Leone Film Group Spa · MIL:LFG
Leone Film Group Spa — FY2018 Earnings Presentation
46 slides from Leone Film Group Spa's earnings presentation, September 2019
Slide 1: 2018 Results and 2019 – 2021 business plan
2018 Results and 2019 – 2021 business plan September, 2019
Slide 2: Agenda
AGENDA 1 The Group 2 Key Facts 3 Our Roadmap 4 Distribution 5 Production 6 2018 Results and 2021 targets 2
Slide 3: 1. The Group
1. THE GROUP
Slide 4: Two mainstream areas of activity
Two mainstream areas of activity Distribution Production • Theatrical • Production • Free-TV • Co-production • Pay-Tv • Executive production • Home Video • International co-production • Digital • TV series production • International TV series co-production • International executive production servic
Slide 5: A History of Growth
A History of Growth 2001 2002 2007 2009 2013 2014 2015 2016 2017 2018 2019 IPO Bulgari becomes First Theatrical relevant shareholder Big Hit: Big Hits: Distribution: The Wolf of La La Land Established Traffic First Movie Wall Street Wonder 1989 The Post Production: First Acquisition Big Hit: Generaz
Slide 6: Consistent financial growth over the years
Consistent financial growth over the years € ml CAGR +40% CAGR +25% 6
Slide 7: Italy’s largest independent distributor
Italy’s largest independent distributor Box Office 2016 - All Market - LFG pro forma Box Office 2017 - All Market - LFG pro forma Box Office 2018 - All Market - LFG pro forma Box Office 06.2019 - All Market - LFG pro forma Distributor Market Share Distributor Market Share Distributor Market Share Di
Slide 8: Two companies creating strong synergies
Two companies creating strong synergies National Distribution Co-Production National Movie Production Executive Production National TV Series Production International TV Series Production International Co-Production International Executive Production • Connect production and distribution • Expand an
Slide 9: Leone Film Group Top Hits since IPO
Leone Film Group Top Hits since IPO Box Office (1) Wonder (2017) 12,4 The Wolf of Wall Street (2013) 12,0 Green Book (2019) 10,1 The Hateful Eight (2016) 8,5 La La Land (2017) 8,3 The Post (2018) 6,5 (1) Source: Cinetel, data as of August 26th 2019 in € ml 9
Slide 10: Leone Film Group Library
Leone Film Group Library • Top independently owned Italian library • Almost 500 movies • Mostly composed of recent titles 10
Slide 11: Snapshot on Sergio Leone’s library
Snapshot on Sergio Leone’s library • Cult movies on which LFG commercializes perpetual distribution rights (1) (1) With the exception of ‘Once Upon a Time in America’ whose rights expire in 2035 11
Slide 12: Lotus Top Hits
Lotus Top Hits Box Office (1) Perfetti Sconosciuti (2016) Immaturi (2011) 17,4 Immaturi – Il Viaggio (2012) 15,2 11,8 A Casa Tutti Bene (2018) 9,2 Tutta Colpa di Freud (2014) 7,9 La Pazza Gioia (2016) 6,2 (1) Source: Cinetel, data as of March 20th 2019 in € ml 12
Slide 13: Lotus TV Series Production
Lotus TV Series Production IMMATURI - LA SERIE January 12th 2018 19,3% share 4.6M audience Under Development TUTTA COLPA DI FREUD SUI GENERI BLACK MACCIO Paolo Genovese Maccio Capatonda Maccio Capatonda 13
Slide 14: Sales Distribution Cycle
Sales Distribution Cycle Theatrical Home Video Pay Per View 1st Pay TV Free TV Digital 2st Pay TV Library Start 5th Month 8th Month 12th Month 24th Month 30th Month 49th Month …til the end Past 3 years now 14
Slide 15: Our Goals: Infrastructure Content Brand
Out Goals: Maintaining the leadership among Italians Independent movie producers and distributors Scaling our successful business model Distribute top US Produce top Continue independent commercial and expanding our blockbusters high-quality movie, production and TV series, along distribution top-no
Slide 16: 2. Key Facts
2. KEY FACTS
Slide 17: Key highlights
Key highlights Content Content Content Acquisition Distribution Production Strong relationships with all US Multi-year agreement with RAI Signed agreements with top independent producers, including for at least 10 movies per year directors and screen players Lionsgate, Amblin and others. Long-term s
Slide 18: 2018 – 2019 Main Releases - Distribution
2018 – 2019 Main Releases - Distribution Title Box Office (1) After 6.4 M € Green Book 10.1 M € Mia and The White Lion 5.7 M € Wonder 12.3 M € The Post 6.5 M € 18 (1) Source Cinetel. Data as of August 26th 2019
Slide 19: 3. Our Roadmap
3. OUR ROADMAP
Slide 20: Distribution - Titles snapshot (1/2)
Distribution - Titles snapshot (1/2) AFTER 2 GOODYEAR THE GENTLEMEN Director: Roger Kumble Director: Miguel Director: Guy Ritchie Sapochnik Cast: Josephine Langford, Cast: Matthew Hero Tiffin Cast: Tom Hanks McConaughey, Collin Farrel, Hugh Grant KILLER OF THE FLOWERS MOON THE LOST PRINCE MISSING LI
Slide 21: Distribution - Titles snapshot (2/2)
Distribution - Titles snapshot (2/2) ANNA CHAOS WALKING Director: Luc Besson Director: Doug Liman Cast: Sasha Luss, Luke Cast: Tom Holland, Daisy Evans, Helen Mirren Ridley COME AWAY BOMBSHELL Director: Brenda Chapman Director: Jay Roach Cast: Angelina Jolie, Cast: Charlize Theron, Nicole Michael Ca
Slide 22: Production – selection of Movies completed or in production
Production – selection of Movies completed or in production Supereroi LA VOLTA BUONA Director: Vincenzo Marra Director: Paolo Genovese Cast: Massimo Ghini, Max Script: Paolo Genovese Tortora, Ramiro Garcia, Cast: Jasmine Trinca, Alessandro Francesco Montanari, Antonio Borghi Gerardi GLI ANNI Più BEL
Slide 23: Production - selection of Movies and TV Series in development
Production - selection of Movies and TV Series in development Alfredino Rampi 56k Director: Marco Tullio Giordana Director: Maccio Capatonda Cast: TBD Cast: Maccio Capatonda Gucci Profondo Rosso Director: TBD Director: TBD Cast: TBD Cast: TBD 23
Slide 24: Production – International TV Series and Movies Under Development Snapshot
Production – International TV Series and Movies Under Development Snapshot LES ITALIENS BEATI PAOLI Script: Barbara Petronio Original Idea: Luigi Natoli Director: TBD Script: TBD Cast: TBD Director: TBD Cast: TBD GIPSY QUEEN L’AMERICANO Script: Barbara Petronio and TBD Script: Massimiliano Virgilio,
Slide 25: 4. Distribution
4. DISTRIBUTION 5. DISTRIBUTION
Slide 26: Business structure
Business structure Content Acquisition DISTRIBUTION Library Acquisition of new rights for Right management 15-25 years Acquisition of direct-to- Theatrical release highly video movies relevant to set movie revenues along right Resilient cash generation exploitment period Asset rotation as value Afte
Slide 27: Theatrical Distribution structure
Theatrical Distribution structure Acquisition DreamWorks Summit Amblin Red Granite Voltage IM Global Bloom Film Nation Sierra STX Leone Film Group Free TV RAI, Mediaset, Theatrical co-distribution: joint decisions on marketing plan Discovery, CIELO, RSI 01 Pay TV The Space Universal Medusa Eagle Luc
Slide 28: Theatrical Distribution market update
Theatrical Distribution market update • Total Box Office 2018: 555.4 ml (-5.0% vs 2017) • Total Tickets 2018: 85.9 ml (-6.9% vs 2017) Source: Cinetel Annual Report 2018 28
Slide 29: 1st Cycle Distribution structure
1st Cycle Distribution structure Library Home video Pay-TV Free-TV Digital • 4 months after • 1 year after • 24 months after • PPV: 7 months after theatrical theatrical theatrical theatrical on exclusive • Exhibition weeks • Re-runs negotiated basis negotiated case by case by case • S-VoD: 12/27 mon
Slide 30: 5. Production
5. PRODUCTION
Slide 31: Lotus business model hedges its risks pre-covering production budgets
Lotus business model hedges its risks pre- covering production budgets Production Cost coverage Commercialization Production and co-production Project identification Cost covered by pre-sales of Perpetual sale of content rights, international sales, tax across all distribution channels credit, gover
Slide 32: Our investment criteria in movie production
Our investment criteria in movie production Stand-out Marketability We focus on products which can be Commercial appeal is the key driver immediately recognized by the audience (director, cast, story, etc.) Financial discipline Internationalization No cash-out until all movie costs are Products that
Slide 33: A Solid contracted pipeline
A Solid contracted pipeline Paolo Paolo Rolando Genovese Virzì Ravello Exclusivity contract 2 movies as screenwriter and • Exclusivity agreement as up to 2023 director screenwriter and director • Screenwriter and Director • “Notti Magiche” till 2019 on “THE PLACE” and • “La pazza gioia” “Perfetti sc
Slide 34: 6. 2018 Results and 2021 Targets
6. 2018 RESULTS AND 2021 TARGETS
Slide 35: 2018 Financial highlights
2018 Financial highlights € ml 2017A(1) 2018A(1) growth Revenues 105,8 122,1 +15% EBITDA 29,4 30,5 +4% EBIT 5,4 6,7 +23% NET INCOME 3,9 6,8 +73% CAPEX 33,6 23,2 -10,4 NET FINANCIAL POSITION 40,5 49,4 +8,9 (1) IFRS, audited 35
Slide 36: Our (old) targets for 2018
Our (old) targets for 2018 (1) (2) € ml 2018E 2018A Δ Δ% Revenues 107,6 122,1 14,5 13,5 EBITDA 30,3 30,5 0,2 0,7 EBIT 6,5 6,7 0,2 3,1 Net Income 5,0 6,8 1,8 36,0 Net Financial 44,2 49,4 5.2 -11,8 Position/(Cash) Net Debt / EBITDA 1,5x 1,6x Total releases (#) 29 23 -6 Distribution 22 16 -6 Production
Slide 37: 2018 EBITDA and EBIT generation
2018 EBITDA and EBIT generation (1) € ml EBITDA: 30,5 ml EBIT: 6,7 ml (1) IFRS, audited 37
Slide 38: 2018 financial structure
2018 financial structure (1) € ml Total Net Debt 49.4 ml (1) IFRS, audited 38
Slide 39: Net Financial Position evolution
Net Financial Position evolution (1) € ml EBITDA 2018 exceeded investments by Eur 7,3ml Fiscal components are responsible for the debt increase. As of December 2018 the Group accounted the following: - VAT Credits: Eur 7,2 ml - Production Tax Credits: Eur 10,2 ml All other items are less relevant (1
Slide 40: Our targets for 2021
Our targets for 2021 (€/m) 2018A 2019E 2020E 2021E CAGR Revenues 122,1 65,3 91,1 105,9 -3% EBITDA 30,5 25,9 42,6 47,9 12% EBIT 6,6 6,6 9,1 10,8 13% Net Income 6,8 4,3 6,6 8,1 4% Net Financial Position/(Cash) 49,4 57,6 60,8 70,3 Net Debt / EBITDA 1,6 2,2 1,4 1,5 Total releases (#) 23 19 26 26 3% Dist
Slide 41: 2021 targets by business
2021 targets by business (€/m) 2018A 2019E 2020E 2021E Revenues 122,1 65,3 91,1 105,9 Distribution 33,2 33,9 37,7 44,1 Production 88,9 31,4 53,4 61,8 Ebitda 30,4 25,9 42,6 47,9 Distribution 17,3 18,7 20,9 26,4 Production 13,1 7,1 21,6 21,4 Ebit 6,6 6,6 9,1 10,8 Distribution 0,6 4,9 3,1 3,0 Productio
Slide 42: Distribution
Distribution (€/m) 2018A 2019E 2020E 2021E Theatrical Releases (#) 16 16 20 17 Theatrical Revenues 7,2 7,9 8,6 8,0 Sale of Rights 2,7 1,9 2,2 4,8 Free TV 7,1 6,0 9,0 15,2 Digital + Pay-TV 10,8 16,1 15,7 14,5 Home Video 1,1 1,6 1,9 1,3 Others 4,4 0,3 0,3 0,3 Revenues 33,2 33,9 37,7 44,1 P&A and Other
Slide 43: Production
Production (€/m) 2018A 2019E 2020E 2021E Productions 7 3 6 9 Revenues 88,9 31,4 53,4 61,8 Production, Corporate & P&A costs (75,8) (24,3) (31,7) (40,4) EBITDA 13,1 7,1 21,6 21,4 D&A (7,1) (5,4) (15,7) (13,6) EBIT 6,0 1,8 6,0 7,8 43
Slide 44: Our 2019 – 2021 expected releases
Executive Production Our 2019 – 2021 expected releases 2019 2020 2021 ✓ Vice o The Gentlemen o Killers of the Flower Moon ✓ Mia And The White Lion o 1917 o 355 ✓ Green Book o Bombshell o Instrumental ✓ Remi Sans Famille o Anna o Rich Old Broads ✓ After o Missing Link o Larry ✓ John Wick 3 o Anna o R
Slide 45: A lifetime commitment
A lifetime commitment LEONE FILM GROUP
Slide 46: Disclaimer
DISCLAIMER This presentation contains certain forward-looking statements that reflect Leone Film Group S.p.A. (“LFG”) management’s current views with respect to future events and financial and operational performance of the company and its subsidiaries. These forward-looking statements are based on