JETIX EUROPE 
By
* Revenue decreased by ?29.5[1] million to ?136.9 million. This
was in line with management's expectations and the guidance given
at the interim results
* The decline in revenue was primarily due to the effects of a
limited number of previously announced deals, combined with
adverse exchange rate movements
* EBITDA[2] was down ?18.6 million at ?50.8 million. The revenue
impact was partially offset by a reduction in marketing, selling
and distribution costs
* Operating profit was ?12.7 million, a decline of ?11.7 million.
Lower amortisation costs further limited the impact of the
revenue reduction
* Net profit attributable to shareholders was ?20.1 million
* Diluted earnings per share were down 20.3 cents to 23.6 cents per
share
* Channel subscribers increased 1.8 million to 52.3 million
households
* Operating cash flow increased ?11.1 million to ?37.5 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 year ended September 30, 2008. Revenue decreased by ?29.5
million to ?136.9 million, compared with the year ended September 30,
2007. This was in line with management's expectations, and the
guidance given at the interim results. The decline in revenue was
primarily due to the effects of a limited number of previously
announced deals, combined with an adverse movement in exchange rates.
At exchange rates consistent with the prior year, revenue would have
been ?144.9 million. Operating profit was down ?11.7 million, at
?12.7 million. The decline in revenue was partially offset by a
reduction in marketing, selling and distribution costs, as well as a
decrease in amortisation costs. Net profit attributable to
shareholders was ?20.1 million. Operating cash flow increased by
?11.1 million to ?37.5 million. Subscribers increased by 1.8 million
to 52.3 million at September 30, 2008.
Paul Taylor, Chief Executive Officer, said "Throughout this year we
have continued to pursue our core strategy - creating the best kids
entertainment content and delivering it whenever and wherever our
audience wants to engage with it.
Our new programming team has made a strong start, commissioning two
outstanding new co-productions. Their first, Jimmy Two-Shoes,
continues Jetix's drive to create strong characters in shows which
combine action with humour. The other, Kid vs. Kat, develops this
further, and I am confident that both shows will prove popular. We
have also increased the level of resources that we are investing in
our creative development process, ensuring that our new team is well
positioned to uncover the best ideas and grow them into our future
hit franchises.
We have continued to strengthen our programming alliance with The
Walt Disney Company (Disney). We collaborate closely on our
long-term hit property, Power Rangers, and are co-producing its
seventeenth season. We also have a new initiative with Disney's
programming team to develop live-action series. This initiative has
been given increased impetus with Disney's recently announced plans
to launch a new channel, Disney XD, in the US. Disney has an
impressive track record and we are uniquely placed in being able to
access their expertise in this area.
Our programming alliance with Disney also benefits us in other areas.
We have continued to air Disney content on a number of our channels,
and in the US, Disney has been airing the second series of Pucca, one
of the productions Jetix Europe developed.
We have renewed a number of major carriage deals this year, notably
in Eastern Europe and with Canalsat in France. Following the
Canalsat deal, we decided to restructure our French channel
operations in order to take advantage of the economies of scale
available from working more closely with Disney. This deal allows
Jetix to continue to benefit from a profitable business in France,
whilst limiting our risk and ensuring that we benefit from future
revenue growth.
We are also realising synergy benefits with Disney in other areas.
This year we signed an important deal which secures us access to
Disney's new integrated sales structure. Disney-ABC-ESPN Television
(DAET) has been created to pull together under one organisation sales
of programming, channels and new media. DAET already services Jetix
Europe's programme sales and this deal extends the relationship to
include our channels and digital video content. I am confident that
being presented alongside Disney's broad portfolio of products to
their wide range of established contacts will ensure that we are able
to maximise our revenue in these areas.
During the year we have also been investing in the development of our
online and mobile businesses. We have redesigned our websites to
take advantage of the opportunities presented by the latest
developments in technology. Our new sites include a range of
community features, such as avatars and loyalty rewards, as well as a
new video-on-demand player and an improved games offering. The
enhanced sites are currently being launched, offering our audience a
new destination where they can be entertained and where they can
engage and interact with our characters.
We continue to distribute our content through various third-party
digital platforms. As the range of different distribution channels
continues to increase, we are working to ensure that wherever kids
search for entertainment, we are present. This year we have
significantly increased our mobile distribution with a
multi-territory deal with Orange, and we have recently launched a new
service offering some of our content on a download-to-own basis
through iTunes in the UK.
As a full service kids entertainment company, creating content and
then delivering it through a broad range of different media, from
television and online to consumer products, Jetix Europe is well
positioned for the future. We will continue to pursue our core
strategy, to leverage our relationship with Disney and to deliver the
very best kids entertainment possible."
Dene Stratton, Chief Financial Officer, said "As expected, the
results we are announcing today have been adversely affected by the
impact of a limited number of specific deals, as well as exchange
rate movements. However, I am pleased that the results are in line
with our guidance, and that our strong focus on cost control is
evident in reduced operating costs. We have achieved strong growth
in operating cash flow and this year we generated ?37.5 million of
operating cash flow."
OPERATING REVIEW
Channels and Online
* Subscribers increased by 1.8 million to 52.3 million households
* New structure in France following multi-year distribution deal
with Canalsat
* DAET appointed to service the distribution of our channels
* Major re-launch of Jetix branded websites
* Online content distribution launched on iTunes
Despite the effects on revenue of a limited number of specific deals,
the Channels and Online division has continued to expand and develop
its operations. We have grown the number of households reached by
our channels, enhanced the appeal of our content with further
localisation and increased our investment in digital media. We have
also agreed to be part of a new sales structure which leverages the
strengths of our majority shareholder, Disney, and should ensure we
maximise future revenues.
At the end of the period our channels reached 58 countries across
Europe and the Middle East. We broadcast 15 separate channel feeds in
19 languages, and our 18 websites offer our audience the opportunity
to interact directly with our content.
We have increased the number of subscribers to our television
channels by 1.8 million, and we now reach 52.3 million households. We
continued to achieve strong growth on our Central and Eastern
European (CEE) channel feed, primarily serving Russia and Romania,
which increased the number of households reached by over one million.
Our Polish channel also performed well, increasing subscribers by
10%. These increases were partially offset by a reduction in the
number of households reached by our channel in Turkey, as one of our
distribution contracts came to an end. We do not expect this to have
a significant financial impact. In France we saw strong subscriber
growth of almost 20% as we continue to benefit from the increased
carriage we secured following the merger of TPS and Canalsat.
We have continued to localise our presence in Eastern Europe with the
addition of a Bulgarian language track to our CEE feed. Jetix is the
first dedicated kids channel to broadcast a local language channel in
this market, helping us to consolidate our position by securing new
distribution and increasing the number of households we reach. In
Serbia we have begun the process of localisation with the addition of
Serbian subtitles. This has already delivered results through the
renewal of our distribution contract with the local satellite
television operator, SBB.
We continue to realise synergies with Disney. In France we secured a
multi-year distribution agreement with Canalsat and, following this
agreement, we have restructured our operations. We have licensed the
operation of the Jetix channel in France to the local Disney channel
operations, allowing us to take further advantage of the economies of
scale available from working closely with Disney. This new structure
ensures that Jetix Europe will continue to benefit from a profitable
business in France.
Since the period end we have secured a multi-year distribution
agreement in Eastern Europe with UPC to continue carriage of our
channels on their platforms in five markets. UPC is one of our
largest distributors in the region, and this deal covers Poland,
Romania, Hungary, Slovakia and the Czech Republic. In Eastern Europe
we have also renewed our distribution deal with NTV, our second
largest distribution partner in Russia. In the UK we have recently
exercised our option with Sky to extend carriage by two years to
2012. This secures our long-term distribution in one of Europe's key
pay television markets.
In June we announced a fundamental change to the way we sell our
channels and digital video content. We have signed a deal with
Disney for Disney-ABC-ESPN Television (DAET) to service the
distribution of our channels. This means that, since July 2008,
Jetix Europe's channels and digital content have been presented to
customers alongside the portfolio of Disney and ESPN channels, films
and television programmes for which DAET is currently responsible.
DAET already services Jetix Europe's programme distribution
business. This new deal will allow Jetix Europe to benefit from
DAET's distribution expertise and strong market presence across our
key territories.
Advertising revenue grew strongly in Eastern Europe. In Russia, we
more than doubled advertising revenue as we increased the scale of
our business. Our Poland channel feed grew advertising revenue by
30%, whilst our Hungary, Czech, Slovakia channel feed achieved growth
of more than 25%. In our more developed markets advertising growth
was more constrained. Healthy growth in Italy, Spain and Scandinavia
was more than offset by declines in The Netherlands and France. The
reported advertising revenue in France was lower than the prior year
as we no longer recognise advertising revenue following our
restructuring[3]. In the UK, local currency advertising growth was
negated by the decline in the UK pound against our reporting
currency, the euro.
We are currently re-launching our Jetix branded websites. The sites
have been redesigned to take advantage of the latest developments in
technology. We have introduced a range of new features, including
personalised avatars, new navigation tools, an enhanced loyalty
scheme and improved interactive applications. We have also focused
on improving our games offering, one of our most popular online
activities, and we have invested in our video-on-demand player. This
investment has been in both the infrastructure, with new underlying
technology, and in content, where we have begun commissioning several
series of shorts primarily for online distribution. Some of these
series are based on our main television content, whilst others
develop new characters, which if successful could inspire future
television properties.
We are also distributing our content through online and mobile
distribution platforms, allowing us to reach our audience whenever
and wherever they would like to engage with our characters. Online
video distribution continues to expand and we offer our content
through a range of different providers covering a number of business
models, including transactional video-on-demand, subscription
services and download-to-own.
We have recently launched a range of our most popular series for sale
on iTunes in the UK, and we have other video-on-demand deals in six
countries. Our channels or content are also available on mobile
phones, either through an aggregator or from a network operator. At
present we have services reaching eight countries, including a
multi-territory deal with Orange which has led the expansion of our
mobile offering into Eastern Europe.
Programme Distribution
* Strong sales from Power Rangers and Yin Yang Yo!
* Second series of Pucca delivered to US alliance partners
* Five new series commissioned or acquired
* 165 new episodes delivered
* Programme pipeline of 95 episodes
The majority of our programme distribution revenue comes from
programme sales to third-party free-to-air broadcasters, which is
serviced by DAET. These sales are predominantly denominated in US
dollars and so have been impacted by the fall in the US dollar
against the euro through the period. Revenue has also been affected
by a reduced volume of episodes supplied outside of Europe and a
production commissioned in the prior year from our Israel operation
which was not repeated this year. However, the success of the
original Israeli series has led to a new series being commissioned,
which we will be delivering next year.
Our third-party programme sales were led by Power Rangers, which
again sold in most major markets. Yin Yang Yo!, the latest
co-production from the Jetix programming alliance with Disney also
sold well, as did our recent acquisitions Captain Flamingo and Iggy
Arbuckle. These shows continued to deliver strong audiences, ranking
as one of the top two shows with kids in their timeslots in the major
European markets in which they aired.
We have supplied a second series of Pucca to Disney ABC Television
Group, our Jetix alliance partner in the US. The show airs in the
Jetix programming block on Toon Disney and has continued to perform
well, ranking as one of their top ten series. As we only acquire US
rights on an opportunistic basis, the volume of programming we have
supplied is lower than in the previous year, and we do not expect
further sales in the near future.
During the year we have secured five new series. Through our global
programming alliance with Disney we have commissioned a new series of
Power Rangers. This will be the seventeenth season in Europe,
highlighting the on-going attractiveness of this property. We have
commissioned two new co-productions, Jimmy Two-Shoes and Kid vs Kat.
Jimmy Two-Shoes is the first commission from our new programming team
and it is being produced by Breakthrough Animation in Canada. It
follows the adventures of fourteen-year-old Jimmy after he falls into
the weird world of Miseryville. We are pleased that in the recent
Mipcom Junior television programming market Jimmy Two-Shoes was the
most viewed show by potential buyers. This is the highest ever
ranking for a new Jetix show and was achieved against a field of more
than 1,000 other titles. Kid vs. Kat will be produced by Studio B,
which also produced Pucca for us. It follows the exaggerated
conflicts between a malevolent cat with extra-terrestrial links and
the beleaguered ten-year-old boy to whom it has taken a demented
dislike.
We have also acquired two new series from Cookie Jar Entertainment,
Magi-Nation and World of Quest. Magi-Nation is a new
action-adventure series set in an ancient magical world and World of
Quest is a fantasy action-comedy following Prince Nestor on his quest
against the evil Lord Spite.
During the year we have taken delivery of 165 new episodes of
programming. This includes episodes from each of our major sources
of programming. We have received new episodes from series
co-produced through our programming alliance with Disney, Power
Rangers and Yin Yang Yo!; new episodes from Jetix Europe
co-productions Pucca, Combo Ninos and Kid vs. Kat, and new content
from our acquired series Captain Flamingo, Urban Vermin, Magi-Nation
and World of Quest.
At the end of the period we had 95 episodes in production.
Consumer Products
* Power Rangers remains largest property
* Pucca continues strong performance
* Four new magazines launched
* Strong home entertainment sales of Marvel catalogue
* Consumer products rights secured on new series and properties
As expected, the reported results in our consumer products division
have been affected by the decision not to produce a third series of
A.T.O.M. Alpha Teens on Machines. As a result the master toy licence
sale in the prior year was not repeated. There has also been an
impact on reported revenue from the change in our contract with
Disney Consumer Products, which was phased in during the first
quarter of the prior year, and the fall in the US dollar against the
euro.
Power Rangers, our largest selling property, is represented for us by
Disney Consumer Products (DCP). Overall Power Rangers revenue has
been under pressure as we have seen increased competition from a
number of new properties with a similar target audience, in a
difficult trading environment. However, following last year's change
in our contractual arrangements with DCP, which allows us to be
included directly in DCP's agreements, we have seen a significant
increase in our volume of contracts, highlighting Power Rangers
continued popularity. We have also been expanding our sales into
Eastern Europe, building upon our strong channel presence in these
markets.
Jetix Consumer Products (JCP), our in-house consumer products
division, had a good year with strong revenue growth in both its
merchandising and home entertainment divisions. JCP represents all
of our owned and third-party properties, apart from the Power Rangers
rights which we have licensed to Disney.
In JCP's merchandising division we have continued to develop Pucca,
which again delivered strong revenue growth this year. France
remains Pucca's key market, with fashion and stationery the most
important categories. We have continued to exploit the Jetix brand
with new magazines launched in Turkey, Hungary, Romania and Bulgaria.
Following these launches we have ten magazines across Europe, each
of which helps to build the Jetix brand and offers new commercial
opportunities for our advertising partners.
Home entertainment has also seen strong revenue growth this year.
Our catalogue of Marvel series, including characters such as
Spiderman, The Incredible Hulk and Iron Man, has been a notable
highlight. We have secured a number of new deals, reaching over 30
countries. A range of Marvel titles was also licensed in Italy to
the newspaper Gazzetta dello Sport where the series featured in a
promotion, with an exclusive DVD available for purchase by readers
who also bought a newspaper. Some of the Marvel licensing deals
include a commitment to advertise the products on our local
television channels, demonstrating the benefits of building
franchises across all of our operations.
During the year we have continued to expand the range of properties
we represent. We have secured the consumer products rights to our
two new co-productions, Jimmy Two-Shoes and Kid vs. Kat. We are also
the agent for all available consumer products rights on our recent
acquisitions, World of Quest and Magi-Nation. Alongside our
television properties we are looking to leverage the scale of our
consumer products business, and we have just been appointed as
exclusive merchandising licensee by the Really Useful Group for a
number of their major musicals. We will be representing a range of
the non-music merchandising rights outside of the theatre for Joseph
and the Amazing Technicolor Dreamcoat, Cats, Starlight Express and
Evita.
FINANCIAL REVIEW
Revenue
Revenue decreased 18% to ?136.9 million. On a constant currency
basis, revenue would have been ?144.9 million, a decline of 13% (see
note 5).
Channels and online revenue decreased 15% to ?104.2 million.
Subscription revenue decreasing 22% to ?62.6 million as a result of
rate reductions in a limited number of markets, the impact of the
appreciation of the euro against the pound sterling and the US
dollar[4], and the licensing of our channel operations in France to
The Walt Disney Company France[5]. This was partially offset by an
increase in the subscriber rate in a key Western European market and
increases in the number of subscribers in Italy, CEE and Poland.
Advertising revenue increased 1% to ?37.7 million[4]. At exchange
rates consistent with fiscal 2007, advertising revenue would have
increased by 6% with increases across most territories. Other
channel and online revenue was down at ?3.9 million.
Our programme distribution revenue was ?15.9 million, a decrease of
24%. The decrease is primarily due to the delay of programme sales
in Israel until fiscal 2009, the timing of programme deliveries to
broadcasters and lower sales of programming with non-European
rights. Revenue was also impacted by the strengthening of the euro
versus the US dollar as distribution sales are predominantly US
dollar-based.
Consumer products revenue decreased 25% to ?16.8 million. The
decrease was principally a result of the fiscal 2007 A.T.O.M. Alpha
Teens on Machines master toy license not being repeated this year,
increased competition in the market with respect to the Power Rangers
property, and the change in recording DCP Power Rangers revenue on a
net basis[6]. This was partially offset by increased home
entertainment revenue, primarily for the Marvel properties, and
growth of JCP merchandising revenue.
Marketing, Selling and Distribution Costs
Marketing, selling and distribution costs decreased 21% to ?39.6
million. This was primarily driven by the appreciation of the euro
against the pound sterling and the US dollar, a decrease in
participations, and savings from the licensing of our channel
operations in France. The decrease in participations largely
resulted from a one-time reduction of the liability, following the
revision of estimates of the ultimate performance of certain
properties. There were also savings in production costs, driven by
the delay of programming in Israel, and lower costs from the change
in accounting for the DCP Power Rangers arrangements (resulting in
revenue being recorded net and with no commission expense)[6].
General and Administrative Costs
General and administrative costs decreased ?0.7 million to ?47.8
million principally due to the strengthening of the euro against the
pound sterling and the US dollar, and savings from the licensing of
our channel operations in France. Other cost reductions included
lower bad debt expense and professional fees. These lower overall
costs were partially offset by increases from the end of an office
rental rebate period, French employee termination costs, an increase
in share based compensation and costs related to our channel
distribution deal with DAET.
EBITDA
EBITDA decreased 27% to ?50.8 million. Channels and online EBITDA
was ?39.6 million, a decrease of 22%. This is primarily due to the
decrease in subscription revenue and increased office rental costs
due to the end of the rebate period, offset by the reduction in bad
debt expense and savings in production costs.
Programme distribution EBITDA decreased 14% to ?11.2 million due to
the timing of programme deliveries to broadcasters, the net impact of
the delay in programme sales within Israel, offset by the one-time
adjustment to the participation liability.
Consumer products EBITDA was down 31% to ?8.9 million as a result of
the fiscal 2007 A.T.O.M. Alpha Teens on Machines master toy license
not being repeated in fiscal 2008 and increased competition with
respect to our Power Rangers property, offset by decreased costs from
participation fees.
Shared costs not allocated to segments increased to ?8.9 million
principally as a result of one-time employee termination costs for
our French channel operations, an increase in office rental costs due
to the end of a rental rebate period, and increased share based
compensation charges as described above.
Amortisation and Impairment of Programme Rights
Amortisation and impairment of programme rights (defined as cost of
sales in the income statement) decreased 15% to ?36.8 million
primarily due to the appreciation of the euro versus the US dollar,
as the programme library is predominantly US dollar based, and a
decline in the amortisation related to titles with non-European
rights. This was partially offset by an impairment for programme
rights on a limited number of our titles as a result of changes in
our future programming schedules. Movements of foreign exchange
rates contributed ?4.4 million to the savings and, excluding the
exchange rate movements, amortisation and impairment on programme
rights would have declined by 5%.
Finance Income (net)
Finance income (net) decreased ?1.0 million to ?4.9 million primarily
due to a decrease in interest rates and a decrease in the average
cash balances held by the company due to the ?50 million distribution
to shareholders made during fiscal 2007.
Gain on Foreign Exchange
The gain on foreign exchange recognised during the year of ?8.0
million primarily relates to gains on intercompany transactions which
reflect the exchange risk of doing business with foreign group
members where the functional currency is not in euros[7]. Commencing
April 2008, foreign exchange gains or losses in relation to certain
intercompany transactions, that are formally deemed to be permanent
in nature, are no longer recognised in the statement of income but
directly recognised in equity. If this formal process had been in
place at October 1, 2006, the gain on foreign exchange would have
been ?3.4 million and ?0.8 million for fiscal 2007 and 2008,
respectively.
Profit Before Tax Expense
Profit before tax and minority interest decreased by 36% to ?28.2
million, resulting from decreased EBITDA as discussed above, a
reduction in gains on foreign exchange and a decrease in net finance
income.
Tax Expense
The effective tax rate for the period was 24% compared with 14% in
the prior period. This higher rate primarily reflects the
differential pattern of profit distribution among the tax
jurisdictions in which the Group operates, changes to the forecast
utilisation of deferred tax losses, changes to tax rates that
impacted the carrying value of certain deferred tax assets and an
adjustment in the previous fiscal year that did not recur in the
current period.
Minority Interest[8]
Net profit attributable to minority interest increased by ?0.6
million to ?1.2 million resulting from higher profits from the Polish
channel.
Earnings per Share
Basic and diluted earnings per share decreased to 23.6 cents from
43.9 cents in the prior period.
Cash Flow
Cash and cash equivalents increased by ?33.1 million to ?132.6
million from September 30, 2007. Net cash generated from operations
increased by ?11.1 million to ?37.5 million primarily as a result of
the fiscal 2007 use of working capital not being repeated, partially
offset by lower net profit.
OUTLOOK
At present, visibility on fiscal 2009 is limited, due to the
uncertainty of the economic outlook. However, we currently expect
that revenue in 2009 will be broadly flat with the current year,
assuming current exchange rates. The new structure of our channel
operations and carriage agreement in France[9] and the possible
effect of general economic conditions on advertising revenue are
expected to offset growth in other areas of the business.
We currently expect that costs in fiscal 2009, excluding
amortisation, will approach the fiscal 2007 level. Costs in fiscal
2008 benefited from cost control efforts, as well as a number of
items which we do not expect to be repeated in 2009, for example the
reduction in the provision for participations. Alongside the impact
from these, we are expecting cost increases in 2009 from strategic
initiatives and from costs directly linked to revenue increases in
specific areas.
FINANCIAL CALENDAR
We will be announcing our interim results for the 6 months ending
March 31, 2009 on May 14, 2009. We will be holding our Annual
General Meeting (AGM) on January 29, 2009. Further details will be
published on our website, www.jetixeurope.com. Please note that this
is a change to the previously advised AGM date.
Jetix Europe N.V.
Consolidated Statements of Income
for the Years Ended September 30, 2008 and September 30, 2007
Year ended Year ended % Change
In euro' 000 September 30, September 30,
Unaudited 2008 2007
Revenue 136,917 166,444 (18)%
Cost of sales (36,770) (43,441) 15%
Gross Profit 100,147 123,003 (19)%
Marketing, selling and (39,622) (50,025) 21%
distribution costs
General and administrative costs (47,791) (48,526) 2%
Operating profit 12,734 24,452 (48)%
Analysed as:
EBITDA 50,756 69,392 (27)%
Amortisation and impairment of (36,770) (43,441) 15%
programme rights
Depreciation of property and (434) (659) 34%
equipment
Amortisation of other (818) (840) 3%
intangibles
12,734 24,452 (48)%
Finance income 11,658 11,752 (1)%
Finance expense (6,793) (5,898) (15)%
Gain on foreign exchange 8,033 10,770 (25)%
Share of net profits from joint 2,526 2,755 (8)%
ventures
Profit before tax expense 28,158 43,831 (36)%
Tax expense (6,866) (5,987) (15)%
Net profit 21,292 37,844 (44)%
Attributable to minority (1,172) (537) (118)%
interest
Net profit attributable to 20,120 37,307 (46%)
shareholders
Earnings per share for net
profit attributable to the
equity shareholders of the Group
during the period
(expressed in euro cents per
share)
Basic 23.6 43.9
Diluted 23.6 43.9
The notes on pages 17 to 19 are an integral part of the consolidated
financial information.
Jetix Europe N.V.
Consolidated Balance Sheets as at September 30, 2008 and 2007
In euro' 000 September 30, 2008 September 30, 2007
Unaudited
ASSETS
Non-current assets
Intangible assets
Programme rights 66,024 81,647
Goodwill 9,834 9,834
Other 1,593 1,896
Total intangible assets 77,451 93,377
Property and equipment, net 985 1,022
Investment in joint ventures 849 649
Deferred tax assets 5,572 7,589
Total non-current assets 84,857 102,637
Current assets
Trade and other receivables, 44,179 47,053
net
Related party receivables 5,998 11,278
Cash and cash equivalents 132,567 99,488
182,744 157,819
Total assets 267,601 260,456
EQUITY
Capital and reserves
attributable to the Group's
equity
Share capital 21,310 21,303
Share premium 409,231 408,948
Other reserves (39,490) (27,906)
Retained losses (176,831) (196,951)
214,220 205,394
Minority interest 1,724 1,542
Total equity 215,944 206,936
LIABILITIES
Current liabilities
Trade and other payables 44,920 44,913
Current income tax liabilities 3,262 3,159
Related party payables 2,236 3,227
Provisions for other 1,239 2,221
liabilities
51,657 53,520
Total equity and liabilities 267,601 260,456
The notes on pages 17 to 19 are an integral part of the consolidated
financial information.
Jetix Europe N.V.
Consolidated Statement of Changes in Equity for the Years Ended
September 30, 2008 and September 30, 2007
In euro' 000 Share Share Currency Other Share Retained Minority Total
Unaudited capital premium translation Reserves[10] option (losses)/ interest equity
adjustment reserve earnings
Balance at 21,199 456,799 (11,383) - 2,875 (234,258) 1,627 236,859
September
30, 2006
Currency - - (19,786) - - - (26) (19,812)
translation
differences
Net profit - - (19,786) - - - (26) (19,812)
recognised
directly in
equity
Profit for - - - - - 37,307 537 37,844
the period
Total - - (19,786) - - 37,307 511 18,032
recognised
income for
period
Distribution - (49,930) - - - - - (49,930)
of share
premium
Employee
share option
scheme
Value of - - - 429 210 - - 639
employee
services
Proceeds 104 2,079 - - - - - 2,183
from shares
issued
Change in - - - - (251) - - (251)
settlement
from equity
to cash for
restricted
shares
Total 104 2,079 - 429 (41) - - 2,571
employee
share option
scheme
Redemption - - - - - - (596) (596)
of shares
Balance at 21,303 408,948 (31,169) 429 2,834 (196,951) 1,542 206,936
September
30, 2007
Currency - - (12,275) - - - (232) (12,507)
translation
differences
Net profit - - (12,275) - - - (232) (12,507)
recognised
directly in
equity
Profit for - - - - - 20,120 1,172 21,292
the period
Total - - (12,275) - - 20,120 940 8,785
recognised
income for
period
Distribution
of share
premium
Employee
share option
scheme
Value of - - - 668 23 - - 691
employee
services
Proceeds 7 283 - - - - - 290
from shares
issued
Total 7 283 - 668 23 - - 981
employee
share option
scheme
Redemption - - - - - - (758) (758)
of shares
Balance at 21,310 409,231 (43,444) 1,097 2,857 (176,831) 1,724 215,944
September
30, 2008
The notes on pages 17 to 19 are an integral part of the consolidated
financial information.
Jetix Europe N.V.
Consolidated Cash Flow Statements for the
Years Ended September 30, 2008 and 2007
In euro' 000 Notes Year ended Year ended
Unaudited September 30, September 30,
2008 2007
Cash flows from operating
activities
Net profit 21,292 37,844
Depreciation 434 659
Amortisation 36,056 44,281
Impairment charge 1,532 -
Loss on disposal of assets - 75
Share based compensation charge 1,756 1,177
Equity in income of joint (1,063) (834)
ventures
Interest income (11,658) (11,752)
Interest expense 6,793 5,898
(Decrease)/increase in provision (688) 1,009
for bad and doubtful debts
Decrease in other liabilities - (1,394)
Deferred and current taxation 6,866 5,987
Decrease in amounts due from - 985
related parties
Decrease in provisions for other (898) (1,381)
liabilities
Adjustment for non-cash movement (7,751) (11,210)
in intra-group balances
Operating cash flows before change 52,671 71,344
in working capital
Change in working capital 3 5,925 (21,218)
Cash generated from operations 58,596 50,126
Purchase of programme (21,878) (22,804)
rights
Dividends received from 863 510
joint ventures
Interest received 11,406 11,250
Interest paid (6,793) (5,898)
Income tax paid (4,743) (6,830)
Net cash generated from operating 37,451 26,354
activities
Cash flows from investing
activities
Purchases of property and equipment (361) (301)
Purchases of software (510) (40)
Net cash from investing activities (871) (341)
Cash flows from financing
activities
Proceeds from exercise of employee 290 2,183
share options
Redemption of shares to minority (758) (596)
interests
Distribution of share premium - (49,930)
Net cash from financing activities (468) (48,343)
Increase/(decrease) in cash and 36,112 (22,330)
cash equivalents
Cash and cash equivalents at the 99,488 127,126
beginning of the year
Effects of exchange rate changes on (3,033) (5,308)
cash and cash equivalents
Cash and cash equivalents at the
end of the year 132,567 99,488
The notes on pages 17 to 19 are an integral part of the consolidated
financial information.
Jetix Europe N.V.
Operating Results by Business Segment for the
Years Ended September 30, 2008 and 2007
Year ended Year ended % Change
In euro' 000 September 30, September 30,
Unaudited 2008 2007
BUSINESS SEGMENT
Segment Revenue
Channels and online 104,211 122,897 (15)%
Programme distribution 15,917 21,068 (24)%
Consumer products 16,789 22,479 (25)%
Total revenue 136,917 166,444 (18)%
EBITDA
Channels and online 39,590 51,054 (22)%
Programme distribution 11,180 13,040 (14)%
Consumer products 8,861 12,772 (31)%
Shared costs not allocated to (8,875) (7,474) (19)%
segments
Total EBITDA 50,756 69,392 (27)%
Segment Result
Channels and online 9,504 19,664 (52)%
Programme distribution 7,138 5,760 24%
Consumer products 4,694 6,911 (32)%
Shared costs not allocated to (8,602) (7,883) (9)%
segments
Operating profit 12,734 24,452 (48)%
Jetix Europe N.V.
Operating Results by Geographic Segment for the
Years Ended September 30, 2008 and 2007
Year ended Year ended % Change
In euro' 000 September 30, September 30,
Unaudited 2008 2007
GEOGRAPHIC SEGMENT
Revenue
Italy 28,438 25,381 12%
United Kingdom and Ireland 26,388 43,952 (40)%
Central and Eastern Europe 19,374 18,359 6%
Benelux 15,695 18,187 (14)%
France 11,577 18,561 (38)%
Germany 10,813 10,931 (1)%
Poland 8,417 8,565 (2)%
Nordic Region 5,752 5,414 6%
Middle East 5,287 8,739 (40)%
Spain and Portugal 4,001 4,749 (16)%
USA 700 1,171 (40)%
Other 475 2,435 (80)%
Total revenue 136,917 166,444 (18)%
EBITDA
Italy 13,258 10,620 25%
United Kingdom and Ireland 13,301 27,312 (51)%
Central and Eastern Europe 8,608 6,614 30%
Benelux 3,530 5,192 (32)%
France 5,500 8,661 (36)%
Germany 4,073 4,300 (5)%
Poland 5,410 4,794 13%
Nordic Region 1,501 783 92%
Middle East 2,387 4,568 (48)%
Spain and Portugal 1,281 1,848 (31)%
USA 520 725 (28)%
Other 262 1,449 (82)%
Shared costs not allocated to (8,875) (7,474) (19)%
segments
EBITDA 50,756 69,392 (27)%
Less: amortisation, impairment 38,022 44,940 15%
and depreciation
Operating profit 12,734 24,452 (48)%
Notes to the consolidated financial information
Unaudited
1 Basis of preparation
The consolidated financial information of the Group has been prepared
using accounting policies which are consistent with the policies used
in preparing the consolidated financial statements for year ended
September 30, 2007.
The consolidated financial information does not include all of the
financial statement disclosures included in the annual consolidated
financial statement prepared in accordance with International
Financial Reporting Standards (IFRS) and therefore should be read in
conjunction with the most recent annual consolidated financial
statements.
The preparation of financial information requires that management
make estimates in reporting 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 from 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 financial information presented in this document is
for the twelve months ended September 30, 2008. This period is
compared to the corresponding twelve months ended September 30, 2007,
unless otherwise stated.
Weighted average exchange rates used in the translation of income
statement accounts were US dollar - ?1 = $1.504 (2007 - ?1 = $1.331)
and pound sterling - ?1 = £0.763 (2007 - ?1 = £0.676). Exchange rates
used to translate assets and liabilities at the balance sheet date
were US dollar - ?1 = $1.445 (September 30, 2007 - ?1 = $1.415) and
pound sterling ?1 = £0.799 (September 30, 2007 - ?1 = £0.698).
2 Share-based compensation
During the year ended September 30, 2008, there were 75,297
restricted shares for Jetix Europe N.V. 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 period there were 27,107 options
exercised. There were 18,808 restricted shares and 8,194 options
forfeited.
The total share-based compensation expense for the year ended
September 30, 2008 is ?1.8 million (?1.2 million for the year ended
September 30, 2007), of which ?0.7 million related to Disney share
options and restricted shares (?0.4 million for the year ended
September 30, 2007).
Notes to the consolidated financial information
Unaudited
3 Change in working capital
In euro' 000 Year ended Year ended
Unaudited September 30, September 30,
2008 2007
Change in working capital
Decrease/(increase) in trade and 2,240 (214)
other receivables
Decrease/(increase) in amounts due 5,353 (2,318)
from related parties
Decrease in trade and other (804) (9,697)
payables
Decrease in amounts due to related (864) (8,989)
parties
5,925 (21,218)
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 both the currency translation
differences which arise as a result of translating the assets and
liabilities of non-euro Group companies to euro at year-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.
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 would
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) Year ended Year ended
Unaudited September 30, 2008 September 30, 2007
Weighted average number of
common shares used in 85,227 84,899
calculated basic EPS
Effect of dilutive securities
- Share options 4 14
- Unvested restricted shares 96 36
Weighted average number of
common shares used in 85,327 84,949
calculating diluted EPS
Notes to the consolidated financial information
Unaudited
5 Analysis of effects of changes in exchange rates
The following table shows the operating results by business segment
at exchange rates consistent with those in fiscal 2007[11].
Year ended Year ended Year Change % Change
In euro' 000 September September ended at at
Unaudited 30, 2008 30, 2008 September constant constant
at 2008 at 2007 30, 2007 exchange exchange
exchange exchange rates rate
rates rates
BUSINESS
SEGMENT
Segment
Revenue
Channels and 104,211 110,852 122,897 (12,045) (10)%
online
Programme 15,917 16,564 21,068 (4,504) (21)%
distribution
Consumer 16,789 17,454 22,479 (5,025) (22)%
products
Total revenue 136,917 144,870 166,444 (21,574) (13)%
EBITDA
Channels and 39,590 41,887 51,054 (9,167) (18)%
online
Programme 11,180 11,325 13,040 (1,715) (13)%
distribution
Consumer 8,861 8,883 12,772 (3,889) (30)%
products
Shared costs (8,875) (9,944) (7,474) (2,470) (33)%
not allocated
to segments
Total EBITDA 50,756 52,151 69,392 (17,241) (25)%
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 the 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 Yin Yang Yo! 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-ESPN Television.
Consumer Products
Jetix Consumer Products International (JCP) is Jetix Europe's
consumer products and home entertainment business. JCP has
representation in over 50 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 and percentage changes are stated versus the year
ended September 30, 2007.
[2] Consistent with prior years, EBITDA is operating profit stated
before programme amortisation, impairment and depreciation.
[3] On June 1, 2008, Jetix Europe licensed its French channel
operations to The Walt Disney Company France. From that date
forward, Jetix Europe is paid a license fee, which is recorded as
other revenue in the Channels and Online segment. During the term of
the contract Jetix will no longer record gross revenue (subscription
or advertising) or marketing, selling, distribution or general and
administrative costs for channel operations in France.
[4] In certain markets revenues and costs are denominated in either
pound sterling or US dollar, including the UK, CEE, Poland and
Israel.
[5] On June 1, 2008, Jetix Europe licensed its French channel
operations to The Walt Disney Company France. From that date
forward, Jetix Europe is paid a license fee, which is recorded as
other revenue in the Channels and Online segment. During the term of
the contract Jetix will no longer record gross revenue (subscription
or advertising) or marketing, selling, distribution or general and
administrative costs for channel operations in France.
[6] Reported revenue was 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 consistent
basis against the prior year, impact on revenues was ?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.
[7] Primarily the result of balances between group members
denominated in dollars. The euro to US dollar year end rate has
increased from 1.415 to 1.445 in 2007 and 2008, respectively. The
euro to US dollar rate at March 31, 2008 was 1.580.
[8] Minority interest relates to a third party's 20% interest in
Jetix Poland Limited.
[9] On June 1, 2008, Jetix Europe licensed its French channel
operations to The Walt Disney Company France. From that date
forward, Jetix Europe is paid a net license fee, which is recorded as
other revenue in the Channels and Online segment. During the term of
the contract Jetix will no longer record gross revenue (subscription
or advertising) or marketing, selling, distribution or general and
administrative costs for channel operations in France.
[10] The other reserves represent a capital contribution by Jetix
Europe's parent company, The Walt Disney Company, for Disney stock
options issued to Jetix Europe employees
[11] A number of subsidiaries within the Group have a functional
currency that is not the euro. To provide an approximation of the
underlying fiscal 2008 results excluding the impact of foreign
currency movements, the monthly results in the applicable functional
currency of these subsidiaries have been retranslated at an
equivalent rate that would have been applied in fiscal 2007. Certain
transactions which are originated in a currency other than the euro
and the functional currency of the subsidiary have been separately
translated using the fiscal 2007 rate.
Bergweg 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:
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
http://hugin.info/132845/R/1269278/280619.pdf
Copyright © Hugin AS 2008. All rights reserved.JETIX EUROPE NV : . Announces Results for the Year ended September 30, 2008
November 13, 2008 at 02:02 am EST
Share
Share
© GlobeNewswire - 2008
