Technicolor (Euronext Paris : TCH ; OTCQX : TCLRY) announces today its results for the full year 2014
Paris (France), 19 February 2015 – Technicolor (Euronext Paris: TCH; OTCQX: TCLRY) announces today its results for the full year 2014.
Frederic Rose, Chief Executive Officer of Technicolor, stated:
“I am extremely proud of the work done by everyone in Technicolor to deliver a fantastic performance in 2014 resulting in a positive net income and the initiation of a dividend. As we now embark on our Drive 2020 strategic plan, we will remain fully focused on creating shareholder value as a leader in media and entertainment services, developing and monetizing video and audio technologies.”
Since last year, the Group has decided to accelerate its investments in targeted growth areas, as well as into new business initiatives highly relevant in terms of technology and IP generation (e.g. HDR, M-GO, Virdata…). In addition, as part of the Drive 2020 strategic plan, the Group has reviewed its activity portfolio and expects to proceed with some small-size divestments or deconsolidation of business lines that are not key contributors to its strategic objectives.
As a result, the Group has adjusted its 2015 objective and now expects an Adjusted EBITDA between €560 million and €590 million. The Group expects to generate at least €230 million of free cash flow, which will result in a cumulated free cash flow over the 2012-2015 period well above €700 million, by far exceeding its Amplify 2015 free cash flow objective. As a result, the Group expects to achieve a leverage ratio of around 0.75x at end December 2015.
In 2012, Technicolor launched its Amplify 2015 strategic framework to increase its free cash flow generation, deleverage its balance sheet and accelerate its efforts in technology innovation. With the strong set of 2014 results published today, Technicolor has exceeded its financial objectives for both free cash flow and leverage ratio, notwithstanding strategic investments in next-generation video and audio technologies and services. With the completion of Amplify 2015, Technicolor has restored its financial foundation, and benefits from a reinvigorated innovation and IP engine, and strong operating businesses with leading market positions.
The emergence of next-generation video and audio technologies, coupled with the growth of digital content powered by Over-The-Top (“OTT”) services, is fundamentally changing not only the way consumers experience content, but the way content itself is created. These trends will have a significant impact on the current media and entertainment ecosystem: proliferation of content available across a wide variety of devices, and growth in consumer media usage across all forms of content, with increased demand for higher quality, ubiquitous and personalized consumption experiences. Technicolor is competitively positioned to take advantage of these shifts through its leading global and trusted position as a service and technology provider to content creators, network service providers and consumer electronics manufacturers. Technicolor builds upon its strong presence in content creation services, its innovation in OTT markets in M-GO and Connected Home, and its role in developing and licensing next-generation video and audio technologies.
Technicolor today announces the launch of its new strategic plan, Drive 2020, to deliver its vision of the Group as a leader in Media & Entertainment Services, developing and monetizing next-generation video and audio technologies.
Drive 2020 is based on the following strategic objectives:
Technicolor will continue to focus on improving its free cash flow generation and promoting operational excellence across its activities to support the execution of Drive 2020.
The implementation of Drive 2020 strategic objectives is designed to strengthen the competitive advantage of each business division:
As part of Drive 2020, Technicolor will dynamically adapt its portfolio of activities to focus on market leading, profitable and strategically competitive assets, with the objective to reinforce its operational and technology positions and expand its addressable markets and capabilities.
With its restored financial health and confidence in operational execution, Technicolor benefits from greater financial flexibility to accelerate the execution of Drive 2020. The Group will target, as appropriate, external opportunities to acquire or develop new technologies, expand into larger addressable markets, such as in Technology and in Production Services.
Technicolor will continue to focus on free cash flow generation and maintain credit lines to secure temporary liquidity needs and cushion, therefore securing ample liquidity. The Group will also seek to maintain or improve its S&P (B+) and Moody’s (B2) credit ratings.
Drive 2020 objectives
The Group anticipates to reach an adjusted EBITDA of around €400 million and a free cash flow comprised between €160 million and €200 million in 2017, which will be the low point in terms of financial performance due to the end of the MPEG-LA licensing program.
Technicolor has set the objective to return by 2020 to an adjusted EBITDA above €500 million with a free cash flow in excess of €250 million.
All objectives are at constant rate and perimeter.
The Board of Directors of Technicolor has decided to propose to the 2015 Annual General Meeting of Shareholders the payment of a cash dividend of €0.05 per share in relation with the 2014 financial year. The initiation of a yearly dividend payment demonstrates the Group’s confidence in its prospects. The Board will consider every year the balance sheet structure and economic development of Technicolor to maintain or grow its dividend payment. If approved, the time schedule related to the dividend payment will be as follows:
Technicolor shares will trade ex-dividend as from the beginning of the trading session on 20 May 2015. Holders of Technicolor shares on 20 May 2015, who would not have previously sold their shares will be able to freely trade their shares on the stock exchange as from such date and will not need to block their shares until the payment date of the dividend to benefit from such dividend.
Annual General Meeting 2015
At its meeting yesterday, the Board of Directors of Technicolor convened the annual general shareholders’ meeting on 9 April, 2015, in lieu of 21 May, so as to be able to move forward swiftly with the implementation of the new strategic plan.
An analyst conference call hosted by Frederic Rose, CEO, and Stéphane Rougeot, CFO, will be held on Thursday, 19 February 2015 at 9:30am CET.
9 April 2015
Q1 2015 revenues
23 April 2015
H1 2015 results
23 July 2015
Technicolor will hold a Capital Market Day in 2015.
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.
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
Technicolor shares are on the NYSE Euronext Paris exchange (TCH) and traded in the USA on the OTCQX marketplace (OTCQX: TCLRY).
Press: +33 1 41 86 53 93
Investor relations: +33 1 41 86 55 95