February 13, 2020

Technicolor Announces 2020-2022 Strategic Plan Supported By A Comprehensive Strengthening Of The Capital Structure Including A C. €300m Capital Increase

Technicolor announces today its 2020-2022 Strategic Plan concurrently with three transactions aimed at strengthening its capital structure and restoring strategic flexibility

  • 2020-2022 Strategic Plan will pave the way for a sound and sustainable future for Technicolor, allowing it to better serve clients, take advantage of market opportunities, deliver profitable growth and create value for shareholders
  • Following an in-depth review of the business, Technicolor has identified several initiatives to drive the financial and operational transformation of the company
  • Comprehensive strengthening of the capital structure enhancing strategic flexibility:
    • Proposed c. €300m capital increase with shareholders' preferential subscription rights (the “Rights Issue”):
    • Extension of the Revolving Credit Facility (“RCF”) maturity from December 2021 to June 2023 and of the Wells Fargo facility maturity from September 2021 to March 2023
  • An extensive overview of the Strategic Plan and new initiatives for Technicolor will be presented during a Capital Markets Day scheduled for February 19th, 2020
  • Update on full year 2019 Group Performance


Paris (France), February 13th, 2020Technicolor (Euronext Paris: TCH, OTCQX: TCLRY) (“Technicolor” or the “Company”) announces today its 2020-2022 Strategic Plan concurrently with three transactions aimed at strengthening its capital structure and restoring strategic flexibility:


  • Capital increase with preferential subscription rights for shareholders for a total gross amount of c. €300 million, issue premium included;
  • Extension of credit lines (RCF and bi-lateral ABL with Wells Fargo), originally maturing in 2021, to 2023 subject to the successful completion of the Rights Issue; the RCF will be reduced from €250m to €225m starting from January 1st, 2021 and to €202.5m starting from December 22nd, 2021;
  • New $110m short-term facility providing additional liquidity headroom.


Technicolor 2020-2022 Strategic Plan
Technicolor’s new CEO Richard Moat, along with a renewed Board of Directors and the top management team, have designed a 2020-2022 Strategic Plan focused on prioritising profitable growth opportunities, adopting a more disciplined approach to business selection whilst continuing to provide market leading products and services, all of which will cement the group’s long-held position as the best partner across its three activities. Additionally, Technicolor will endeavour to streamline all operations. A number of these initiatives are already in progress and the Strategic Plan will benefit all of our stakeholders: shareholders, employees, clients, suppliers and lenders.
Actionable initiatives and priorities for each of Technicolor’s divisions have been identified. In Production Services, Technicolor is well placed to benefit from the burgeoning growth of streaming platforms and the unprecedented demand for original content and is well positioned to capture outsized market share in Film & Episodic, Advertising, and Animation. DVD Services has already started creating a more resilient business model through its ongoing cost optimization efforts and the renewal of key major customer contracts under volume-based pricing schemes. Finally, in Connected Home, Technicolor will focus on Broadband gateway activities, which are experiencing an improved trading environment.



Strengthening of Technicolor’s Capital Structure
In order to regain strategic flexibility and operate in a sustainable environment, Technicolor is announcing a comprehensive reinforcement of its capital structure comprising of c. €300m of new equity through a Rights Issue and the concurrent extension of its RCF (which will be progressively reduced from €250m to €225m starting January 1st, 2021 and to €202.5m starting December 22nd, 2021) and Wells Fargo facility to 2023, conditional on the successful execution of the Rights Issue. The company has also secured a new $110m short-term facility providing additional liquidity headroom.



C. €300m Rights Issue
An Extraordinary General Meeting of Shareholders will be held on March 23rd, 2020 which will vote on resolutions related to the Rights Issue. It is anticipated that the equity issuance will be launched in Q2 2020, subject to approval from Technicolor’s shareholders, regulatory authorities, and market conditions.
RCF and Wells Fargo Facility Extensions
Concurrently, Technicolor announces that it has reached an agreement for a 18-month extension of its existing RCF from December 2021 to June 2023, conditional on the successful execution of the Rights Issue. Similarly, the Wells Fargo facility will be extended by 18 months from September 2021 to March 2023.
The following committed facilities will therefore remain available to Technicolor:


  • Revolving Credit Facility:
    • €250m until December 31st, 2020;
    • €225m from January 1st, 2021 until December 21st, 2021;
    • €202.5m from December 22nd, 2021 until June 30th, 2023;
  • $125m bilateral facility with Wells Fargo until March 31st, 2023.

$110m Short-Term Facility
Technicolor has secured an additional $110m short-term facility which has been arranged by J.P. Morgan. The facility will provide additional liquidity headroom and will be repayable following the receipt of proceeds of the Rights Issue.
Update on Full Year 2019 Group Performance
All figures and data for 2019 disclosed in this Press Release are estimated, the 2019 Financial Statements being currently audited. The Board of Directors will approve the 2019 Financial Statements on February 18, 2020


Post IFRS 16

Pre IFRS 16






Adjusted EBITDA




Adjusted EBITA




Free Cash Flow




Free Cash Flow excl. Net Interest




Net Debt

€1 233m



  • Sales of c. €3.8bn reflecting double digit growth in Production Services, more than offset by a decline in the North American video segment in Connected Home and replication volume decline in DVD Services (as anticipated);
  • Adjusted EBITDA of c. €246m reflecting solid improvement in Connected Home vs the first half 2019 as anticipated, driven mainly by margin recovery as a result of improvements in memory costs and benefits from our transformation plan;
  • Adjusted EBITA of c. €36m due to high rendering costs consumed in Production Services Film and Episodic Visual Effects in an intense period of deliveries and higher D&A linked to the investments in Film & Episodic Visual Effects;
  • Free cash flow1 of c. -€161m: as expected, and communicated in the 2019 third quarter press release, working capital at the end of the year was negatively affected by downgrades by the rating agencies in 2019. The impact is estimated to be -€95m, mainly explained by a one-off reduction in payment terms;
  • Net Debt of c. €961m (3.9x Net Debt / Adjusted EBITDA);
  • Credit lines fully undrawn as of 31 December 2019.

Timeline of the Offering Process Proposed to the Extraordinary General Meeting
The proposed c. € 300m Rights Issue will be subject to Technicolor Extraordinary General Meeting (EGM) approval. The EGM is convened for March 23rd, 2020. Resolutions to be voted at the EGM will include:

  • A reverse split: the existing shares (the "Old Shares") will be exchanged into new ones (the "New Nominal Value Shares");
  • A share capital reduction for reasons other than for losses, by reducing the par value of the shares
  • A capital increase with a preferential subscription right to be detached from the New Nominal Value Shares (the “Rights Issue”); the new shares issued in the Rights Issue are referred to as the “New Shares”.

Conference Call and Investors Presentation
Technicolor will host a conference call for analysts and investors at 7:45 pm CET on February 13th, 2020 (www.technicolor.com/webcastFebruary2020). A presentation will be made available on the Technicolor website shortly ahead the start of the call.
Technicolor will host its Capital Markets Day on February 19th in London. Details to be shared via the Technicolor website.

Note: The English version of this press release may differ from the French version for regulatory reasons.


About Technicolor: www.technicolor.com
Technicolor shares are on the Euronext Paris exchange (TCH) and traded in the USA on the OTCQX marketplace (OTCQX: TCLRY).

Investor Relations
Christophe Le Mignan: +33 1 88 24 32 83
Media Contact
Laurent Poinsot: +33 1 53 70 74 77
Nathalie Feld: +33 1 53 70 94 23

Financial Calendar

FY 2019 Results

18 February 2020

Capital Markets Day

19 February 2020

Extraordinary General Meeting

23 March 2020

Q1 Trading Update

29 April 2020

Annual Shareholders Meeting

30 April 2020



This press release includes certain projections and forward-looking statements with respect to the anticipated future performance of Technicolor.
Such information is sometimes identified by the use of the future tense, the conditional mood and forward-looking terms such as “think,” “aim,” “expect,” “intend,” “should,” “has the ambition of,” “consider,” “believe,” “wish,” “could” and so forth. This information is based on data, assumptions and estimates that Technicolor considers reasonable. Actual results could differ materially from those projected or forecast in the forward-looking statements, in particular due to uncertainties inherent to any business activity and to the economic, financial, competitive and regulatory environment. All forward-looking statements contained in this press release are expressly qualified in their entirety by the cautionary statements contained or referred to in this disclaimer. Each forward-looking statement speaks only as at the date of this press release. Technicolor makes no undertaking to update or revise any information or the objectives, outlook and forward-looking statements contained in this press release or that Technicolor otherwise may make, except pursuant to any statutory or regulatory obligations applicable to Technicolor.
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1 Free cash flow defined as: Adj. EBITDA – (net capex + restructuring cash expenses + change in pension reserves + change in working capital and other assets & liabilities + cash impact of other non-current result + net financial interests + exchange result + other financial results and income tax)