Xilam Animation Sa · EURONEXT:ALXIL
Xilam Animation Sa — Investor Presentation (February 2022)
44 slides from Xilam Animation Sa's investor presentation, February 2022
Slide 1: Ambition
WE CREATE EMOTION AMBITION FEBRUARY 2022
Slide 2: Disclaimer
DISCLAIMER This statement may contain estimated financial data, information on future projects and transactions and future business results/ performance. Such forward-looking data are provided for estimation purposes only. They are subject to market risks and uncertainties and may vary significantly
Slide 3: Our Vision & Values
OUR VISION & VALUES Strengthening our position as an animation champion at global scale, creating, producing and distributing WE CREATE innovative programs EMOTION that transcend time and place. FORWARD GLOBAL TALENTS BOLDNESS INNOVATION INCLUSIVITY THINKING THINKING AMBITION 2026 3
Slide 4: Summary
SUMMARY CREATIVITY AND ESG DRIVING A WELL BALANCED BUSINESS MODEL THE DISTRIBUTION LANDSCAPE OFFERS NEW OPPORTUNITIES IP PROJECTS AND CATALOG TO CAPITALIZE ON FAST GROWING MARKET TRENDS ADDITIONAL GROWTH LEVERS: ADULT CONTENT, NON-PROPRIETARY PRODUCTION AND MERCHANDISING ACCELERATION OF GROWTH TO DO
Slide 5: Creativity and ESG, driving a well balanced business model
CREATIVITY AND ESG, DRIVING A WELL BALANCED BUSINESS MODEL
Slide 6: Solid set-up to build a prosperous future
SOLID SET-UP TO BUILD A PROSPEROUS FUTURE 5 PRODUCTION STUDIOS 35BN+ PARIS (2), 500 VIEWS 52M+ LEADING LYON, ANGOULEME HO CHI MINH EMPLOYEES ANIMATION 400 ARTISTS) ( SUBSCRIBER GROUP INNOVATOR 2 35 CÉSAR AND ORIGINAL DIGITAL 1 CREATIONS PLAYER 2,800+ 190 OSCAR NOMINATION FOR BEST EPISODES PRODUCED G
Slide 7: A reinforced and experienced management team
A REINFORCED AND EXPERIENCED MANAGEMENT TEAM CHAIRMAN & CEO Marc du Pontavice COO: CONTENT DISTRIBUTION & PRODUCTION & SUPPORT Dorothée Lanchier CREATIVE PRODUCTION DISTRIBUTION Jean Cayrol François Bardoux Morgann Favennec EDITORIAL CFO Claire Darras Caterina Gonnelli Arnaud Duault STUDIOS Cécile H
Slide 8: Attracting and retaining the best creative and qualified talents
ATTRACTING AND RETAINING THE BEST CREATIVE AND QUALIFIED TALENTS ATTRACTING THE BEST FRENCH TALENTS MENTORSHIP TO GROW IN ANIMATION AND RETAIN THE BEST TALENTS France has one of the best animation ecosystems A unique ecosystem to grow new talents through in- in the world with 5 of the TOP 11 animati
Slide 9: A flexible mix of technologies to serve visual innovation
A FLEXIBLE MIX OF TECHNOLOGIES TO SERVE VISUAL INNOVATION RENEWAL OF 2D ANIMATION EXPERTISE IN CGI ANIMATION One of the best 2D animation studio in the world, CGI successfully implemented through thanks to slapstick comedy’s mastery two major series: Attracting the best talents in the field, • Oggy
Slide 10: Scaling production to support growth
SCALING PRODUCTION TO SUPPORT GROWTH FLUIDITY OF A MULTIPLE STUDIOS ORGANIZATION 5 production studios • Xilam Animation (Paris, France): headquarters (support services) and studio (2D and CGI) Organized • Cube Creative (Paris, France): specialized in CGI to absorb • Angouleme (France): specialized i
Slide 11: Responsibility is in our DNA
RESPONSABILITY IS IN OUR DNA Our characters carry positive values High ESG Ratings DIVERSITY / GENDER / FREEDOM TO CHOOSE EMPLOYEES PARITY You can use your talents Each viewer can identify and find your way in life himself with the characters on screen, whatever OPEN-MINDEDNESS Your benevolence and
Slide 12: A powerful business model with strong barriers to entry
A POWERFUL BUSINESS MODEL WITH STRONG BARRIERS TO ENTRY “IP” PRODUCTIONS TOMORROW’S CATALOG & MERCHANDISING OPPORTUNITIES CREATIVITY LEVERAGE “NON IP” PRODUCTIONS Capacity to create A key partner new attractive “IP” for international ATTRACTIVE MARGINS, COVERING FIXED COST STRUCTURE, character platf
Slide 13: A high margin business model, in a low competition category
A HIGH MARGIN BUSINESS MODEL, IN A LOW COMPETITION CATEGORY LOW COMPETITION MULTI IP PREMIUM FOCUS CREATIVE WORK FOR HIRE (WFH) MULTI IP FOCUS LOW NON PREMIUM HIGH MARGIN FOCUS MARGIN MERCHANDISING TECHNICAL WORK FOCUS FOR HIRE (WFH) FOCUS HIGH COMPETITION A 25-year-old multi-IP A unique Premium pos
Slide 14: The distribution landscape offers new opportunities
THE DISTRIBUTION LANDSCAPE OFFERS NEW OPPORTUNITIES
Slide 15: Globalization of the broadcasting revenue generates exciting opportunities
GLOBALIZATION OF THE BROADCASTING REVENUE GENERATES EXITING OPPORTUNITIES TRADITIONAL LINEAR BROADCASTERS SVOD / AVOD PLATFORMS / … GLOBAL SVOD Subscription Video On Demand AVOD Advertising Video On Demand LOCAL Adapting Xilam’s business model to seize significant new market potential AMBITION 2026
Slide 16: SVOD: a booming market with strong investments
SVOD: A BOOMING MARKET WITH STRONG INVESTMENTS Market leaders are investing heavily in premium IP/content GLOBAL SVOD REVENUES ($BN) to win over subscribers and minimize churn CAGR: 11.2% Global SVOD revenues are forecast to increase with a 11,2% CAGR until 2026 Content spend by the 5 major companie
Slide 17: AVOD platforms are proving their value proposition
AVOD PLATFORMS ARE PROVING THEIR VALUE PROPOSITION TO BOTH CONSUMERS AND ADVERTISERS GLOBAL AVOD REVENUES FORECAST ($BN) 66,3 The proliferation of SVOD boosted CAGR: 15.9% by pandemic-era behaviors will weight 24,4 on consumers wallets, driving demand for compelling digital content 10,6 27,2 31,8 al
Slide 18: The golden age of adult animation is coming
THE GOLDEN AGE OF ADULT ANIMATION IS COMING ORIGINAL ANIMATED SERIES BY BUYERS(*) Adult animated comedy replaced live 30 action sitcoms as millennials turned to 24 this medium to consume comedy 16 • Cheaper to make than scripted 13 originals 10 6 • Safely produced during a pandemic Other The cultura
Slide 19: Global trends driving the content market
GLOBAL TRENDS DRIVING THE CONTENT MARKET TRENDS The video-on-demand market CONSEQUENCES is incremental Massive investments in Premium content The video-on-demand business is accelerating broadcasting of Rising demand for animation globally deep catalog of content Concentration Content distribution o
Slide 20: Xilam, a key partner for streaming platforms and TV
XILAM, A KEY PARTNER FOR STREAMING PLATFORMS AND TV I am so impressed by the level Xilam’s collaboration with of artistry happening at Disney on multiple series has Xilam. You are amazing confirmed my view that it is stewards for a new Europe’s leading studio for generation of storytellers in cartoo
Slide 21: IP projects and catalog to capitalize on fast growing market trends
IP PROJECTS AND CATALOG TO CAPITALIZE ON FAST GROWING MARKET TRENDS
Slide 22: Powerful catalog boosted by the launch of new seasons
POWERFUL CATALOG BOOSTED BY THE LAUNCH OF NEW SEASONS CATALOG / NUMBER FRANCHISES NUMBER OF IP development with a multi seasons potential GENRE OF SERIES SEASONS(*) (franchises) is one of the key pillar of Xilam Group Oggy and the Coakroaches Since 2010, 2/3 of original creations become Slapstick 9
Slide 23: Nurturing successful franchises
NURTURING SUCCESSFUL FRANCHISES EXPANSION OF OGGY EXPANSION ZIG & SHARKO EXPANSION FRANCHISE INTO 3 BRANDS FRANCHISE INTO 2 BRANDS OF OTHER FRANCHISES Original Oggy Original Zig & Sharko Magoo and the Cockroaches 3 seasons 1 season 7 seasons 4th season in production 2nd season in production & a feat
Slide 24: Record investment in proprietary production
RECORD INVESTMENT IN PROPRIETARY PRODUCTION EVOLUTION OF INVESTMENT IN PROPRIETARY PRODUCTION AND NON-PROPRIETARY PRODUCTION (€M): The Group invested c. € 30 million in proprietary production in 2021, 14,6 15,6 23,2 22,8 22,8 29,0 30,0 an unprecedented level, reflecting the strong growth in 0,3 dema
Slide 25: Evolution of the catalog's revenues since 2010
EVOLUTION OF THE CATALOG'S REVENUES SINCE 2010 Catalog revenues are to be assessed over 4-year periods corresponding to the average duration EVOLUTION OF CATALOG’S REVENUES (€M) of broadcasters' rights 9,7 Revenues are fully recognized when 8,6 broadcasting rights are opened 7,7 6,8 6,3 6,0 4,9 5,1
Slide 26: Additional growth levers: adult content, non-proprietary production, merchandising
ADDITIONAL GROWTH LEVERS: ADULT CONTENT NON-PROPRIETARY PRODUCTION MERCHANDISING
Slide 27: Addressing the strong demand in adult-focused content
ADDRESSING THE STRONG DEMAND IN ADULT-FOCUSED CONTENT Capitalizing on the Group’s high visibility and worldwide notoriety acquired with the Oscar nominated success of I lost my body Taking advantage of the streaming platforms’ investments out of the U.S., in search of Circa $1bn invested per year in
Slide 28: Capitalizing on strategic high-return non-IP content through creative WFH
CAPITALIZING ON STRATEGIC HIGH-RETURN NON-IP CONTENT THROUGH CREATIVE WFH The saturation of the US talent market forces the VOD platforms to find highly qualified studio partners in Europe on Work for Hire basis The level of the margin is directly driven by the creative component of the commission (
Slide 29: A new driver of growth through merchandising
A NEW DRIVER OF GROWTH THROUGH MERCHANDISING Merchandising strategy integrated in selected series in development Signing of a Master Toy agreement in Strong value October 2021, to launch the merchandising creation campaign for the Oggy Oggy Series First high-potential merchandising potential operati
Slide 30: Acceleration of growth to double revenues by 2026
ACCELERATION OF GROWTH TO DOUBLE REVENUES BY 2026
Slide 31: 14 series in production for a total of 256 half-hours
14 SERIES IN PRODUCTION FOR A TOTAL OF 256 HALF-HOURS 14 PROJECTS IN PRODUCTION NUMBER OF PROJECTS NUMBER OF 1/2H 9 series of continuing seasons Non-Kids series 2 26 7 series for digital SVOD platforms Kids series 9 187 Preschool series 3 series produced as Work for Hire 3 43 Total projects in prod.
Slide 32: 19 series and 2 films in development from preschool to adult
19 SERIES AND 2 FILMS IN DEVELOPMENT FROM PRESCHOOL TO ADULT 21 PROJECTS IN DEVELOPMENT The Non-kids segment (Adult, Family, NUMBER OF PROJECTS NUMBER OF 1/2H Teen) segment is attracting the highest Preschool series 4 91 investments per half-hours Kids series 8 145 Non-Kids 9 88 2 feature films are
Slide 33: Our ambition: aiming to double revenues by 2026
OUR AMBITION: AIMING TO DOUBLE REVENUES BY 2026 2021 (*) 2026 Merchandising Non- Proprietary Merchandising 10% Non- €40m Proprietary 30% €80m 60% Proprietary Proprietary (*) 2021 revenues with the average mix of 2020-2021 AMBITION 2026 33
Slide 34: A unique investment proposal
A UNIQUE INVESTMENT PROPOSAL Recurring and growing revenue from the premium proprietary catalog Strong growth leverage with adult contents Dynamic management of franchises over time Aiming to double Unrivalled talented teams revenue supported by an efficient Ability to deliver by 2026 worldwide orga
Slide 35: Appendix
APPENDIX
Slide 36: An independent family group
AN INDEPENDENT FAMILY GROUP VOTING RIGHTS MDP AUDIOVISUEL 38,4% 53.3% XILAM GROUP 14,9% MDP Audiovisuel 1 TREASURY SHARES 0,9% 26,3% OTHER 3,3% FREE FLOAT 42,5% Free Float 57,9% Xilam Group 10,1% Treasury shares XILAM 1,3% IS MAJORITY Other2 CONTROLLED 4,4% BY ITS FOUNDER (1) Xilam Group is controll
Slide 37: Strong organic growth over 20+ years
STRONG ORGANIC GROWTH OVER 20+ YEARS 1999… … 2021… … 2025 FOUNDATIONS STRUCTURING ACCELERATION SCALING NEW TERRITORIES Creating Building Building Consolidating brands AVOD SVOD Global Teenagers, expertise brands a global sales sales recognition adults Emerging markets distribution ramp-up ramp-up Me
Slide 38: France counts 5 of the top 11 animation schools
FRANCE COUNTS 5 OF THE TOP 11 ANIMATION SCHOOLS TOP 11 INTERNATIONAL XILAM’S PARTNERSHIP ANIMATION SCHOOLS WITH ANIMATION SCHOOLS IN FRANCE RANK SCHOOL NAME COUNTRY SCHOOL NAME CITY 1 Gobelins FRA Les Gobelins (Paris (2D) and Annecy (3D)) Paris / Annecy 2 Sheridan College CAN Rubika (3D) Valencienne
Slide 39: A unique ecosystem in growing new talents, through in-house mentorship
A UNIQUE ECOSYSTEM IN GROWING NEW TALENTS, THROUGH IN-HOUSE MENTORSHIP GENERATION Arrival at Xilam Mains series as Director / Co Director Jean-Yves Raimbaud 1993 Space Goofs – Oggy & the Cockroaches Olivier Jean-Marie 1 st 1995 Oggy & the Cockroaches – Zig & Sharko – Ronks Hugo Gittard 1997 Mr Baby
Slide 40: How Xilam manages broadcasting cycle over time: Oggy and the Cockroaches
HOW XILAM MANAGES BROADCASTING CYCLE OVER TIME: OGGY AND THE COCKROACHES Slot leader 8,30am – 10,30am 1.00pm-3.00pm INDIA 2008-2012 2012-2015 2015-2018 2018-2021 2021-2025 FRANCE 1998-1999 1999-2002 2002-2005 2005-2010 2010-2013 2013-2017 2017-2022 AMBITION 2026 40
Slide 41: SVOD investments in premium to attract subscribers and to lower churn
SVOD INVESTMENTS IN PREMIUM TO ATTRACT SUBSCRIBERS AND TO LOWER CHURN US SUBSCRIBER CHURN RATE (Q4 2020)(*) 15,6% Platforms with the large catalogs, premium content and IP (such as Netflix 9,5% and Disney+) are experiencing 6,7% 5,9% 5,2% far lower churn than newer 4,3% 2,5% platforms The battle for
Slide 42: Accelerate growth of catalog revenue through AVOD
ACCELERATE GROWTH OF CATALOG REVENUE THROUGH AVOD Intensifying direct activity on YouTube and diversifying XILAM ON YOUTUBE into other AVOD platforms to boost direct advertising 35bn views to date revenues 52m subscribers since the launch of its programs on the platform Capitalizing on short series
Slide 43: Expansion of Oggy and the Cockroaches on VOD
EXPANSION OF OGGY AND THE COCKROACHES ON VOD OGGY AND THE COCKROACHES TOTAL Oggy and the Cockroaches is broadcasted ON DIGITAL PLATFORMS on 27 stand alone digital platforms Discovery + The first Oggy and the Cockroaches Facebook channel on YouTube was launched in 201. Galaxy Revenues are incremental
Slide 44: Example of merchandising products to be launched in 2022
EXAMPLE OF MERCHANDISING PRODUCTS TO BE LAUNCHED IN 2022 AMBITION 2026 44
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