JETIX EUROPE 
By
* Revenue declined by ?16.5 million to ?71.2[1] million. Excluding
adverse exchange rate movements of ?3.8 million, this was in line
with management's expectations. The fall is primarily due to
changes in a limited number of specific deals, notably with
channel distributors
* At constant exchange rates, Jetix Europe is on target with the
guidance range previously given for the full fiscal year.
However, the appreciation of the euro against the US dollar and
pound sterling is expected to continue to have an adverse impact
* Advertising revenue grew by ?2.0 million to ?22.7 million, with
growth in most markets
* EBITDA[2] was down ?10.9 million at ?29.5 million. A reduction
in marketing, selling and distribution costs has helped to limit
the impact from the decline in revenue
* Operating profit fell by ?5.7 million to ?11.2 million. A lower
amortisation charge further reduced the impact of the revenue
reduction
* Net profit attributable to shareholders decreased by ?0.6 million
to ?20.1 million
* Diluted earnings per share down 0.8 cents to 23.6 cents per share
* Channel subscribers increased by 1.8 million to 52.3 million
* Operating cash flow increased by ?9.5 million to ?30.3 million
Amsterdam, The Netherlands and London, UK - Jetix Europe N.V. (Jetix
Europe or the Company, "we", "our") (AMEX: JETIX; Reuters JETIX.AS;
Bloomberg: JETIX.NA), one of Europe's leading integrated kids
entertainment companies, today announced its financial results for
the six months ended March 31, 2008. Revenue decreased by ?16.5
million to ?71.2 million, which was in line with management's
expectations excluding adverse exchange rate movements of ?3.8
million. The decline is primarily due to changes in a limited number
of specific deals, notably with channel distributors. Operating
profit fell by ?5.7 million to ?11.2 million, with reductions in
marketing, selling and distribution costs, and amortisation costs
limiting the impact from reduced revenue. Net profit attributable to
shareholders decreased by ?0.6 million to ?20.1 million. Operating
cash flow increased by ?9.5 million to ?30.3 million. During the six
month period, subscribers increased by 1.8 million to 52.3 million
households.
Paul Taylor, Chief Executive Officer, said "As expected, we have seen
the impact from a number of specific deals reflected in the financial
results we are announcing today. However, excluding adverse exchange
rate movements, the results are broadly in line with our
expectations.
Although we have been affected by the renegotiation of specific
channel carriage deals and the decision not to continue producing
A.T.O.M., most of our underlying businesses have continued to perform
well. We have increased our advertising revenue, despite a worsening
economic environment and continued stiff competition, we are
investing in our websites in advance of a re-launch planned for
summer 2008 and we have seen our in-house merchandising activities
continue to grow.
We are also in the final stages of negotiating a major new initiative
with our parent company, The Walt Disney Company (Disney). Disney
has recently created an integrated television distribution division,
which brings together sales of its programming, channels and new
media products, offering its business customers a single
point-of-sales contact. Jetix is negotiating to secure access to
this division's sales capability for our channels and digital media
products, which would then be sold alongside Disney's world-leading
content and channels. This would extend the relationship that we
already have in place to sell our programming through Disney-ABC
International Television. We believe that, if completed, this new
deal will allow us to benefit from Disney's strong brand and market
presence, delivering significant benefits to Jetix Europe over the
medium and long term. Whilst negotiations are close to completion,
this deal is still subject to contract and supervisory board
approval.
We are also expanding one of our other significant strategic
relationships with Disney, our global programming alliance. Alongside
our existing hit live-action property and our successful animation
co-productions, we are working with Disney to develop up to two new
live-action shows, to be delivered in the next fiscal year. Disney
has had significant success recently with their live-action
productions and we are looking to build on this success by using the
same development and production teams on the new Jetix shows. I
believe that Jetix is in a unique position in being able to access
Disney's world-class talent in this area.
I am also excited by the first co-productions to be commissioned by
our new programming team. The new shows, Jimmy Two Shoes and Kid vs.
Kat, increase our focus on character driven comedies and will help to
broaden our audience appeal. The creation of characters that
entertain and engage with our audience is at the heart of our
strategy to build long-term franchises which can be exploited across
our business lines.
We are investing in a major re-launch of our websites, planned for
later this year. Broadband online access continues to grow across
Europe and we are positioning ourselves to take advantage of this.
The re-launch will see new applications and an enhanced video
player, all of which capitalise on these technological advances. We
will also be improving our games offering, both through a higher
volume and an increased specification, and we will be developing our
community and loyalty functions. I am confident this will allow us
to offer a more compelling online experience to our consumers, taking
full advantage of the new ways to interact created by broadband.
There is no doubt that our business faces a number of challenges,
such as pay television consolidation, strong competition and a
declining economic outlook. However the actions we are taking to
ensure we have the best content possible, to leverage our
relationship with Disney and to develop new businesses as technology
allows, should enable us to return to growth as quickly as possible."
Dene Stratton, Chief Financial Officer, said "Despite the pressure on
revenue, we have achieved strong growth in cash flow. In the current
economic climate, I am also pleased that we are able to maintain the
guidance we gave last year, excluding the effect of exchange rates."
OPERATING REVIEW
Channels and Online
* Subscribers increased by 4% to 52.3 million households
* New Bulgarian language track secures new distributors
* Multi-year distribution deal signed with Canalsat in France
* Significant re-launch of websites planned
* Multi-territory deal extends mobile distribution
Jetix Europe reaches 58 countries through its 15 television channel
feeds, broadcasting local channels in 19 languages. Alongside TV, we
also reach out to our audience whenever and wherever they would like
to engage with our content, through online, mobile and other digital
distribution channels.
Subscribers to our television channels grew by 1.8 million to 52.3
million households, up 4% during the six month period. This growth
was led by our Central and Eastern Europe (CEE) feed which accounted
for a substantial proportion of the growth, increasing its
subscribers by almost 1 million households. Our Polish channel also
achieved good growth, increasing its households reached by more than
300,000 homes.
We have continued to localise our presence in Eastern Europe with the
launch of a new Bulgarian language track on our CEE feed. We are the
first dedicated kids channel to broadcast in Bulgarian, and this has
helped us secure our presence in this market, doubling both the
number of distributors that carry our channel and the number of
households we reach.
In Western Europe we have seen continued growth in our subscribers in
Italy and France, whilst in the UK we have seen subscriber growth
from our major distributors being offset by the termination of a
number of small distribution contracts in Ireland.
We secured strong growth in subscription revenue in a key Western
European market due to an increase in rates, and we grew subscription
revenue in Poland and on our CEE feed following the increase in
subscriber numbers. However, overall subscription revenue was
impacted by deal renewals in a limited number of markets.
We have secured a new multi-year distribution agreement with Canalsat
for our French channel, following last year's resumption of
negotiations. This secures the long-term future of our brand in this
important market. As the new deal has an impact on revenue, we are
exploring options to reduce costs whilst maintaining our scale of
operations and their profitability.
Advertising revenue grew by 9%. We achieved notably strong growth in
Eastern Europe, where our CEE feed increased advertising revenue by
more than 50% and our Polish channel also made a strong start to the
year. Our second largest advertising market, Italy, continued its
recent strong performance and again grew revenue by more than 10%.
We also achieved strong growth in Scandinavia and France.
We are investing in our 18 websites and are planning a major
re-launch of these sites, scheduled to roll out in summer 2008. We
are developing deeper and richer content for our audience to enjoy,
through an increased volume of higher quality games, better online
applications and an improved interactive video-on-demand (VOD)
service. We will also be developing the community aspects of our
websites, with new functionality that should build loyalty. This
will ensure that we retain our audience for as long as possible, and
offer them a compelling destination to return to.
Alongside our own websites we also distribute our channels and
programmes through online and mobile partners, ensuring that our
content is available to our audience whenever and wherever they would
like to view it.
We are distributing our channels through IPTV aggregators in a number
of markets, and we have also been developing our VOD distribution.
We have deals with a number of different VOD distributors. In some
markets individual episodes are offered alongside our channels
through the VOD offering of the main pay-television distributors, in
other markets specialist VOD distributors have emerged and we have
recently secured our first deal with a generalist retailer who is
looking to offer digital content through its online site.
We also supply our channels, individual episodes and, in some cases,
a customised programme loop to mobile operators and distributors. We
have recently secured our first multi-territory deal with Orange, and
our content can now be viewed on mobile phones in six markets, with
further launches planned in the next few months.
Programme Distribution
* Revenue impact from the timing of programme deliveries and
exchange rates
* Power Rangers continues to sell well
* Second series of Pucca delivered to alliance partner in US
* Two new co-productions green-lit
* Programme pipeline of 120 episodes
As expected, the programme distribution division is reporting
significantly lower revenue than in the first half of fiscal 2007.
This is partially due to the timing of deliveries, with a
significantly higher volume of episodes expected to be delivered in
the second half of the year. As in prior years, the weighting of
revenue between the first and second half of the fiscal year varies,
and this year revenue is expected to be weighted towards the second
half of the year. Revenue has also been affected by a planned
reduction in the volume of episodes being sold to the US and, as a
significant proportion of the programme sales business is denominated
in US dollars, we have been impacted by the decline in the US dollar.
Our third-party programme sales, serviced by Disney-ABC International
Television, were led by Power Rangers, which again sold in a number
of major markets. We have also seen strong sales from our recent
acquisitions Iggy Arbuckle and Captain Flamingo. On-air Power Rangers
continued to perform well, leading its slot amongst boys in all of
the major Western European markets it aired in. Italy was a notable
highlight, where it achieved a share of more than 35%. Pucca and
W.I.T.C.H. both aired in a number of markets and were one of the two
most popular shows with kids in their time slots. Iggy Arbuckle and
Captain Flamingo have launched in the UK, where they led their
timeslots amongst boys, and Yin Yang Yo! has just launched in
Germany, where the early episodes have made a good start, with a
share amongst boys of more than 30%.
We have continued to supply our programming to our alliance partner
in the US, Disney ABC Cable Networks Group, although as expected the
volume is lower than in the comparable period. During this period we
have delivered the second series of Pucca, which is airing on
Disney's Toon Disney channel. The programme has continued to perform
well and has been building its audience in its key target
demographics. As Jetix only buys the US rights to programming on an
opportunistic basis, this deal brings to the end our US sales for the
immediate future.
During the period we have entered into two new co-productions. Jimmy
Two Shoes is the first co-production green-lit by our new programming
team and will be produced by Breakthrough Animation in Canada. The
series follows the comedy adventures of fourteen-year-old Jimmy after
he falls into the weird world of Miseryville. Our second new
co-production is Kid vs. Kat, which will be produced by Canada's
Studio B. Kid vs. Kat follows the exaggerated conflicts between a
malevolent cat and the beleaguered ten-year-old boy to whom it has
taken a demented dislike.
We have taken delivery of new episodes from each of our major sources
of programming. We have received episodes of Yin Yang Yo! and Power
Rangers, produced with our US alliance partner, as well as episodes
of Pucca, a major production led by Jetix. We have also received new
episodes from our co-production Combo Ninos, and our recent
acquisitions, Captain Flamingo and Urban Vermin.
During the period we received 56 new episodes and at the end of the
period we had 120 episodes in production, compared with 124 at the
end of fiscal 2007.
Consumer Products
* Major home entertainment deal for library product
* Power Rangers continues to be biggest selling property
* New magazine launched in Turkey
* Pucca success continues, notably in France
* Consumer products rights secured on new series
The reported revenue in the consumer products division has fallen
compared with the prior year. This is primarily because, as
previously announced, the master toy licence with Hasbro for A.T.O.M.
Alpha Teens on Machines in the prior period was not repeated,
following the decision not to produce a third series. We have also
seen some decline in Power Rangers revenue, following last year's
strong growth. Our in-house consumer products merchandising
activities have continued to grow and our home entertainment division
has recently secured a major deal, the benefits of which will be seen
later in this financial year, and in fiscal 2009.
Power Rangers remains our biggest selling property, and is
represented by Disney Consumer Products (DCP). We have seen a
significant increase in the number of contracts we have with
licensees, up 27% on the prior year. This is due to the new
contractual arrangements we introduced last year, which allows Power
Rangers to be directly included in DCP's deals, rather than
contracted for separately. During the period toys and action figures
remained the largest category, with apparel and home furnishings
increasing their share of total sales. Notably, apparel built on
last year's strong performance in both the UK and Italy.
Jetix Consumer Products (JCP), our in-house consumer products
division, represents all of Jetix's other owned and licensed
properties. JCP has two divisions, merchandising and home
entertainment.
JCP's merchandising division continues to expand and recently
launched a new magazine in Turkey. This brings our total number of
titles to eight and increases the exposure of the Jetix brand across
Europe. During the period the merchandising division continued to
grow revenue, with Pucca again a notable success. In France, Pucca's
largest market in Europe, fashion and stationery were popular
categories. In the Netherlands we had a successful Christmas
promotion with a major supermarket, and over one and a half million
sing-along CD's based on a special seasonal programme were
distributed.
In JCP's home entertainment division we have recently secured a
significant deal for a range of our Marvel library properties,
showing the continued appeal of these titles. As the deal was
completed towards the end of this period, the benefits will be seen
in the second half of this fiscal year, and in fiscal 2009. The deal
includes promotion of the DVDs on the Jetix channels, highlighting
the synergy benefits from our multi-media product offering. During
the period, Power Rangers has again been popular. Over Christmas we
repeated last year's promotion with La Gazetta dello Sport in Italy,
offering their readers the exclusive opportunity to buy the latest
series of Power Rangers. We have also secured a Power Rangers deal
covering more than fifteen countries across Western and Eastern
Europe.
We continue to secure the consumer products rights for the programmes
we invest in and we have the rights for the two new co-productions
green-lit this period, Jimmy Two Shoes and Kid vs. Kat.
FINANCIAL REVIEW
Revenue
Revenue decreased 19% to ?71.2 million. On a constant currency
basis, revenue would have been ?75.0 million, a decline of 14%.
Channels and online revenue decreased 9% to ?57.9 million.
Subscription revenue decreased 16% to ?33.7 million as a result of
rate reductions in a limited number of markets and the negative
impact of the appreciation of the euro against the pound sterling and
the US dollar[3]. This was partially offset by an increase in the
subscription rate in a key Western European market and an increase in
the number of subscribers in CEE and Poland. Advertising revenue
increased 9% to ?22.7 million. The largest growth markets were
Italy, CEE and Poland. This was partially offset by the appreciation
of the euro against the pound sterling and the US dollar[3]. Other
channel and online revenue, including VOD, mobile, live events, and
on-air production, was down ?1.0 million. Movements in foreign
exchange rates contributed ?3.3 million to the overall decline in
channel and online revenue. Excluding the adverse exchange rate
movements, channel and online revenue would have declined by 4%.
Programme distribution revenue decreased by 44% to ?6.4 million. The
decrease is primarily due to the timing of deliveries of programming
to broadcasters, lower sales to Disney ABC Cable Network Group in the
U.S. and the depreciation of the US dollar against the euro, as
distribution sales are predominately US dollar-based. Revenue is
expected to be weighted towards the second half of fiscal year 2008.
Our consumer products revenue decreased by 45% to ?6.9 million. The
decrease was primarily the result of the 2007 A.T.O.M. Alpha Teens on
Machines master toy license not being repeated in fiscal 2008,
increased competition in the market with respect to the Power Rangers
property, the change in recording DCP Power Rangers revenue on a net
basis[4] and the appreciation of the euro against the pound sterling
and US dollar.
Marketing, Selling and Distribution Costs
Marketing, selling and distribution costs decreased by 25% to ?19.1
million. This was primarily due to a decrease in participations,
which largely resulted from a one-time release of ?2.0 million
following the revision of estimates of the ultimate performance of
certain properties, the appreciation of the euro against the pound
sterling and US dollar[3], the change in accounting for the DCP Power
Rangers arrangement (resulting in revenue being recorded net and with
no commission expense)[4], reduced commissions and lower technical
costs. Movements in foreign exchange rates contributed ?0.8 million
to the overall reduction in marketing, selling and distribution
costs, of which substantially all of the impact was seen in channels
and online. Marketing, selling and distribution costs would have
declined by 22% excluding the effects of foreign exchange.
General and Administrative Costs
General and administrative costs increased by 2% to ?23.3 million
principally due to an increase in costs resulting from the end of a
rental rebate period, increase in share-based compensation, one-time
employee termination costs and a decrease in the release of a
provision for indirect taxes. Movements in foreign exchange rates
offset the increase in general and administrative costs by ?1.5
million, of which substantially all of the impact was seen in
channels and online and distribution. Excluding the effects of
foreign exchange, general and administrative costs would have
increased by 8%.
EBITDA
EBITDA decreased by 27% to ?29.5 million. Channels and online EBITDA
was down 14% at ?24.4 million. This was driven primarily by a
decrease in subscription revenue being offset by increased
advertising revenue as described above. Costs increased as a result
of increased office rental costs due to the end of the rental rebate
period and a specific provision for bad debt. The impact of the
appreciation of the euro against the pound sterling and US dollar
resulted in a decrease in channels and online EBITDA of ?1.6 million.
Without the effects of foreign exchange, channel and online EBITDA
would have declined by 8%.
Programme distribution EBITDA decreased by 36% to ?5.0 million driven
primarily by timing of deliveries of programming to broadcasters, and
lower sales to Disney ABC Cable Network Group in the U.S. offset by
lower participations and a reduction in bad debt expense.
Consumer products EBITDA decreased by 52% to ?3.4 million primarily
from the 2007 A.T.O.M. Alpha Teens on Machines master toy license not
being repeated in fiscal 2008 and increased competition on one of our
major properties. This was offset by decreased costs from
participation fees.
Shared costs not allocated to segments increased by 19% primarily due
to increased share-based compensation and one-time employee
termination costs and a decrease in the release of a provision for
indirect taxes. This was offset by a reduction in overhead costs.
Amortisation and Impairment of Programme Rights
Amortisation and impairment of programme rights (defined as cost of
sales in the income statement) decreased by 22% to ?17.7 million as a
result of the strengthening of the euro against the US dollar[5] and
a decrease in spend on non-European rights. Excluding the effects of
foreign exchange, amortisation and impairment of programme rights
would have decreased by 11%.
Foreign Exchange Gains
The foreign exchange gains recognised during the period of ?10.6
million primarily relate to non-cash gains on intercompany
transactions which reflect the exchange risk of doing business with
foreign group members where the functional currency is not the euro.
Of the total foreign exchange gains, ?1.6 million relates to the
revaluation of monetary assets and liabilities and other
transactional items associated with the normal course of business.
Financial Income (net)
Financial income (net) increased by 10% to ?2.6 million due to a
change in the interest rates along with the mix of cash held in
various currencies.
Profit Before Tax Expense
Profit before tax expense and minority interest increased by 1% to
?25.8 million, resulting from a decrease in EBITDA, as discussed
above, offset by increased foreign exchange gains.
Tax Expense
The current period effective tax rate for the half year (excluding
the foreign exchange gains) is 34% compared with 23% in the previous
period. The primary reason for the increase is the change in
distribution of the lower level of profits among the tax
jurisdictions in which the group operates.
Minority Interest
Net profit attributable to minority interest increased by ?0.3
million to ?0.5 million resulting from higher profits from the Polish
channel.[6]
Earnings per Share
Basic and diluted earnings per share decreased to 23.6 cents each
from 24.5 cents and 24.4 cents, respectively in the prior period.
Cash Flow
Cash and cash equivalents increased by ?22.4 million to ?121.9
million from September 30, 2007. Net cash generated from operations
during the period increased by ?9.5 million to ?30.3 million
resulting from a reduction in the rate of utilisation of working
capital. This was offset by the decrease in net profit, before
amortisation and depreciation.
Outlook
If exchange rates are held constant with fiscal 2007, we expect
revenue for the full 2008 fiscal year to be within the guidance range
given last year, which was a decline of 10 to 15%. However, during
the first half of the year we have seen the US dollar and the pound
decline against the euro. At current exchange rates, we expect
revenue for the full 2008 fiscal year to decline by 16 to 19%. We
expect the EBITDA margin to be broadly in line with the 34% we
achieved in 2005.
Financial Calendar
We will be announcing our annual results for the 12 months ending
September 30, 2008 on November 13, 2008, and we expect to hold our
Annual General Meeting on February 5, 2009. Further details for both
events will be published closer to the time on our corporate website,
www.jetixeurope.com.
Jetix Europe N.V.
Consolidated Statements of Income
for the six months ended March 31, 2008 and March 31, 2007
+-------------------------------------------------------------------+
| | 6 Months | 6 Months | % Change |
| In Euro' 000 | ended | ended | |
| Unaudited | March 31, | March 31, | |
| | 2008 | 2007 | |
| | | | |
|--------------------------------+-----------+-----------+----------|
| | | | |
|--------------------------------+-----------+-----------+----------|
| Revenue | 71,210 | 87,674 | (19)% |
|--------------------------------+-----------+-----------+----------|
| Cost of sales | (17,670) | (22,552) | 22% |
|--------------------------------+-----------+-----------+----------|
| Gross profit | 53,540 | 65,122 | (18)% |
|--------------------------------+-----------+-----------+----------|
| Marketing, selling and | (19,070) | (25,356) | 25% |
| distribution costs | | | |
|--------------------------------+-----------+-----------+----------|
| General and administrative | (23,256) | (22,858) | (2)% |
| costs | | | |
|--------------------------------+-----------+-----------+----------|
| Operating profit | 11,214 | 16,908 | (34)% |
|--------------------------------+-----------+-----------+----------|
| | | | |
|--------------------------------+-----------+-----------+----------|
| Analysed as: | | | |
|--------------------------------+-----------+-----------+----------|
| EBITDA | 29,462 | 40,386 | (27)% |
|--------------------------------+-----------+-----------+----------|
| Amortisation and impairment of | (17,670) | (22,552) | 22% |
| programme rights | | | |
|--------------------------------+-----------+-----------+----------|
| Depreciation of property and | (160) | (454) | 65% |
| equipment | | | |
|--------------------------------+-----------+-----------+----------|
| Amortisation of other | (418) | (472) | 11% |
| intangibles | | | |
|--------------------------------+-----------+-----------+----------|
| | 11,214 | 16,908 | (34)% |
|--------------------------------+-----------+-----------+----------|
| | | | |
|--------------------------------+-----------+-----------+----------|
| Finance income | 5,874 | 4,905 | 20% |
|--------------------------------+-----------+-----------+----------|
| Finance expense | (3,293) | (2,549) | (29)% |
|--------------------------------+-----------+-----------+----------|
| Foreign exchange gains | 10,598 | 4,952 | 114% |
|--------------------------------+-----------+-----------+----------|
| Share of net profits from | 1,419 | 1,358 | 4% |
| joint ventures | | | |
|--------------------------------+-----------+-----------+----------|
| Profit before tax expense | 25,812 | 25,574 | 1% |
|--------------------------------+-----------+-----------+----------|
| Tax expense | (5,197) | (4,744) | (10)% |
|--------------------------------+-----------+-----------+----------|
| Net profit | 20,615 | 20,830 | (1)% |
|--------------------------------+-----------+-----------+----------|
| Attributable to minority | (533) | (163) | (227)% |
| interest | | | |
|--------------------------------+-----------+-----------+----------|
| Net profit attributable to | 20,082 | 20,667 | (3)% |
| shareholders | | | |
|--------------------------------+-----------+-----------+----------|
| | | | |
|--------------------------------+-----------+-----------+----------|
| Earnings per share for profit | | | |
| attributable | | | |
| to the equity shareholders of | | | |
| the Group | | | |
| during the period (expressed | | | |
| in Euro cents per share) | | | |
|--------------------------------+-----------+-----------+----------|
| Basic | 23.6 | 24.5 | |
|--------------------------------+-----------+-----------+----------|
| Diluted | 23.6 | 24.4 | |
+-------------------------------------------------------------------+
The notes on pages 15 to 16 are an integral part of the consolidated
interim financial information.
Jetix Europe N.V.
Consolidated Balance Sheets as at March 31, 2008 and September 30,
2007
+-------------------------------------------------------------------+
| In Euro' 000 | March 31, 2008 | September 30, 2007 |
| Unaudited | | |
| | | |
| ASSETS | | |
|-----------------------------+----------------+--------------------|
| Non-current assets | | |
|-----------------------------+----------------+--------------------|
| Intangible assets | | |
|-----------------------------+----------------+--------------------|
| Programme rights | 68,065 | 81,647 |
|-----------------------------+----------------+--------------------|
| Goodwill | 9,834 | 9,834 |
|-----------------------------+----------------+--------------------|
| Other | 1,657 | 1,896 |
|-----------------------------+----------------+--------------------|
| Total intangible assets | 79,556 | 93,377 |
|-----------------------------+----------------+--------------------|
| Property and equipment, net | 865 | 1,022 |
|-----------------------------+----------------+--------------------|
| Investment in joint | 1,266 | 649 |
| ventures | | |
|-----------------------------+----------------+--------------------|
| Deferred tax assets | 6,961 | 7,589 |
|-----------------------------+----------------+--------------------|
| Total non-current assets | 88,648 | 102,637 |
|-----------------------------+----------------+--------------------|
| Current assets | | |
|-----------------------------+----------------+--------------------|
| Trade and other | 43,625 | 47,053 |
| receivables, net | | |
|-----------------------------+----------------+--------------------|
| Related party receivables | 4,538 | 11,278 |
|-----------------------------+----------------+--------------------|
| Cash and cash equivalents | 121,915 | 99,488 |
|-----------------------------+----------------+--------------------|
| Total current assets | 170,078 | 157,819 |
|-----------------------------+----------------+--------------------|
| | | |
|-----------------------------+----------------+--------------------|
| Total assets | 258,726 | 260,456 |
|-----------------------------+----------------+--------------------|
| EQUITY | | |
|-----------------------------+----------------+--------------------|
| Capital and reserves | | |
| attributable | | |
| to the Company's equity | | |
|-----------------------------+----------------+--------------------|
| Share capital | 21,310 | 21,303 |
|-----------------------------+----------------+--------------------|
| Share premium | 409,231 | 408,948 |
|-----------------------------+----------------+--------------------|
| Other reserves | (48,280) | (27,906) |
|-----------------------------+----------------+--------------------|
| Retained losses | (176,869) | (196,951) |
|-----------------------------+----------------+--------------------|
| Total shareholders' equity | 205,392 | 205,394 |
|-----------------------------+----------------+--------------------|
| Minority interest | 1,852 | 1,542 |
|-----------------------------+----------------+--------------------|
| Total equity | 207,244 | 206,936 |
|-----------------------------+----------------+--------------------|
| | | |
|-----------------------------+----------------+--------------------|
| LIABILITIES | | |
|-----------------------------+----------------+--------------------|
| Current liabilities | | |
|-----------------------------+----------------+--------------------|
| Trade and other payables | 40,399 | 44,913 |
|-----------------------------+----------------+--------------------|
| Current income tax | 4,614 | 3,159 |
| liabilities | | |
|-----------------------------+----------------+--------------------|
| Related party payables | 5,336 | 3,227 |
|-----------------------------+----------------+--------------------|
| Provisions for other | 1,133 | 2,221 |
| liabilities | | |
|-----------------------------+----------------+--------------------|
| Total current liabilities | 51,482 | 53,520 |
|-----------------------------+----------------+--------------------|
| | | |
|-----------------------------+----------------+--------------------|
| Total equity and | 258,726 | 260,456 |
| liabilities | | |
+-------------------------------------------------------------------+
The notes on pages 15 to 16 are an integral part of the consolidated
interim financial information.
Jetix Europe N.V.
Consolidated Statements of Changes in Equity
In Euro Share Share Currency Other Share Retained Minority Total
'000 capital premium translation Reserves option losses interest equity
Unaudited adjustment reserve
Balance at 21,199 456,799 (11,383) - 2,875 (234,258) 1,627 236,859
September
30, 2006
Currency - - (9,898) - - - 11 (9,887)
translation
differences
Net profit - - (9,898) - - - 11 (9,887)
recognised
directly in
equity
Profit for - - - - - 20,667 163 20,830
the
period
Total - - (9,898) - - 20,667 174 10,943
recognised
income for
period
Employee
share
option
scheme
Value of - - - 175 117 - - 292
employee
services
Proceeds 25 645 - - - - - 670
from shares
issued
Change in - - - - (251) - - (251)
settlement
from equity
to cash for
restricted
shares
Total 25 645 - 175 (134) - - 711
employee
share
option
scheme
Redemption - - - - - - (596) (596)
of shares
Balance at 21,224 457,444 (21,281) 175 2,741 (213,591) 1,205 247,917
March 31,
2007
Movement
for the 79 (48,496) (9,888) 254 93 16,640 337 (40,981)
period
April 1,
2007
to
September
30,
2007
Balance at 21,303 408,948 (31,169) 429 2,834 (196,951) 1,542 206,936
September
30, 2007
Currency - - (20,672) - - - (223) (20,895)
translation
differences
Net profit - - (20,672) - - - (223) (20,895)
recognised
directly in
equity
Profit for - - - - - 20,082 533 20,615
the period
Total - - (20,672) - - 20,082 310 (280)
recognised
income for
period
Employee
share
option
scheme
Value of - - - 287 11 - - 298
employee
services
Proceeds 7 283 - - - - - 290
from shares
issued
Total 7 283 - 287 11 - - 588
employee
share
option
scheme
Balance at 21,310 409,231 (51,841) 716 2,845 (176,869) 1,852 207,244
March 31,
2008
The notes on pages 15 to 16 are an integral part of the consolidated
interim financial information.
Jetix Europe N.V.
Consolidated Cash Flow Statements for the
six months ended March 31, 2008 and March 31, 2007
+-------------------------------------------------------------------+
| In Euro' 000 | Notes | 6 Months | 6 Months |
| Unaudited | | ended | ended |
| | | March 31, | March 31, |
| | | 2008 | 2007 |
| | | | |
|-----------------------------------+-------+-----------+-----------|
| | | | | |
|-----------------------------------+-------+-----------+-----------|
| Cash flows from operating | | | |
| activities | | | |
|-----------------------------------+-------+-----------+-----------|
| Net profit | | 20,615 | 20,830 |
|-----------------------------------+-------+-----------+-----------|
| Depreciation | | 160 | 454 |
|-----------------------------------+-------+-----------+-----------|
| Amortisation | | 18,088 | 23,024 |
|-----------------------------------+-------+-----------+-----------|
| Loss on disposal of | | - | 191 |
| assets | | | |
|-----------------------------------+-------+-----------+-----------|
| Share-based compensation | 2 | 934 | 686 |
| charge | | | |
|-----------------------------------+-------+-----------+-----------|
| Equity income of joint | | (617) | (255) |
| ventures | | | |
|-----------------------------------+-------+-----------+-----------|
| Finance income | | (5,874) | (4,905) |
|-----------------------------------+-------+-----------+-----------|
| Finance expense | | 3,293 | 2,549 |
|-----------------------------------+-------+-----------+-----------|
| Increase in provision for | | 353 | 635 |
| bad and doubtful debts | | | |
|-----------------------------------+-------+-----------+-----------|
| Decrease in other | | - | (727) |
| liabilities | | 5,197 | 4,744 |
| Deferred and current | | | |
| taxation | | | |
|-----------------------------------+-------+-----------+-----------|
| Decrease in amounts due | | - | 540 |
| from related parties | | | |
|-----------------------------------+-------+-----------+-----------|
| Decrease in provision for | | (920) | (1,415) |
| other liabilities | | | |
|-----------------------------------+-------+-----------+-----------|
| Non-cash foreign exchange | | (8,989) | (5,166) |
| gains on intercompany balances | | | |
|-----------------------------------+-------+-----------+-----------|
| Operating cash flows before | | 32,240 | 41,185 |
| changes in working capital | | | |
|-----------------------------------+-------+-----------+-----------|
| | | | |
|-----------------------------------+-------+-----------+-----------|
| Change in working capital | 3 | 6,660 | (10,503) |
|-----------------------------------+-------+-----------+-----------|
| | | | |
|-----------------------------------+-------+-----------+-----------|
| Cash generated from operations | | 38,900 | 30,682 |
|-----------------------------------+-------+-----------+-----------|
| | | | | |
|-------+---------------------------+-------+-----------+-----------|
| | Purchase of programme | | (7,585) | (8,395) |
| | rights | | | |
|-------+---------------------------+-------+-----------+-----------|
| | Interest received | | 5,390 | 4,905 |
|-------+---------------------------+-------+-----------+-----------|
| | Interest paid | | (3,293) | (2,549) |
|-------+---------------------------+-------+-----------+-----------|
| | Income tax paid | | (3,112) | (3,834) |
|-------+---------------------------+-------+-----------+-----------|
| | | | | |
|-----------------------------------+-------+-----------+-----------|
| | | | |
|-----------------------------------+-------+-----------+-----------|
| Net cash generated from operating | | 30,300 | 20,809 |
| activities | | | |
|-----------------------------------+-------+-----------+-----------|
| | | | | |
|-----------------------------------+-------+-----------+-----------|
| Cash flows from investing | | | |
| activities | | | |
|-----------------------------------+-------+-----------+-----------|
| Purchases of property and | | (88) | (102) |
| equipment | | | |
|-----------------------------------+-------+-----------+-----------|
| Purchases of software | | (160) | (33) |
|-----------------------------------+-------+-----------+-----------|
| Net cash from investing | | (248) | (135) |
| activities | | | |
|-----------------------------------+-------+-----------+-----------|
| | | | | |
|-----------------------------------+-------+-----------+-----------|
| Cash flows from financing | | | |
| activities | | | |
|-----------------------------------+-------+-----------+-----------|
| Proceeds from exercise of | | 290 | 670 |
| employee share options | | | |
|-----------------------------------+-------+-----------+-----------|
| Redemption of shares to minority | | - | (596) |
| interests | | | |
|-----------------------------------+-------+-----------+-----------|
| | | | | |
|-----------------------------------+-------+-----------+-----------|
| Net cash from financing | | 290 | 74 |
| activities | | | |
|-----------------------------------+-------+-----------+-----------|
| | | | |
|-----------------------------------+-------+-----------+-----------|
| | | | | |
|-----------------------------------+-------+-----------+-----------|
| Increase in cash and cash | | 30,342 | 20,748 |
| equivalents | | | |
|-----------------------------------+-------+-----------+-----------|
| Cash and cash equivalents at the | | 99,488 | 127,126 |
| beginning of the period | | | |
|-----------------------------------+-------+-----------+-----------|
| Effects of exchange rate changes | | (7,915) | (1,797) |
| on cash and cash equivalents | | | |
|-----------------------------------+-------+-----------+-----------|
| Cash and cash equivalents at the | | 121,915 | 146,077 |
| end of the interim period | |-----------+-----------|
| | | | |
| | | | |
| | | | |
+-------------------------------------------------------------------+
The notes on pages 15 to 16 are an integral part of the consolidated
interim financial information.
Jetix Europe N.V.
Operating Results by Business Segment for the
six months ended March 31, 2008 and March 31, 2007
In Euro' 000 6 Months ended 6 Months ended % Change
Unaudited March 31, 2008 March 31, 2007
BUSINESS SEGMENT
Segment Revenue
Channels & online 57,840 63,436 (9)%
Programme distribution 6,424 11,553 (44)%
Consumer products 6,946 12,685 (45)%
Total revenue 71,210 87,674 (19)%
EBITDA
Channels & online 24,395 28,285 (14)%
Programme distribution 5,026 7,849 (36)%
Consumer products 3,403 7,069 (52)%
Shared costs not allocated (3,362) (2,817) (19)%
to segments
Total EBITDA 29,462 40,386 (27)%
Segment Results
Channels & online 9,286 12,044 (23)%
Programme distribution 2,463 3,985 (38)%
Consumer products 2,686 3,608 (26)%
Shared costs not allocated (3,221) (2,729) (18)%
to segments
Operating profit 11,214 16,908 (34)%
Jetix Europe N.V.
Operating Results by Geographic Segment for the
six months ended March 31, 2008 and March 31, 2007
In Euro '000 6 Months ended 6 Months ended % Change
Unaudited March 31, 2008 March 31, 2007
GEOGRAPHIC SEGMENT
Revenue
Italy 15,521 14,617 6%
United Kingdom & Ireland 14,674 23,603 (38)%
Benelux 9,185 10,822 (15)%
Central and Eastern Europe 8,812 9,200 (4)%
France 6,678 9,538 (30)%
Germany 4,261 5,268 (19)%
Poland 4,228 3,668 15%
Nordic Region 2,802 2,746 2%
Middle East 2,336 3,750 (38)%
Spain & Portugal 1,749 2,397 (27)%
Other 964 2,065 (53)%
Total revenue 71,210 87,674 (19)%
EBITDA
Italy 8,666 6,889 26%
United Kingdom & Ireland 7,285 15,105 (52)%
Benelux 2,512 3,545 (29)%
Central and Eastern Europe 3,439 3,799 (9)%
France 2,927 4,407 (34)%
Germany 1,514 2,289 (34)%
Poland 2,983 1,964 52%
Nordic Region 645 636 1%
Middle East 1,331 2,027 (34)%
Spain & Portugal 821 1,116 (26)%
Other 701 1,426 (51)%
Shared costs not allocated (3,362) (2,817) (19)%
to segments
EBITDA 29,462 40,386 (27)%
Less: amortisation, (18,248) (23,478) 22%
impairment and
depreciation
Operating profit 11,214 16,908 (34)%
Notes to the consolidated financial information
Unaudited
1 Basis of preparation
This consolidated interim financial information has been prepared
using accounting policies that are consistent with the policies used
in preparing the 2007 annual consolidated financial statements and in
accordance with IAS 34 "Interim Financial Statements" as adopted by
the European Union (EU). The consolidated interim financial
information should be read in conjunction with the annual
consolidated financial statements for the year ended September 30,
2007 which have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the EU.
The preparation of financial information requires that management
make estimates in reporting the amounts of certain revenues and
expenses for each financial year and certain assets and liabilities
at the end of each financial year. On an ongoing basis, management
reviews its estimates, including those related to revenue, accruals
for costs incurred but not billed by vendors, bad debts, potential
impairment and useful lives of assets, income taxes, certain other
accrued liabilities and share-based compensation. Actual results may
differ from these estimates.
The consolidated interim financial information presented in this
document is for the six months ended March 31, 2008. This period is
compared to the corresponding six months ended March 31, 2007, unless
otherwise stated.
Weighted average exchange rates used in the translation of income
statement accounts were US dollar - ?1 = $1.47 (2007 - ?1 = $1.30)
and pound sterling ?1 = £0.7316 (2007 - ?1 - £0.6715). Exchange
rates used to translate assets and liabilities at the balance sheet
date were US dollar - ?1 = $1.58 (September 30, 2007 - ?1 = $1.41)
and pound sterling ?1 = £0.7930 (September 30, 2007 - ?1 = £0.6983).
2 Share-based compensation
During the six months ended March 31, 2008, there were 74,952
restricted shares issued. The restricted shares vest in two tranches
at January 9, 2010 and January 9, 2012. There are no performance
related criteria associated with the restricted shares. During the
six month period there were 27,072 options exercised. There were
6,403 restricted shares and 8,194 options forfeited.
The total share-based compensation expense for the six months ended
March 31, 2008 is ?0.9 million (?0.7 million for the six months ended
March 31, 2007), of which ?0.3 million related to Disney share
options (?0.2 million for the six months ended March 31, 2007).
3 Change in working capital
Euro' 000 6 Months ended 6 Months ended
Unaudited March 31, 2008 March 31, 2007
Change in working capital
Decrease in trade and other 798 636
receivables
Decrease in amounts due from 5,956 450
related parties
Decrease in trade and other (2,577) (8,242)
payables
Increase/(decrease) in amounts 2,483 (3,347)
due to related parties
6,660 (10,503)
The Consolidated Statement of Cash Flows reflects the cash flows
arising from the activities of Group companies as measured in their
own currencies, translated to euros at monthly average rates of
exchange. Therefore, the cash flows recorded in the Consolidated
Statement of Cash Flows exclude the currency translation differences
which arise as a result of translating the assets and liabilities of
non-euro Group companies to euros at period-end rates of exchange,
with the exception of those arising on cash and cash equivalents.
These currency translation differences must therefore be added to the
cash flow movements at average rates in order to arrive at the
movements derived from the Consolidated Balance Sheet, resulting in a
?7.9 million foreign exchange impact on cash and cash equivalents for
the six months ended March 31, 2008 (?1.8 million for the six months
ended March 31, 2007).
4 Earnings per share
Basic earnings per share (EPS) is net profit attributable to
shareholders divided by the weighted average number of shares
outstanding. Diluted EPS reflects the potential dilution that could
occur if dilutive share options and non-vested restricted shares were
exercised. A reconciliation of the weighted average number of shares
is as follows:
(000's of shares) 6 Months ended 6 Months ended
Unaudited March 31, 2008 March 31, 2007
Weighted average number of common
shares used 84,948 84,386
in calculating basic EPS
Effect of dilutive securities
- Share options 3 227
- Unvested restricted shares 41 20
Weighted average number of common
shares used 84,992 84,633
in calculating diluted EPS
ABOUT JETIX EUROPE N.V.
Jetix Europe N.V. is one of Europe's leading integrated kids
entertainment companies with localised television channels, programme
distribution and consumer products businesses. Jetix Europe N.V. is
listed on Euronext Amsterdam Stock Exchange and is majority owned
(approximately 73%) by The Walt Disney Company. In 2004 Jetix Europe
and The Walt Disney Company launched Jetix, a global kids
entertainment brand which brings a unique combination of action,
adventure and cheeky humour to kids aged 6-14 worldwide.
Channels
Jetix Europe broadcasts 15 channels to 58 countries across Europe and
the Middle East, reaching more than 52 million households. These
channels are broadcast in 19 languages, with content tailored to suit
each market. The 13 Jetix branded channels entertain kids ages 6-14,
whilst Jetix Play targets a younger audience, and in Italy, GXT
targets teenage boys. Jetix Europe also runs localised websites,
supporting all of Jetix Europe's activities by enabling kids to
interact with their favourite characters through video-on-demand,
games and exclusive content.
Programme Distribution
Jetix Europe owns one of the largest libraries of kids programming in
the world with approximately 6,000 episodes. Distributed to more
than 110 terrestrial, cable and satellite channels in over 50
markets across Europe and the Middle East, the library includes major
global programming franchises such as Power Rangers, Sonic X,
Spiderman, X-Men and W.I.T.C.H. Jetix Europe also has branded blocks
that appear on terrestrial TV channels across Europe, reaching over
100 million households. The Jetix Europe library is serviced by
Disney-ABC International Television.
Consumer Products
Jetix Consumer Products International (JCP) is Jetix Europe's
consumer products and home entertainment business. JCP has
representation in over 40 European countries, including fully
integrated offices in the UK, France, Germany, Israel, Italy, Spain
and the Netherlands, as well as third party agents in other key
markets. JCP's properties are sourced from the Jetix Europe library
and include Sonic X and the Jetix brand, as well as third party
representation for properties such as Pucca and Totally Spies.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements. These
statements may be identified by words such as "expect", "should",
"could", "shall" and similar expressions. These statements are
subject to risks and uncertainties, and actual results and events
could differ materially from what is contemplated by the
forward-looking statement. Factors which could cause actual results
to differ from these forward-looking statements may include, without
limitation, general economic conditions, competition for viewers and
ratings, changes to our channel distribution deals, the popularity of
our content and characters, technology issues or changes in the
distribution of television, regulatory change, the timing of new
programme deliveries and foreign exchange fluctuations. The
foregoing list of factors should not be construed as exhaustive.
Jetix Europe disclaims any intention or obligation to update or
revise these forward-looking statements, whether as a result of new
information, future events or otherwise.
[1] All comparisons are stated versus the six months ended March 31,
2007; except channel subscribers stated versus September 30, 2007.
[2] Consistent with prior years, EBITDA is operating profit stated
before programme amortisation, impairment and depreciation.
[3] In certain markets revenues and costs are denominated in either
pound sterling or US dollar, including the UK, CEE, Poland and
Israel.
[4] Reported revenue was unfavourably impacted by a change in our
Power Rangers representation contract with DCP, which resulted in
revenue being recorded net of DCP's share of revenue. Measured on a
like-for-like basis against the prior year, the impact on revenues
was a decline of ?0.7 million. Revenue had been recorded gross along
with the related DCP commissions in marketing, selling and
distribution costs under the previous arrangement. This change was
phased in during the first half of fiscal 2007.
[5] The majority of the central programme library is purchased and
held in US dollars.
[6] Minority interest relates to a third party's 20% interest in
Jetix Poland LimitedBergweg 50, 1217 SC Hilversum, The Netherlands.
PO Box 901, 1200 AX Hilversum, The Netherlands.
Official Seat: Rotterdam. Trade Register Number: 32076694.
www.jetixeurope.com
The report can be downloaded from the following link:
http://hugin.info/132845/R/1219356/255916.pdf
Copyright © Hugin AS 2008. All rights reserved.JETIX EUROPE NV : . announces results for the six months ended March 31, 2008
May 15, 2008 at 02:02 am EDT
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