At the time of its IPO in 2013, Ymagis drew the bulk of its income from the VPF (“Virtual Print Fee”) model, which is still its leading source of cash flow. Since this activity has a limited life cycle, the Group was called upon to define and implement a diversification strategy, which led to the creation of two new business units:  CinemaNext, dedicated to products and services for cinema operators, and Eclair, dedicated to services for film & television content producers, distributors and rights holders.

In 2018, the Group intensified its efforts to strengthen the activities of these business units.

On the one hand, CinemaNext streamlined its structure. The effects of this process should begin to be felt in 2019: the premises of its Belgian headquarters and several of its subsidiaries (France, Germany, and the United Kingdom) were optimised with, as the key element, greater operational efficiency, in particular for the supply chain, and the adoption of a savings plan. This effort, which will be continued throughout the course of 2019, aims to establish an entity that is both strong from its products and services, but also high-performing and profitable. At the same time, CinemaNext has proceeded to revamp its portfolio for cinema exhibitors, developing original software solutions, evolving its Sphera premium cinema offering, which is prompting growing interest in the market, and lastly by offering modular virtual reality spaces for cinema lobbies.

In 2019, CinemaNext is a robust entity, present in 25 countries in Europe, the Middle East, and Africa. It is protected from the uncertainties affecting the national markets and is able to pool its resources and devote them to developing new products. CinemaNext, which currently serves nearly a quarter of all movie screens in the EMEA zone, has emerged as a global player that maintains significant proximity to its clients thanks to its numerous local sites, which benefit from a best practices logic established at the Group level. It is a natural partner for both independent operators and major international groups, which can rely on its well-structured, consistent technical expertise.

As for Eclair, in 2018 it continued its digitalisation project and the streamlining of its activities. Eclair thus put its first digital platforms on the market: EclairPlay, EclairTrack, EclairSend, and EclairScreener. Particular effort was also put into developing its versioning and accessibility offer (subtitling, dubbing, etc.), an activity which is now experiencing sustained and profitable growth. The streamlining of Eclair’s activities has also been reflected in the gross restructuring of its Eclair Cinema subsidiary, which specializes in the postproduction and restoration of films in France. This entity had two thirds of its staff cut as part of a collective insolvency proceeding begun in November 2018, and for which the observation period, which was initially scheduled to end in mid-May, has just been extended by six months. 2019 should lead to new developments for Eclair, with the Group pursuing its search for options and agreements to allow it to determine optimal partnership solutions for Eclair and the Group.

Yet while the Group has made extensive investments to streamline its longstanding activities, it has also prepared for the future. In 2018, Ymagis made significant investments to identify new activities that could lead to new synergies with its existing businesses. The result of this effort was the development of the Illucity virtual reality concept, for which the first site was successfully launched in Paris-La Villette at the end of the year. This development is part of the very strong growth of the "LBE-VR" (Location-Based Entertainment – Virtual Reality) world market, which can become a source of income diversification for cinema operators, who are Ymagis’ natural partners. Illucity thus represents a “turnkey” solution for the Group’s clients to rapidly and effectively deploy a proven LBE-VR solution.

The Group’s development is now going through a budgetary consolidation phase. This project is being carried out on two parallel fronts: on the one hand, by renegotiating the Group’s debt, in an effort to render it more compatible with its future margin profile and, on the other, through better control of its accounts receivable. These two points must be settled during the 2019 year for Ymagis to successfully develop over the long-term as the Group’s businesses are poised to experience strong organic growth during the upcoming years, due to a very promising market.

Jean Mizrahi
Chairman and CEO

The Perform strategic plan became operational in 2017 and focuses on three axes:

  1. Rationalize our centralized and transversal organization
  2. Develop strong innovation program (R&D represents 1% of the Group’s annual revenue)
  3. Create and market high-value added services

The corporate goal is to maintain the top line organically without VPF business and improve the profitability of our two main business units – CinemaNext and Eclair. Five objectives have been set up:

  1. Compound Annual Growth Rate (CAGR) for Eclair and CinemaNext superior to 10% between 2016 and 2020
  2. CinemaNext market share to increase from 20 to 30% by 2020
  3. Digital transformation of Eclair's services with the development of online and fully-integrated platforms
  4. Eclair’s positive Earnings Before Taxes (EBT) before end of 2018
  5. Expected operational margin above 5% by 2020 for both CinemaNext and Eclair