcinex SA, which is included in the Group’s consolidated financial statements as of 1 October 2014. In order to provide a better comparison basis for activity in the nine months of 2015, pro forma (1) revenues are indicated in the following chart and upon which the analysis mentioned below is based. 2015’s nine-month revenue comparison with last year’s published figures, i.e. excluding dcinex, is presented at the end of this document.

VPF (2): Growth sustained by latest signed agreements

The VPF division recorded third-quarter revenue of €18.4m, an organic increase of 6% compared to the third quarter of 2014. As of 30 September, cumulative 2015 growth is 8%. Over the period, YMAGIS notably benefited from signed contracts in Greece and the Balkans, and in Turkey, during the fourth quarter of 2014 and second quarter of 2015 respectively. As of 30 September 2015, the total number of screens rolled out by the Group amounted to 6,395 in 19 European countries compared to 5,776 in the prior year period.

Exhibitor Services: Business resilience thanks to a wave of new cinema builds and exhibitors’ investment in new technologies

After experiencing a significant decrease during the first quarter of 2015, the Group’s revenue from the Equipment Sales and Installation business, which were mainly driven by the digital transition of cinemas in Europe that is now complete, shows signs of resilience and has posted revenue over the last two quarters close to the levels recorded last year. The business was positively impacted by the high number of equipment sales to new cinema builds in Europe and investments made by cinema owners in new image and sound technologies. To illustrate this phenomenon, YMAGIS has completed the installation of over 50 cinemas with immersive sound technology since the beginning of the year and has sold numerous 4K projection systems during the same period.

In a positive pattern, Online/Support business revenue amounted to €2.6m in the third quarter, an increase of 10% compared to the third second quarter of 2014. As of 30 September 2015, cumulative revenue was up 9% at €7.7m.

All in all, revenues for the Exhibitor Services division slightly decreased by 4% to €12.9m during the third quarter. As of 30 September 2015, cumulative revenue was down 20%. Excluding the €7.2m decrease in revenue linked to the sale of equipment to leasing companies under VPF contracts signed with exhibitors, revenue declined by 6% only.

Content Services: strong growth driven by the take-over of Éclair Group’s businesses

The Content Delivery business has consolidated since 1 August 2015 the main activities of Éclair Group, contributing to third quarter revenue at €3.6m according to the new reporting units.

The Distribution and Preservation division (3) posted revenues for the third quarter at €3.1 million, up 32% (€0.9m generated by Éclair). For the nine-month period ending 30 September 2015, revenue is up by 30% at €8.1m. YMAGIS is fully taking advantage of its new reporting segment with television broadcasters following the take-over of Éclair, offsetting the temporarily downtrend situation with content delivery to cinemas due primarily to a weaker line up of feature films, particularly in France. Excluding DSAT Cinema, the number of connected cinemas, net of overlaps between the SmartJog/Ymagis and Arqiva networks, amounted to around 2,600 cinemas as at 30 September 2015 versus 2,540 in the prior year period.

The Post-production and Restoration division (4) recorded increased revenue at €1.9m, up +263% in the third quarter of 2015, with €1.3m generated by Éclair. As of 30 September 2015, cumulative revenue indicates a 46% increase at €3 million. YMAGIS indicates that in the third quarter, the majority of Éclair’s activities were considerably slowed down following the Éclair Group’s rehabilitation proceedings, which translated into client’s longer-than-usual decision-making process. These activities are expected to return to normal in the fourth quarter of 2015.

Localisation (5), a new market segment for which 100% of revenues are generated by Éclair, indicated revenue of €1.4m during the third quarter of 2015. Operated from four different sites – Vanves and Strasbourg (France), Karlsruhe (Germany) and Rabat (Morocco) –, this business is now ramping up following the August nomination of its new managing director.

As a whole, the Content Services division recorded third quarter growth of 114% at €6.6m. For the first ninemonth period ending 30 September 2015, the business was up by 44% at €13m.

Financial position as of 30 September 2015

As at 30 September 2015, the cash position of the Group stood at €25.2m, of which €12.5m is assigned primarily to future repayments of bank loans and leases related to the VPF business. This position integrates €40m in private bond placement raised earlier this year, the repurchase of dcinex’s subordinated debt of €14.3m and the full repayment of the bonds (OBSA) issued in October 2014 and subscribed by dcinex stakeholders for €15.4m.

Business Outlook

The third quarter was positively marked by the early August take-over of Éclair Group, which has enriched and added value to the entire portfolio of services offered by YMAGIS’ Content Services business unit now: from image and sound post production to content distribution services for cinemas and television broadcasters as well as content restoration and localisation. Additionally, a new subsidiary, Éclair Preservation was created last month to develop archiving services and new technologies for content asset management for the cinema and TV industries, whether in physical or electronic formats.

YMAGIS is actively working on the seamless integration of Éclair Group’s businesses and, to this end, has proceeded with the appointment of industry experts to manage existing teams and drive new business activities. Simultaneously, YMAGIS has set up cost-optimization strategies, including the relocation and centralization of all of Éclair’s Parisian activities in a single existing site located in Vanves, which should generate a minimum fullyear savings of €2m. Since YMAGIS’ summer take over, Éclair has won back the confidence of its clients and employees, creating a new base upon which to build a thriving, solid business in the long term and sustain its developments.

In parallel, YMAGIS recently announced the completion of a 51% stake in Proyecson SA, a leading Spanish cinema integrator specializing in the installation and maintenance of cinema equipment in Spain. This operation will allow YMAGIS to offer cinema owners in the Iberian market a comprehensive portfolio of products and services, combining knowledge and expertise from both organizations.

These recent strategic operations allow YMAGIS to confirm its position as a European leader in its industry.

Below are the revenues published by YMAGIS for the third quarter and for the first nine-month period of 2014. These therefore do not include the contribution of dcinex, which was consolidated from 1 October 2014.

NEXT RELEASE: 10 February 2016 – Revenue for the fourth quarter of 2015