Oddo Forum 5-6/01/2017 www.ymagis.com
Speakers Jean Mizrahi Founder & CEO Pierre Flamant CFO Page 2
Table of Contents 1 Introduction Page 3
About Ymagis Group 20+ 1st ~20% x4 Presence in 24 countries with 750+ professionals Content delivery network with 3.300* cinemas connected Solid market share in equipment and services for cinema operators Quadrupled size since the IPO (May 2013) thanks to successful external growth * incl. DSAT European leader in digital services and technologies for the cinema industry Page 4
Three business units serving the cinema value chain Financial Services Content Services Exhibitor Services 41%* 26%* 33%* 16 employees as of 30/06/2016 440 employees as of 30/06/2016 245 employees as of 30/06/2016 - VPF Model - Financial Services - Post-production & Restoration - Versioning & Accessibility - Theatrical Delivery, Digital Distribution & Preservation - Sales & Field Services - Customer Services - Software Solutions * Breakdown of sales on 30 June 2016 Combine technology and financial solutions for added value services Page 5
Content Services: 6 divisions dedicated to 5 customer profiles DIVISIONS CUSTOMERS Producers Post Production Theatrical Delivery Restoration International sales agents Distributors Versioning Accessibility Digital Distribution Preservation Broadcasters Catalogue owners Page 6
Exhibitors Services: 3 divisions serving exhibitors Sales & Field Services Customer Services Software Solutions Full service provider Page 7
A strong network to bolster footprint in European cinema industry services EXHIBITOR SERVICES 20 locations across Europe CONTENT SERVICES 15 locations across Europe BERLIN KARLSRUHE STRASBOURG VICENZA 31% MADRID Breakdown of Group revenue 69% France International Page 8
Table of Contents 2 2016 Highlights Page 9
Content Services: strategic aquisitions to boost Eclair in France and abroad Acquisition in Feb. 2016 German distribution services leader for cinema distributors and exhibitors A unique portfolio of products and services ranging Acquisition in May 2016 One of Germany s leading cinema dubbing companies A comprehensive portfolio services Eclair to build new dubbing studios in Berlin Acquisition in June 2016 A company specialised in subtiling services for live television broadcast and recorded content Description services for the blind and visually impaired people Acquisition in Nov. 2016 One of Spain leading dubbing services companies for cinema, television and multimedia Working with all major Hollywood studios and independant companies Complete acquisition in Nov. 2016 European network for cinema distribution via satellite 1 300 cinemas under contract Acquisition in Nov. 2016 1 An integrated operator working with satellite A content delivery technology 650 connected cinema sites in Italy 1 Under conditions precedent Strengthening footprint in Germany New Berlin sound recording and mixing facilities Strengthening subtiling services in France Expand dubbing business in Spain Strengthening Europe s global presence 1st step in Italy for Content Services Page 10
Exhibitor Services: a positive trend before the beginning of replacement market In the first nine months of 2016 45+ new cinemas equipped across Europe 20+ laser-illuminated projectors delivered 40+ Dolby Atmos immersive sound installed Product diversification with a wider range of products (seats, digital signage, ) New developments on the African continent Signed agreement with the UK s leading independentlyowned cinema chain Empire Cinemas (14 locations, 127 screens) Increase from 20% to 60% of Ymagis Group ownership in Belarusian partner Kraftwerk Integration of R2D1, expert in installation and maintenance of digital cinema equipment in France Integration of Proyecson, cinema installation / maintenance of digital equipment in Spain New Builds & New Technology Gain in market share External growth Page 11
Launch of EclairColor An innovation to bring HDR into cinemas at a competitive cost A new business model facilitating the technology roll-out In less than 3 months, 11 cinemas equipped, 14 screens EclairColor technology has already won over the production teams at Pathé Films, Gaumont, Mandarin Production, JD Prod, Les Films du Losange, Les Films 13 and Rouge International «Belle et Sébastien 2 : l aventure continue» - Production: Gaumont, Epithète Films / Radar Films - Director: Christian Duguay Page 12
A new 3-year strategic plan A CENTRALIZED AND TRANSVERSAL ORGANISATION A STRATEGY FOCUSED ON HIGH VALUE- ADDED SERVICES A STRONG INNOVATION PROGRAMM Maintain the top line organically without VPF Improve the profitability for each BU Page 13
Table of Contents 3 Financial Update Page 14
Group YTD Sales CHANGE IN ACTIVITY REVENUE CHANGE IN CONSOLIDATED REVENUE In m -6% In m 55,1 52,0 +10% 41,6 37,9 +148% 32,2 106,0 125,9 13,0 VPF Exhibitor services Content services 9M 2015 9M 2016 As of 30 Sept. 2015 As of 30 Sept. 2016 Page 15
Group Quarterly Sales In m 51,4 31,9 3,3 10,7 36,4 37,9 3,3 6,6 14,3 12,9 11,3 21,4 42,7 10,7 14,0 40,9 42,3 10,8 10,6 13,8 14,0 Q3 16 vs. Q3 15: +12% Q3 16 vs. Q2 16: +3% 18,0 18,7 18,4 18,7 18,0 16,3 17,7 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 VPF Exhibitor Services Content Services Page 16
VPF 9M16 sales: -5,7% at 52m In m 10,0 10,2 10,4 10,6 10,8 11,0 11,2 11,4 11,6 11,8 12,0 12,2 12,4 12,6 12,8 13,0 13,2 13,4 13,6 13,8 14,0 14,2 14,4 14,6 14,8 15,0 15,2 15,4 15,6 15,8 16,0 16,2 16,4 16,6 16,8 17,0 17,2 17,4 17,6 17,8 18,0 18,2 18,4 18,6 18,8 19,0 19,2 19,4 19,6 19,8 20,0 0,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 1,6 1,8 2,0 2,2 2,4 2,6 2,8 3,0 3,2 3,4 3,6 3,8 4,0 4,2 4,4 4,6 4,8 5,0 5,2 5,4 5,6 5,8 6,0 6,2 6,4 6,6 6,8 7,0 7,2 7,4 7,6 7,8 8,0 8,2 8,4 8,6 8,8 9,0 9,2 9,4 9,6 9,8 6 401 6 395 5 994 6 127 6 036 6 029 6 127 18,0 18,7 18,4 18,7 18,0 16,3 17,7 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 6 300 6 100 5 900 5 700 5 500 5 300 Impact from 1st recoupments: - Austria Q3 15 - Poland Q1 16 Turn rate: higher no. of releases in Q3 16 mainly in France and Spain VPF # of screens at quarter end Page 17
Exhibitor Services 9M16 sales: +10% at 41,6m In m 21,4 0,2 2,6 14,3 14,0 0,2 12,9 13,8 14,0 0,2 0,2 0,3 10,7 0,2 2,5 2,6 2,8 2,5 0,2 2,6 2,6 18,6 11,6 10,1 11,2 10,8 11,2 7,9 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 Contribution of R2D1 and Proyecson acquired in 2015 Equipment sales flat - New builds current trend - Investment in new technology - Replacement market still ahead Online & Support Services in line with historical average Equipment sales & instal. Online & support serv. Others Page 18
Content Services 9M16 sales: +148% at 32,2m In m 11,3 10,8 10,8 0,2 10,6 0,2 0,2 0,1 2,3 2,0 2,1 3,0 6,6 0,2 3,9 3,9 3,2 2,6 1,4 3,3 3,3 0,2 1,6 0,5 0,5 4,9 4,7 5,3 5,0 2,5 2,6 3,5 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 Delivery & Preservation Post-Prod & Restoration Versioning & Accessibility Others Eclair contribution for 19,4m YTD 2016 Delivery & Preservation: - Stable nb of cinemas connected at 2.650 - Rationalization underway Post-Prod & Restoration: - -0,6m in post-prod in Q3 after high H1 (seasonal effect) Versioning & Accessibility: - Increase driven by ST 501 and CKS Page 19
2016 HYR Results by Activity VPF Content services Exhibitor services IFRS, in m HY 2016 HY 2015 HY 2016 HY 2015 HY 2016 HY 2015 Revenue 34.3 36.7 21.6 6.6 27.7 25.0 EBITDA 26.2 28.0-3.4-2.6 0.9 0.7 % 76% 76% -16% -39% 3% 3% EBIT 9.9 9.5-6.3-4.6 0.2 0,1 Non rec. charges - - -8,4 0.0 - - PBT 6.7 4.9-15.2-4.9 0.1 0.1 % 20% 13% -70% -74% 0% 0% VPF: profitability increase thanks to lower amortization and deleveraging Content Services: ongoing integration of Eclair, exceptional depreciation for 7.9m related to RBC technology, 0.5m other non recurring charges linked to Epinay closure Exhibitor Services: performance in line with the volume of sales. No replacement market yet Page 20
2016 HYR Income Statement IFRS, in m 30 June 2016 30 June 2015 Var. % Revenue 83.6 68.3 +22% EBITDA 1 23.6 26.2-10% EBITDA margin 28% 38% - D&A 2-20.0-21.2-6% REBIT 3.6 5.0-28% Non rec. charges 3-8.4 - EBIT -4.8 5.0-196% Interest charges, net 4-3.6-4.9-27% Profit before tax -8.4 0.1-8500% Income tax 5-1.0-0.1 900% Minority interest 0 0.9-100% Net income Group share -9.4 0.9-1144% 1 2 EBITDA Mix of sales impact with lower VPF revenues and higher Content Services sales D&A Decreasing depreciation on VPF assets offset by depreciation of Dcinex PPA ( 1.2m) 3 Non recurring charges RBC technology write-off and Epinay closure 4 Interest charges Decreasing thanks to VPF debt deleveraging 5 Tax Incl. DTA net impact for - 0.5m Excl. non recurring charges, PBT would be in line with last year Page 21
2016 HYR Balance Sheet IFRS, in m 30 June 2016 30 June 2015 1 Goodwill ASSETS Goodwill 1 7.3 4.3 Intangible assets 2 5.7 15.7 Tangible assets 90.1 106.3 Deferred tax assets 5.0 5.9 Other non-current assets 5.2 5.0 Trade receivables 3 59.2 57.5 Cash 19.1 23.2 Other current assets 28.3 25.1 TOTAL ASSETS 219.9 243.0 EQUITY & LIABILITIES Shareholder s equity 32.3 41.1 Non-current financial debt 4 87.2 90.2 Other non-current liabilities 8.7 16.2 Current financial debt 4 24.7 32.8 Trade payables 26.6 23.4 Other current liabilities 40.4 39.3 TOTAL LIABILITIES 219.9 243.0 2 Acquisition of Cine-logistics ( 1.5m) and ST 501 ( 1.3m) Intangible assets RBC technology impairment ( 7.9m) and dcinex PPA depreciation ( 1.2m) 3 Trade receivables Slight increase despite new entities in scope 4 Debt Debt reimbursement ( 15m) offset by new loans to finance external growth ( 3.2m) and asset sales & lease back ( 1.6m) * Other current assets & liabilities have been reclassified as of 31/12/2015 Page 22
Debt Structure in m 30 June 2016 30 June 2015 DEBT RELATED TO VPF BUSINESS Leases 35.0 42.4 Financial liabilities 14.9 23.3 Factoring of receivables 1.0 - TOTAL VPF DEBT 50.9 65.7 DEBT RELATED TO CONTENT SERVICES Leases - delivery business 3.9 4.8 Leases - others 1.3 - Financial liabilities 3.3 - Factoring of receivables 2.2 1.2 TOTAL CONTENT SERVICES DEBT 10.7 6.1 OTHER DEBT Euro PP 40.3 39.6 Other financial liabilities 10.0 11.6 TOTAL OTHER DEBT 50.2 51.2 Net Financial Debt decrease to 92.8m - 2.3x EBITDA (on an annual basis) TOTAL GROSS DEBT 111.9 123.0 Cash & cash equivalent -19.1-23.2 TOTAL NET DEBT 92.8 99.7 Page 23
Cash Flow Statement IFRS, in m 30 June 2016 30 June 2015 Net Cash Flow from Operations 16.3 23.0 Net Cash Flow used in Investment -4.5-4.0 Net Cash Flow used in Financing -15.9-16.1 Cash at the opening of the period 23.1 18.1 Change in Cash -4.1 2.9 Cash at the end of the period 19.0 21.0 Operating CF: impact of mix of sales and WCR (new entities for 1.6m + AP regularization for 2.3m) Investing CF: new financial assets ( 2.6m) + capex for Content Services mainly in Vanves ( 1.7m) Financing CF: net debt redemption ( 11m) + interest charges ( 4m) Page 24
Table of Contents 4 Outlook Perform2020 Strategic plan Page 25
Perform2020 Our mission RATIONALIZATION & EFFICIENCY INNOVATION INTERNATIONALIZATION PROFITABLE GROWTH Page 26
Cinema: a fast-moving high-tech industry CONSTANT INNOVATION DIGITAL DISRUPTION CONSOLIDATION Our role is to anticipate future trends and provide our clients with the best solutions Page 27
Content Services: At the crossroad of new trends CONTENT VOLUME INCREASE PLATFORM SERVICES PICTURE AND SOUND EVOLUTION Opportunity through lower barriers of entry Technical Development of access to digital and online content via platform Important upside in picture innovation Ergonomics Financial Creative tools have become software available everywhere on the web Reproduce sound and picture Greater information flow and consultation Our mission: To be the new "netlab" Page 28
Exhibitor Services: a positive trend, even before the emergence of the replacement market 8.8 billion in box office revenue in Europe in 2015, an increase of +12.5% Cinema box office leads to positive investment climate +6% increase in 2015 of number of admissions in Europe at 1.26 billion Market is resilient despite unfavorable macroeconomic environnement and competition from other entertainment sources Constant deployment of new cinemas in urban centers or shopping malls + 40 000 new cinema openings around the world between 2005 and 2015 + 2 640 screens in EU between 2010 and 2015 Strong demand for technological innovation Laser projection Immersive Sound HDR Comfortable seating Source: CNC, Media Salles, UNIC Page 29
Continuous growth of number of screens sales expected Increase of no. of screens expected in EMEA Source: I.H.S Replacement market: growth driver Source: I.H.S & Company's estimates 45 000 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 Western Europe +10% 2016 2017 2018 2019 2020 Central & Eastern Europe Africa & Middle East 5000 4000 3000 2000 1000 0 2016 2017 2018 2019 2020 New cinemas Replacement market Page 30
VPF: deleveraging at a much faster pace than expected revenue decrease Decrease of no. of screens based on estimated VPF recoupment date 1 Accelerated debt extinction 1 6 130 5 958 5 152 2 783 2 783 2 783 3 469 3 347 3 175 2 783 2 369 686 1 025 854 2015 2016 2017 2018 2019 2020 dcinex VPF screens Ymagis VPF screens 60 40 20 0-20 -40-60 -80 2015 2016 2017 2018 2019 2020 In m 1 As of 31 December 2015 VPF Operating CF NFD VPF High free cash flow generation Page 31
VPF replaced by organic growth of services activities CAGR of Content and Exhibitor Services BU >10% between 2016 and 2020 offset the drop in VPF turnover Estimated sales breakdown Exhibitor Services market share: current average share to increase to 30% in 2020 (vs. 20% today) 33% 60% 26% Expected Content Services EBT break-even in 2018 VPF supports margins to the return of profitability of Content services by the end of 2017 with an EBITDA >0 41% 38% 2% H1 2016 2020 Expected EBT margin above 5% by 2020 in each BU VPF Content Services Exhibitor Services Page 32
An important upside Additional revenues from acquisitions Reach full coverage at European level in key businesses and expand in new territories Target 50m additional revenue by 2020, with at least the same profitability as the rest of the Group Additional revenues from innovation Certain new products such as EclairColor, EclairPlay & EclairPremium are not included in BP Page 33
Table of Contents 5 Appendix Page 34
YMAGIS Stock STOCK EVOLUTION AT DEC. 28, 2016 SHAREHOLDERS STRUCTURE AT DEC 28, 2016 10,5 9,5 YMAGIS Holdings 23.5% 8,5 7,5 6,5 5,5 Public 42,3% Amiral Gestion 12.5% STOCK MARKET INFORMATION DEC. 28, 2016 Euronext C ISIN ticker: FR0011471291 Shares oustanding: 7,894,390 Share price: 10.26 Capitalization: 81m Eligible FCPI, label «Entreprise Innovante» Analysts: Oddo, Aurel BGC, IdMidcaps Fin. Arbevel 5,8% YMAGIS Pierre Flamant CFO investisseurs@ymagis.com Fin. de l Echiquier 4,6% OTC AM 0.7% CONTACT Odyssée Venture 0.7% Sycomore AM 9,9% CALYPTUS Investor relations Sophie Boulila ymagis@calyptus.net Page 35
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