- Decline in VPF activity
- Eclair BU activity impacted by the difficulties of Eclair Cinema (postproduction and restoration) in France
- Robust growth of CinemaNext BU during Q4
- First revenues for EclairGame and Illucity activities
- Trading suspended on Ymagis stock pending announcement concerning the Group’s financing
Ymagis Group (FR0011471291, MAGIS, PEA-PME, TECH 40), the European specialist in digital technologies for the film industry, today reported its consolidated financial results for Q4 and for the full year 2018, ending 31 December 2018.
Business penalised by Eclair’s post-production and restoration activities in France and by the anticipated drop in VPF activities, despite CinemaNext’s robust growth in Q4
The Group’s business continued to be affected in Q4 2018 by the sharp drop in Eclair postproduction and restoration activities performed by Eclair Cinema, which was placed in receivership on 20 November 2018. Although CinemaNext revenue rose by +8.0% to €23.5m, the Group’s services activities did not offset the decline in VPF activity. Revenue for Ymagis Group thus fell by 3.7% to €51.9m over the period.
Over the full-year, the Group’s consolidated financial results reached €167.1m, down by 7.0% and below the target of €170m set by the Group.
| Q4 2018 |
Q4 2017 |
Var. (%) |
2018 | 2017 | Var. (%) |
||||||||
| In millions of Euros | |||||||||||||
| Virtual Print Fee | 13.6 | 16.3 | (16.3)% | 51.8 | 61.5 | (15.7)% | |||||||
| Equipment Sales | 18.7 | 17.5 | 47.1 | 50.1 | |||||||||
| Online & Support | 4.8 | 4.2 | 15.0 | 12.7 | |||||||||
| Consulting | 0.0 | 0.2 | 0.1 | 0.6 | |||||||||
| CinemaNext | 23.5 | 21.8 | 8.0% | 62.2 | 63.3 | (1.7)% | |||||||
| Distribution Services & Preservation | 6.4 | 7.1 | 23.9 | 24.6 | |||||||||
| Post Production & Restoration | 1.4 | 3.1 | 7.4 | 11.5 | |||||||||
| Localisation | 6.5 | 5.6 | 21.2 | 18.7 | |||||||||
| Eclair | 14.4 | 15.8 | (9.3)% | 52.5 | 54.8 | (4.3)% | |||||||
| Other activities | 0.4 | – | 0.6 | – | – | ||||||||
| TOTAL REVENUE | 51.9 | 53.9 | (3.7)% | 167.1 | 179.6 | (7.0)% | |||||||
| VPF as % of revenue | 26.3% | 30.2% | 31.0% | 34.2% | |||||||||
| CinemaNext as % of revenue | 45.3% | 40.4% | 37.2% | 35.2% | |||||||||
| Eclair as % of revenue | 27.6% | 30.5% | 31.4% | 30.5% | |||||||||
| Other act. as % of revenue | 0.8% | – | 0.4% | – | |||||||||
VPF activity continued its decline in line with expectations, with revenue falling by 16.3% to €13.6m during Q4. Over the full year, the business unit recorded revenue of €51.8m.
Several new recoupments (Turkey, Benelux, Portugal, Greece, Slovenia, Serbia, Croatia and Montenegro) were made towards the end of 2018, bringing the number of screens under VPF contract to 4,300 as compared to 5,411 at the end of December 2017.
CinemaNext sales rose again during Q4 2018. Over the year, revenue for the business unit stood at €62.2M. Sluggish equipment distribution sales in 2018 are expected to take off again in 2019. A number of discussions are underway with various exhibitors concerning the replacement of projection systems in Europe. It should be noted that the consulting unit was sold back to its managing partners in 2018, marking a drop in CinemaNext revenue of €0.5m.
The Eclair BU revenue suffered from the drop in postproduction and restoration activities on the French market, with Eclair Cinema SAS being placed in receivership in November 2018. However, this fall masks the progress made by the adaptation activities (subtitling and dubbing), digital distribution, preservation and content delivery to cinemas, which continued to drive the organic growth of the business unit in line with the strategic development plan that aims to speed up the digitalisation of its services.
Ymagis Group’s new activities (EclairGame and Virtual Reality) achieved revenue of almost €0.6m over the full year, mainly driven by the development of EclairGame (eSport in cinemas). The launch of the first virtual reality adventure park, Illucity, in Paris in mid-December also marked an important step for the Group. Since its opening, Illucity has emerged as a benchmark in the LBE (location-based entertainment) sector in Europe. The establishment of its franchise programme over the next few months and the development of new EclairGame partnerships should lead to growth for the activity in the next quarters. These new activities at the centre of the Group’s development strategy should become significant revenue and earnings contributors from 2019 onwards.
Outlook
Although impacted by the difficulties of its Eclair Cinema subsidiary, now restructured with the redundancy of 38 employees, Ymagis continued its forward-looking investments in its new high-potential development activities. Earnings for 2018 are therefore expected to be down.
The efforts made to restructure Eclair and propel the distribution services business unit into a new growth momentum driven by an ambitious policy to digitalise its services, the start of several projects at CinemaNext linked to the replacement of first-generation projection systems, and the deployment of its new Virtual Reality activities remain the Group’s priorities for 2019.
Lastly, the Group has requested that trading on Ymagis stock be suspended as from 13 February 2019, pending an announcement concerning the Group’s financing which should be released in the next few days.
Next press release: 29 March 2019: Full-Year 2018 Earnings