FINANCIAL RESULTS 2017
22 March 2018 TABLE OF CONTENT
KEY BUSINESS TAKEAWAYS UPDATE p.3 p.9 FINANCIAL OVERVIEW 2017 1 2 FY 2017 A NEW GROUP STRATEGY ACCOUNTS BEING FORMED & OUTLOOK p.16 p.22 p.27 3 4 5 2 | FINANCIAL RESULTS 2017 KEY TAKEAWAYS 2017 HIGHLIGHTS
CREATION OF A NEW MEDIA GROUP , WITH THE ACQUISITION ✓ AND INTEGRATION OF 6 COMPANIES IN LESS THAN 12 MONTHS CONFIRMATION OF THE MARKET POTENTIAL WITH BOOMING ✓ APPETITE FOR VIDEO CONTENT IN EUROPE AND GLOBALLY
SOLID BUSINESS PERFORMANCE IN ALL SEGMENTS SUP P ORTE D ✓ BY NEW COMMERCIAL INITIATIVES ✓ FULL - YEAR FINANCIAL RESULTS SIGNIFICANTLY ABOVE GUIDANCE ✓ STRONG LINE - UP AN D ATTRACTIVE PERSPECTIVES FOR 2018
4 | FINANCIAL RESULTS 2017 KEY TAKEAWAYS | DEPLOYMENT OF THE STRATEGY SINCE IBC : Business development
Production Distribution Channels & Digital Confirm strength of historical Continued investment in Contracts renewal with key f r a n c h i s e s : top audiences in c o n t e n t : €52m spent in FY17 French operators 2 0 1 7 f o r Research Unit a n d Alice Nevers Accelerated strategy of Launch of new channels : international distribution : A B X p l o r e Launch new formats The Mantis, Missions, e t c with international Positioning on fast - g r o w i n g positioning : and differentiating B l a c k S p o t Focus on international v e r t i c a l s : e - S p o r t Prepare line - up for future c o n t e n t : Babylon Berlin, Focus on diversifying y e a r s : new seasons already in MGM films,… monetization options : production + 2019 objectives advertising, digital,… f o r A p o c a l y p s e s e r i e s Envisage new types of format : digital, mobile…
5 | FINANCIAL RESULTS 2017 KEY TAKEAWAYS | DEPLOYMENT OF THE STRATEGY SINCE IBC : Additional value creation through M&A
➢ CC&C – documentaries: closed in July 2017 APPROX. €100M ✓ FOLLOW - U P INVESTMENT AFTER ➢ STORIA TELEVISION – f i c t i o n : closed in January 2018 ✓ G R O U P E A B
➢ MAKEVER – f i c t i o n : closed in March 2018 Attractive financial ✓ t e r m s a n d acquisition metrics ➢ ON ENTERTAINMENT – a n i m a t i o n : expected closing i n Q 2 2 0 1 8 Flexible investment structure enabling to incentivize talents ➢ MON VOISIN PRODUCTION – f i c t i o n : expected and align interests closing in Q2 2018
6 | FINANCIAL RESULTS 2017 KEY TAKEAWAYS | SOLID 2017 FINANCIAL PERFORMANCE: Significantly above initial guidance
➢ R e p o r te d financials (only 9 months of activity) : ➢ Revenues of € 1 1 5 . 7 m ➢ EBITDA [ 1 ] o f € 2 5 . 5m
➢ P r o fo r m a performance (12 months) : ➢ Revenues of € 1 6 3 . 8 m + 1 % vs. guidance ➢ EBITDA [ 1 ] o f € 3 7 . 0m + 1 0 % vs. guidance [ 2 ]
➢ Consolidated net debt position of € 2 8 . 5 m
[1] After amortization of audiovisual rights (other than recognized through business combinations) 7 | FINANCIAL RESULTS 2017 [2] On a comparable perimeter basis, i.e. excluding Mediawan overheads KEY TAKEAWAYS | STRATEGY AND OUTLOOK
CAPITALIZE ON THE BOOMING DEMAND FOR CONTENT TO ACCELERATE PRODUCTION AND CREATE NEW IP
STRENGTHEN AND GROW OUR LIBRARY OF RIGHTS
ORGANIZE MEDIAWAN AS AN INTEGRATED MEDIA GROUP
CONSOLIDATE LEADERSHIP WITH SELECTED EUROPEAN ACQUISITIONS
SIGNIFICANTLY IMPROVED ORGANIC GROWTH PROFILE: DOUBLE DIGIT ANNUAL GROWTH [1]
[1] Like-for-like growth Including contribution of Storia, Makever, ON Entertainment and MVP 8 | FINANCIAL RESULTS 2017 KEY TAKEAWAYS | BUSINESS REVIEW CHANNELS & DIGITAL : Business update and trends
Carriage fees o Challenging environment o Renewal of historical o Increased distribution of due to operator business with top the group’s existing budgetary pressures and c l i e n t s TF1 carriage fee battle c h a n n e l s o New channels and o Full year effect of new o Service upgrades and rebranding projects to channel launches in 2016 developments may bolster distribution provide new channel/ contract negotiations Advertising service opportunities o Good audience results o L a u n c h o f A B X p l o r e supporting advertising o Pick up in the French consolidates position in r e v e n u e s advertising market B e l g i u m o Launch of AB3 in o Uncertainty in Belgian o Launch of AB3 in Switzerland advertising market due Switzerland: new o L a u n c h o f A B X p l o r e i n to the TF1 market entry revenue source B e l g i u m i n 2 0 1 7
10 | FINANCIAL RESULTS 2017 BUSINESS REVIEW | CHANNELS & DIGITAL : Snapshot on advertising Advertising revenues 2015-2017 ➢ Market +7% +10% ➢ TV Audiences 23,3 21,8 RTL9 19,8 10,0 9,5 7,8 AB1
AB3 12,1 12,4 13,4 Mangas & Toute l’Histoire
2015 2016 2017 ➢ Distribution actual actual actual France Others
[1] Mediamat’ Thematik V34 ; 6-month evolution V33 vs V34 ; 12-month evolution V32 vs V34 11 | FINANCIAL RESULTS 2017 BUSINESS REVIEW | CHANNELS & DIGITAL : Financial performance 2017
Revenues (+1%) F Y 2 0 1 7 F Y 2 0 1 7 F Y 2 0 1 6 C h a n g e ➢ +3% increase in carriage fees due I n € m to broader distribution of existing R e p o r t e d P r o f o r m a R e s t a t e d (%) c h a n n e l s E x t e r n a l ➢ +7% in advertising revenues as a 81.2 108.2 106.8 + 1 % result of the good audience r e v e n u e s performances of channels, a more dynamic market in France and continued growth of the group’s To t a l 8 2 . 1 1 0 9 . 2 1 0 7 . 6 + 1 % position in Belgium r e v e n u e s ➢ Partially offset by a decrease in other revenues e.g. transport (no EBITDA impact) and technical EBITDA [1] 9.4 11.9 11.6 + 3 % s e r v i c e s EBITDA (+3%) ➢ EBITDA margin increase despite [1] EBITDA is reported after amortization of audiovisual rights (other than new programming spend recognized through business combinations)
12 | FINANCIAL RESULTS 2017 BUSINESS REVIEW | PRODUCTION & DISTRIBUTION : Business update and trends
P r o d u c t i o n P r o d u c t i o n P r o d u c t i o n o New seasons of long - o Local broadcaster price o Full year effect of running series pressure, offset by increases CC&C integration (Research Unit, Alice in tax credit o Continued production N e v e r s ) o More interest from o f l o n g - running series o First season of new international players in and of a new season of series Zone Blanche/ French production Zone Blanche/ Black B l a c k S p o t Spot (end of the year) Distribution Distribution o Solid domestic market Distribution o Strong renewals of o More international appetite o Further growth of classics (Research Unit, and opportunities for French international sales Rex, Friends) and European programs o Increase of international o Rise of digital streaming sales in the revenue mix platforms as new clients
13 | FINANCIAL RESULTS 2017 BUSINESS REVIEW | PRODUCTION & DISTRIBUTION : Snapshot on library
Library € 1 4 5 m € 5 2 m
Distribution rights € 2 0 m Production rights € 3 2 m
[1] Groupe AB’s library valued for the PPA as of March 31st 2017 [2] Before coproduction revenues and subsidies restatement ; including production deliveries and production WIP
14 | FINANCIAL RESULTS 2017 BUSINESS REVIEW | PRODUCTION & DISTRIBUTION : Financial performance 2017
Revenues (+5%) I n € m F Y 2 0 1 7 F Y 2 0 1 7 F Y 2 0 1 6 C h a n g e ➢ +12% increase of distribution revenues led by strong renewals of R e p o r t e d P r o f o r m a R e s t a t e d (%) library classics and continued development of international sales E x t e r n a l 34.4 55.6 52.7 + 5 % ➢ Increase in the production r e v e n u e s deliveries (new series Zone Blanche) offset by the co - [ 1 ] To t a l production effect on revenues 7 5 . 6 1 0 9 . 9 1 0 6 . 5 + 3 % r e v e n u e s EBITDA (+12%) ➢ Favorable amortization partially offset by higher royalties rate due EBITDA [1] 19.7 28.6 25.4 + 1 2 % to sales mix ➢ Good fixed costs control
[ 1 ] C o - production financing is deducted from [1] EBITDA is reported after amortization of audiovisual rights (other than costs rather than accounted for in revenues recognized through business combinations)
15 | FINANCIAL RESULTS 2017 BUSINESS REVIEW | FY 2017 ACCOUNTS INTRODUCTION
➢ No material change in accounting principles and methodology
➢ Perimeter and treatment of M&A operations ➢ Groupe AB consolidated since acquisition on March 31 st ➢ RTL9 consolidated at 100% as of June 30 th (no minority interests at closing) ➢ CC&C consolidated as of July 1 st (acquired on July 20th)
➢ Full year Pro Forma: key indicators presented in the audited accounts
➢ EBITDA defined post amortization of audiovisual rights ➢ D&A presented below EBITDA only relate to ( i ) other intangible and tangible assets and (ii) assets recognized through business combinations ➢ Also excludes other operating income/expense (non - recurring items and non - cash charges under IFRS 2)
➢ Goodwill: PPA analysis completed for Groupe AB and CC&C
17 | FINANCIAL RESULTS 2017 FY 2017 ACCOUNTS | SUMMARY 2017 PERFORMANCE
I n € m F Y 2 0 1 7 F Y 2 0 1 7 F Y 2 0 1 6 C h a n g e R e p o r t e d P r o f o r m a R e s t a t e d (%)
Channels & Digital 8 1 . 3 1 0 8 . 2 1 0 6 . 8 + 1 % Prod. & Distribution 3 4 . 3 5 5 . 6 5 2 . 7 + 5 % REVENUES 115.7 163.8 159.6 + 3 % +1% vs. guidance Channels & Digital 9 . 4 1 1 . 9 1 1 . 6 + 3 % of €163m Prod. & Distribution 1 9 . 7 2 8 . 6 2 5 . 4 + 1 2 % E B I T D A - O p e r a t i o n s 29.1 40.5 37.0 + 9 % +10% vs. guidance O v e r h e a d s ( 3 . 6 ) ( 3 . 6 ) of €37m
ISKANDER – 4x45’ produced E B I T D A - M e d i a w a n 25.5 37.0 in 2017 by LoveMyTV and Mademoiselle Films (Makever) Note: EBITDA reported after amort. of audiovisual rights (other than recognized through 18 | FINANCIAL RESULTS 2017 business combinations) FY 2017 ACCOUNTS | CONSOLIDATED P&L
I n € m F Y 2 0 1 7 F Y 2 0 1 7 Reported income is affected R e p o r t e d P r o f o r m a by significant non - r e c u r r i n g R e v e n u e s 1 1 5 . 7 1 6 3 . 8 i t e m s Cost of sales ( 6 7 . 9 ) ( 9 8 . 0 ) ➢ €(21.7)m amortization of assets recognized through SG&A ( 2 2 . 2 ) ( 2 8 . 9 ) business combinations EBITDA [1] 2 5 . 5 3 7 . 0 ➢ €(4.2)m other expenses : D&A (excl. audiovisual rights) ( 2 . 8 ) ( 3 . 8 ) mostly costs incurred in the context of realized A d j . E B I T [ 2 ] 2 2 . 7 3 3 . 3 acquisitions, partially offset by exceptional Other income/expense ( 4 . 2 ) i n d e m n i t y Amort. of assets recognized through ( 2 1 . 7 ) business combination Reported net loss of €(6.8)m Reported operating income ( 3 . 1 ) ➢ Neutral tax result thanks to €9.4m deferred tax income Financial income ( 3 . 7 ) ➢ Financial interests of Ta x 0 . 2 €(3.7)m from the Wannabe Minority interests ( 0 . 2 ) credit facility N e t I n c o m e ( 6 . 8 )
[1] After amortization of audiovisual rights (other than recognized through business combinations) 19 | FINANCIAL RESULTS 2017 [2] Before amortization of assets recognized through business combinations FY 2017 ACCOUNTS | SUMMARY BALANCE SHEET
BALANCE SHEET (€m) ➢ Goodwill (from the IBC and CC&C) has been allocated in FY 2017 accounts Intangible assets 209 - Combined library valuation confirmed above G o o d w i l l 96 €145m by independent expert Other assets 21 ➢ Net financial debt of €28.5m Total assets 326 - €82m available cash, partly consumed with recently announced acquisitions Shareholders’ equity 210 - Gross debt mainly relates to €130m credit Net financial debt 29 facility raised for the IBC (5 - year amortizable Other liabilities 52 loan) o/w €16.25m were repaid in FY17 Net Working capital 36 - New €45m credit line secured in March 2017 To t a l liabilities 326 ➢ Negative Working capital of €(36)m
20 | FINANCIAL RESULTS 2017 FY 2017 ACCOUNTS | FY 2017 NET CASH EVOLUTION
IBC impact: -289 M€ Mediawan Pro Forma (Groupe AB over 12 months 2017): +10 M€ 250,7
70,0
50,0
30,0 Mainly driven by over- investment in library (4,0) vs. depreciation 10,0 Including €5m (38,1) 37,0 regularisation for In €m (241,2) 2016 income tax
(10,0) (15,0) (10,2) (1,5) (3,8) 4,8 (30,0) (28,5) (16,8) (28,5) (50,0) Net Debt as of Acq. of shares Acq. of shares Transac. Capital PF as of 1st PF Change in Capex Interests Tax Others Net Debt as of Dec16A in Gpe AB in RTL9 Fees reduction Jan17A EBITDA WC & library (excl. audio.) Dec17A (net of cash) rights
21 | FINANCIAL RESULTS 2017 FY 2017 ACCOUNTS | A NEW MEDIA GROUP BEING FORMED M&A STRATEGY : INITIAL OBJECTIVES
COMMON PLATFORM FOR MULTI - CHANNEL DISTRIBUTION CREATION AND DEVELOPMENT OF PROPRIETARY IP FEEDING A LIBRARY OF PREMIUM CONTENT
23 | FINANCIAL RESULTS 2017 A NEW GROUP BEING FORMED | ANIMATION: Majority investment in ON Entertainment
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24 | FINANCIAL RESULTS 2017 A NEW GROUP BEING FORMED | FICTION: Consolidation of 3 independent studios
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25 | FINANCIAL RESULTS 2017 A NEW GROUP BEING FORMED | MEDIAWAN PROFORMA
Integrated group Leading platform
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[1] Corporate financial debt only, i.e. excluding 26 | FINANCIAL RESULTS 2017 production financing. A NEW GROUP BEING FORMED | STRATEGY & OUTLOOK STRATEGIC FOCUS FOR 2018
F O C U S O N DELIVERING THE PRODUCTION PLAN FOR 2018/2019 AND PREPARE THE LINE UP FOR 2020 ONWARDS
LAUNCH NEW PROJECTS TO STRENGTHEN CHANNELS PORTFOLIO AND DEVELOP ADDITIONAL CONTENT MONETIZATION AVENUES INCL. LICENSING/MERCHANDIZING AND DIGITAL VIDEO DISTRIBUTION
ACCELERATE INTERNATIONAL PRODUCTION AND CONSOLIDATE LEADERSHIP WITH SELECTED EUROPEAN ACQUISITIONS
OPERATE MEDIAWAN AS AN INTEGRATED MEDIA GROUP W I T H EFFICIENT ORGANIZATION AND GOVERNANCE
READAPT THE GROUP FINANCING STRUCTURE FOR THE LONG - TERM
28 | FINANCIAL RESULTS 2017 STRATEGY & OUTLOOK | PRODUCTION LINE-UP FOR 2018
Strong line up with c. 2 7 0 h o u r s of production planned for delivery in 2018 Significantly weighted towards the end of the year: cut - off issues potentially affecting 2018 target
GROUPE AB CC&C MAKEVER STORIA ON KIDS
Research Unit (S12/13) Histoire de Cherif (S6) Aux animaux la guerre Miraculous (S2/3) l'Azerbaïdjan Alice Nevers (S15) Bracelets Rouges (S2) Les rivières pourpres Robin Hood (S2) Apocalypse, La Black Spot (S2) Paix Impossible Noces Rouges Traqués 7 and Me (S2) Meurtre dans le Morvan Histoire de Système D Arthur & les Minimoys Tall Tales l’Aviation Poulet Grillé Sous la Peau Denver MVP Hydravion, la Maman Je sais tomber Five & It renaissance Dix Pour Cent (S3) Deux gouttes d'eau Infidèle Meurtre à Brides les bains Meurtres au Havre Un Homme Abimé
29 | FINANCIAL RESULTS 2017 STRATEGY & OUTLOOK | OUTLOOK
2017 Perimeter Mediawan proforma
PROFORMA REVENUES OF APPROX. €270M REVENUES OF € 1 6 4M IN 2018, EXCLUDING CONTRIBUTION OF PLAYMOBIL MOVIE
E BIT DA OF € 3 7 M MIX EFFECT ON EBITDA MARGIN , RESULTING (22% MARGIN) FROM AMBITIOUS PRODUCTION DELIVERY PLAN
ANNUAL GROWTH 3 - 5% DOUBLE DIGIT ANNUAL ORGANIC GROWTH
30 | FINANCIAL RESULTS 2017 STRATEGY & OUTLOOK | DISCLAIMER
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31 | FINANCIAL RESULTS 2017 22 March 2018