Full-Year 2011 Results: Resilient Adjusted EBITDA Margin and Return to Positive Free Cash Flow

Share
Share to Google+Share to FacebookShare to TwitterShare to LinkedIn
February 23, 2012
A New Strategic Roadmap: Amplify 2015

H2 2011 and FY 2011 Results Financial Highlights (unaudited)

    FY 2011 Adjusted EBITDA1 of €475 million: increase in Technology and Entertainment Services, partly offsetting decrease in Digital Delivery.
    FY 2011 Adjusted EBITDA margin nearly stable at 13.8%.
    Strong free cash flow2 generation, reaching €81 million for FY 2011.
 

In € million

Second Half

Full Year

2010 2011 Change, reported 2010 2011 Change, reported
Group revenues from continuing operations 2,075 1,891 (8.9)% 3,574 3,450 (3.5)%
Change at constant currency (%)   (7.9)%     (1.1)%  
Adjusted EBITDA from continuing operations 363 308 (15.1)% 505 475 (5.9)%
As a % of revenues 17.5% 16.3% (1.2)pt 14.1% 13.8% (0.3)pt
Group Free cash flow 16 49 +33 (100) 81 +181
Cash position at  31 December, 2011       332 370 +38
Net Debt IFRS at  31 December, 2011       993 957 (36)
Net Debt non IFRS at 31 December, 2011       1,191 1,130 (61)

FY 2011 Business Highlights

    Licensing: Highest revenues since 2003 and significant progress in launch of new patent licensing programs.
    Innovation: Significant progress on M-GO, a new platform to help end-users discover, view and share all forms of media; continued development of metadata-based solutions and deployment of color re-alignment technology in special effects.

    Entertainment Services: Record year in Digital Production’s revenues and in DVD volumes.
    Digital Delivery: Revenue decline and turnaround action plan launched, as announced in December 2011.

2012 Objectives

    Adjusted EBITDA in the range of €475-500 million reflecting:
         Continued strength in Technology and Entertainment Services;
        Return to Adjusted EBITDA breakeven in Connected Home, with positive Adjusted EBITDA in the second half;
        An increase in operating expenses to support the ramp-up of growth businesses, including M-GO;
        An uncertain macroeconomic environment.
    Continue to generate positive free cash flow despite higher restructuring expenses and investments in growth businesses.
    Operate within the financial covenants of credit agreements.

Technicolor’s Strategic Roadmap: Amplify 2015

Technicolor’s mission is to enhance media experience on any screen, in theaters, at home or on the go through innovative technologies and solutions in imaging and sound.

The Amplify 2015 plan will put Technicolor on a new growth path to achieve its strategic ambition: lead innovation in media monetization solutions.

Amplify 2015 is built on three pillars:

1.   Boost our innovation pipeline and expand in licensing:

While continuing to file patent applications, leading to about 2,000 patent grants per year in promising technology areas and launching new patent licensing programs, Technicolor will also expand its licensing activities by:

    Leveraging the growing range of connected devices in patent licensing programs;
    Broadening our presence in growing markets, such as Extended Home Applications;
    Entering new geographies, such as China, India and Brazil;
    Developing new licensing models such as Technology Licensing.

The combination of new applications and services, new geographies and new licensing models is expected to generate an adjusted EBITDA of at least €40 million in 2015.

2.   Develop innovative solutions to address expanding digital markets:

Technicolor will expand its presence in digital media monetization platforms, deriving new revenues from a broad array of media. For example, M-GO is the result of intensive R&D, market testing and investment over the past 3 years. It aims at providing end-users with a seamless experience for media consumption. M-GO will be preloaded as of Q2 2012 on most U.S. connected devices of Samsung and Vizio and on Intel Ultrabooks™.

3.    Consolidate and expand geographically to gain scale or access broader ecosystems:

Technicolor will leverage its asset portfolio and seize external growth opportunities to consolidate and expand geographically in Innovation and Licensing, Media Creation and Media Distribution.

    Innovation and Licensing: the Group aims to seize opportunities to add complementary patents to its existing portfolio and carry out targeted technology acquisitions.
    Media Creation and Distribution: the Group aims to consolidate and expand geographically as well as develop new added value services for its studio customers.
    Packaged Media: Technicolor will continue to focus on cash flow generation by expanding its client base, extending its Blu-rayTM capacity, lowering its cost structure and innovating in Supply Chain solutions.
    Connected Home: Technicolor will implement the turnaround plan announced in December 2011, deploy its digital home software suite for smart home applications and participate in consolidation to gain scale.

Amplify 2015 Goals3

    Profit growth: Adjusted EBITDA above €600 million (vs. €475 million in 2011).
    Free Cash Flow generation: over €400 million generated over 2012-2015 which will be used to repay debt.
    Significant deleveraging: Technicolor’s Net debt/Adjusted EBITDA ratio to fall below 1.2x (vs. 2.4x in 2011 based on nominal debt).

Frederic Rose, Chief Executive Officer of Technicolor, stated:

“I am very pleased with Technicolor’s 2011 performance, in particular our return to positive free cash flow. Technicolor is now poised to seize opportunities in an increasingly digitized world. With our Amplify 2015 plan, we have a clear roadmap to achieve our strategic ambition: lead innovation in media monetization solutions. Technicolor is on track to grow profits and generate strong cash flow while significantly deleveraging its balance-sheet.”

A meeting hosted by Frederic Rose, CEO and Stéphane Rougeot, CFO and SEVP Strategy will be held on Friday, 24 February, 2012 at 11:00 CET.

***

About Technicolor

Technicolor, a worldwide technology leader in the media and entertainment sector, is at the forefront of digital innovation. Our world class research and innovation laboratories enable us to lead the market in delivering advanced video services to content creators and distributors. We also benefit from an extensive intellectual property portfolio focused on imaging and sound technologies, based on a thriving licensing business. Our commitment: supporting the delivery of exciting new experiences for consumers in theaters and homes. Euronext Paris: TCH - www.technicolor.com
 

Financial Calendar

Q1 2012 Revenues

26 April, 2012

H1 2012 Results

26 July, 2012

Q3 2012 Revenues

26 October, 2012

 

Contacts

Press: +33 1 41 86 53 93

technicolorpressoffice@technicolor.com

Investor relations: +33 1 41 86 55 95

investor.relations@technicolor.com

1 EBIT from continuing operations excluding other income (expense), and Depreciation & Amortization (including impact of provisions for risks, litigations and warranties).

2 Free Cash Flow from both continuing operations and discontinued operations.

3 At constant scope of activities.