Trading Update

Entertainment One Ltd.

Trading Update

Trading performance in line with expectations in the nine months to 31 December 2015

· Underlying Group EBITDA was 15% higher on a reported basis reflecting strong performance in Television and the impact of acquisitions during the period, partly offset by weaker Film trading

· Group revenues for the period were 3% lower on a reported basis, with strong Television performance (up 39%) offset by lower Film (down 14%)

Making Peppa Pig the world's most loved pre-school property

· Completion of the acquisition of Astley Baker Davies Limited gives eOne control of the future development of Peppa Pig, which remains the number one pre-school brand in key territories

· Sales in the US continue to be exceptionally strong, with a doubling of the licensee base and an estimated 275% increase in retail sales in 2015 - and France, South East Asia and China continue to be strong growth markets

· Good performance in the Group's wider Family portfolio - PJ Masks is one of the top three shows on Disney Junior in the US and the number one kids' show on France Télévisions, and will be rolled out in all Disney territories by the end of 2016

Creating a global television studio

· Television performance boosted by significantly increased production supported by strong third party content sales

· eOne Television Studios produced/acquired 679 half hours of content in the period (prior year period: 421) with over 1,000 half hours of content expected to be produced/acquired in the full financial year

· Production on Mark Gordon's new series Designated Survivor commences in March and viewership remains very strong for Criminal Minds, Grey's Anatomy, Quantico and Ray Donovan - over 50 projects are currently in development

Positioning Film for the future

· Challenging period for the Film business with box office takings lower at US$174 million (prior year period: US$228 million), reflecting a difficult trading environment with a lower number of releases and some recent title underperformance - on track to deliver around 210 theatrical releases in the full financial year

· New partnership with 20th Century Fox Home Entertainment gives opportunity for Film restructuring to leverage efficiencies and reduce costs - expected to deliver annualised savings of £10 million by FY18

· Very strong theatrical release slate for FY17 driven by the new partnership with Amblin Partners delivering titles such as The BFG and The Girl on the Train, as well as a range of other high profile releases including Now You See Me: The Second Act, Story of Your Life and David Brent: Life on the Road

Positive outlook

· Outlook for Group full year underlying earnings continues to be in line with expectations, delivering positive free cash flow (after interest and tax)

· The issuance of the Group's £285 million senior secured notes due 2022, and a new £100 million revolving credit facility, maturing 2020, which together refinanced the Group in December 2015, provide a strong balance sheet to support eOne's growth plans

· Anticipated year end adjusted net debt leverage of 1.4x underlying EBITDA, reflecting recent corporate activity

· The Group continues to have confidence in its target of doubling the size of the business by 2020, with strong organic growth and carefully targeted acquisitions

Darren Throop, Chief Executive, commented:

"The Group continues to deliver very strong growth across its Television Division - with both eOne Television Studios and the Family businesses performing well in the period. Whilst the Film Division continues to experience trading challenges, its restructuring and the exciting committed film release slate for the next financial year provide a positive outlook for Film.

The directors look forward to delivering full year underlying earnings and positive free cash flow for the Group in line with expectations. With a long term capital structure in place and a strong balance sheet, the Group is well-positioned to deliver on its growth strategy to double the size of the business by 2020."

Trading Performance

Underlying Group EBITDA was 15% higher on a reported basis reflecting the strong performance in Television and the impact of acquisitions during the period, partly offset by weaker Film trading.

Group revenues for the nine month period to 31 December 2015 were 3% lower on a reported basis, with strong Television performance (up 39%) offset by lower Film (down 14%).

As at 31 March 2015 the overall value of the Group's content library, including all of the Group's film, television, music and family assets, had increased to over US$1 billion (2014: US$801 million).

Group full year underlying earnings continue to be in line with expectations.

Television

Television revenues were up 39% on a reported basis over the comparative period, driven by strong international sales and production deliveries, as well as strong licensing revenues from Family.

eOne Television Studios (formerly Television Production and Sales)

eOne's strategy of partnering with the world's best creative talent continues to drive success at eOne Television Studios where there is a very strong pipeline of programming, including the soon-to-air comedy You Me Her on AT&T/DirecTV's Audience Network (US) and HBO Canada, and drama Private Eyes, starring Jason Priestley, on CTV (Canada). Additionally, new thriller Cardinal, starring Billy Campbell (The Killing), has commenced shooting for CTV. The Company has a number of highly-anticipated series in pre-production, including drama Mary Kills People for Shaw (Canada) as well as Ransom, from Executive Producer Frank Spotnitz (The X-Files), for TF1 (France) and Shaw (Canada) and Foreign Bodies for E4 (UK) from Eleven Film, producers of Sky Living hit The Enfield Haunting. eOne is in advanced discussions with major US networks on both series. The returning slate of TV productions includes Saving Hope returning for a fifth season for CTV (Canada) and Ion (US), Rogue returning for a fourth season on Audience Network and HBO Canada and Bitten returning for a third season on Space (Canada) and SyFy (US). The non-scripted business is also very positive. Current productions in the US business include TruTV's hit reality series Growing Up Hip Hop and renewal of David Spade's comedy prank show Fameless as well as WEtv's SWV Reunited and a new season of Mary Mary. In Canada, new non-scripted show The School has recently been ordered as well as recent renewals for First Dates, Chopped and Timber Kings.

eOne Television Studios also continues to see very strong revenue growth from the Company's exclusive distribution agreement with AMC Networks. New series Into the Badlands premiered in November to major ratings success and has sold extremely well internationally, while The Walking Dead companion series Fear The Walking Dead will return in April for a second season. The next series from the AMC portfolio is Hap and Leonard, starring Christina Hendricks (Mad Men), James Purefoy (The Following) and Michael Kenneth Williams (The Wire). Non-scripted programming has also been successful internationally with David Attenborough's Great Barrier Reef, now close to being sold in over 100 international territories. This epic documentary series recently aired on BBC One in the UK to a combined audience reach of over 10 million. Other third party shows being handled on an international basis include The Making of The Mob: New York on AMC (US) and See No Evil on Discovery (US), both of which have been renewed for a second season.

679 half hours of content were produced/acquired in the period (prior year period: 421) and the Group is on track to produce/acquire over 1,000 half hours of content in the full year.

The Mark Gordon Company

The Mark Gordon Company has over 50 active TV projects in development and Designated Survivor is the studio's first production under joint ownership, with eOne leading sales on a worldwide basis - the straight-to-series commission from the ABC network in the US stars Kiefer Sutherland (24) and is executive produced by Simon Kinberg (The Martian). In January, ABC also gave a pilot order to a legal drama Conviction. The Steve Jobs movie has received two Golden Globe Awards, took the BAFTA for best supporting actress and was nominated for two Academy Awards. Criminal Minds: Beyond Borders, the spin-off from Criminal Minds, first broadcasts on 16 March 2016 on CBS.

Family

The completion of the acquisition of Astley Baker Davies Limited in October 2015 gives eOne control of the future development of Peppa Pig and the deal includes the production of 52 new episodes of Peppa for television broadcast, with delivery commencing in June 2016. Peppa Pig remains the leading pre-school brand in the UK, Spain, Australia and Latin America.

Sales in the US continue to be exceptionally strong, with all retailers increasing their buying levels, and with particularly strong sales in Toys R Us. Licensing partners in the US have doubled and retail sales are expected to show an increase of over 275% - toys have seen a 230% increase and apparel has seen a 300% increase during calendar year 2015. In Canada, Peppa is already the top-selling pre-school toy brand at Toys R Us and a full mass merchandising launch is planned for autumn 2016. Peppa continues to perform well in France backed by excellent television exposure and a full retail roll-out is scheduled for this year. Markets in South East Asia and China continue to develop well and are expected to show strong growth next financial year.

Performance in the Group's wider Family portfolio has been very strong - PJ Masks is consistently in the top three shows on Disney Junior in the US and is currently the number one kids' show on France Télévisions. The show is rolling out in the UK, Spain and Italy this quarter and will roll out in all Disney territories by the end of 2016. Toy partner, JustPlay, has been selected on a global basis for the brand and a merchandising programme will start to roll out in the US in autumn 2016, with multiple licensees to be announced in the upcoming weeks, and in the rest of the world during 2017.

Film

Film revenues were 14% lower on a reported basis, compared to the same period last year, reflecting challenging market conditions, a reduced theatrical slate and some recent title underperformance.

Total box office takings of US$174 million (prior year period: US$228 million) reflected the anticipated lower number of releases overall (157 box office releases, compared to 191 in the prior year period). There were 427 DVD releases during the period compared to 528 in the prior year period. The Group expects to deliver around 210 film releases and around 540 DVD releases in the full year. Prior to the year end the sequel The Divergent Series: Allegiant will be released. eOne is also the international distributor for Spotlight, winner of the Oscar for Best Picture at the 2016 Academy Awards.

eOne has recently partnered with 20th Century Fox Home Entertainment on a multi-territory basis to further streamline DVD and Blu-ray activities and to maximise the exploitation of eOne's slate in the evolving home entertainment landscape. This partnership underpins the Group's focus to deliver efficiencies by leveraging the scale of eOne's global footprint, which is expected to achieve annualised savings of £10 million overall by FY18.

In December, eOne expanded its partnership with Steven Spielberg, Participant Media and Reliance Entertainment to create Amblin Partners, a new film, television and digital content company. eOne will handle direct distribution of all Amblin Partners' films in Australia/New Zealand, Spain, the UK and the Benelux. Titles slated for the next financial year include The BFG, directed by Steven Spielberg, and the highly anticipated adaptation of the best-selling novel The Girl on the Train, starring Emily Blunt. eOne will also have the opportunity to collaborate with Amblin Partners on television production and distribution, as well as international licensing and merchandising.

In December, eOne also made a strategic investment in Sierra Pictures, an independent film production and sales company. The partnership allows eOne to leverage Sierra's deep relationships with filmmakers and provides eOne an enhanced global platform to maximise sales and distribution of its films. In addition, Sierra's established production business, including the 2016 release of The Coldest City, starring Charlize Theron, bolsters eOne's existing production pipeline. As part of the agreement, Sierra is handling the international sales and distribution of all eOne Features film titles outside of eOne direct territories.

Financing and Corporate Development

The Group continues to anticipate delivering a positive free cash flow (after interest and tax) during the financial year driven by increased trading cash flows and reduced year-on-year working capital outflows, as anticipated, particularly in Film.

Adjusted net debt as at 31 December 2015 was in line with expectations at £209 million, lower than 31 March 2015 (£225 million) mainly due to the excess proceeds from the Company's £200 million rights issue, which was completed in October 2015, for utilisation in targeted acquisitions and partnerships.

The Group expects year end adjusted net debt to be 1.4x underlying EBITDA after reflecting recent corporate activity including Amblin Partners, Sierra Pictures and the acquisition completed in January 2016 of Dualtone Music Group.

In December, eOne announced the refinancing of its existing credit facilities with the issuance of its £285 million offering of 6.875% senior secured notes (seven year tenor, due December 2022). The Company's new financing structure also includes a new five year £100 million revolving credit facility, maturing in December 2020.

The combination of this new non-amortising, fixed-rate debt financing and revolving credit facility provides the Company with a long term capital structure appropriate for its strategic ambitions. In addition, the refinancing permits greater flexibility allowing the Company to react swiftly to commercial opportunities, whilst also removing other restrictions typical of bank loan-based financing structures.

Since the announcement of its refreshed strategy in November 2014, the Company continues to have confidence in its target of doubling the size of the business by 2020.

Notes to Editors:

About Entertainment One

Entertainment One Ltd. (LSE:ETO) is a leading international entertainment company that specialises in the acquisition, production and distribution of film and television content. The Company's comprehensive network extends around the globe including Canada, the US, the UK, Ireland, Spain, the Benelux, France, Germany, Scandinavia, Australia, New Zealand and South Africa.

Through established Film and Television Divisions, the Company provides extensive expertise in film distribution, television and music production, family programming, merchandising and licensing, and digital content. Its current rights library is exploited across all media formats and includes more than 40,000 film and television titles, 4,500 hours of television programming and 45,000 music tracks.

Further information is available at www.entertainmentone.com or email Redleaf Communications at [email protected]