EUROPACORP (EPA:ECP) - Europacorp - Annual results FY 2020/2021

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24/06/2021 18:00

PRESS RELEASE
                          Annual results FY 2020/2021

* EuropaCorp recorded a positive operating profit of EUR3.7 million thanks to
the margin on its film and TV series catalog and the continued control of
overheads, which are still on a downward trend.
* Current income before income tax was positive at EUR2.9 million, excluding
the EUR134.9 million "technical" profit linked to the equitization of the
mezzanine debt in July 2020, as a result of the normalization of the financial
result following this operation.
* After taking into account this "technical" profit and the net deferred tax
charge, net income for the year was EUR122.7 million.
* These positive results are the fruit of the Group's efforts to improve its
operations and financial structure.

Saint-Denis, June 24, 2021 - EuropaCorp, one of the leading independent film
studios in Europe, film producer and distributor, reports its annual
consolidated income, which ended on March 31, 2021, as approved by the Board of
Directors at its meeting on June 23, 2021.

                                                                     Variation
Profit & Loss ? in millions of euros  31 March 2021  31 March 2020     (EURM)

Turnover                                   41.5           69.8          -28.3
Cost of sales                             (22.5)         (48.3)          25.8
Operating margin                           18.9           21.4           -2.5
% of revenue                                46%            31%
Overheads                                 (15.7)         (16.2)           0.6

Other income and expenses                   0.4          (64.3)          64.7

Operating profit (loss)                     3.7          (59.1)          62.8
% of revenue                                 9%           -85%
Financial income                           (0.8)         (26.6)          25.8
"Technical" profit from debt
restructuring (IFRIC 19)                  134.9                         134.9
Current income before income tax          137.8          (85.7)         223.5
Tax                                       (14.6)          (8.5)          -6.1
Equity in net earnings of associated
companies                                  (0.6)          (0.8)           0.3

Net income                                122.7          (95.1)         217.7
% of revenue                               296%          -136%
For information
Current income before income tax
exclusive of "technical" profit             2.9          (85.7)          88.6
% of revenue                                 7%          -123%

> The decline in revenue to EUR41.5 million (against EUR69.8 million during the
previous fiscal year) is mainly explained by the absence of new films during
the financial restructuring finalized in July 2020 and by the Covid-19 epidemic
which has constrained the resumption of productions. The exploitation of
EuropaCorp's catalog thus constitutes the bulk of revenues.

Revenue from International sales stood at EUR12.1 million for the fiscal year,
representing approximately 29% of total turnover, versus 14.8 million for FY
2019/2020. They comprised mainly of significant overages collected on films
from the catalog (mainly Lucy and the trilogy Taken), as well as the last
deliveries of the films Kursk and Renegades in China.

Revenue from Theatrical distribution in France was EUR0.6 million for FY
2020/2021, or around 1% of total revenue, against EUR8.7 million in 2019/2020.
This revenue corresponds in FY 2020/2021 to the last receipts received for the
exploitation in the French theatres of Nous finirons ensemble (Little White
Lies 2).

Revenue from Video & VOD in France and the United States represented around 3%
of the annual revenue, coming in at EUR1.3 million, versus EUR4.9 million in FY
2019/2020. This turnover included video and VOD sales realized in the United
States, in particular for Valerian and the City of a Thousand Planets, and in
France for Little White Lies 2 (Nous finirons ensemble) and Taxi 5 (though less
significant than during the previous financial year).

Revenue from Television & SVOD sales in France and the United States stood at
EUR19.0 million, or 46% of total revenue, versus EUR27.3 million for last
financial year. This turnover was mainly driven by the French market and
corresponds essentially to the opening of broadcasting rights windows for films
from the catalog such as Taxi 5, Anna, Bis, It Boy (20 ans d'écart), and the
trilogy Taken.

Revenue from TV Series production was EUR5.6 million for FY 2020/2021, or 14%
of total revenue, against EUR6.0 million for FY 2019/2020. This revenue
corresponds to the international exploitation of the series Taken (overages).

Revenue from Other activities comprised mainly of post-production, licenses,
partnerships and coproduction / line production receipts and was EUR2.8 million
(including EUR0.6 million for post-production), or 7% of total turnover,
against EUR7.0 million for the previous financial year which included
coproduction receipts for the film Little White Lies 2 (Nous finirons
ensemble).

> The operating margin rate improved significantly to 46% (compared with 31%
for FY 2019/2020), mainly due to the high proportion of the catalog in this
year's revenues. With the normalization of overheads (structural
rationalization) and financial result (equitization of the mezzanine debt), the
current income before income tax (excluding the "technical" profit linked to
the restructuring of the debt) is positive at EUR2.9 million.

The consolidated operating margin was EUR18.9 million, compared with EUR21.4
million in the previous fiscal year, a decrease of EUR2.5 million due to the
lower revenues. The decrease in the cost of sales linked to the high proportion
of the catalog in the revenues for the year (lower amortization) enabled the
margin rate to increase from 31% to 46%.

Overheads amounted to EUR15.7 million, a saving of EUR0.6 million compared with
the previous fiscal year (-3%), confirming the effectiveness of the measures
implemented by the Group to reduce its overheads, which have fallen by a total
of EUR37.3 million over the last four financial years.

Operating profit was EUR3.7 million, compared to EUR(59.1) million in the
previous fiscal year, which was impacted by non-recurring items related to the
financial restructuring.

Exclusive of the "technical" profit linked to the capital increases accounting,
net financial income was EUR(0.8) million, compared with EUR(26.6) million in
the previous fiscal year. This decrease of nearly EUR26 million is explained
for EUR14 million by the equitization of the mezzanine debt in July 2020 and
the subsequent savings in financial interest, and for EUR9 million by a
positive foreign exchange result (+EUR5 million compared to -EUR4 million in
the previous fiscal year).

The current income before income tax (exclusive of the "technical" profit) is
thus positive at EUR2.9 million, thanks to the operating margin on the catalog
covering overheads and financial result.

A "technical" profit linked to the two capital increases resulting from the
July 2020 debt restructuring was recorded for EUR134.9 million. This is the
application of IFRIC 19, which reflects in the consolidated income statement
the difference between the book value of the converted debt and the fair value
of the shares issued.

The current income before income tax was then EUR137.8 million, compared with
EUR(85.7) million in the previous fiscal year.

After the tax impact of EUR(14.6) million, mainly related to deferred tax on
temporary differences in amortization, net income was EUR122.7 million,
compared with EUR(95.1) million the previous fiscal year.

> Net cash flow from operations was down at EUR2.9 million, reflecting the
decrease in revenues of the year and the payment of significant restructuring
costs at the end of the safeguard period. As no investments were made in the
production of new projects, and after taking into account in particular the
payment of interest, the overall change in cash over the year was EUR(3.4)
million.

Net cash flow from operations was EUR2.9 million, compared with EUR30.9 million
in the previous year.

This decrease of EUR28 million is explained in particular by:
(i) Higher cash inflows from operations in the previous fiscal year (receipts
from the theatrical distribution of the film Nous finirons ensemble as well as
higher international and TV sales) ;
(ii) The payment of significant fees at the end of the safeguard procedure in
July 2020.

As a result of the financial restructuring and the Covid-19 epidemic, the Group
has had to delay the start of production of new projects. The health conditions
following the end of the safeguard procedure have significantly complicated the
organization of production, especially for English-language films with an
international footprint. As a result, no production investments were made
during the year (EUR0.5 million against -EUR0.2 million in the previous fiscal
year).

As announced on March 16, 2021, following the Covid-19 epidemic and its impact
on the Group's production restart, a request was made to the Bobigny Commercial
Court to extend the duration of EuropaCorp S.A.'s safeguard plan by an
additional two years. The request was validated and the total duration of the
safeguard plan has thus been extended from 7 to 9 years from July 24, 2020,
implying a new repayment schedule.

As a reminder, the Group is not experiencing any short-term cash flow pressure
at this stage and already has several film projects ready to go into
production.

> The financial structure has been considerably strengthened following the
equitization of the mezzanine debt.

As of March 31, 2021, net debt amounted to EUR44 million, compared to EUR153
million as of March 31, 2020. This decrease is the result of the share capital
increase reserved for the Vine funds, the Company's main creditor at the time,
by way of offsetting the mezzanine debt for a total amount of approximately
EUR115 million.

Besides, on July 30, 2020, the Group entered into a credit agreement with
certain of the Vine funds and the agent Comerica to finance the production
costs of its upcoming projects. This new production revolving credit facility
enables the Company to raise up to $100 million related to contracts
receivables, and can, by mutual agreement, be increased by $25 million. To date
this revolving line is undrawn.

> The Group's outlook, subject to the control of the Covid-19 epidemic, is to
put into production as soon as possible film and TV series projects that are
100% pre-financed.

The Group is pursuing its strategy to launch new film productions with a target
of two English-language films and one French-language film per year, and
English-language television series with strong international potential.

EuropaCorp currently has several film projects ready to go into production, but
the evolving health conditions linked to Covid-19 have significantly
complicated the organization of the production launch, especially for
English-language projects with an international footprint.

While taking into account the evolution of the market, the Company has
continued to develop content corresponding to the type of films and TV series
that have made the Group's reputation, and production will start as soon as
possible.

The Group is also developing docuseries with three main focuses that correspond
to the DNA of EuropaCorp and its founder Luc Besson:
- The environmental cause;
- Urban territories;
- The world of cinema.

Financial calendar

* Annual General Meeting: September 2021

* Revenue and consolidated financial statements for the 1st semester:
  December 2021

* Annual revenue: May 2022

* Annual consolidated financial statements: June 2022

ABOUT EUROPACORP

Founded in 1999, EuropaCorp has grown to become the leading film and series
production studio in Europe.
The Group's international activities cover the entire film value chain with
expertise in production, theatrical distribution, international sales, TV,
video & VOD, and music publishing. EuropaCorp is able to ensure creativity and
quality throughout the lifecycle of its films and television projects. The
Group has produced or co-produced more than 120 films and has distributed more
than 160 of them in French cinemas. Since 1999, it has produced 10 of the 20
biggest French hits internationally and 22 films among the 70 French
productions with the most international admissions (source: Le film français
- May 17, 2019). The Group has also been active since 2010 in the production of
TV series and single titles for platforms worldwide.
EuropaCorp was created by the director, screenwriter and producer Luc Besson.

More information on www.europacorp.com

Contacts

Groupe EuropaCorp
Lisa Reynaud / Investor Relations / investors@europacorp.com
Régis Lefèbvre / Communication / rlefebvre@europacorp.com
Tel: 01 55 99 50 00

NewCap
Pierre Laurent / NewCap
plaurent@newcap.fr / Tel: 01 44 71 94 94

          EuropaCorp is listed on the C Compartment of Euronext Paris
                   ISIN Code: FR0010490920 - MNEMO Code: ECP

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EUROPACORP (EPA:ECP) - Europacorp - Annual results FY 2020/2021

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