(Boursier.com) — In huge volumes, Xilam collapsed by 57.5% to 4.55 euros, in turn abandoned after a big warning on its 2024 results and the suspension of its medium-term objectives. The independent production and distribution company for animated programs explains that in a context of an economic model under pressure, American streaming platforms are significantly slowing down their investments in the production of programs aimed at children. They now favor fewer investments, more oriented around world-famous American brands.
This economic development affecting one of the drivers of Xilam’s growth, the Group now anticipates a significant drop in turnover for 2024. The objective of achieving ‘Total operating income’ of 80 million euros by 2026 is suspended. This event will, however, have no impact on the expected performance for the 2023 financial year, nor on the catalog activity which remains very dynamic, specified the group, which is implementing a plan to reduce its costs in order to maintain positive profitability in 2024 while maintaining its creative and production capacities to continue its development.
Oddo BHF lowers its topline forecasts by an average of 50% over the period 2024-26 (2023 unchanged). For operating income expected to decline by 30% in 2024, the broker integrates the restructuring efforts anticipated by Xilam which should allow the group to be close to balance in 2024 and to maintain a positive net result a posteriori even in a very degraded growth scenario compared to initial expectations… The reasons which pushed these two platforms to cancel these two series cast doubt on Xilam’s growth trajectory in the medium term considering that the turnover of new productions is today very dependent on SVOD platforms, and was all the more so in the group’s MT ambitions. After updating the DCF following the drastic drop in its forecasts as well as the increase in the risk premium, the objective is cut from 25 to 9 euros. The analyst therefore downgrades his recommendation to ‘underperform’.
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