GAUMONT: 2020 Universal Registration Document
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2020 2020 Universal registration document registration Universal 2020 Universal registration document Annual report WorldReginfo - fec16dd1-ba4f-4fec-87c2-ccf2ffba35a4 WorldReginfo - fec16dd1-ba4f-4fec-87c2-ccf2ffba35a4 UNIVERSAL REGISTRATION DOCUMENT 2020 ANNUAL REPORT This document is a free translation into English of some contents included in the French Document d’enregistrement universel filed with the AMF (Autorité des marchés financiers, the French financial markets authority) on April 14, 2021. WorldReginfo - fec16dd1-ba4f-4fec-87c2-ccf2ffba35a4 2 - 2020 UNIVERSAL REGISTRATION DOCUMENT WorldReginfo - fec16dd1-ba4f-4fec-87c2-ccf2ffba35a4 born with cinema CONTENTS OVERVIEW OF THE MAIN INFORMATION ON CORPORATE 1 OPPORTUNITIES AND RISKS 7 3 OFFICERS 91 Outlook and strategic direction 8 Operating Board members 92 Impacts of the Covid-19 epidemic on Gaumont’s Compensation of Corporate officers 101 activity, income and financial résults 9 Risk factors 10 Internal control and risk management procedure 15 SHARE CAPITAL 4 AND SHAREHOLDERS 107 Shareholders 108 CONSOLIDATED FINANCIAL Information on share capital 111 2 INFORMATION 17 Consolidated income statement 18 Consolidated statement of comprehensive income 19 ADDITIONAL INFORMATION 115 Consolidated statement of financial position 20 5 Financial disclosure timetable 116 Consolidated statement of changes in equity 22 Persons responsible for information 117 Consolidated statement of cash flows 23 Performance and business review 24 Notes to the consolidated financial statements 34 Statutory auditors’ report on the consolidated financial statements 86 - 2020 UNIVERSAL REGISTRATION DOCUMENT 3 WorldReginfo - fec16dd1-ba4f-4fec-87c2-ccf2ffba35a4 born with cinema MESSAGE FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS What a year! Never had all movie theaters worldwide been closed at the same time. There is no war, In this deteriorated environment, a new audiovisual bill should be voted before the end of the year. no revolution. An appalling pandemic is affecting the whole world. If, at the time of writing, in some Surprisingly and not in concert, it creates uncertainty about the compensation of certain production countries movie theaters have reopened, often with reduced capacities, in the main countries where participants and the management of catalogs. For the rest, with minor differences, it is an extension Gaumont films generate most of their revenue, primarily in France, they are still closed and the date to the previous project, which was not entirely satisfactory, particularly in terms of effectively of reopening is unknown. combating illegal downloading. This, along with legal downloads, is unfortunately one of the major The compensatory measures granted by the public authorities only mitigate the effect of the crisis. winners of the pandemic. On top of the closure of movie theaters, film and series shootings stopped for three months in France The draft decree integrating platforms into the French audiovisual landscape is currently under and Germany, for six months in the United States and the United Kingdom, resulting in review in Brussels. Its application, on which the profession is very vigilant, will depend on the future postponements of deliveries and a corresponding decrease in revenue. Not and not even close to of the French cultural exception. offsetting this drastic reduction in activity, sales of films in the catalog benefited, particularly in France, 2021 will be a very challenging year. The Gaumont teams, who proved able to quickly and effectively from the need for programs from small-screen broadcasters, both historical players and platforms. adapt their working methods to new conditions in 2020, are more than ever mobilized to ensure that The strategy is clear but its implementation is complex. At Gaumont, as for its peers, the number this dramatic virus is no more than a memory in 2022. of films lined up for release have never been so high, thereby creating foreseeable congestion when Attractive series and ambitious films should satisfy fans of the small screen and welcome back the movie theaters will be able to welcome them. viewers to movie theaters, bored after the successive lockdowns. In a very strict health framework, which significantly increased production costs, shooting continued. While the pandemic has affected some members of the teams, requiring frequent rearrangements and corresponding additional costs, no main actor on which a film or series is based has fortunately Nicolas SEYDOUX, April 7, 2021 been affected to date. 4 - 2020 UNIVERSAL REGISTRATION DOCUMENT WorldReginfo - fec16dd1-ba4f-4fec-87c2-ccf2ffba35a4 born with cinema MESSAGE FROM THE CHIEF EXECUTIVE OFFICER 2020 or the pandemic. From mid-May, shooting resumed in France and more generally in Europe. Many series and film 2020 will have been a year like no other. The whole world has been hit by the health crisis caused projects were then able to start or resume their course. We had to wait until October so that by Covid-19, a virus that appeared in late 2019 from China. the shooting of season three of Narcos Mexico resumed in Mexico. Faced with this unprecedented situation, all countries adopted different strategies to try to contain As I write these few lines, France is entering its third lockdown. Unlike the first one, we can continue this sometimes fatal disease, in order to relieve overwhelmed and weakened health systems. to shoot. The series will be delivered to television channels and platforms on time. In France, the government took radical measures in mid-March by closing all so-called The only parameter, and not the least, on which we have no information is the reopening date “non-essential” businesses and, for the first time in their existence, all movie theaters had to close for movie theaters in France. After reopening in June 2020, they were obliged to close at the end their doors to the public. All shooting has been interrupted. France has experienced total lockdown of October, and have not yet been able to open yet. for two months. For the first time, Gaumont is left with a large stock of films that have not yet been released in movie During this period, Gaumont’s activity, which consists of producing and distributing films and series, theaters. came to a brutal halt. Luckily, Gaumont has a catalog of more than a thousand titles with very strong Gaumont’s revenue in 2020 is strongly impacted by the pandemic. It did not allow us to return to demand from historical channels. a profitable result despite the performance of catalog film sales, the very good results of Bronx and These two months obliged us to implement a different organization. We had to think about the time Barbarians on Netflix, the successful track record of Tout Simplement Noir during the summer and when everything would reopen, find solutions to ensure that the insurance policies of our future the incredible eight days of distribution of Bye Bye Morons totaling more than 700,000 tickets sold productions include this new virus and determine how to implement effective health protocols while France was partially under curfew. on film sets to avoid giant clusters. At the same time, the profession remains very committed to ensuring that the transposition of For Gaumont, no film was interrupted. In contrast, the third season of Narcos Mexico, the most the AVMS Directive takes place under favorable conditions for our businesses. At the same time, important series produced by the Company, saw its shooting suspended due to the epidemic the media release chronology that was revised three years ago, with minor modifications, is once outbreak in Mexico. again evolving. Because when we ask platforms to invest in French audiovisual and cinematographic creation, we must give them the position they deserve! All of this had a significant impact on Gaumont’s business. For reasons mainly exogenous in connection with the pandemic, our activities have been and will During this unique period, we were approached by Netflix who was highly interested by Bronx, continue to be disrupted this year, but Gaumont remains fully focused and vigilant while remaining directed by Olivier Marchal and initially scheduled for release in movie theaters in September. bold and confident in the future! After long negotiations, and with the agreement of Canal+ and Olivier Marchal, we decided to sell the film to Netflix. Sidonie DUMAS, April 7, 2021 - 2020 UNIVERSAL REGISTRATION DOCUMENT 5 WorldReginfo - fec16dd1-ba4f-4fec-87c2-ccf2ffba35a4 born with cinema 6 - 2020 UNIVERSAL REGISTRATION DOCUMENT WorldReginfo - fec16dd1-ba4f-4fec-87c2-ccf2ffba35a4 born with cinema OVERVIEW OF THE MAIN 1 OPPORTUNITIES AND RISKS Outlook and strategic direction 8 Risk factors 10 Impacts of the Covid-19 epidemic Internal control and risk management on Gaumont’s activity, income procedure 15 and financial résults 9 - 2020 UNIVERSAL REGISTRATION DOCUMENT 7 WorldReginfo - fec16dd1-ba4f-4fec-87c2-ccf2ffba35a4 born with cinema OVERVIEW OF THE MAIN OPPORTUNITIES AND RISKS 1 OUTLOOK AND STRATEGIC DIRECTION OUTLOOK AND STRATEGIC DIRECTION A multi-genre local presence based on our core activities: Rise of multi-screen image content consumption creating, producing and marketing After over a year of travel restrictions that affected all countries worldwide, the audiovisual sector Gaumont is working to address this change in demand by providing an offer that is as close as is experiencing disruption already made possible by the constant evolution of technologies possible to its talent