The Board of Directors of Technicolor met today to review the Group’s first half 2011 results.
Paris (France), 27 July 2011 - The Board of Directors of Technicolor (Euronext Paris: TCH) met today to review the Group’s first half 2011 results.
Q2 2011 revenues
Group revenues from continuing operations amounted to €747 million in Q2 2011, down 6.1% at current currency compared to Q2 2010, and up 1.2% at constant currency.
Technology revenues were up 4.1% YoY1 at constant rates, with Licensing benefitting from a stable revenue stream from MPEG-LA and from the sustained performance of the other licensing programs.
Entertainment Services revenues were up 16.8% YoY at constant rates, driven by increased activity levels in Creation Services and higher DVD and Blu-ray™ volumes.
Digital Delivery revenues declined by 14.6% YoY at constant rates as a result of an unfavorable overall product mix, reflecting in particular a degraded economic environment in Europe, and a less favorable geographic mix due to stronger demand in Latin America.
H1 2011 key indicators
Group revenues from continuing operations amounted to €1,559 million in H1 2011, up 4.0% at current currency compared to H1 2010, and up 8.3% at constant currency.
Adjusted EBITDA2 from continuing operations reached €167 million or 10.7% of revenues in H1 2011, an increase of 1.2 points compared with H1 2010. The increase in Technology and Entertainment Services profitability more than offset the drop in Digital Delivery Adjusted EBITDA in H1 2011.
Group Free Cash Flow3 reached €32 million for H1 2011 and Group net debt as per consolidated financial statements reduced by €45 million in the first half to €948 million on 30 June 2011.
The Group confirms its previously stated objectives for FY 2011. In H2 2011, the continued resilience in Licensing and improved trends in Entertainment Services are expected to compensate the weakness in Digital Delivery revenues and margins, and enable the Group to achieve slight revenue growth overall at constant rates for the full year and generate an Adjusted EBITDA comparable or slightly up compared to the level achieved in 2010.
In addition, the Group expects to generate a positive Free Cash Flow in the second half of 2011.
2 EBIT from continuing operations excluding other income (expense), and Depreciation & Amortization (including impact of provisions for risks, litigations and warranties).
3 Free Cash Flow from both continuing operations and discontinued operations
Comment by Frederic Rose, CEO
“Notwithstanding a challenging macroeconomic environment in the first half of 2011, we delivered a strong operational and financial performance. I am particularly satisfied by the positive Free Cash Flow generated in the first half of the year. Based on the resilience of our licensing programs, our customer wins and new offerings, we confirm our 2011 objectives.
Recent developments in the intellectual property field reinforce our conviction that our patent portfolio is an extremely valuable asset. We are determined to pursue the development of alternative programs and approaches to maximize its monetization potential.”
Warning: Forward Looking Statements
This press release contains certain statements that constitute "forward-looking statements", including but not limited to statements that are predictions of or indicate future events, trends, plans or objectives, based on certain assumptions and include any statement which does not directly relate to a historical fact or current fact. 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 French Autorité des marchés financiers.
Technicolor is home to industry-leading creative and technology professionals committed to the creation, management and delivery of entertainment content to consumers around the world. Propelled by a culture of innovation and underpinned by a dedicated research organization, the company’s thriving licensing business possesses an extensive intellectual property portfolio focused on imaging and sound technologies. Serving motion picture, television, and other media clients, the company is a leading provider of high-end visual effects, animation, and postproduction services. In support of network service providers and broadcasters globally, Technicolor ranks among the worlds’ leading suppliers of digital content delivery services and home access devices, including set-top boxes and gateways. The company also remains a large physical media service provider, being one of the world’s largest film processors and independent manufacturers and distributors of DVDs and Blu-ray™ discs.
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