Highlight Communications AG

DGAP-News: Highlight Group with solid business development

DGAP-News: Highlight Communications AG / Key word(s): Interim Report
Highlight Group with solid business development

19.05.2014 / 18:38

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  - Consolidated sales rise to CHF 125.7 million

  - Consolidated net profit for the period at CHF 1.0 million; earnings per
    share of CHF 0.02

  - Net debt reduced by CHF 35.3 million

  - Forecast confirmed for fiscal year 2014

In a market environment that remains challenging,the Highlight Group
achieved sales and earnings in the first quarter of 2014 that were in line
with expectations.

Group development in the first quarter of 2014

  - At CHF 125.7 million, consolidated sales outstripped the comparable
    figure for the previous year (CHF 81.9 million) by CHF 43.8 million or
    53.5%. The increase in sales results from the Film segment.

  - Consolidated operating expenses rose by CHF 36.5 million or 36.3% to
    CHF 137.2 million after CHF 100.7 million in the first three months of
    2013. The increase is primarily due to amortization, depreciation and
    impairment, which rose to CHF 65.2 million (previous year's period: CHF
    19.2 million).

  - Consolidated net profit for the period was down year-on-year at CHF 1.0
    million (previous year's period: CHF 2.2 million). The amount
    attributable to Highlight shareholders was CHF 0.7 million (previous
    year's period: CHF 1.8 million), corresponding to earnings per share of
    CHF 0.02 (previous year's period: CHF 0.04).

  - As of March 31, 2014, consolidated equity (including non-controlling
    interests) at CHF 106.0 million was down slightly as against the end of
    2013 (CHF 107.2 million). The reduction was essentially due to currency
    effects, the re-measurement of the pension obligation and losses from
    the measurement of financial assets at fair value.

  - The notional equity ratio rose from 24.2% (December 31, 2013) to 26.8%
    (March 31, 2014).

  - Net debt was reduced by CHF 35.3 million to CHF 72.4 million (December
    31, 2013: CHF 107.7 million).



Development of the operating segments in the first quarter of 2014

  - In the Film segment, the Constantin Film Group achieved good results in
    particular in the area of theatrical distribution. Including the
    performance of all of its movies released in German theaters in the
    first quarter of 2014, it achieved a substantial market share of 11.9%
    by audience figures and 11.0% by sales. This success was based on the
    one hand on the performance of the youth adventure movie "The Famous
    Five 3", which was released in mid-January 2014 and attracted around
    1.2 million viewers. On the other hand, the sensational hit "Fack ju
    Göhte", which was released in November 2013, attracted around another
    1.5 million viewers in the first three months of this year. The global
    distribution of the co-production "Pompeii" also meant that the
    Constantin Film Group recorded significantly higher income from both
    theatrical distribution and license trading than in the first quarter
    of the previous year.

As a result of these developments, external sales in the Film segment
increased by 64.3% to CHF 112.7 million (previous year's period: CHF 68.6
million). This higher level of sales was offset by a sharp rise in
expenses, as the theatrical release of "Pompeii" also meant that the
capitalized production costs of the movie were amortized accordingly.
Furthermore, earnings were negatively impacted by impairment on film
assets, particularly for the film "Tarzan". In total, impairment on film
assets climbed by CHF 7.0 million to CHF 8.9 million in the first quarter
of 2014. Segment earnings in the first three months of the current fiscal
year were therefore down year-on-year at CHF -2.5 million (previous year's
period: CHF -1.3 million).

  - In the Sports- und Event-Marketing segment, the TEAM Group secured
    further major deals in the marketing process for the commercial rights
    of the UEFA Champions League and the UEFA Europa League for the 2015/16
    to 2017/18 seasons in the first quarter of 2014. TV contracts were
    concluded in markets as diverse as Italy, Israel and Myanmar. In the
    area of sponsorship rights, the Japanese automotive manufacturer Nissan
    was acquired as new sponsor of the UEFA Champions League.

At CHF 12.4 million, external sales in the Sports- and Event-Marketing
segment were practically unchanged year-on-year (CHF 12.5 million). Segment
expenses were reduced by CHF 0.4 million to CHF 7.1 million in the period
under review (previous year's period: CHF 7.5 million), with the result
that segment earnings improved to CHF 5.4 million (previous year's period:
CHF 5.0 million).

  - The external sales in the Other Business Activities segment, which
    covers in particular marketing for the Eurovision Song Contest and the
    Vienna Philharmonic Orchestra as well as activities in the field of
    online/social gaming, declined slightly from CHF 0.9 million to CHF 0.7
    million. The same applies to segment expenses, which were reduced from
    CHF 1.7 million to CHF 1.5 million. The segment loss, which resulted
    from online/social gaming, amounted to CHF 0.7 million (previous year's
    period: CHF 0.5 million).



Targets for fiscal year 2014

According to current planning 2014 for the theatrical production business
area, another ten promising movie projects are in the pipeline for
theatrical release in 2015. Three of these movies - including the sequels
to two global hit movie series, "Fantastic Four 2" and "Resident Evil 6" -
are English-language productions that are geared towards the international
market. For the German movie market, scheduled productions include "Ostwind
2 - Die Rückkehr nach Kaltenbach" and a sequel to "Fack ju Göhte".

For fiscal year 2014, the highlight Group continues to expect consolidated
sales of between CHF 380 million and CHF 410 million and consolidated net
profit attributable to shareholders of between CHF 9 million and CHF 11
million.

The German interim report as of March 31, 2014 will be available to
download at www.highlight-communications.ch starting from this evening, and
the English version from May 22, 2014.


End of Corporate News

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19.05.2014 Dissemination of a Corporate News, transmitted by DGAP - a
company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language:    English
Company:     Highlight Communications AG
             Netzibodenstrasse 23b
             4133 Pratteln
             Switzerland
Phone:       +41 61 816 96 96
Fax:         +41 61 816 67 67
E-mail:   ir@hlcom.ch
Internet: www.hlcom.ch
ISIN:        CH0006539198
WKN:         920299
Listed:      Regulierter Markt in Frankfurt (Prime Standard);
             Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
             München, Stuttgart


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