Editoria e Media
Technicolor: Third Quarter 2021 Results
PRESS RELEASE
Technicolor: Third Quarter 2021 Results
Significant demand for original content and high-performance broadband products but continuing supply constraints resulting from the pandemic
Technicolor on track to meet its 2021 and 2022 guidance
Paris (France), November 04, 2021 – Technicolor (Euronext Paris: TCH; OTCQX: TCLRY) is today announcing its results for the third quarter of 2021.
Richard Moat, Chief Executive Officer of Technicolor, stated:
“ Technicolor benefited from strong and growing demand across all activities during the third quarter of 2021. Results are robust , and demonstrate significant profitability improvement , reflecting our disciplined operational focus . Demand for creative VFX artistry and technology continues to improve across media and entertainment, boosted by the increasing desire for original content. Live action production is ramping up as expected, with almost all of our 2021 V isual E ffects and A nimation pipeline committed , and more than 75% of our 2022 pipeline . Revenue and profitability in DVD Services was ahead of expectations , driven by higher -than- anticipated strength in back catalog, and ongoing growth in supply chain activity. In Connected Home, despite very strong demand in North America and in Eurasia, revenue has been impacted by component shortages , leading to sales being pushed into 2022 . However, our customers are now committing on volumes and have agreed on pass through contracts to secure components supply . Based on business activity for the first nine months and the continued successful optimization of its businesses, the Group is confirming its outlook for 2021 and 2022.”
Technicolor delivered a positive third quarter 2021, and a significant improvement in profitability , despite supply constraint challenges affecting both Connecting Home and Technicolor Creative Studios.
For the first nine months of the year, Technicolor reported:
All Technicolor activities are benefiting from sustained market demand
The Group is on track to achieve the c. €115 million cost savings planned for calendar year 2021, with € 7 5 million cost savings realized in the first 9 month s. The target of delivering a cumulative €325 million in savings by the end of 2022 is confirmed .
Based on business activity for the first 9 month s , the Group is reiterat ing the outlook presented in its FY 2020 results press release issued on March 11, 2021.
Third quarter 2021 results and forward outlook – key highlights
End of September 2021 year-to-date Group key indicators for continuing operations:
Outlook
Segment Review – Third quarter 2021 Results Highlights
(*) including Post Production
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The division has intensified its collaboration with clients and suppliers to maximize deliveries, and to mitigate potential profitability and working capital impacts.
New wins and product launches are driven by better user experience in the home with Wi-Fi 6, while innovation is coming with new technologies in the field of sound and far-field voice. Public announcements for the quarter were:
The division continues to focus on selective investments in key customers, platform-based products and partnerships optimizing fixed costs that will lead to improved margins over the year.
(*) Change at constant rate
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DVD Services continued to progress previously announced structural division-wide initiatives to adapt distribution and manufacturing operations, and related customer contract agreements, in response to continued volume reductions. Two significant North American facility closures were completed in the first half of 2021 as part the ongoing transformation plan.
The ongoing Covid-19 impact will be dependent on the extent and duration of ongoing restrictions driven by the rate of new Covid case growth. DVD Services has accelerated certain aspects of its future restructuring plans in an effort to adapt to these potential impacts.
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Corporate & Other recorded revenues of €16 million at the end of September 2021 YTD, decreasing compared to last year as a result of a reduction in retained patent revenue. Adjusted EBITDA amounted to €(11) million and Adjusted EBITA was €(14) million.
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As part of the financial restructuring transaction completed in 2020, debt maturities were extended and new financings executed, reinforcing the Group's liquidity.
Summary of consolidated results for nine months ended
(*) Change at current rate
Reconciliation of adjusted indicators
In addition to published results, and with the aim of providing a more comparable view of the evolution of its operating performance in 2021 compared to 2020, Technicolor is presenting a set of adjusted indicators which exclude the following items as per the statement of operations of the Group's consolidated financial statements:
These adjustments, the reconciliation of which is detailed in the following table, amounted to an impact on EBIT from continuing operations of €(11) million in 2021 compared to €(116) million in 2020 (including IFRS 16).
(*) Variation at current rates
(**) including reserves (Risk, litigation and warranty reserves)
Free Cash Flow Reconciliation and Summarized Financial Structure
Technicolor defines “Free Cash Flow” as net cash from operating activities (continuing and discontinued) plus proceeds from sales of property, plant and equipment (“PPE”) and intangible assets, minus purchases of PPE and purchases of intangible assets including capitalization of development costs.
An analyst audio webcast hosted by Richard Moat, CEO and Laurent Carozzi, CFO will be held today, November 04, 2021 at 6:30pm CET.
Financial calendar
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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
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About Technicolor:
www.technicolor.com
Technicolor shares are admitted to trading on the regulated market of Euronext Paris (TCH) and are tradable in the form of American Depositary Receipts (ADR) in the United States on the OTCQX market (TCLRY).
Investor Relations Media
Christophe le Mignan Stephanie Varlotta
Christophe.lemignan@technicolor.com Stephanie.varlotta@technicolor.com
Alexandra Fichelson Nathalie Feld
Alexandra.fichelson@technicolor.com nfeld@image7.fr
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
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 ).
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