Ymagis Group today reported its consolidated financial results for the first sixth months of 2018, ending June 30. Ymagis Group reported €79.3 million in revenue during the first half of 2018, a 3.6 percent decrease compared to the prior year period. The Group's non-virtual print fee activities are especially seasonal with strong sales traditionally in the second half of 2018, peaking in Q4.
On a rolling 12-month period, Ymagis Group met its objective of offsetting the scheduled decline in VPF revenue with revenue growth in its CinemaNext and Eclair business units. The Group's revenue between July 1, 2017 and June 30, 2018 remains stable at €176.6 million compared to the prior year period.
With its natural decline quarter over quarter, VPF revenue fell by 14.5 million in the first six months of 2018 at €26.7 million compared to €31.2 million for the prior year period. The number of screens under VPF contract remains stable following the recoupment in Germany at the end of 2017.
Buoyed by its Equipment sales division, CinemaNext recorded a slight growth during the first half of 2018, with revenue up 3.4 percent at €25.4 million. Discussions regarding the replacement of existing equipment installed over the past decade are underway with numerous large exhibitors but the final decision process is expected to take several months. In this context, CinemaNext has demonstrated its ability to sustain organic growth with services and sales related to new cinema projects. Following the successful inauguration of its Sphera premium format cinema in Athens (Greece), a first French installation is currently underway in Paris.
Eclair showed continued organic growth with revenue up +2.0 percent at €27.0 million, driven by activities the Business Unit has focused on further developing: content delivery and localization. Among other actions in the first six months of 2018, Eclair signed a 3-year agreement with the German independent distributors association, AG Verleih, for the electronic theatrical delivery of feature films and promotional assets.
Ymagis Group's new activities (EclairColor, EclairGame and Virtual Reality) recorded symbolic revenue of €0.2 million in the first six months of 2018. That is expected to change significantly in the second half of the year with the rapid development of EclairGame (eSports activities in cinemas) and the opening of the Group's first Virtual Reality centres during the fourth quarter.
During the first half of 2018, Ymagis Group strengthened its position in key markets, particularly with regard to its cinema equipment and content management activities.
Having been enthusiastically received by exhibitors, EclairColor HDR technology is now available from certified third-party labs, which are currently producing at least one film per week in EclairColor. Ymagis has also signed an agreement with Samsung Electronics for the integration of the EclairColor HDR technology in its Onyx Cinema LED screens, with the first theatre installation recently completed by CinemaNext in Austria.
Finally, EclairColor began its deployment in China this July as the cornerstone of a new Premium Format cinema concept, with the potential for substantial development and adoption by additional Chinese exhibitors.
As for the deployment of its new digital content management platforms, Eclair continues its international development of EclairPlay, including the signing of an agreement with the American Cinema Buying Group. Per the terms of the agreement, the CBG helps Eclair connect the association's 500 member exhibition companies, providing them with expanded programming options via its broadband content delivery platform.
As announced in the quarterly earnings, Ymagis has been working for several months on the launch of a new Virtual Reality concept to be commercialized both independently and in association with its exhibitor partners. With the rapid growth of new forms of entertainment-based leisure activities, Ymagis has identified location based entertainment as a strong growth vector capable of generating substantial profit margins for the Group. The business model for this new concept will be presented to investors in the second half of the year.
Finally, Ymagis Group recently inaugurated its new sites in Liège, Paris and Düsseldorf. This strategic reorganization has allowed for the consolidation of teams to reduce costs, increase synergies and set up a new, optimized supply chain.
Bolstered by these developments and supported by its performance during the rolling 12-month period, the Group maintains its annual plan for 2018 to offset the decline in VPF revenue with the organic growth of its other revenue streams and reiterates its profitability targets for 2020 established in its Perform plan.