Technicolor: First Half 2021 Results

PRESS RELEASE Technicolor: First Half2021ResultsStrong recovery from the pandemic slowdownImproving delivery capacity to boost second half and 2022 performanceTechnicoloron track to meet its 2021 and 2022 guidanceParis (France),July29 ,2021–Technicolor(Euronext Paris: TCH; OTCQX: TCLRY) is today announcing its results for the first half of 2021. Richard Moat, Chief Executive Officer of Technicolor, stated:“...

Paris, 29/07/2021 (informazione.news - comunicati stampa - editoria e media)

PRESS RELEASE

Technicolor : F irst Half 20 2 1 R esults

Strong recovery from the pandemic slowdown

Improving delivery capacity to boost second half and 2022 performance

Tech nicolor on track to meet its 2021 and 2022 guidance

Paris (France), July 29 , 20 2 1 – Technicolor (Euronext Paris: TCH; OTCQX: TCLRY) is today announcing its results for the first half of 2021.

Richard Moat, Chief Executive Officer of Technicolor, stated:

“ Technicolor's first half of 2021 results are positive and in line with expectations. The Group is experiencing growing demand across all of its businesses , and is benefiting from improved profitability as a result of our disciplined operational focus. Demand for creative VFX artistry and technology continues to improve across media and entertainment, in combination with the progressive return of live action production. In particular, we are pleased by the fact that we have secured our target VFX sales pipeline for 2021 and a material part of 2022, a milestone which clearly demonstrates the tangible recovery of the Media and Entertainment industry.  The creation of Technicolor Creative Studios was well timed in the light of the upcoming surge in content . The division is led by a strong new leadership team focused on redefining content experiences across film, episodic, gaming, marketing, and advertising through a powerful combination of storytelling and innovation. 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 the second half of the year. In DVD Services we saw a 4% increase in total replicated disc activity, showing the attractiveness of back catalog and the resiliency of packaged media . Based on business activity for the first half and the continued successful optimization of its businesses, the Group is confident of achieving its outlook for 2021 and 2022.”

Despite the continuing challenging environment, Technicolor deliver ed a positive first half 2021 , with results in line with expectations and delivering significant improvement in profitability :

All T echnicolor activities are benefiting from sustained ma r ket demand :

The Group is on track to achieve the c. €115 millio n cost savings planned for calendar year 2021, with € 42 million cost savings realized in the first half , en route to deliver ing a cumulative €325 million by the end of 2022.

Based on business activity for the first half , the Group is confident of achieving the outlook presented in its FY 2020 results press release issued on March 11, 2021.

F irst Half year 202 1 results and forward outlook – key highlights

First Half 202 1 key indicators for cont inuing operations

Outlook

Perimeter Change

Segment Review – First Half 202 1 Results Highlights

(*) including Post Production

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The overall worldwide market situation has multiple consequences for the Connected Home business:

Connected Home will continue to work with its partners and customers to minimize supply disruptions.

The Connected Home division has strengthened its leadership in key market segments:

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 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 half of 2021 as part the ongoing transformation plan. Executive and management teams have been implementing multiple cost reduction and business improvement and efficiency programs, and these are ahead of plan at first half, and expected to deliver the full-year savings and efficiencies projected.

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Corporate & Other recorded revenues of €11 million in the first half 2021, decreasing compared to last year as a result of the decrease of the retained patent revenue. Adjusted EBITDA amounted to €(7) million and Adjusted EBITA was €(9) 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 half

(*) 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 €(1) million in 2021 compared to €(105) 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

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, July 29, 2021 at 6:30pm CEST.

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

INTERIM CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

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 ).

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