Chairman's Statement
YNON KREIZ
Chairman
and Chief Executive Officer
"Millions of children in millions of homes across Europe and the Middle East are enjoying our services and products"
Our first year as a publicly listed company has been marked by notable achievements, both operationally and financially. All four divisions have maintained their growth momentum throughout the year, as we continue towards achieving our goal of establishing Fox Kids Europe as the leading Pan-European integrated children's entertainment company.
In a year of launching new local services and building the Fox Kids brand and assets across Europe, we managed to achieve strong growth in revenues and EBITDA and reach profitability. Total revenues, including our share of the revenues of our joint ventures, increased by 27% to $100.4 million and the improvement in EBITDA before non-recurring charges of $1.8 million was greater still with a rise of 41% to $36.7 million. The financial achievements also included more than doubling our advertising revenues to almost $10 million, and increasing channel subscribers and subscription revenues by 32% and 56% respectively.
This is a result of our success in completing the rollout of our Pan-European channel platform, strengthening our programming library, integrating the consumer products operations and establishing a leading online and interactive proposition for children. Overall, the operational and financial achievements provide a clear picture of the underlying strengths of our business and the success of our localisation strategy.
Millions of children in millions of homes across Europe and the Middle East are enjoying our services and products as we continue to broadcast programme content that is among the best in the world. In total, our channels reach out to more than 21 million households in 38 countries. With recent launches of channels in Italy and Turkey, and the pending launch of our channel in Germany following our agreement with Premiere World, we will have secured a strong foothold in all of the major European markets. We have also scored many ratings successes that have served to put us in leading positions in almost every market in which we operate.
"We are a young company with great drive and ambition, which is already delivering strong results"
Children want to watch our programmes, and cable and satellite operators want to do business with us. We have more than 350 active channel distribution agreements and our programming is licensed to more than 110 broadcasters in 36 countries. We have clearly maintained our position as a leading provider of content with a library of thousands of episodes that includes exciting new titles such as Digimon and Flint the Time Detective, as well as established hits such as Power Rangers, Spiderman, X-Men, Inspector Gadget and Dennis the Menace. Good quality children's properties do not get old, they become classics. X-Men, which first appeared in 1963, is now one of the highest grossing films this year. As the owner of such a strong library, we can capitalise on the expansion of both current distribution platforms and new media.
Whilst the evolution of the Internet may have broken down many geographical barriers to the distribution of content, as demonstrated by our channels, localisation is still the key to success in individual markets. Consumers are very selective and want entertainment that is relevant to them. Our online offering includes localised websites in 10 languages, which we plan to expand to 14 within the coming year.
"We are well positioned to maximise our returns in an exciting, fast growing and technology-driven environment"
And shortly millions of children around Europe will begin to enjoy our new second generation websites that should put us out in front of our competitors as we aim to achieve our goal of establishing the leading Pan-European online community for children.Considerable advances were also made during the year by our consumer products division. The division has now become one of the largest licensing and merchandising operations in Europe, located in seven major markets. We are confident that we will soon see tangible benefits from our endeavours to integrate consumer products with our other businesses.
Following our initial public offering in Amsterdam last year, we now have more resources to take advantage of the many opportunities that exist in the world of children's entertainment. We are well positioned to maximise our returns in an exciting, fast growing and technology-driven environment that has significantly increased the size of the markets in which we operate.
We are a young company with great drive and ambition, which is already delivering strong results with products that are testament to the creativity, ingenuity and teamwork of our staff in all of our offices. All our employees work in an entrepreneurial environment, driven by an experienced senior management team, strengthened during the course of the financial year through a proactive recruitment policy.
Satisfying investors also became a new and very important priority for us during the financial year, a period that witnessed a considerable widening of our shareholder base since the initial issue of shares. Our focus is fixed firmly on maximising returns for shareholders by continuing to strengthen and advance in all of our four business lines as we build our company and strive towards long-term growth.
With 12 offices and established businesses in all major markets, we now have the critical mass of a fully localised Pan-European children's entertainment company and are well positioned for more growth in the coming years. We remain hungry for more success!
YNON KREIZ
Chairman
and Chief Excecutive Officer
