Technicolor today announces its results for the first half of 2014.
H1 2014 results: improved profitability
and strong cash generation
Paris (France), 25 July 2014 – Technicolor (Euronext Paris: TCH; OTCQX: TCLRY) today announces its results for the firsthalf of 2014.
Frederic Rose, Chief Executive Officer of Technicolor, stated:
“We are well on track to achieve our 2014 objectives and to exceed our prior guidance on free cash flow generation. Our performance continues to be fueled by profitable growth in Connected Home, the signature of new license agreements and the very strong growth in visual effects.”
Key points
2014 guidance
Innovation
Summary of consolidated results for the first half of 2014 (unaudited)
Key financial indicators and analysis at constant scope[2]
First Half |
Change YoY |
|||
In € million |
2013 |
2014 |
Reported |
At constant rate |
Group revenues |
1,589 |
1,505 |
(5.3)% |
(0.9)% |
Group revenues (excl. legacy activities) |
1,537 |
1,495 |
(2.7)% |
+1.7% |
Adjusted EBITDA |
207 |
213 |
+3.1% |
+6.3% |
As a % of revenues |
13.0% |
14.2% |
+1.2pt |
|
Adjusted EBIT |
111 |
127 |
+14.2% |
+17.3% |
As a % of revenues |
7.0% |
8.4% |
+1.4pt |
|
EBIT from continuing operations |
89 |
122 |
+35.8% |
+38.5% |
Financial result |
(72) |
(74) |
(2) |
|
Share of profit/(loss) from associates |
(5) |
1 |
+6 |
|
Income tax |
(20) |
(22) |
(2) |
|
Profit/(loss) from continuing operations |
(10) |
27 |
+37 |
|
Profit (loss) from discontinued operations |
16 |
0 |
(16) |
|
Net income |
6 |
27 |
+21 |
|
Net income excl. costs due to debt prepayments |
6 |
46 |
+40 |
|
Group Free cash flow |
24 |
129 |
+105 |
|
Net financial debt at nominal value (non IFRS) |
837 |
671 |
(166) |
|
Revenues from continuing operations amounted to €1,505 million in first half of 2014, including a negative forex impact of €69 million. Revenue growth was 1.7% at constant rate and scope (excl. legacy activities), reflecting solid performances in Production Services, particularly Visual Effects, and in the Connected Home segment, which reinforced its market leadership and benefited from a number of customer wins and new awards, as well as continued resiliency in DVD Services, despite a challenging year-on-year comparison. In the Technology segment, the revenue decrease reflected weaker contribution from MPEG LA, due to a one-off adjustment in the first quarter and ongoing softness in optical disc drive demand from PC makers, partly offset by double-digit growth in revenues generated by direct licensing programs, driven by a good level of new contracts and renewals, with notably the contribution of an LG smartphone licensing agreement and successful renewals with two major US digital TV providers during the period.
Adjusted EBITDA from continuing operations amounted to €213 million in the first half of 2014, including a negative forex impact of €7 million compared to the first half of 2013. Adjusted EBITDA margin was 14.2%, up by 1.2 points year-on-year, reflecting significant margin improvement in Connected Home, driven by higher shipments and better mix, stable margin in Entertainment Services, due to strong performance in Production Services and continued operating efficiencies in DVD Services, and lower corporate costs, mostly related to transversal functions.
Technicolor remained focused during the first half on optimizing its cost base and generating efficiencies across its businesses and at corporate level. Total operating expenses decreased year-on-year, driven by a sharp reduction in the Entertainment Services segment, with operating expenses down 17% at constant rate, and material declines for the Connected Home segment and at corporate level.
Adjusted EBIT from continuing operations amounted to €127 million in the first half of 2014, up 17.3% at constant currency compared to the first half of 2013, with margin of 8.4%, up by 1.4 points year-on-year, resulting from the growth in Adjusted EBITDA and lower D&A expenses.
EBIT from continuing operations totaled €122 million in the first half of 2014, up 42% at constant currency compared to the first half of 2013, with margin of 8.1%, up by 2.6 points year-on-year, due to the increase in Adjusted EBIT, lower restructuring costs and a gain on disposal of available-for-sale financial assets.
The Group’s financial result amounted to €(74) million, broadly stable year-on-year, reflecting the following:
Net income was a profit of €27 million in the first half of 2014, increasing from a profit of €6 million in the first half of 2013. Restated from refinancing and repricing charges, net income was a profit of €46 million.
An analyst conference call hosted by Frederic Rose, CEO, and Stéphane Rougeot, CFO, will be held on Friday, 25 July 2014 at 3:00pm CEST.
Financial Calendar
Q3 2014 revenues |
22 October 2014 |
FY 2014 results |
19 February 2015 |
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Warning: Forward Looking Statements
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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, homes and on-the-go.www.technicolor.com
Follow us: @Technicolor - linkedin.com/company/technicolor
Technicolor shares are on the NYSE Euronext Paris exchange (TCH) and traded in the USA on the OTCQX marketplace (OTCQX: TCLRY).
Contacts
Press: +33 1 41 86 53 93
technicolorpressoffice@technicolor.com
Investor relations: +33 1 41 86 55 95
investor.relations@technicolor.com
[1] Excluding the Cirpack softswitch operations, sold in 2013.