Xilam Animation (XIL) H1 2024 earnings summary

Executive summary

• Two new proprietary series entered production in H1 2024, with major European broadcasters as partners, and several series were delivered or in production for major platforms and broadcasters.

• First half 2024 marked by launch of new productions and strong free cash flow generation.

• The group implemented a cost-saving plan, consolidating production sites and resources.

• Net income attributable to the group was close to breakeven, despite a challenging market.

• Major recognition for Xilam's expertise with the global launch of Netflix's Twilight of the Gods.

Financial highlights

• Revenue for H1 2024 was €13.3M, down from €20.5M in H1 2023, mainly due to a sharp drop in non-proprietary production activity.

• Sales fell 36% year-over-year to €11.6m, reflecting reduced orders from US streaming platforms.

• Operating income fell to -€1.3M from €2.2M in H1 2023; net income attributable to shareholders was -€956K versus €1.85M a year earlier.

• Free cash flow rose 24% year-over-year to €2.7m.

• Subventions received totaled €1.7M, down from €2.4M in H1 2023.

Outlook and guidance

• Despite a forecasted revenue decline for 2024, management expects operating income to approach breakeven, anticipating a stronger H2, especially in catalogue sales.

• Three new productions launched in 2024, including a new animated feature, reinforcing the studio's creative reputation and strategic positioning.

• Strategy focuses on rebuilding the order book and expanding in the young-adult and feature film segments.