Ymagis Group today reported its consolidated financial results for the first quarter of 2018, ending March 31. Revenue for Ymagis Group fell by 5.4 percent to €39.3 million during the first three months of 2018 due to the anticipated acceleration in the decline of virtual print fee activities. This is partly offset by the growth in service activities (+4.1 percent at €25.6 million).
As a reminder, the group’s revenue is seasonal and sales for the first quarter are historically unrepresentative of annual business. VPF revenue fell by €3.2 million during the first quarter of 2018 to €13.7 million. In line with expectations, the decline in VPF activities is picking up speed under the effect of the initial recoupments made at the end of 2016 and those made in late 2017 in Germany and Bulgaria. 5,407 screens were under VPF contracts on March 31, 2018 as compared to 5,918 the previous year.
Buoyed by its services activities, CinemaNext recorded growth during the first quarter of 2018, in particular within the online and support division, with revenue up by 3.7 percent at €11.7 million million. In a context where sales linked to the replacement market have yet to take off, new cinema installation projects have kept equipment sales stable.
Revenue continued to rise for Eclair during the first quarter of 2018, up by 4.2 percent at €13.9 million driven by new organic growth. The investment strategy focusing on content distribution and versioning is bearing fruit, boosting the growth of the business unit despite the slight dip in creative services activities (postproduction and restoration).
In line with the group’s expectations, service activities are taking over from the VPF, with CinemaNext and Eclair growing by almost 10 percent over the last rolling four-quarter period and offsetting declining VPF activities, thus confirming the Perform Plan strategy. Moreover, the growth recorded by the two business units during this quarter is primarily organic for the first time.
For 2018, after a first quarter that saw the signing of numerous new sales contracts across Europe and the United States, the Group is confident in the strength of its growth engines. The drop of approximately €10 million in VPF revenue is expected to be offset by the organic growth of the other activities.
Moreover, the group should benefit from its recent innovations, particularly the deployment of Eclair’s new digital content management platforms: EclairPlay, EclairTrack and EclairSend. The implementation of additional services platforms throughout the year should accelerate this trend.
Initially anticipated for 2018, Eclair's return to profitability is expected to be delayed by an additional year as a result of the significant investment in research and development the group agreed to incur to develop and market these new platforms, which are instrumental to a solid, sustainable and profitable growth. Finally, the group reiterates the targets of its perform plan for 2020 as announced in the full-year 2017 results.
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