EuropaCorp : Financial results 2016/2017

Financial results 2016/2017 During a year marked by substantial loss, company has taken measures to reinforce financial strength and realign content strategy

• Consolidated revenue of €151.7 million
• Full year loss of €119.9 million, considerably higher than past years, as per prior warning, driven by underperforming slate
• Entered new multi-year US theatrical distribution agreement
• Focusing future slate to more closely align with company's historic successes
• 17/18 line-up led by three major global franchises : ValerianandtheCityofaThousandPlanets, Taxi5 and the second season of the TV series, Taken
• Closed multiple transactions including debt restructure, capital increase and sale of non-strategic assets to strengthen treasury

Saint-Denis, June 28th2017 - EuropaCorp, one of the leading independent film studios in Europe, film producer and distributor, reports its annual consolidated income, which ended on March 31st, 2017, as approved by the Board of Directors at its meeting on June 26th, 2017.

€ million FYIFRS5

2016/20171

FY 2016/2017

FY 2015/2016

∆12 months

Revenue	144.2	151.7	147.3	+4.4
Cost of sales	-217.1	-221.4	-110.0	-111.4
Operating margin (before overhead)	-72.9	-69.7	37.3	-107.0
% of revenue	-50,6%	-45,9%	25,3%
Operating profit	-122.6	-122.2	-22.3	-99.9
% of revenue	-85,0%	-80,6%	-15,1%
Net income - Group share	-119.9	-119.9	-27.7	-92.2
Equity	96.7	96.7	155.2	-58.5

1To be compliant with IFRS 5, the multiplex and music publishing activities - sold or held for sale - have been restated within the consolidated 2016-2017 financial statement above. The net income for that specific lines of business (-0.3 M€) has been booked directly in

« Net Income - Group Share ».

• Consolidated revenue of €151,7 million, an increase of 3.0%, driven by foreign sales and SVOD and free TV sales in the United States, breaks down as follows:

  Revenue from International Sales was €48.8 million or 32.2% of total revenue.

  Revenue from Theatrical distribution in France and the United States was €13.7 million, up 40.1% thanks to a larger volume of films, representing 9% of total revenue.

  Revenue from Video & VOD in France and the United States was €17.4 million, up almost 15%, representing 11.5% of total revenue.

  Revenue from Television sales & SVOD in France and the United States was €29.9 million, up more than 25% thanks to the SVOD sales in the United States, representing 19.7% of total revenue.

  Revenue from TV Series productions was €23.6 million, up more than 8%, or 15.5% of total revenue. Revenue from Subsidies was €3.9 million.

  Revenue from Multiplexes, sold in December 2016, was €5.2 million.

  Revenue from other activities of the Group (licenses, partnerships, music publishing and post-production, etc.) was €8.2 million.

• Annual loss of €119.9 million due to:

  • Poor performance of English language slate, including losses from 9Lives, ShutIn, MissSloaneand

    The Circle.

  • Disappointing box-office revenues that failed to offset distribution costs to support wide releases.

    - More than €100 million of US distribution costs

    In response to this significant underperformance, company has made dramatic changes to its US distribution strategy, downsizing distribution and marketing overhead and entering into a multi-year agreement for STX Motion Pictures Group to provide theatrical marketing and distribution services for future releases. Management believes these changes will lead to superior box-office performance, more efficient P&A spend, and will ultimately result in a lower distribution costs to release films in the US.

    Further in response to these issues, company is refocusing development and production to more closely reflect core strengths in action, sci-fi genres and with greater emphasis on productions written and directed by company founder Luc Besson.

• Net operating cash flows

  The net operating cash flows amount to €2.4 million for FY 2016/2017, down from €81.7 million for the previous financial year. This decrease can be explained by the significant amount of P&A costs disbursed during the fiscal year for the release of the films in the United States, while the total amount of corresponding revenues on those films has not yet been recognized nor collected.

  In response to the company's recent underperformance, EuropaCorp closed multiple transactions during the fiscal year to provide additional financial strength. These include restructuring the company's first and second lien debt, raising €60 million in equity from FF Motion Invest (a subsidiary of Fundamental Films) and sale of the multiplex activities to Cinemas Gaumont-Pathé for more than €20 million.

• Investments for the future

  The 2016/2017 financial year was marked by a high level of investment in world-class films and TV series. The company invested €133.7 million with the largest investments being the movie ValerianandtheCityofaThousandPlanets,and the first season of the TV series, Taken.

• Perspectives

In responses to FY 2016/2017 results, the Group has set the following priority objectives for the coming year:

• Makingthesci-fiepicValerian and the City of a Thousand Planets asuccessfulnewfranchise;

• Expanding existing franchises (i.e. Taxi5film, second season of TakenTV);

• Refocusing the future slate to better align with company's historical successes;

• Returning to historical levels of French-language productions; and

• Reducing activities in non-core businesses.

• Films

Five English-language films and seven French-language films, either produced or acquired by EuropaCorp, are currently in post-production or completed:

• ValerianandtheCityofaThousandPlanets, directed by Luc Besson, starring Cara Delevingne and Dane DeHaan. The film is completed. The film will be released on the 21stof July, 2017, in the United States, and on the 26thof July in France;

• Souslemêmetoit, directed by Dominique Farrugia, starring Louise Bourgoin and Gilles Lellouche and produced by EuropaCorp. The film was released in France on April 19th 2017 and has had more than 650 thousand admissions to date;

• TheirFinest, directed by Lone Scherfig, starring Gemma Arterton and Sam Claflin. EuropaCorp acquired the US distribution rights. The film was released in theaters in the United States in April 2017 and has earned $3,6 million in Domestic Box Office (US & Canada) to date;

• TheCircle, directed by James Ponsoldt, starring Emma Watson and Tom Hanks. EuropaCorp acquired the US distribution rights. The film was released in theaters in the United States in April 2017 and has earned $20.5 million in Domestic Box Office to date;

• BadBuzz, directed by Stéphane Kazandjian, starring Eric Metzger and Quentin Margot, and coproduced by EuropaCorp. The film has been released in France on June 21st;

• CoeXister, comedy by and starring Fabrice Eboué. Ramzy Bedia, co-starring Guillaume de Tonquédec and Audrey Lamy, and produced by EuropaCorp. The film is completed and is scheduled for release in France on the 11thof October, 2017;

• Eva, directed by Benoît Jacquot, starring Isabelle Huppert, Gaspard Ulliel and Richard Berry. The film is coproduced by EuropaCorp and is currently in post-production;

• Carbone, directed by Olivier Marchal, starring Benoît Magimel and Laura Smet, and coproduced by EuropaCorp. The film is in post-production;

• Renegades, directed by Steven Quale, starring J.K. Simmons and Sullivan Stapleton, and produced by EuropaCorp. The film is completed;

• Sparring, directed by Samuel Jouy, starring Mathieu Kassovitz, and coproduced by EuropaCorp. The film is completed; and

• Jevaismieux, directed by Jean-Pierre Améris, starring Eric Elmosnino, Alice Pol and Ary Abittan. The film is produced by EuropaCorp and is completed.

  EuropaCorp also acquired the French distribution rights of TheOldManandtheGun, directed by David Lowery, with Robert Redford and Casey Affleck. The film is currently in post-production.

  Taxi5, the new installment of the successful film series, will start shooting July 2017. The film will be directed by Franck Gastambide, starring Franck Gastambide and Malik Bentalha.

  • TV series

In May 2017, NBC picked-up Takenfor a second season. The 16 episodes of season two will be coproduced by EuropaCorp Television and Universal Television for the NBC network in the United States and the SVOD platform SFR Play in France. Production will start July 2017 and episodes are scheduled to air January 2018.

On the French-language productions side, EuropaCorp Television will be delivering a diversified set of fictions during the fiscal year 2017/2018, including:

• A new 90' series from the Mary Higgins Clark for France 3: Riennevautladouceurdufoyer;

• The AuxAnimauxlaGuerrefor France 3 (6 episodes x 52' minutes);

• The animated series ArthurandtheMinimoys, in coproduction with Studio 100 Animation (Mayal'Abeille,VicleViking…);

• A TV film for Arte: Jesaistomber;

  EuropaCorp Television is also developing other projects such as the series LesRivièresPourpres(8x52') for France 2, the French adaptation of the British series DoctorFoster(from Drama Republic) for TF1 in coproduction with BBC Worldwide France, as well as the TV fiction Traquésfor TF1. EuropaCorp also works for France 2 on the series NoFutur, by Fabrice Eboué, planned as a late night program, and for France 3 on the series Souslapeau.

  In sum, EuropaCorp Television is collaborating with a diverse array of French and international broadcasters across multiple genres.

  Financial calendar

  • Annual General Meeting : September 2017

  • Revenue and consolidated financial statements for the 1st semester : December 2017

  • Annual revenue : May 2018

  • Annual consolidated financial statements : June 2018

ABOUT EUROPACORP

One of Europe's leading film studios, EuropaCorp was founded in 1999 and has operations spanning production, theatrical distribution, video and VOD, and French TV sales. With a line-up of films in French and English language and a strong foothold in international markets, the Group has produced France's biggest international hits in recent years. In 2014, EuropaCorp entered direct distribution for its films in the United States. EuropaCorp also has international rights, partnerships and licensing, production and soundtrack publishing activities. The Group has been producing TV series since 2010. EuropaCorp's integrated business model allows it to benefit from diversified sources of revenue. EuropaCorp was founded by French filmmaker, screenwriter and producer Luc Besson. The Group owns a catalogue of around 500 movies.

For more information, go to www.europacorp-corporate.com

Contacts

EuropaCorp Group NewCap

Lisa Reynaud | Investors Relations | [e-mail] Pierre Laurent | NewCap

Régis Lefèbvre | Communication | [e-mail] | Tel : [phone]

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EuropaCorp is listed in Compartment C of Euronext Paris ISIN code: FR0010490920 - Ticker: ECP