H1 2017 Results September 27th 2017 - Zone Bourse
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H1 2017 Results September 27 th 2017
Mediawan Update
Key Highlights
➢ Creation of a new media group with the acquisition and
integration of Groupe AB
➢ Confirmation of the booming appetite for TV content in Europe
and globally
➢ Solid business performance supported by new commercial
initiatives
➢ Strong H1 financial results comforting FY17 targets
➢ Continued focus on M&A through disciplined market screening
3
Mediawan : from a SPAC to a leading independent player
➢ December 2015: Founded as a “SPAC” by PA Capton, X Niel and M Pigasse
➢ April 2016: Raised €250m through an IPO on Euronext Paris
➢ March 2017: Realized its first structuring acquisition, Groupe AB
➢ Today: Leading independent editor, producer and distributor of TV content in French
speaking Europe
▪ Means and ambition to aggregate independent cies with complementary expertise
Largest production & distribution Strong portfolio of channels Scaled and balanced business
platform in French speaking Europe and digital services
▪ Large and diversified library ▪ 19 TV channels ▪ 2016 revenue of €160m
of programming rights ▪ Entertainment ▪ 2016 EBITDA of €37m
(c. 12,000 hours)
▪ Special interest ▪ 370 full-time employees
▪ c. 80 hours in-house equivalent
production per year ▪ Documentaries
4
Key achievements since IBC – organic levers
Channels & Digital Production & Distribution
Develop new / rebranded channels Accelerate international content distribution
Launch of new channels to strengthen the group’s Strengthened partnership with the global content
offering and diversify the thematic offering: platforms distributing Mediawan content:
- AB-Xplore (Belgium FTA) - AMC & BBC (Missions)
- Channels rebranding (in progress) - Amazon (in discussions)
- New channel launches on identified verticals (in - Netflix (in discussions)
progress)
Initiate new monetization opportunities Invest in premium content
New levers deployed to generate additional Continuous investment in both internal
revenues with limited incremental costs production and acquired content:
- Advertising: AB3 Switzerland - Approx. €22m invested in content over H1
- Digital: app “Mon Science & Vie Junior” - Babylon Berlin: unprecedented budget for a
non-English-language series
- In house production projects (Black Spot S2)
5
Key achievements since IBC – M&A levers
1 • Fragmented landscape with few pan-European players
Large # opportunities • Mediawan is an attractive and distinctive project in the industry,
explored constituting a unique development opportunity for independent talents
• Boiling M&A market
2 • Strategic rationale comes first
Disciplined approach • Reasonable acquisition multiples
• Long-term incentive to align interests with the top talents
3 • Acquisition of CC&C, operating the global “Apocalypse” brand
Acquisition of 80% of CC&C • International content, highly complementary to Groupe AB expertise
• Attractive valuation parameters and reinvestment of the founders
4
• Rationalization of portfolio
Acquisition of 35% of RTL9
• Full integration of one of the largest channels of the group
5 • More than 20 companies under review
Numerous opportunities
• Include both small add-ons and transforming transactions
under review
• Clearly identified areas of focus incl. animation and fiction
6
H1 results – key highlights
➢ Reported performance (with Groupe AB consolidated over 3 months):
➢ Revenues of €38.6m
➢ EBITDA of €10.0m
➢ Pro forma performance (with Groupe AB consolidated over 6 months):
➢ Revenues of €86.8m
➢ EBITDA of €21.5m
➢ Consolidated cash position of €104m
➢ Confirmed guidance for FY 2017
7
Alignment of stars for the European content market
Hulu to spend
$2.5 billion on
content in 2017,
add 7 more
original series
8Strategy and outlook
➢ Capitalize on the booming demand for TV content
➢ Strengthen relationships with global platforms as well as local
broadcasters thanks to our independent status
➢ Develop production capabilities with organic developments as
well as selected acquisitions
➢ Focus on fully pre-financed productions
➢ Build a large and diversified library of rights
➢ Consolidate a European leader with acquisitions in
complementary verticals
9Divisional overview
Mediawan Today: leading independent content editor, producer and distributor
Leading independent integrated player in France… ...with scaled and balanced asset base
▪ Founded in 1977, Groupe AB is a leading player in channels ▪ 2016 revenue of €160m (a)
broadcasting, production and distribution of audio visual
content in French-speaking Europe ▪ 2016 EBITDA of €37m (a)(b)
▪ 2016 unlevered FCF > €30m and 80% cash conversion ratio
▪ Fully integrated business model with a broad offering across
the value chain of the French TV landscape ▪ 370 full-time employees equivalent
▪ Large and diversified library of programming rights
2016 revenue by segment (a)(c) 2016 EBITDA by segment (a)(b)
Channels &
Production Distribution Digital Channels &
Production & Channels & Production &
c. 80 hours in- c. 12,000 hours 19 TV channels in Digital
Distribution Digital Distribution
house production of programming entertainment, c. 30%
c. 1/3 c. 2/3 c. 70%
per year in library special interest and
documentaries
Strong integration between the group’s divisions
(a) Excluding exceptional revenues of €7.5m
(b) After amortization of programming rights
(c) Excluding c. €60m intra-group revenue 11Resilient channels and digital business Channels &
Digital
Strong portfolio of channels Contractual fees with advertising upside
▪ Strong portfolio of 19 channels widely distributed in French
€107m external revenues in FY2016 (a)
speaking territories and globally Others Carriage
▪ Carriage Fees: Driven by contractual
▪ Categories of channels focused on entertainment, special interest 13 % Fees
relations with channels broadcasters. Advertising
and documentaries, with differentiated positioning and 67 %
2/3rd are fixed revenues 20 %
partnerships with premium content publishers
▪ Advertising: Driven by audience results
▪ Meaningful production and purchasing efficiencies generated and channels attractivity to advertisers
through integrated operating structure ▪ Other: Transportation, audiotel, TV
shopping, barters.
Channels portfolio Broad coverage with key strategic relationships
▪ 3 channels
▪ Extensive distribution strategy
Entertainment ▪ Basic packages widely distributed ▪ Leading independent player in France benefiting from long term
▪ Large advertising potential
relationships with pay-TV platforms
▪ 12 thematic channels
▪ Significant and fast growing international presence
Special interest ▪ ARPU generating
▪ Wide distribution in standard package to pay-TV operators in
▪ Strong digital potential
France, Switzerland and Belgium
▪ 4 channels ▪ Wide broadcasting generating audience and growing
Documentary ▪ High-end positioning
advertising revenues
▪ Strong ARPU subscribers
(a) Excluding exceptional revenues of €7.5m
12Channels & Digital – Key trends Channels &
Digital
Key factors of H1 2017 performances
▪ Full effect of new channels launches and improved distribution within pay-TV services
▪ Pick up in French advertising market
Positive current market dynamics… … and trends that require vigilance
▪ Positive focus on content driven by competitive ▪ Vertical integration (Altice own channels…)
dynamics between operators (Vivendi, Altice, Orange) ▪ Potential sides effects of sports rights inflation
▪ Signs of improvements at Canal and TF1 carriage fees row
▪ TF1 Belgian market entry
Focuses for H2 2017
▪ Channel distribution contracts renegociations
▪ Rebranding and new channels developments
▪ Consolidation of Belgian position with ABXplore
13Channels & Digital – H1 performance Channels &
Digital
Key comments Performance review
Revenues (+2%)
In €m H1 2017 H1 2017 H1 2016 Change
➢ +5% in carriage fees, due to increased Reported Pro forma Restated (%)
distribution and new channels launches
➢ Heterogenous results on French, External
27.2 54.2 53.4 +2%
Belgian and Swiss markets led to +3% in revenues
advertising revenues, led by good
performances on the French market, Total
that shows signs of recovery 27.5 54.6 53.8 +2%
revenues
➢ Partially offset by a decrease in other
revenues eg transport (no EBITDA
impact) and technical services EBITDA 4.4 7.6 6.1 +24%
EBITDA (+24%)
Rec. EBIT 4.4 7.6 6.1 +24%
➢ Strong EBITDA increase due to fixed
cost base and good cost control
14Leading independent production and distribution player Production &
Distribution
Fully integrated platform… 2016 revenue contribution
▪ Leading producer and distributor of TV programs, including fiction €53m external revenues in 2016 (a)
(TV series & movies), cartoons and documentaries
▪ Distribution: Sales of broadcasting rights Distribution Production
on library programming (incl. subsequent 67 % 33 %
and international sales on in-house
▪ Distribution rights under mandate are generated through in-house productions and acquired rights /
mandates). 20% of international sales
productions, rights acquisitions or 3rd-party mandates
▪ Increasing international distribution activities (approx. 20% of 2016 ▪ Production: Sales of first-run broadcasting
rights on newly produced programming
distribution revenues) thanks to recognised expertise and (generated by own studios) to original
international relationships broadcasters.
80 hours of in-house production per year Library overview (in % hours)
▪ French TV series for wide audience
Fiction ▪ Coproduction of TV series with strong Rights under
potential for international distribution Animation
mandate 12%
15% Films and
Animation / In-house Telefilms
▪ Exclusive partnership with On
Children’s Entertainment (Method Animation) Production 14%
content ▪ 2 series under production in 2017 44%
Rights
TV series and
▪ c. 50 documentaries pa, distributed in Acquired Documentaries
France and globally Sitcoms
Documentaries 41% 14%
▪ Investment in projects with strong 60%
potential of international distribution
(a) Excluding c. €54m intra-group revenue
15Production & Distribution – Key trends Production &
Distribution
H1 2017 performances : strong production deliveries
▪ New prime time series: Zone Blanche (Black Spot) – 8 episodes delivered – Commercial success internationally
▪ Two recurrent series: Section de Recherches : 6 episodes delivered / Alice Nevers : 10 episodes delivered
▪ New co-production model fully implemented with local broadcasters
▪ New investment opportunities sourced for library (Babylon Berlin)
Current market dynamics
▪ Market interest internationally for French content both from platforms (Netflix, Amazon) and from
traditional broadcasters (BBC, RTL)
▪ Increase tax credit regime has helped relieve pricing pressure
▪ New channel launches creating demand in France
Focuses for H2 2017
▪ Season 2 of Zone Blanche (Black Spot) in preparation
▪ New seasons of Section de Recherches and Alice Nevers in production
▪ Integration of CC&C, with synergies with channels and distribution businesses
▪ New series in development
16Production & Distribution – Accounting policy Production &
Distribution
PRODUCTION DISTRIBUTION
▪ Recognized at delivery ▪ Recognized when the broadcasting rights
REVENUES
▪ Corresponds to the group’s co-producer share of open for the client (and after the broadcaster
revenues (split between co-producers and co-owners has accepted the material)
of the rights, based on respective participation) ▪ No revenue repartition for multi-year contracts
▪ Recorded as fixed assets at production cost
(excluding financial and marketing costs) ▪ Purchase costs recorded as fixed assets when the
COSTS
▪ Co-producers’ share and some subventions are broadcasting rights open
deducted from the gross carrying amount ▪ Costs are capitalized and recognized as
▪ All direct costs are capitalized and recognized as costs in the P&L through amortization
costs in the P&L through amortization
▪ Revenues recognition is linked to deliveries and rights opening: potential volatility of revenues on short periods
▪ Costs are capitalized: costs recognition in the P&L follows revenues recognition (reported above EBITDA)
▪ Amortization of rights based on recognized revenues compared to expected future receipts
17Production & Distribution – H1 performance Production &
Distribution
Key comments Performance review
Revenues (+6%)
In €m H1 2017 H1 2017 H1 2016 Change
➢ Revenues led by high distribution Reported Pro forma Restated (%)
sales on H1 2017
➢ Increased production deliveries in External
11.3 32.6 30.7 +6%
2017 offset by the co-production revenues
effect[1] on revenues.
Total
EBITDA (-11%) 24.6 59.1 57.7 +2%
revenues
➢ Particularly low amortizations levels
in H1 2016 due to the sales mix
EBITDA 7.2 15.5 17.3 -11%
➢ Prudent amortization of new
productions in H1 2017
Rec. EBIT 6.3 13.6 15.5 -12%
[1] Co-production financing is deducted from costs rather than accounted for in revenues
18H1 2017 Financials
Scope of consolidation and accounting introduction
➢ IFRS accounts, no significant difference in accounting principles vs. Groupe AB
➢ Perimeter and treatment of M&A operations
➢ Groupe AB consolidated since acquisition on March 31st
➢ RTL9 consolidated at 100% as of June 30th (no minority interests at closing)
➢ CC&C not consolidated in H1 (acquired on July 20th)
➢ 6 months Pro Forma: key indicators presented in the audited accounts
➢ EBITDA defined post amortization of audiovisual rights
➢ D&A as presented below EBITDA only relates to other intangible and tangible assets
➢ Exceptional items restated from P&L: indemnity received from interruption of SVOD and
costs related to the IBC (but not other M&A costs)
➢ Goodwill: PPA work to be completed for FY 2017
20Consolidated P&L
Key comments Performance review
➢ Consolidated PF revenues of €86.8m In €m H1 2017 H1 2017
➢ +3% vs. H1 2016 on a like for like Reported Pro forma
basis (ie excluding SVOD
Revenues 38.6 86.8
indemnity payment)
➢ Primarily driven by channels Cost of sales (22.0) (52.1)
carriage fees and distribution SG&A (6.5) (13.2)
revenues
EBITDA 10.0 21.5
➢ Consolidated PF EBITDA of €21.5m D&A (excl. rights) (1.0) (1.9)
➢ 25% EBIDTA margin, higher than
Current EBIT 9.0 19.6
FY guidance
Exceptional items (6.2)
➢ Lack of comparability with 2016
Financial income (1.4)
performance because of holding
and M&A costs EBT 1.5
➢ Net income affected by IBC-related fees
Tax (2.4)
and significant tax expense Minority interests (0.3)
Net Income (1.2)
21Summary Balance Sheet
ASSETS (€m) LIABILITIES (€m)
Intangible assets 69 Shareholders’ equity 214
Goodwill 190 Financial debt 137
Other assets 15 Other liabilities 11
Working capital 63 Working capital 80
Cash & equivalents 104
Total assets 442 Total liabilities 442
➢ Goodwill (from the IBC and previous ➢ Financial debt of €137m
acquisitions) will be allocated in FY 2017
accounts ➢ Mainly relates to €130m credit facility raised
for the IBC (5-year amortizable loan)
➢ Significant cash resources available
➢ Financial debt also includes €1m interim
➢ Additional financing options being explored to production financing lines and €4m payment
increase financial flexibility for RTL9 minority stake
22H1 2017 net cash evolution
On a PF basis, Mediawan generated +5 M€ cash flow over the first half of 2017
IBC impact: -289 M€ Mediawan Pro Forma (Groupe AB over H1 2017): +5 M€
250,7
70,0
50,0
30,0
10,0
(241,2) (38,1) (33,2)
In (4,0)
€m
(10,0)
21,5
(15,0)
(0,3)
(5,7)
(30,0) 0,6
(11,3)
(28,5)
(50,0)
Net Debt as Acq. of Acq. of Transac. Capital PF as of 1st PF Change Capex Tax Others Net Debt as
of Dec16A shares shares Fees reduction Jan17A EBITDA in WC & (excl. of June17A
in Gpe AB in RTL9 library audio.)
(net of cash) rights
232017 outlook
➢ Confirmed 2017 targets for the “Groupe AB” perimeter
➢ Revenues > €163m
➢ EBITDA > €37m
➢ Other contributions to be taken into consideration for FY2017 results
➢ Contribution from CC&C and potential other acquisitions
➢ Holding and M&A costs to support build-up of the group
➢ Key areas of volatility
➢ Production delivery schedule at CC&C
➢ Cut-off considerations for programming distribution
24Strategic focus
Accelerate on content with international reach
Strong demand for European content
Proliferation of ~87m subs ~69m subs ~12m subs ▪ Use viewer segmentation to deliver
1
platforms more targeted audiences to advertisers
~1.8bn users >1bn users ~150m users
Spending on content in 2016
Increasing
▪ Monetize new and existing content
2 spend on
content across a greater number platforms
~$5bn ~$3.2bn
M&A
▪ Strong strategic demand for premium
3 heightening
value of content
(a) proprietary content / IP assets
European
▪ TV series produced in Europe are
4 content has
global success increasingly successful globally
7.8 / 10 8.3 / 10 8.7 / 10
IMDb IMDb IMDb
(a) Distribution agreement instead of acquisition
Source: Broker research, press reports, IMDb, Variety, BCG and Statista
26Focus on re-inforcing the library of rights
Prime-time TV series TV series under mandate
Current prime- Original
time French TV creations of
series Section de Alice Nevers Black Spot Canal +
recherches Spiral Mafiosa Kaboul Kitchen
Classic French
Prime-time units
TV series
Une femme Navarro L’Instit Collection « Meurtres à »
d’honneur
Strong
International TV
animation
series
Un cas pour deux Rex Friends
brands Snoopy Iron Man
TV series with a
American
large public
feature film
175 best movies from Paramount library success Fais pas çi, Fais pas ça
Famous New gen TV
animated TV series with
series strong potential
Miraculous 7 & Me Lazy Company Les Grands Missions
TV series still under production
27Production: priority on fully pre-financed projects
▪ Production on demand : broadcasters are committed to funding the program production (co-production scheme) and/or to buy the
rights for the first run (pre-sale scheme)
▪ Other financing sponsors (co-producers, CNC, regional subsidies, tax credit, minimum guarantees for international distribution,…) are
secured before production: planned costs are totally covered by commitments from sponsors
▪ Financing needs are solely related to the time differences between cash inflows (from sponsors) and outflows (costs) during production
after the development phase:
PRIMARY MARKET : PRODUCTION SECONDARY MARKET : DISTRIBUTION
Development phase Program Program commercialization
Production phase
Project writing & organization
Budget & financing planning
Filming / Editing / Post-production delivery (France & international)
CASH INFLOWS
Optional : Advances
Phased payments from co-producers and broadcasters
from co-producers
Subsidies from CNC (mostly at project approval)
French Tax Credits (payment on year N+1 after delivery)
Other sponsors, including potentially minimum guarantees for international distribution
Financing commitments
fully covering production Production margin : structurally limited Distribution margin : structurally high
costs at launch
28Accelerate M&A strategy
▪ Mediawan will build a global platform for premium content, by expanding Groupe AB business as well as making
strategic investments in other verticals
▪ Business will remain integrated with a centralized distribution organization
GLOBAL CONTENT PLATFORM
EXISTING SELECTED INTERNATIONAL
ANIMATION OTHERS…
PERIMETER ADD-ONS FICTION
• Strengthening of • Developments in key • Existing presence • Production of • Local content in
existing portfolio and areas of expertise • Strong visibility on premium series with other European
production log • Local fiction production schedule high international geographies
• Focus on national potential • Cinema rights
• Documentaries • High international
Free TV content potential • Targeted towards • Digital content
• Entertainment pay-TV operators
• Recruitment of • Very fragmented •…
talents •…
market attracting
Common platform for multi-channel distribution
Creation and development of proprietary IP feeding a library of premium content
29Why invest in Mediawan ?
✓ Attractive content market fundamentals with explosive demand globally
✓ Unique sponsor and management team with recognized industry expertise
✓ Large library and premium proprietary IP delivering strong and predictable cash flow
✓ Powerful levers for growth through content production and multiplatform exploitation
✓ Fragmented industry with few sizable independent players
✓ Ambition and capability to pursue accretive M&A and build a leading international player
30Legal disclaimer and contacts
Legal disclaimer
These materials are being provided to you on a confidential basis, may not be distributed to the press or to any other persons, may not be redistributed or passed on,
directly or indirectly, to any person, or published or reproduced, in whole or in part, by any medium or for any purpose.
This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of
Mediawan or any subsidiary or affiliate of Mediawan nor should it or any part of it form the basis of, or be relied on in connection with, any purchase, sale or
subscription for any securities of Mediawan or any subsidiary or affiliate of Mediawan or be relied on in connection with any contract or commitment whatsoever.
The information contained herein has been obtained from sources believed by Mediawan to be reliable. Whilst all reasonable care has been taken to ensure that the
facts stated herein are accurate and that the opinions and expectations contained herein are fair and reasonable, it has not been independently verified and no
representation or warranty, expressed or implied, is made by Mediawan or any subsidiary or affiliate of Mediawan with respect to the fairness, completeness,
correctness, reasonableness or accuracy of any information and opinions contained herein. In particular, certain of the financial information contained herein has been
derived from sources such as accounts maintained by management of Mediawan in the ordinary course of business, which have not been independently verified or
audited and may differ from the results of operations presented in the historical audited financial statements of Mediawan and its subsidiaries.
Neither Mediawan nor any of its respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss or damage
howsoever arising from any use of this presentation or its contents, or any action taken by you or any of your officers, employees, agents or associates on the basis of
this presentation or its contents or otherwise arising in connection therewith.
The information contained in this presentation has not been subject to any independent audit or review and may contain forward-looking statements, estimates and
projections. Statements herein, other than statements of historical fact, regarding future events or prospects, are forward-looking statements, including forward-looking
statements regarding the group’s business and earnings performance, which are based on management’s current plans, estimates, forecasts and expectations. These
statements are subject to a number of assumptions and entail known and unknown risks and uncertainties, as there are a variety of factors that may cause actual results
and developments to differ materially from any future results and developments expressed or implied by such forward-looking statements. Forward-looking statements
contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.
Although Mediawan believes that the estimates and projections reflected in the forward-looking statements are reasonable, they may prove materially incorrect, and
actual results may materially differ. As a result, you should not rely on these forward-looking statements. Mediawan undertakes no obligation to update or revise any
forward-looking statements in the future or to adjust them in line with future events or developments, except to the extent required by law.
Investor Relations Team Media Relations Team Further information
NewCap NewCap
Mediawan Mediawan For all financial or business
Marc Willaume Nicolas Merigeau
investors@mediawan.eu press@mediawan.eu information, please refer to our
mediawan@newcap.eu mediawan@newcap.eu
+33 1 44 71 00 13 +33 1 44 71 98 55 website at: http://www.mediawan.fr
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