July 24, 2018

Technicolor: First Half 2018 Results

Technicolor (Euronext Paris: TCH; OTCQX: TCLRY) announces today its results for the first half of 2018.

First Half 2018 Key Highlights from continuing operations

 

First Half

In € million

2017

2018

At constant rate

Revenues from continuing operations

2,098

1,769

(9.3)%

Adjusted EBITDA from continuing operations

82

57

(20.0)%

As a % of revenues

3.9%

3.2%

 

Free Cash Flow from continuing operations

(109)

(150)

(41)

 

  • Revenues from continuing operations amounted to €1,769 million, down 9.3% year-on-year at constant rate, with an Adjusted EBITDA of €57 million compared to €82 million in the first half 2017.
  • Production Services recorded a solid performance (+4.6% year-on-year at constant rate) driven by high capacity utilization and strong growth in Film and TV VFX as well as Advertising VFX.
  • In DVD Services, revenues declined 9.5% at constant rate year-on-year, reflecting lower Standard Definition DVD volumes partly compensated by continued growth in Blu-rayTM and Ultra HD.
  • Connected Home saw an overall 13.6% decline in revenues year-on-year at constant rate, as the shortage of key components led to €210 million of orders which could not be delivered in the first half. Nevertheless, revenues outside North America grew by 15% at current rates year-on-year, only partly compensating for the declines in the US.
  • Connected Home launched a three-year transformation targeting market share gains while improving profitability and being able to absorb potential new headwinds in the market. The plan includes reducing the annual fixed cost structure by 40% representing c. €140 million of savings compared to 2017, over a period of three years. Expected future cash costs associated with this plan amount to c.€55 million with an average pay-back of less than 15 months.
  • Free cash flow from continuing operations at €(150) million, down by €41 million year-on-year at constant rate, reflecting mainly lower adjusted EBITDA, working capital affected by seasonality of DVD services and higher taxes.
  • Solid financial structure, with a nominal gross debt of €1,113 million, up €10 million compared to December 2017. The Group also had a strong level of liquidity at end of June, including cash on hand of €197 million and committed undrawn credit lines of €392 million.
  • With regard to the disposal of the Patent Licensing business of Technicolor that was announced on March 1, Technicolor and InterDigital have now entered into a definitive acquisition agreement, the terms of which are in line with those announced on March 1.
  • As mentioned, the Group is committed to deleveraging and expects to make significant debt prepayments in the second half of 2018, including from the proceeds of the sale of the Patent licensing business.
  • The Board of Directors has appointed Mr. Maarten Wildschut as Board Observer for an 18-month term and intends to propose his election as a Director at the next shareholders meeting. Mr. Wildschut is Co-Head of RWC European Focus Fund, a London investment fund which owns 10,1% of Technicolor’s share capital. 

 

Full Year 2018 guidance confirmed

Based on first half performance and current assessment of the market by the management (i.e. 15% year-on-year decline in North American video cable market and no increased supply tightness for components), Technicolor confirms it expects an Adjusted EBITDA from the continuing operations broadly stable compared to 2017 at constant exchange rate. 

 

An analyst audio webcast hosted by Frederic Rose, CEO, and Laurent Carozzi, CFO, will be held Tuesday, 24 July 2018 at 6:30pm CEST.
Link to the Audio Webcast:
http://www.technicolor.com/webcastH12018
The presentation slides will be made available on our website prior to the webcast
The replay will be available at the latest by 9:30pm (CEST) on July 24th, 2018

Financial calendar

Q3 2018 business update 

24 October 2018

FY 2018 results 

28 February 2019

 

###

 

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 or which do not directly relate to historical or current facts. 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.

 

###

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. Our commitment: supporting the delivery of exciting new experiences for consumers in theaters, homes and on-the-go.

www.technicolor.com – Follow us: @Technicolorlinkedin.com/company/technicolor

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

 

Investor Relations

Christophe Le Mignan : +33 1 41 86 58 83
christophe.lemignan@technicolor.com

By continuing to browse this site, you agree to the use of cookies. When placed on your device, cookies enable site visit statistics to be collected and services to be better adapted to your needs, such as language preferences. For more information and to configure cookies, click here.