Editoria e Media
Technicolor: First Quarter 2021 Results
PRESS RELEASE
Technicolor : F irst Q uarter 20 2 1 R esults
Positive start to the year in a challenging environment
Technicolor on track to deliver 2 021 and 2022 guidance
F irst quarter 2021 marks net profitability improvement vs . first quarter 2020
Paris (France), Ma y 11, 20 2 1 – Technicolor (Euronext Paris: TCH; OTCQX: TCLRY) is today announcing its results for the first quarter 2021.
Richard Moat, Chief Executive Officer of Technicolor, stated:
“ Technicolor's first quarter 2021 resul ts demonstrate continued progress with the Group's turnaround strateg y, and o ur business divisions are benefiting from strong and growing demand . L ive action production is ramping up , and more than 90 % of our 2021 visual effects and animation pipeline is already secured, in collaboration with Hollywood's most prestigious studios. The demand for state-of-the-art broadband gateways is four times what it was 12 months ago, driving the continuing improvement in performance of our Connected Home division. Our transformation has delivered improved financial results, whil st making the Group more resilient and innovative in the face of the pandemic. The Group is maintaining its guidance towards strong figures for the rest of the 2021 financial year , and is confirming its previously issued 2022 guidance.”
Technicolor deliver ed a positive first quarter 2021 despite the continuing impact of the pandemic , with results in line with expectations :
Technicolor activities are benefiting from a strong and growing demand driven by the urge to equip homes with strong broadband access, the need for original content from studios and streamers , and appetite for catalog DVDs . The main challenge s in 2021 are the capacity to deliver given component and recruitment constraints .
The Group is well on track to achieve the c. €115 millio n cost savings planned for calendar year 2021, with €20 million cost savings realized in the first quarter, en route to deliver ing a cumulative €325 million by the end of 2022.
Based on business activity for the first 3 months, the Group is confident of achieving the outlook presented in its FY 2020 press release issued on March 11, 2021.
F irst quarter 202 1 results and forward outlook – key highlights:
First quarter 202 1 key indicators for cont inuing operations
Outlook
Perimeter Change
Combined general meeting to be held on May 12, 2021
As the draft resolution n° 8 ("Appointment of Mr. Luigi Rizzo as Director") has become devoid of purpose, votes on this draft resolution, cast prior to the General Meeting in accordance with the provisions of Ordinance n° 2020-321 of March 25, 2020 as amended, will not be taken into account.
Segment Review – First Quarter 202 1 Results Highlights
Production Services has been awarded numerous new projects, securing approximately 90% of its expected 2021 sales pipeline for Film & Episodic Visual Effects and Animation & Games.
Christian Roberton, as President of the Production Services Business Division, has continued to implement management changes to drive the transformation of Production Services into an efficient creative production platform. He is maintaining a relentless focus on improving profitability and streamlining operations, and the following actions have been launched in the first quarter:
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Although demand will remain strong throughout 2021, the Covid pandemic has created distortions in the industry with disruption to global logistics. Shortages in semiconductors, which started in the second half of 2020 and are affecting many industries, will continue to impact the remainder of 2021:
In consequence, Connected Home will continue to work with its partners and customers to minimize supply disruptions. Technicolor has engaged in commercial discussions in order to pass surcharges through to customers.
Adoption of DOCSIS 3.1 and Fiber gateways is expected to continue through 2021. Technicolor Connected Home is already working with multiple major Tier 1 operators in North America, Europe and Latin America to meet current deployment demands. We anticipate the next wave of the expanding market for DOCSIS 3.1 and Fiber as operators make the transition to next generation Wi-Fi technologies and higher speeds like 10G. In the video STB segment, as stated in March this year, Technicolor Connected Home announced its latest milestone achievement in the deployment of over 10 million Android TV set-top boxes (STBs) since the beginning of the initiative in 2016.
The division continues to focus on selective investments in key customers, platform-based products and partnerships that will lead to improved margins over the year.
(*) Change at c onstant rate
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DVD Services continued to progress on previously announced structural division-wide initiatives to adapt distribution and replication operations, and related customer contract agreements in response to continued volume reductions. Two significant North American facility closures were effected in the first quarter of 2021 as part of the ongoing transformation plan.
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Corporate & Other recorded revenues of €5 million in the first quarter 2021, decreasing compared to last year. Adjusted EBITDA amounted to €(3) million and Adjusted EBITA was €(4) 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 the first quarte r
(*) Change at current rate
Reconciliation of adjusted indicators (unaudited)
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 €(16) million in 2021 compared to €(16) million in 2020 (including IFRS 16).
(*) Variation at current rates
(**) including reserves (Risk, litigation and warranty reserves)
Free Cash Flow Reconciliation and Summarized F inancial S tructure (unaudited)
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, May 11, 2021 at 7:30pm CET.
F inancial c alendar
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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: +33 1 88 24 32 83 Stephanie Varlotta
Christophe.lemignan@technicolor.com Stephanie.varlotta@technicolor.com
Nathalie Feld : +33 1 53 70 94 23 nfeld@image7.fr
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
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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