eOne sees Q1 revenue dip ahead of Hasbro sale

The financial filing comes one week before eOne shareholders are scheduled to vote on the proposed Hasbro transaction, which, if completed, values eOne at $5.3 billion.
eOne

eOne on Friday reported a year-over-year Q1 revenue decline of 7% ahead of its proposed sale to U.S. toy company Hasbro.

The Toronto-headquartered studio said that revenues for the period ending June 30 dipped to $289.2 million, down from $310.3 million the prior year. The result was affected by lower revenues from the company’s combined film, TV and music business, according to eOne. Within that segment of the business, broadcast and licensing revenues were down due to fewer scripted deliveries in the period, with those declines being offset partly by higher music revenues.

While eOne did not provide a revenue breakdown for its various business units, it said revenues for the kids and family division was “broadly stable” compared to the prior period, adding that Peppa Pig “maintained its momentum in core markets.” In addition, eOne said PJ Masks has now been fully rolled out across major global markets, while Ricky Zoom made its global broadcast premiere in China on the Youku SVOD platform in August 2019, garnering 100 million views in the first 12 days. Ricky Zoom has been picked up by a number of international broadcasters including Nickelodeon (U.S.), Gulli (France), Super RTL (Germany), RAI (Italy), Discovery Kids (Latin America) and Clan (Spain).

Underlying EBITDA dropped to $22.4 million, from roughly $28.9 million a year ago, while losses for the quarter were $73.3 million.

The financial filing comes one week before eOne shareholders are scheduled to vote on the proposed Hasbro transaction, which, if completed, values eOne at around $5.3 billion (USD$4 billion). Aside from shareholder approval, the deal is also subject to other customary closing conditions and the consent of Ontario Superior Court of Justice. As part of the mega-deal, which was first announced on Aug. 22, a number of eOne executives are set to join the Hasbro team, though no details have been provided about the makeup of that team. With the deal, the companies expect to see cost synergies of approximately USD$130 million by 2022, with a significant portion of eOne’s toy business being brought in-house at Hasbro.

eOne noted that this financial report had been prepared specifically in relation to the proposed acquisition by Hasbro. This represents a change from eOne’s typical yearly reporting schedule, which usually sees the company publish financial reports twice a year (in May and November).

All totals were reported in British pounds and converted to Canadian dollars