July 29, 2010

First Half 2010 Results (unaudited)

The Board of Directors of Technicolor met yesterday to review the Group’s first half of 2010 results.

    Q2 2010 revenues at €776 million, down (12.4)% vs. Q2 2009, or (9.5)% excluding retail telephony, with improved trends and signs of recovery across most activities
        In Q2 2010, the Group recorded sustained revenue growth in all digital Entertainment Services activities and a slight increase in Licensing revenues at constant rates
        In line with market trends, volume pressure in DVD continued to ease in Q2 2010. Volumes in Digital Home Products remained under pressure in Q2 2010 but showed some signs of recovery
    H1 2010 revenues at €1,468 million, down (18.5)% vs. H1 2009, or (15.3)%  excluding retail telephony
    The Group reiterates it expects to deliver revenue growth in H2 2010 vs. H2 2009, driven by new customer wins in Entertainment Services and in Digital Delivery1
        Announcement of two agreements with Verizon for broadband gateways and DirecTV for set-top boxes
    H1 2010 adjusted EBITDA2 at €135 million or 9.2% of revenues
        Down 2.2 points vs. H1 2009 as a direct consequence of lower DVD and Connect volumes
    H1 2010 Group net profit of €96 million compared with a loss of €(325) million in H1 2009
        H1 2010 net profit from continuing activities of €213 million, resulting from EBIT of €15 million, financial result of €212 million including a positive accounting impact related to the Group restructuring in Q2 2010, and from a €(14) million tax charge
        Net loss from discontinued operations of €(117) million in H1 2010, including restructuring costs of €(54) million and an impairment loss of €(40) million
    Net debt as per financial statements of €1,016 million on 30 June 2010 excluding Disposal Proceeds Notes (DPN)
        Free Cash Flow3 from continuing activities of €(105) million in H1 2010 including €(140) million cash out related to the closing of the balance sheet restructuring and currency hedging instruments
        Reduction of Free Cash Flow used by discontinued operations from €(67) million in H1 2009 to €(12) million in H1 2010
        Gross debt as per financial statements at €1,432 million excluding the DPN maturing in December 2010, a reduction of €1,311 million compared with a gross debt of €2,743 million at 31 December 2009
        Cash position of €416 million at 30 June 2010
    Disposal process showing progress
        As announced on 26 July, the Group has received a fully documented binding offer from Francisco Partners for the acquisition of the Grass Valley Broadcast business
        Progress is expected before year end for the disposal of the remaining non-strategic activities

Paris (France), 29 July 2010 - The Board of Directors of Technicolor (Euronext Paris: FR0010918292; NYSE: TCH) met yesterday to review the Group’s first half of 2010 results.

Comment by Frederic Rose, CEO
“With the conclusion of our financial restructuring, we have started to regain customer intimacy. I am extremely pleased with the Verizon and DirecTV agreements announced today, which confirm our technological credibility and gives me confidence that we are poised to return to growth as early as in the second half.”

1 Digital Delivery is a newly created division which brings together the Connect and Digital Content Delivery Services divisions (details on page 10)
2 EBITDA from continuing activities minus restructuring and impairment charges, and minus other income and expenses (full details on page 21)
3 Operating cash flow from continuing activities less change in working capital and other assets and liabilities, tax, financial and non current cash out


Technicolor is a company listed on NYSE Euronext Paris and NYSE stock exchanges, and this press release contains certain statements that constitute "forward-looking statements" within the meaning of the "safe harbor" of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the future results expressed, forecasted or implied by such forward-looking statements. For a more complete list and description of such risks and uncertainties, refer to Technicolor’s filings with the U.S. Securities and Exchange Commission and its filings with the French Autorité des marchés financiers.


About Technicolor
With more than 95 years of experience in technological innovation, Technicolor is a leading provider of production, postproduction, and distribution services to content creators and distributors. Technicolor is one of the world’s largest film processors; the largest independent manufacturer and distributor of DVDs (including Blu-ray™ Disc); and a leading global supplier of set-top boxes and gateways. The company also operates an Intellectual Property and Licensing business. For more information:  www.technicolor.com

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