The Board of Directors of Technicolor met on 26 October 2011 to review the Group’s revenues for the third quarter of 2011
Q3 2011 Group revenues from continuing operations of €837 million, down 7.4% at constant currency
9M 2011 Group revenues from continuing operations of €2,396 million, up 2.3% at constant currency
Consent solicitation request approved by large majorities of Technicolor’s noteholders and lenders
Paris (France), 27 October 2011 - The Board of Directors of Technicolor (Euronext Paris: TCH) met on 26 October 2011 to review the Group’s revenues for the third quarter of 2011.
Q3 2011 revenues
In the third quarter of 2011, Group revenues from continuing operations amounted to €837 million, down 9.0% at current currency and down 7.4% at constant currency compared to the third quarter of 2010.
Technology revenues declined by 25.1% YoY1 at constant currency in the third quarter of 2011, as Licensing activities were affected by an unfavorable comparison to the third quarter of 2010, which had benefited from strong growth in worldwide consumer electronics market and the outcome of audits of past product volumes for certain MPEG LA licensees.
Entertainment Services revenues rose 6.2% YoY at constant currency in the third quarter of 2011, reflecting continued growth in Creation Services and Digital Cinema Distribution activities, as well as higher DVD and Blu-ray™ volumes.
Digital Delivery revenues decreased by 17.6% YoY at constant currency in the third quarter of 2011, as a result of a drop in global shipments of Digital Home Products, due in particular to continued market weakness in Europe partially offset by growth in Latin America and a more favorable overall product mix compared with the third quarter of 2010.
Update on financial situation and objectives
As a result of seasonal working capital requirements, estimated net financial debt, excluding foreign exchange impact, has slightly increased at the end of the third quarter of 2011.
To deliver on its objective of a full year 2011 adjusted EBITDA1 comparable or slightly up compared to 2010, the Group requires a strong Q4 2011 performance in Technology and Entertainment Services which would compensate the deterioration in Digital Delivery. In addition, the Group confirms it expects to generate a positive free cash flow in the second half of 2011.
1 EBIT from continuing operations excluding other income (expense), and Depreciation & Amortization (including impact of provisions for risks, litigations and warranties).
Comment by Frederic Rose, CEO
“Our overall revenues for the first nine months of 2011 are growing, with Technology and Entertainment Services continuing to deliver solid performances. However, in a difficult market environment, Digital Delivery has performed below our expectations. We have therefore started implementing actions in Digital Delivery in order to return it to profitability in 2012. Finally, we continue to focus on our cash generation, with the objective to achieve positive free cash flow in the second half 2011 and for the full year.”
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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