Besson intends to boost operational margins
PARIS — Luc Besson’s EuropaCorp is bidding to double its revenues in the next four years to e316 million ($425.5 million), the filmmaker said Wednesday, a little more than a week ahead of the company’s stock market listing on July 6.
The 7-year-old Gallic film company also intends to increase its operational margins by almost 50%, he said, without giving actual figures. Company, which produces and distributes films such as “Taxi” and “Arthur and the Invisibles,” made a profit of $11.04 million in 2006.
Around a quarter of the company will be floated on the Euronext Paris stock market to raise $94.2 million. Afterward, Besson’s controlling stake will be diluted to around 61% and his partner Pierre Ange Le Pogam’s to around 8%.
“We are committed body and soul to EuropaCorp, it’s our baby,” Besson told financial journalists and investors in Paris on Wednesday.
The group is usually discreet about its affairs but Besson and Le Pogam, accompanied by financial director Raphael Durand, revealed some of the secrets of EuropaCorp’s success so far.
Besson told attendees that in 47 films, EuropaCorp had only gone over budget twice, and that was in the company’s first two years, on two low budget films that he did not name.
EuropaCorp’s golden rule is never to put a film into production unless its budget is 80% pre-financed.
“This dogma is at the heart of our business model,” Besson said. “When we don’t have 80% we don’t make the film. We’ve enough projects to be able to propose something else.”
Coin acquired through the IPO will be earmarked for bigger-budget fare, not for making any more films than the eight to 12 a year the company already puts out, Besson said, because “the more ambitious a film is, the easier it is to pre-finance.”
A chart showed that 31 of the company’s films with budgets averaging $14.7 million were 98% pre-financed, while six films with budgets averaging $33.5 million were prefinanced 121%.
Besson identified four areas in which EuropaCorp hoped to grow its business. On the production side, it would seek to develop franchises like “Taxi” and “The Transporter,” and plans to make one animated film every two years. Two “Arthur” sequels are in the works, as are two more toon projects.
EuropaCorp will also seek external opportunities for growth, via investment in production shingles and the acquisition of film libraries.
“There are catalogs that are sleeping, that are underexploited,” Besson said, without naming names.
Although the company runs a multiplex in Marseilles, it does not have ambitions to become a full fledged exhibitor, the filmmaker said.
But Besson’s ambitious project to build a film studio in the Paris suburbs is still on the agenda, although it will be financed separately, not via EuropaCorp, the filmmaker said. The company will rent space in the facility — which has no building start date yet — along with other French outfits.
“There’s nothing in France. I don’t want all my executives spending their time in planes going elsewhere. EuropaCorp needs this studio,” he said.