|
TECHNICOLOR - 2012: A robust performance
(Thomson Reuters ONE Via Acquire Media NewsEdge)
PRESS RELEASE
2012: A robust performance
* Revenue growth driven by Technology and Connected Home
* Adj. EBITDA and Free Cash Flow generation exceeding objectives and up vs.
2011
* Significant deleveraging and sharp reduction in net debt
* Return to net profit in H2 2012
FY 2012 Financial Highlights
· Revenue growth at constant scope[1] and currency: up 2.2% at €3.5 billion,
driven by Connected Home and Technology.
· Adjusted EBITDA[2] at €512 million, exceeding objectives.
· Net profit of €17 million excluding EU antitrust fine; net loss of €22
million including €38.6 million EU antitrust fine.
· Group Free cash flow[3] up 31% at €106 million, exceeding objectives.
· Net debt at nominal value (non IFRS) at €839 million at December
31, 2012, a reduction of €291 million compared to end December 2011.
H2 2012 Financial Highlights
· Group revenues up 3.4% at constant scope and currency. Excluding legacy
activities[4] which affected Entertainment Services performance, revenues were
up 7.2% at constant rate.
· Adjusted EBITDA at €314 million.
· Net profit of €4 million including the €38.6 million EU antitrust fine.
· Group Free Cash Flow more than doubled at €104 million.
+-----------------+ +----------------------------+ +---------------------------+
|In € million | | Second Half | | Full Year |
+-----------------+ +-----+------+---------------+ +-----+------+--------------+
| | |2011 | 2012 | Change, | |2011 | 2012 | Change, |
| | | | | reported | | | | reported |
+-----------------+ +-----+------+---------------+ +-----+------+--------------+
|Group revenues | | | | | | | | |
|from continuing | | | | | | | | |
|operations | |1,891| 1,934| +2.2%| |3,450| 3,580| +3.8%|
| | | | | | | | | |
|Change at | | | | | | | | |
|constant currency| | | | | | | | |
|(%) | | |(0.8)%| | | |(0.2)%| |
| | | | | | | | | |
|Change at | | | | | | | | |
|constant rate and| | | | | | | | |
|scope | | | +3.4%| | | | +2.2%| |
+-----------------+ +-----+------+---------------+ +-----+------+--------------+
|Adjusted EBITDA | | | | | | | | |
|from continuing | | | | | | | | |
|operations | | 308| 314| +2.0%| | 475| 512| +7.8%|
| | | | | | | | | |
|As a % of | | | | | | | | |
|revenues | |16.3%| 16.2%| (0.1)pt| |13.8%| 14.3%| +0.5pt|
+-----------------+ +-----+------+---------------+ +-----+------+--------------+
|Net Income | |(212)| 4| +217| |(324)| (22)| +302|
+-----------------+ +-----+------+---------------+ +-----+------+--------------+
|Group Free cash | | | | | | | | |
|flow | | 49| 104| +55| | 81| 106| +25|
+-----------------+ +-----+------+---------------+ +-----+------+--------------+
|Cash position at | | | | | | | | |
|31 December | | | | | | 370| 397| +7.3%|
| | | | | | | | | |
|Net Debt IFRS at | | | | | | | | |
|31 December | | | | | | 957| 718| (24.9)%|
| | | | | | | | | |
|Net Debt non IFRS| | | | | | | | |
|at 31 December | | | | | |1,130| 839| (25.8)%|
+-----------------+ +-----+------+---------------+ +-----+------+--------------+
Technicolor, on track to deliver on Amplify 2015
A strong 2012 business performance
* Technology: Solid growth in revenues driven particularly by the record
performance of patent licensing programs and sustained MPEG LA revenues;
* Entertainment Services: Resiliency of DVD activities, which outperformed the
market in 2012; strong reduction in exposure to legacy activities; growth in
Digital Creative Services despite some softness in H2;
* Connected Home: Strong revenue growth driven by emerging markets; turnaround
plan on track with a return to adjusted EBITDA positive in second half of
2012 and breakeven in FY 2012.
A strengthened financial position
* Technicolor's financial structure significantly improved in the second half
of 2012 as a result of the capital increases completed in the third quarter
and the significant positive free cash flow generation achieved by the Group
in 2012.
* Nominal gross debt (non IFRS) reduced by €264 million;
* Increase of the Group's cash position to €397 million at end December
2012 compared to €370 million at end December 2011;
* Net debt at nominal value (non IFRS) reduced by €291 million.
* Technicolor significantly deleveraged its balance sheet in 2012 with Net
Debt to adjusted EBITDA ratio (as per Group's covenants) strongly improved
to 1.41x versus 1.97x the previous year.
Ramping up new growth areas in 2012
* Sustained pace of Intellectual Property production and continued
contribution to standards;
* Launch of Color and Image Certification programs in Technology licensing and
development of the Cinestyle offer to target prosumers, leveraging on
Technicolor's technology expertise in color fidelity and image enhancement
and its Hollywood name recognition;
* Launch of innovative solutions to address expanding digital markets and more
specifically M-GO, the Group's digital initiative which aims at becoming
consumers' first stop to find and watch satisfying entertainment content,
and Magic Ruby, the Group's second-screen initiative, offering broadcasters
and advertisers new monetization solutions;
* Launch of several new added value services for content creators, in
particular on-set services and Cineglass, an end-to-end digital solution
platform for content creators and distributors.
2013 objectives
· Growth of adj. EBITDA between 5% to 10% compared to FY 2012 adj. EBITDA at
constant scope[5] (€498 million):
o Licensing adj. EBITDA broadly stable vs. FY 2012 assuming another year of
strong contracts;
o Continued improvement of Connected Home adj. EBITDA and return to positive
free cash flow generation in this segment;
o Improved profitability in Entertainment Services reflecting cost actions
implemented in H2 2012;
o Continued increase in operating expenses for M-GO and new growth
initiatives.
· Strong growth in Free Cash Flow, above 30%, before one-off payments for
legacy litigation (mainly the EU antitrust fine for €38.6 million).
· Net debt to adj. EBITDA ratio (as per Group's covenants) below 1.25x at
end December 2013.
Confirmed value of Technicolor's Intellectual Property portfolio:
* Technicolor SA has increased its statutory shareholders' equity in December
2012, ahead of its legal obligation, through the intra-group transfer of
Thomson Licensing SAS, the owner of all Technicolor patents. The sale by
Technicolor SA to a fully-owned subsidiary at market value resulted in a
material non cash profit as the shares were previously registered at their
historical value of €40 million.
* Technicolor chose NERA Economic Consulting, a division of Marsh & McLennan
Group, as an independent firm to value Thomson Licensing SAS. NERA performed
the valuation using the DCF approach as the principal method, backed-up by a
Market Multiple approach and achieved an average value of Thomson Licensing
SAS of €2.2 billion.
* Consequently, the statutory equity of Technicolor SA amounted to €2.0
billion at the end of 2012. This intra-group transaction had no impact on
the Group's consolidated financial statements.
Frederic Rose, Chief Executive Officer of Technicolor, stated:
"Our 2012 results demonstrate that Technicolor is fully on track to achieve its
Amplify 2015 strategic roadmap and capture new opportunities to deliver an
enhanced media experience to consumers and prosumers. With higher sales,
improved profitability, free cash-flow above our targets and a strengthened
balance sheet, 2012 was a year of significant financial and strategic
achievements for Technicolor. Our strong operational performance demonstrates
the robustness of our business model and our capacity to innovate".
An analyst conference call hosted by Frederic Rose, CEO, and Stéphane Rougeot,
CFO and SEVP Strategy, will be held on Friday, February 22, 2013 at 3:00 pm CET.
Financial Calendar
+------------------+-----------------+
| Q1 2013 Revenues | April 26, 2013 |
+------------------+-----------------+
| AGM 2013 | May 23 2013 |
+------------------+-----------------+
| H1 2013 Results | July 26 2013 |
+------------------+-----------------+
| Q3 2013 | 25 October 2013 |
+------------------+-----------------+
***
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. 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. Euronext Paris: TCH ? www.technicolor.com
Contacts
Press: +33 1 41 86 53 93
technicolorpressoffice@technicolor.com
Investor relations: +33 1 41 86 55 95
investor.relations@technicolor.com
Fourth quarter and second half of 2012 financial highlights
Paris (France), 22 February 2013 - The Board of Directors of Technicolor
(Euronext Paris: TCH) met yesterday to review the Group's full year 2012
results.
Summary of consolidated results for the second half and full year of 2012
(unaudited)
All figures are preliminary and subject to final completion of review
procedures.
Technicolor is presenting, in addition to published results and with the aim to
provide a more comparable view of the evolution of its operating performance
compared with 2011, a set of adjusted indicators which exclude the following
items as per the statement of operations of our consolidated financial
statements:
· Restructuring charges;
· Net impairment charges;
· Other income and expenses (other non-current items).
These adjustments, the reconciliation of which is detailed on page 23, amounted
to an impact on Group EBIT from continuing operations of €(58) million in the
second half of 2012 (€(240) million in H2 2011).
+-------------------+ +---------------------------+ +--------------------------+
|In € million | | Second Half | | Full Year |
+-------------------+ +-----+------+--------------+ +-----+------+-------------+
| | |2011 | 2012 | Change, | |2011 | 2012 | Change, |
| | | | | reported | | | | reported |
+-------------------+ +-----+------+--------------+ +-----+------+-------------+
|Group revenues from| | | | | | | | |
|continuing | | | | | | | | |
|operations | |1,891| 1,933| +2.2%| |3,450| 3,580| +3.8%|
| | | | | | | | | |
|Change at constant | | | | | | | | |
|currency (%) | | |(0.8)%| | | |(0.2)%| |
+-------------------+ +-----+------+--------------+ +-----+------+-------------+
|Group gross margin | | 436| 476| +9.0%| | 736| 830| +12.8%|
| | | | | | | | | |
|As a % of revenues | |23.1%| 24.6%| +1.5pt| |21.3%| 23.2%| +1.9pt|
+-------------------+ +-----+------+--------------+ +-----+------+-------------+
|Adjusted EBITDA | | | | | | | | |
|from continuing | | | | | | | | |
|operations | | 308| 314| +2.0%| | 475| 512| +7.8%|
| | | | | | | | | |
|As a % of revenues | |16.3%| 16.2%| (0.1)pt| |13.8%| 14.3%| +0.5pt|
+-------------------+ +-----+------+--------------+ +-----+------+-------------+
|Adjusted EBIT from | | | | | | | | |
|continuing | | | | | | | | |
|operations | | 195| 207| +6.3%| | 232| 301| +29.5%|
| | | | | | | | | |
|As a % of revenues | |10.3%| 10.7%| +0.4pt| | 6.7%| 8.4%| +1.7pt|
+-------------------+ +-----+------+--------------+ +-----+------+-------------+
|EBIT from | | | | | | | | |
|continuing | | | | | | | | |
|operations | | (45)| 149| +194| | (33)| 264| +296|
| | | | | | | | | |
|Financial result | | (95)| (81)| +14| |(187)| (197)| (9)|
| | | | | | | | | |
|Share of | | | | | | | | |
|profit/(loss) from | | | | | | | | |
|associates | | 1| (1)| (2)| | 0| (5)| (6)|
| | | | | | | | | |
|Income tax | | (70)| (27)| +43| | (83)| (49)| +34|
+-------------------+ +-----+------+--------------+ +-----+------+-------------+
|Profit/(loss) from | | | | | | | | |
|continuing | | | | | | | | |
|operations | |(209)| 40| +249| |(303)| 13| +316|
+-------------------+ +-----+------+--------------+ +-----+------+-------------+
|Loss from | | | | | | | | |
|discontinued | | | | | | | | |
|operations | | (3)| (35)| (32)| | (21)| (35)| (14)|
| | | | | | | | | |
|Net income | |(212)| 4| +217| |(324)| (22)| +302|
+-------------------+ +-----+------+--------------+ +-----+------+-------------+
|Operating cash flow| | | | | | | | |
|from continuing | | | | | | | | |
|operations[6] | | 199| 211| +12| | 261| 312| +51|
| | | | | | | | | |
|Group Free cash | | | | | | | | |
|flow | | 49| 104| +54| | 81| 106| +25|
+-------------------+ +-----+------+--------------+ +-----+------+-------------+
|Net financial debt | | | | |
|(IFRS) | | 957| 718| (239)|
| | | | | |
|Net financial debt | | | | |
|at nominal value | | | | |
|(non IFRS) | |1,130| 839| (291)|
+-------------------+ +-----+------+-------------+
Stable operating profitability in H2 2012
· In the second half of 2012, revenues from continuing operations amounted
to €1,933 million compared with €1,891 million in the second half of 2011, a
2.2% increase at current currency but a 0.8% decrease at constant currency. At
constant scope and currency, revenues were up 3.4%.
· In the second half of 2012, gross margin amounted to €476 million, up 9%
at current currency, and represented 24.6% of revenues, an improvement of 1.5
points year-on-year.
· Adjusted EBITDA from continuing operations amounted to €314 million in the
second half of 2012 compared with €308 million in the second half of 2011, a
2.0% increase year-on-year at current currency, with adjusted EBITDA margin of
16.2% of revenues, broadly stable.
· This improvement in adjusted EBITDA was driven by increased Technology
profitability generated by strong Licensing performance and the return of
Connected Home to positive adjusted EBITDA, which offset the weaker performance
in Entertainment Services. Corporate costs increased year-on-year, as the
reduction in costs of transversal functions was offset by higher incentive
program costs related to the strong financial improvement recorded year-on-year,
increased costs for growth initiatives and a negative comparison base versus.
2011 that included several positive non-recurring impacts.
Positive net result in H2 2012, despite the European Union antitrust fine
· In the second half of 2012, adjusted EBIT from continuing operations
amounted to €207 million compared to €195 million in the second half of 2011, an
increase in margin of 0.4 point driven by lower depreciation & amortization
expenses.
· EBIT from continuing operations totaled €149 million in the second half of
2012 compared with a loss of €45 million in the second half of 2011. EBIT from
continuing operations included in the second half of 2012 a provision related to
litigation with a third party for €17 million and restructuring costs (including
the closure of Thomson Angers operations) just above 1% of revenues, down from
3.8% of revenues in the second half of 2011.
· In the second half of 2012, the Group's financial result amounted to €(81)
million compared to €(95) million in the second half of 2011. The financial
result included net interest charges of €69 million in the second half of 2012,
compared to €75 million in the second half of 2011.
· Net result was a profit of €4 million in the second half of 2012, compared
to a loss of €212 million in the second half of 2011. This figure includes the
€38.6 million antitrust fine imposed by the European Commission, classified as a
"Net loss from discontinued operations", as it related to a business
discontinued by the Group in 2005, and the €17 million litigation provision
mentioned above.
Sustained Operating Cash Flow from continuing operations in H2 2012
· Operating cash flow from continuing operations amounted to €211 million in
the second half of 2012, an increase of €12 million compared with the second
half of 2011, and represented 10.9% of revenues, a year-on-year increase of 0.4
point. In the second half of 2012, cash outflow for net capital expenditures
amounted to €73 million, a €8.5 million year-on-year decrease resulting mostly
from a decrease in capital expenditure in Creative Services, reflecting the
completion of sizeable investments. Cash outflow related to restructuring
amounted to €31 million, or 1.6% of revenues, broadly stable compared to the
second half of 2011.
Group Free Cash Flow above €100 million in H2 2012
· Group Free Cash Flow amounted to €104 million in H2 2012, compared to €49
million in H2 2011.
· Main impacts on Group Free Cash Flow are as follows:
* Cash financial charges amounted to €56 million in H2 2012;
* Other cash charges, mainly related to tax, pensions and non-current items
amounted to €49 million in H2 2012;
* Free Cash Flow from continuing operations amounted to €106 million, while
Free Cash Flow from discontinued operations resulted in a cash charge of €2
million.
Significant net debt reduction
· Nominal gross debt (non IFRS) amounted to €1,236 million (€1,115 million
IFRS) at end December 2012 compared to €1,500 million (€1,327 million IFRS) at
end December 2011, a reduction of €264 million. This improvement reflected
prepayments of €162 million related to the capital increases and Broadcast
disposal, scheduled senior debt repayments of €58 million, other net debt
repayments of €8 million, excess free cash flow of €25 million in 2011 and a
foreign exchange impact of €11 million.
· The Group's cash position also improved and amounted to €397 million at
end December 2012 compared to €370 million at end December 2011 reflecting
strong free cash flow generation of €106 million in 2012, positive contribution
of the capital increases of €179 million, debt reimbursement for €(253) million
(nominal basis) and others for €(5) million.
· Net debt at nominal value (non IFRS) amounted to €839 million at
end December 2012 compared to €1,130 million at end December 2011, a decrease of
€291 million.
· Net debt as per consolidated financial statements (IFRS) amounted to
€718 million at end December 2012 compared to €957 million at end December
2011, a decrease of €239 million.
· Technicolor has received a firm offer for a new €50 million receivables
backed credit facility replacing the existing €100m facility which expires in
April 2013. The replacement facility, at improved terms versus the existing one,
is currently under negotiation. Technicolor's other receivables backed credit
facility, a $125 million facility with Wells Fargo in the U.S, was amended in Q1
2012, extending the maturity to 2016 and improving the terms and conditions.
Financial covenants
As of December 31, 2012, the Group met its financial covenants.
+--------------------------------------------------+---------------------------+
|Covenants* |Actual on 31 December, 2012|
+--------------------------------------------------+---------------------------+
|Interest cover EBITDA/Financial Interests above| 4.53x |
| 3.65x | |
+--------------------------------------------------+---------------------------+
|Leverage Net debt/EBITDA below 2.25x | 1.41x |
+--------------------------------------------------+---------------------------+
|Capital expenditure (in € million) | 140 |
+--------------------------------------------------+---------------------------+
* For the calculation of covenants, the definition of EBITDA as per the credit
agreements is the same as the definition of adjusted EBITDA detailed in appendix
on page 23.
Fourth quarter, second half and full year of 2012 segment review
Summary of Group financial indicators by segment (unaudited)
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In € million | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Group revenues* | | 1,054| 1,005| | 1,891| 1,933| | 3,450| 3,580|
| | | | | | | | | | |
|Change as reported (%) | | | (4.7)%| | | +2.2%| | | +3.8%|
| | | | | | | | | | |
|Change at constant | | | (6.2)%| | | (0.8)%| | | (0.2)%|
|currency (%) | | | | | | | | | |
| | | | | | | | | | |
|o/w Technology | | 130| 150| | 237| 279| | 456| 515|
| | | | | | | | | | |
|Change as reported (%) | | | +15.7%| | | +17.6%| | | +12.9%|
| | | | | | | | | | |
|Change at constant | | | +20.0%| | | +23.3%| | | +13.5%|
|currency (%) | | | | | | | | | |
| | | | | | | | | | |
|o/w Entertainment | | 594| 524| | 1,048| 973| | 1,832| 1,730|
|Services | | | | | | | | | |
| | | | | | | | | | |
|Change as reported (%) | | |(11.8)%| | | (7.2)%| | | (5.6)%|
| | | | | | | | | | |
|Change at constant | | |(15.1)%| | |(12.4)%| | |(11.0)%|
|currency (%) | | | | | | | | | |
| | | | | | | | | | |
|o/w Digital Delivery | | 329| 330| | 604| 681| | 1,157| 1,334|
| | | | | | | | | | |
|Change as reported (%) | | | +0.3%| | | +12.8%| | | +15.3%|
| | | | | | | | | | |
|Change at constant | | | (0.4)%| | | +10.0%| | | +12.0%|
|currency (%) | | | | | | | | | |
| | | | | | | | | | |
|o/w Connected Home | | 283| 326| | 517| 671| | 989| 1,244|
| | | | | | | | | | |
|Change as reported (%) | | | +15.1%| | | +29.9%| | | +25.7%|
| | | | | | | | | | |
|Change at constant | | | +14.2%| | | +26.6%| | | +22.0%|
|currency (%) | | | | | | | | | |
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBITDA* | | | | | 308| 314| | 475| 512|
| | | | | | | | | | |
|Change as reported (%) | | | | | | +2.0%| | | +7.8%|
| | | | | | | | | | |
|As % of revenues | | | | | 16.3%| 16.2%| | 13.8%| 14.3%|
| | | | | | | | | | |
|o/w Technology | | | | | 183| 222| | 346| 400|
| | | | | | | | | | |
|Change as reported (%) | | | | | | +21.7%| | | +15.7%|
| | | | | | | | | | |
|As % of revenues | | | | | 77.2%| 79.8%| | 75.9%| 77.8%|
| | | | | | | | | | |
|o/w Entertainment | | | | | 163| 132| | 230| 199|
|Services | | | | | | | | | |
| | | | | | | | | | |
|Change as reported (%) | | | | | |(18.8)%| | |(13.3)%|
| | | | | | | | | | |
|As % of revenues | | | | | 15.6%| 13.6%| | 12.5%| 11.5%|
| | | | | | | | | | |
|o/w Digital Delivery | | | | | (2)| 15| | (20)| 14|
| | | | | | | | | | |
|Change as reported (%) | | | | | | nm| | | nm|
| | | | | | | | | | |
|As % of revenues | | | | | (0.4)%| 2.1%| | (1.7)%| 1.1%|
| | | | | | | | | | |
|o/w Connected Home | | | | | (17)| 12| | (43)| 1|
| | | | | | | | | | |
|Change as reported (%) | | | | | | nm| | | nm|
| | | | | | | | | | |
|As % of revenues | | | | | (3.4)%| 1.8%| | (4.4)%| 0.1%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBIT* | | | | | 195| 207| | 232| 301|
| | | | | | | | | | |
|As % of revenues | | | | | 10.3%| 10.7%| | 6.7%| 8.4%|
| | | | | | | | | | |
|o/w Technology | | | | | 180| 225| | 337| 400|
| | | | | | | | | | |
|As % of revenues | | | | | 76.1%| 80.7%| | 73.9%| 77.8%|
| | | | | | | | | | |
|o/w Entertainment | | | | | 75| 39| | 53| 26|
|Services | | | | | | | | | |
| | | | | | | | | | |
|As % of revenues | | | | | 7.1%| 4.0%| | 2.9%| 1.5%|
| | | | | | | | | | |
|o/w Digital Delivery | | | | | (23)| (0)| | (73)| (20)|
| | | | | | | | | | |
|As % of revenues | | | | | (3.9)%| 0.0%| | (6.3)%| (1.5)%|
| | | | | | | | | | |
|o/w Connected Home | | | | | (32)| (2)| | (81)| (34)|
| | | | | | | | | | |
|As % of revenues | | | | | (6.2)%| (0.2)%| | (8.2)%| (2.7)%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
* Continuing operations.
Technology
Technology financial indicators
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In € million | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Revenues | | 130| 150| | 237| 279| | 456| 515|
| | | | | | | | | | |
|Change as reported (%) | | | 15.7%| | | 17.6%| | | +12.9%|
| | | | | | | | | | |
|Change at constant | | | 20.0%| | | 23.3%| | | +13.5%|
|currency (%) | | | | | | | | | |
| | | | | | | | | | |
|o/w Licensing revenues | | 129| 150| | 234| 278| | 451| 512|
| | | | | | | | | | |
|Change as reported (%) | | | 16.6%| | | 18.4%| | | +13.6%|
| | | | | | | | | | |
|Change at constant | | | 20.9%| | | 24.2%| | | +14.2%|
|currency (%) | | | | | | | | | |
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBITDA | | | | | 183| 222| | 346| 400|
| | | | | | | | | | |
|Change as reported (%) | | | | | | 21.7%| | | +15.7%|
| | | | | | | | | | |
|As % of revenues | | | | | 77.2%| 79.8%| | 75.9%| 77.8%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBIT | | | | | 180| 225| | 337| 400|
| | | | | | | | | | |
|As % of revenues | | | | | 76.1%| 80.7%| | 73.9%| 77.8%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|EBIT | | | | | 186| 225| | 343| 403|
| | | | | | | | | | |
|As % of revenues | | | | | 78.3%| 80.7%| | 75.2%| 78.3%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
In the second half of 2012, Technology revenues reached €279 million, up 17.6%
at current currency and up 23.3% at constant currency compared to the second
half of 2011. adjusted EBITDA margin for the Technology segment increased by
2.6 points year-on-year to 79.8% of revenues, driven by a particularly strong
performance in Licensing, as well as continuing cost optimization.
For the full year 2012, Technology revenues totaled €515 million, up 12.9% at
current currency and up 13.5% at constant currency compared to the full year
2011, with Licensing revenues recording an all-time high. As a result, adjusted
EBITDA margin for the Technology segment rose by 1.9 points year-on-year to
77.8% of revenues.
Q4 2012 Revenue Highlights
In the fourth quarter of 2012, Technology revenues amounted to €150 million, up
15.7% at current currency and up 20.0% at constant currency compared to the
fourth quarter of 2011.
Licensing
In the fourth quarter of 2012, Licensing revenues recorded year-on-year growth
of 20.9% at constant currency, as a result of the strong performance of the
Group's non MPEG LA patent Licensing programs. In line with the trends of the
third quarter of 2012, the patent licensing programs experienced strong growth,
notably across the Digital TV programs, benefiting from additional new contracts
and contract renewals, along with good volume performances by some of the
Group's licensees in the fourth quarter of 2012.
Research and Innovation ("R&I") activities in 2012
In 2012, the Research and Innovation ("R&I") division sustained the pace of high
quality Intellectual Property production and its contributions in key
standardization bodies.
Over 2012, R&I significantly increased its contribution to standards,
representing Technicolor in more than 10 Standardization bodies, including MPEG,
ATSC, DVB, SMPTE, DVB & VQEG.
R&I focused on areas where Technicolor has strong differentiation, specifically
in High Efficiency Video Coding ("HEVC") and MPEG/ITU, in coding sound and
image. HEVC is the next generation video compression standard jointly developed
between MPEG and ITU-T VCEG. Technicolor has participated from the outset,
chairing or co-chairing core experiments during development of the standard and
contributing innovative technologies. Technicolor was instrumental in the
creation of the Main10 profile for improved video quality, likely to play a key
role in Ultra-High Definition (UHD). A further extension of the standard,
Scalable HEVC (SHVC) is at the centre of new activity in R&I, underlining the
commitment of Technicolor to the evolution of industry standards. Similarly, R&I
has developed ground-breaking technology to underpin its active participation in
the MPEG Call for Proposal on 3D Audio Coding. This standard is envisaged to
deliver a highly immersive audio experience to home theaters and personal
devices, bringing incomparable quality to the combined Home and Consumer
Electronic markets.
Technicolor also significantly increased its investment in ATSC 3.0 (Advanced
Television Systems Committee). This project capitalizes on Technicolor's
existing and developing technologies, in which Technicolor is one of the
historical participants. Specifically, Technicolor's interests are focused on
the physical, transport and application layers, including audio/video coding.
In 2012, Technicolor filed 444 priority applications with respect to new
inventions. The maintained pace of filings underpins the commitment to focus on
high quality patents in targeted technology areas (such as Video and Audio
Compression, Image enhancement, Networking, Content security &
Privacy), creating long term monetization opportunities for Patent Licensing
and Technology Licensing. Technicolor was also granted 2,300 patents in 2012
compared to 2,000 granted patents on average per year over the 2004-2011 period.
At the end of 2012, over 66% of Technicolor's patent portfolio has a lifetime of
10 years or more.
R&I significantly raised its scientific excellence and reputation in 2012.
Scientific excellence is measured through publications (that in turn lead to
strong Intellectual Property differentiation) and collaboration with the best
academic research institutions worldwide. R&I published in 2012 more than 40
articles in top tier scientific events (per the international research community
ranking). Collaborations have been established with four among the top six
universities (per the Shanghai ranking): Berkeley, Stanford, MIT, and Cambridge.
In France, the IP agreement with INRIA, a public research institute, has been
renewed.
Entertainment Services
Entertainment Services include Creative Services, DVD Services and IZ-ON Media
(formerly PRN). Technicolor has been developing new technology solutions to
support the transition of its customers to digital and is managing its digital
creative services business to capture growth opportunities, while limiting
exposure to fast declining legacy activities. Therefore, Technicolor is now
presenting the performances of its Creative Services business in two categories:
Digital Creative Services (Digital Production, Digital Postproduction and
Distribution, Digital Cinema) and legacy activities (Photochemical film,
Compression & Authoring, Tape duplication).
Entertainment Services financial indicators
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In € million | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Revenues | | 594| 524| | 1,048| 973| | 1,832| 1,730|
| | | | | | | | | | |
|Change as reported (%) | | |(11.8)%| | | (7.2)%| | | (5.6)%|
| | | | | | | | | | |
|Change at constant | | |(15.1%)| | |(12.4)%| | |(11.0)%|
|currency (%) | | | | | | | | | |
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBITDA | | | | | 163| 132| | 230| 199|
| | | | | | | | | | |
|Change as reported (%) | | | | | |(18.8)%| | |(13.3)%|
| | | | | | | | | | |
|As % of revenues | | | | | 15.6%| 13.6%| | 12.5%| 11.5%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBIT | | | | | 75| 39| | 53| 26|
| | | | | | | | | | |
|As % of revenues | | | | | 7.1%| 4.0%| | 2.9%| 1.5%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|EBIT | | | | | 10| 29| | (29)| 12|
| | | | | | | | | | |
|As % of revenues | | | | | 0.9%| 3.0%| | (1.6)%| 0.7%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
In the second half of 2012, Entertainment Services revenues totaled €973
million, down 7.2% at current currency and down 12.4% at constant currency.
Excluding legacy activities, revenues were down 2.4% at current currency and
down 7.9% at constant currency reflecting some softness in Digital Production
and Digital Cinema and a revenue decrease in DVD Services largely driven by the
decline in Standard Definition volumes. In the second half of 2012, combined
Standard Definition DVD and Blu-ray(TM) volumes decreased by 5%, with Blu-
ray(TM) growth of 26% and Games growth of 8%. Adjusted EBITDA amounted to €132
million or 13.6% of revenues, down 2.0 points, due to the revenue decline.
In the full year of 2012, Entertainment Services experienced a decrease in
revenues largely due to legacy activities, which represented in 2012 only 5% of
the Group's total revenues compared to 8% in full year 2011. Excluding legacy
activities, revenues were flat at current currency and down 5.8% at constant
currency. Adjusted EBITDA amounted to €199 million in full year 2012 or a margin
of 11.5%, down 1.0 point compared to full year 2011. Performances by division
are as follows:
* Creative Services experienced a year-on-year decrease in revenues, with
continued weakness in legacy activities partly offset by slight growth in
Digital Creative Services revenues, despite some softness in the second half
of the year. The activity of Visual Effects ("VFX") for feature film
recorded a weak performance due to the delay in some sizeable projects,
leading to a particularly low level of VFX activity for feature films in the
London facilities.
The Group implemented cost reduction measures in its Creative Services
division in the second half of 2012 to mitigate the impact of lower sales on its
profitability. Profitability has been progressively restored and in the fourth
quarter adjusted EBITDA margin recorded a decrease of only 0.5 point compared to
the fourth quarter of 2011 despite the softness experienced in the quarter.
* In DVD Services, a total of 1.45 billion units were replicated in 2012, a
6% decrease compared to the full year 2011, which benefited from several
successful Harry Potter-related releases. Blu-ray(TM) shipments accelerated
throughout the year and Standard Definition DVD volumes were resilient in
the North American market - despite continued pressure in the TV-DVD
category.
For the full year 2012, adjusted EBITDA margin for DVD Services remained
stable, despite an 8% year-on-year contraction in revenues and a slight margin
decline in the second half of 2012. This performance was driven by multiple
factors, including an improved products mix, the positive impact of ongoing cost
savings initiatives and efficiency improvement programs, and reduction of
offload, which offset specific customer price reductions. The DVD Services
division posted solid free cash flow generation in the second half of 2012,
largely due to continuing focus on cost savings and tight management of working
capital requirements.
* In 2012, IZ-ON Media experienced a decline in revenues resulting from a weak
US advertising market during the course of the year which has impacted its
contribution to the adjusted EBITDA margin.
Creative Services - Q4 2012 Revenue Highlights
In the fourth quarter of 2012, Creative Services recorded a year-on-year decline
in revenues, due to the sharp drop of legacy activities and continued weakness
in VFX for feature films. The Group continued to take actions to adjust its cost
base to lower revenues and changing activity mix.
Digital Creative Services
* Digital Production activities recorded a year-on-year decrease in revenues
in the fourth quarter of 2012, reflecting softness in Visual Effects ("VFX")
for feature films, offset in part by stable revenues in VFX for commercials.
The softness in feature film VFX activities was due to delays in some
sizeable projects that impacted the London facility, while customer workload
was ramping up at the Vancouver facility. Commercial VFX activities recorded
stable revenues following three quarters of strong performance, especially
at Los Angeles and New York facilities.
In the fourth quarter of 2012, VFX teams completed work on Man of Steel
(Warner), while continuing work on Maleficent (Disney), The Seventh Son
(Warner), The Lone Ranger (Disney) and 47 Ronin (Universal). They also started
work on Percy Jackson: Sea of Monsters (Fox). VFX teams won the BAFTA award for
Life of Pi (Fox), and have been nominated for Oscars for their work on
Prometheus (Fox) and Life of Pi. This was another demonstration of Technicolor's
excellence in servicing its studio customers.
* Digital Postproduction and Distribution Services activities experienced
mixed trends in the fourth quarter of 2012, following several straight
quarters of sustained revenue growth. Sound activities continued to expand
at a fast pace, thanks to the ramp-up of the Group's new facilities, notably
in Hollywood, whereas Video activities suffered from market softness. During
the quarter Hollywood Postproduction teams maintained their leading position
in Broadcast TV series, and gained market share with tent-pole movies.
Technicolor's excellence in servicing was also demonstrated as the Group served
19 projects that have received Oscar nominations, including 6 of the 9 films
nominated for the Best Picture Oscar and award nominations for its sound mixing
team on Skyfall (Sony).
Digital Distribution Services activities delivered another quarter of strong
year-on-year revenue growth in the fourth quarter of 2012, benefiting from
continued work on the catalogs of titles of major Over-the-Top and Video-on-
Demand players, as well as initial work on new delivery formats for in-flight
entertainment.
* Digital Cinema activities reported a slight year-on-year revenue decline in
the fourth quarter of 2012, with a significant rebound in volume offset by
specific customer price reductions given early in the year. At the end of
December 2012, digital screen penetration was 84% in North America and 70%
in Europe.
Legacy activities
As expected, legacy activities continued to decline sharply in the fourth
quarter of 2012, in particular photochemical film activities with photochemical
film footage down 59% and revenues down 40% year-on-year. Technicolor continued
in the quarter to reduce its exposure to such activities, which represented
4.3% of Group revenues.
DVD Services - Q4 2012 Revenue Highlights
In the fourth quarter of 2012, combined Standard Definition DVD and Blu-ray(TM)
volumes decreased by 8% compared to the fourth quarter of 2011. This decline was
driven by a decrease in Standard DVD volumes, attributable to an overall weaker
title release slate year-on-year, as well as a challenging comparison base in
Europe, which benefited from the release of multi-disc and special edition
collector's box-sets for the Harry Potter franchise in the fourth quarter of
2011.
These factors were partially offset by strengthening growth in Blu-ray(TM), with
volumes up 27% in the fourth quarter of 2012 following a 25% increase in the
third quarter of 2012, as well as stronger Games shipments, driven by several
major title releases for Microsoft's Xbox video game console. Major titles
produced in the fourth quarter of 2012 included Brave (Walt Disney), The Dark
Knight Rises (Warner Bros.), Ted (Universal) and Paranormal Activity 4
(Paramount).
DVD / Blu-ray(TM) volumes
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In million units | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Total Volumes | | 529| 487| | 947| 895| | 1540| 1,454|
| | | | | | | | | | |
|Change (%) | | | (8)%| | | (5)%| | | (6)%|
| | | | | | | | | | |
|o/w SD-DVD (Standard | | 423| 365| | 772| 691| | 1270| 1,160|
|Definition) | | | | | | | | | |
| | | | | | | | | | |
|Change (%) | | | (14)%| | | (10)%| | | (9)%|
| | | | | | | | | | |
|o/w Blu-ray(TM) | | 57| 72| | 101| 127| | 152| 182|
| | | | | | | | | | |
|Change (%) | | | +27%| | | +26%| | | +19%|
| | | | | | | | | | |
|Games | | 38| 40| | 57| 62| | 85| 88|
| | | | | | | | | | |
|Change (%) | | | +6%| | | +8%| | | +4%|
| | | | | | | | | | |
|Software and Kiosk | | 10| 9| | 16| 15| | 33| 25|
| | | | | | | | | | |
|Change (%) | | | (9%)| | | (10)%| | | (25)%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
Digital Delivery
Following the sale of the Broadcast Services, the SmartVision (television-over-
IP) businesses and the Cirpack softswitch operations (voice-over-IP),
Technicolor has renamed the existing "Digital Delivery" segment to "Connected
Home". The business review is focused on Connected Home activities. Digital
Delivery financial indicators are presented for reconciliation purposes.
Digital Delivery financial indicators
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In € million | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Revenues | | 329| 330| | 604| 681| | 1,157| 1,334|
| | | | | | | | | | |
|Change, as reported (%) | | | 0.3%| | | 12.8%| | | 15.3%|
| | | | | | | | | | |
|Change at constant | | | (0.4)%| | | 10.0%| | | 12.0%|
|currency (%) | | | | | | | | | |
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBITDA | | | | | (2)| 15| | (20)| 14|
| | | | | | | | | | |
|As % of revenues | | | | | (0.4)%| 2.1%| | (1.7)%| 1.1%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
Connected Home financial indicators
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In € million | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Revenues | | 283| 326| | 517| 671| | 989| 1,244|
| | | | | | | | | | |
|Change, as reported (%) | | | 15.1%| | | 29.9%| | | 25.7%|
| | | | | | | | | | |
|Change at constant | | | 14.2%| | | 26.6%| | | 22.0%|
|currency (%) | | | | | | | | | |
+------------------------+-+-------+-------+-+-------+-------+-+-------+-------+
|Adjusted EBITDA | | | | | (17)| 12| | (43)| 1|
| | | | | | | | | | |
|As % of revenues | | | | | (3.4)%| 1.8%| | (4.4)%| 0.1%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBIT | | | | | (32)| (2)| | (81)| (34)|
| | | | | | | | | | |
|As % of revenues | | | | | (6.2%)| (0.2)%| | (8.2%)| (2.7)%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|EBIT | | | | | (183)| (43)| | (242)| (56)|
| | | | | | | | | | |
|As % of revenues | | | | |(35.5)%| (6.5)%| |(24.4)%| (4.5)%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
In the second half of 2012, Connected Home revenues totaled €671 million, up
29.9% at current currency and up 26.6% at constant currency compared to the
second half of 2011. This performance was primarily driven by sustained customer
demand across Latin America, strong growth in the Asia-Pacific region, as well
as increasing mix of higher-end Cable devices in North America. Connected Home
adjusted EBITDA amounted to €12 million in the second half of 2012 compared to
€(17) million in the second half of 2011 and €(12) million in the first half of
2012, due to very strong revenue growth and the benefit of cost savings
initiatives. Gross margin improved by 3.5 points at 14.5% in the second half of
2012, driven by Connected Home's new customer wins for solutions and services
across all regions over the period and cost savings initiatives completed in the
second half of 2012. Cost savings achieved in full year 2012 amounted to €27
million, a gap of €5 million compared to the target announced in December 2011
and mainly due to some delay in the restructuring in Europe.
For the full year 2012, Connected Home revenues were €1,244 million, up 25.7% at
current currency and up 22.0% at constant currency compared to the full year
2011, driven by record product volumes of more than 30 million units (+27%), an
all-time high. Connected Home adjusted EBITDA amounted to €1 million in the full
year 2012 compared to €(43) million in the full year 2011, reflecting the
positive outcome of the turnaround plan launched by the Group in December 2011.
This performance was in line with the Group's objective to achieve adjusted
EBITDA breakeven for the Connected Home segment in 2012. Gross margin also
improved by 2.6 points year-on-year to 13.0%. Free cash flow was impacted by
restructuring expenses associated with cost reduction actions initiated as part
of the turnaround plan of the Connected Home segment and by operating working
capital needs associated with the significant growth of the business in 2012.
Connected Home - Q4 2012 Revenue Highlights
In the fourth quarter of 2012, Connected Home revenues amounted to €326 million,
up 15.1% at current currency and up 14.2% at constant currency compared to the
fourth quarter of 2011, confirming the solid trend experienced in the second and
third quarters of 2012 (revenues up in double-digits). This performance
principally reflected strong customer demand across emerging markets,
particularly in Latin America and Asia-Pacific, as well as improved overall
product mix in North America, driven by Cable customers.
* In North America, Connected Home product volumes recorded a year-on-year
decline in the fourth quarter of 2012, reflecting softer shipments in
Satellite set top boxes and digital-to-analog Cable adaptors. Overall
product mix however significantly improved year-on-year, driven by growing
contribution from new products introduced in the third quarter of 2012 and
higher-end devices in Cable, partly offset by weaker deliveries of HD PVRs
in Satellite compared to the prior-year quarter.
* In Latin America, global demand was strong in the fourth quarter of 2012, as
reflected by double-digit year-on-year growth in Connected Home product
volumes, driven by stronger shipments of Satellite set top boxes,
particularly in Brazil, as well as increased deliveries of broadband
gateways to Telecom customers, especially in Mexico. However overall product
mix was less favorable year-on-year, principally as a result of a decreased
proportion of HD devices in total volumes compared to the prior-year
quarter.
* In Europe, Middle-East and Africa, Connected Home products posted a slight
year-on-year volume decline in the fourth quarter of 2012, as strong growth
in shipments of Telecom broadband gateways and Cable modems largely offset
softer set top box deliveries, due primarily to the phase-out of some
Satellite and Telecom devices. Overall product mix was slightly lower year-
on-year, driven principally by a reduced contribution of HD set top boxes in
total shipments compared to the prior-year quarter.
* In Asia-Pacific, customer demand remained at a high level across the region
in the fourth quarter of 2012, as reflected by more than a three-fold
increase in Connected Home product volumes year-on-year, primarily as a
result of a sharp growth in set top box shipments to Satellite customers,
especially in India and Malaysia and new high-end solutions delivered to
Telecom customers, in particular in Australia.
Connected Home Product Volumes
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In million units | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Total Connected Home | | 6.4| 7.9| | 11.6| 15.7| | 23.7| 30.1|
|Product Volumes* | | | | | | | | | |
| | | | | | | | | | |
|Change (%) | | | +22%| | | +35%| | | +27%|
| | | | | | | | | | |
|o/w North America | | 1.9| 1.1| | 3.5| 2.8| | 7.7| 6.8|
| | | | | | | | | | |
| Change (%) | | | (39)%| | | (19)%| | | (12)%|
| | | | | | | | | | |
| Latin America | | 2.9| 3.8| | 4.7| 7.6| | 8.9| 13.7|
| | | | | | | | | | |
| Change (%) | | | +31%| | | +63%| | | +53%|
| | | | | | | | | | |
| Europe, Middle-East | | 1.3| 1.3| | 2.4| 2.5| | 4.9| 5.4|
| and Africa | | | | | | | | | |
| | | | | | | | | | |
| Change (%) | | | (2)%| | | +2%| | | +10%|
| | | | | | | | | | |
| Asia-Pacific | | 0.4| 1.7| | 1.0| 2.8| | 2.2| 4.3|
| | | | | | | | | | |
| Change (%) | | | +311%| | | +172%| | | +99%|
+------------------------+ +-------+-------+ +-------+-------+ +-------+-------+
* Including tablets and other connected devices
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------
(in € million) Year ended December 31,
-----------------------------
Unaudited 2012 2011
---------------- ------------
Continuing operations
Revenues 3,580 3,450
Cost of sales (2,750) (2,714)
---------------- ------------
Gross margin 830 736
---------------- ------------
Selling and administrative expenses (397) (376)
Research and development expenses (132) (128)
Restructuring costs (29) (83)
Net impairment losses on non-current operating (10) (188)
assets
Other income (expense) 2 6
---------------- ------------
Profit (loss) from continuing operations before 264 (33)
tax and net finance income (expense)
---------------- ------------
Interest income 4 5
Interest expense (149) (154)
Other financial income (expense) (52) (38)
---------------- ------------
Net finance income (expense) (197) (187)
---------------- ------------
Share of loss from associates (5) -
Income tax (49) (83)
---------------- ------------
Profit (loss) from continuing operations 13 (303)
---------------- ------------
Discontinued operations
Net loss from discontinued operations (35) (21)
---------------- ------------
Net income (loss) (22) (324)
---------------- ------------
Attributable to:
- Equity holders (20) (323)
- Non-controlling interests (2) (1)
-----------------------------
Year ended December 31,
-----------------------------
(in euros, except number of shares) 2012 2011
---------------- ------------
Weighted average number of shares outstanding 275,885,374 211,364,435
(basic net of treasury shares held) ((1))
---------------- ------------
Earnings (loss) per share from continuing
operations
- basic 0.05 (1.4)
- diluted 0.05 (1.3)
- basic (0.12) (0.1)
- diluted (0.12) (0.1)
Total earnings (loss) per share
- basic (0.07) (1.5)
- diluted (0.07) (1.4)
---------------- ------------
1. According to IAS 33.26 and IAS 33.27b, the weighted average number of shares
outstanding was adjusted in 2012 and 2011 to take into account the share
capital increase with preferential subscription rights that occurred on
August 14, 2012. The 2011 earnings (loss) per share was adjusted
accordingly.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
---------------------------- ------------------
( in € million) Unaudited December December 31, 2011
31, 2012
---------------------------- ------------------
ASSETS
Non-current assets
Property, plant and equipment 350 401
Goodwill 478 481
Other intangible assets 433 459
Investments in associates and 18 14
joint ventures
Investments and available- 7 7
for-sale financial assets
Derivative financial
instruments - 1
Contract advances and up- 42 49
front prepaid discount
Deferred tax assets 388 394
Income tax receivable 20 20
Other non-current assets 66 67
Cash collateral and security 15 14
deposits
---------------------------- ------------------
Total non-current assets 1,817 1,907
---------------------------- ------------------
Current assets:
Inventories 112 118
Trade accounts and notes 526 585
receivable
Income tax receivable 12 13
Other current assets 340 325
Cash collateral and security
deposits 29 35
Cash and cash equivalents 397 370
Assets classified as held for 4 66
sale
---------------------------- ------------------
Total current assets 1,420 1,512
---------------------------- ------------------
---------------------------- ------------------
Total assets 3,237 3,419
---------------------------- ------------------
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
--------------------------- ------------------
(in € million) Unaudited December December 31, 2011
31, 2012
--------------------------- ------------------
EQUITY AND LIABILITIES
Shareholders' equity:
Common stock (335,543,841
shares at December 31, 2012 335 224
with nominal value of €1 per
share)
Treasury shares (156) (156)
Additional paid-in capital 940 857
Subordinated perpetual notes 500 500
Notes redeemable in shares - 13
Other reserves - 60
Retained earnings (accumulated (1,142) (1,122)
deficit)
Cumulative translation (240) (225)
adjustment
--------------------------- ------------------
Shareholders' equity 237 151
--------------------------- ------------------
Non-controlling interests 4 4
--------------------------- ------------------
Total equity 241 155
--------------------------- ------------------
Non-current liabilities:
Borrowings 1,019 1,242
Retirement benefits
obligations 353 349
Restructuring provisions 1 2
Other provisions 76 83
Deferred tax liabilities 158 167
Other non-current liabilities 96 97
--------------------------- ------------------
Total non-current liabilities 1,703 1,940
--------------------------- ------------------
Current liabilities:
Borrowings 96 85
Derivative financial
instruments - 1
Retirement benefits
obligations 35 37
Restructuring provisions 45 79
Other provisions 78 58
Trade accounts and notes
payable 445 499
Accrued employee expenses 164 138
Income tax payable 13 14
Other current liabilities 414 361
Liabilities classified as held
for sale 3 52
--------------------------- ------------------
Total current liabilities 1,293 1,324
--------------------------- ------------------
Total liabilities 2,996 3,264
--------------------------- ------------------
--------------------------- ------------------
Total equity and liabilities 3,237 3,419
--------------------------- ------------------
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------
(in € million) Year ended December 31
-----------------------
Unaudited 2012 2011
---------------- ------
Net income (loss) (22) (324)
Loss from discontinued operations (35) (21)
Profit (loss) from continuing operations 13 (303)
---------------- ------
Summary adjustments to reconcile profit from continuing
operations to cash generated from continuing operations
Depreciation and amortization 219 261
Impairment of assets ((1)) 16 191
Net changes in provisions (75) 1
Gain on asset disposals - (8)
Interest (income) and expense 145 149
Other non-cash items (including tax) 77 80
Changes in working capital and other assets and 26 20
liabilities
Cash generated from continuing operations 421 391
Interest paid (117) (124)
Interest received 4 5
Income tax paid (49) (7)
Net operating cash generated from continuing activities 259 265
Net operating cash used in discontinued operations (6) (19)
-------------------------------------------------------- ---------------- ------
Net cash from operating activities (I) 253 246
-------------------------------------------------------- ---------------- ------
Acquisition of subsidiaries, associates and (10) (12)
investments, net of cash acquired
Net cash impact from sale of investments 17 14
Purchases of property, plant and equipment (PPE) (80) (106)
Proceeds from sale of PPE and intangible assets 2 5
Purchases of intangible assets including capitalization (69) (64)
of development costs
Cash collateral and security deposits granted to third (4) (7)
parties
Cash collateral and security deposits reimbursed by 8 31
third parties
Loans (granted to) / reimbursed by third parties (1) 1
Net investing cash used in continuing activities (137) (138)
Net investing cash used in discontinued operations (5) (20)
-------------------------------------------------------- ---------------- ------
Net cash used in investing activities (II) (142) (158)
-------------------------------------------------------- ---------------- ------
Increase in capital (net of fees paid) 179 -
Changes in ownership interests with no gain / loss of - 3
control, net of transaction fees
Proceeds from borrowings 2 4
Repayments of borrowings (255) (55)
Fees paid linked to the debt and capital restructuring (1) (9)
Hedge accounting 2 -
Net financing cash generated used in continuing (73) (57)
activities
Net financing cash used in discontinued operations - -
-------------------------------------------------------- ---------------- ------
Net cash used in financing activities (III) (73) (57)
-------------------------------------------------------- ---------------- ------
Net increase in cash and cash equivalents (I+II+III) 38 31
-------------------------------------------------------- ---------------- ------
Cash and cash equivalents at beginning of year 370 332
-------------------------------------------------------- ---------------- ------
Exchange gains/(losses) on cash and cash equivalents (11) 7
-------------------------------------------------------- ---------------- ------
Cash and cash equivalents at end of year 397 370
-------------------------------------------------------- ---------------- ------
(1) Including €6 million and €3 million of impairment of assets as part of
restructuring plans in 2012 and 2011, respectively.
Summary of consolidated results at constant scope (unaudited)
At constant scope: excluding Broadcast Services activities, sold by the Group in
July 2012, as well as IPTV/VoIP activities.
+------------------+ +---------------------------+ +---------------------------+
|In € million | | Second Half | | Full Year |
+------------------+ +-----+-----+---------------+ +-----+-----+---------------+
| | |2011 |2012 | Change, | |2011 |2012 | Change, |
| | | | | reported | | | | reported |
+------------------+ +-----+-----+---------------+ +-----+-----+---------------+
|Group revenues | | | | | | | | |
|from continuing | | | | | | | | |
|operations | |1,804|1,923| +6.6%| |3,282|3,489| +6.3%|
| | | | | | | | | |
|Change at constant| | | | | | | | |
|currency (%) | | |+3.4%| | | |+2.2%| |
+------------------+ +-----+-----+---------------+ +-----+-----+---------------+
|Group gross margin| | 415| 469| +13.0%| | 703| 800| +13.9%|
| | | | | | | | | |
|As a % of revenues| |23.0%|24.4%| +1.4pt| |21.4%|22.9%| +1.5pt|
+------------------+ +-----+-----+---------------+ +-----+-----+---------------+
|Adjusted EBITDA | | | | | | | | |
|from continuing | | | | | | | | |
|operations | | 293| 312| +6.5%| | 452| 498| +10.3%|
| | | | | | | | | |
|As a % of revenues| |16.2%|16.2%| 0.0pt| |13.8%|14.3%| +0.5pt|
+------------------+ +-----+-----+---------------+ +-----+-----+---------------+
|Adjusted EBIT from| | | | | | | | |
|continuing | | | | | | | | |
|operations | | 186| 206| +10.6%| | 225| 287| +27.8%|
| | | | | | | | | |
|As a % of revenues| |10.3%|10.7%| +0.4pt| | 6.8%| 8.2%| +1.4pt|
+------------------+ +-----+-----+---------------+ +-----+-----+---------------+
|EBIT from | | | | | | | | |
|continuing | | | | | | | | |
|operations | | (37)| 152| +189| | (23)| 263| +286|
+------------------+ +-----+-----+---------------+ +-----+-----+---------------+
Reconciliation of adjusted indicators
Technicolor is presenting, in addition to published results and with the aim to
provide a more comparable view of the evolution of its operating performance
compared with 2011, a set of adjusted indicators which exclude the following
items as per the statement of operations of our consolidated financial
statements:
· Restructuring charges;
· Net impairment charges;
· Other income and expenses (other non-current items).
These adjustments, the reconciliation of which is detailed in the following
table, amounted to an impact on the Group EBIT from continuing operations of
€(36) million for the full year of 2012 (€(266) million for the full year of
2011).
+---------------------------------------+-----+-----+-------+-----+-----+------+
|In € million |H2 11|H2 12| Change|FY 11|FY 12|Change|
+---------------------------------------+-----+-----+-------+-----+-----+------+
|EBIT from continuing operations | (45)| 149| +194| (33)| 264| +297|
+---------------------------------------+-----+-----+-------+-----+-----+------+
|Restructuring charges, net | (73)| (21)| +52| (83)| (29)| +55|
| | | | | | | |
|Net impairment losses on non-current |(175)| (5)| +170|(189)| (10)| +179|
|operating assets | | | | | | |
| | | | | | | |
|Other income / (expense) | 8| (32)| (40)| 6| 3| (4)|
+---------------------------------------+-----+-----+-------+-----+-----+------+
|Adjusted EBIT from continuing | 195| 207| +12| 232| 301| +68|
|operations | | | | | | |
| | | | | | | |
|As a % of revenues |10.3%|10.7%| +0.4pt| 6.7%| 8.4%|+1.7pt|
+---------------------------------------+-----+-----+-------+-----+-----+------+
|Depreciation and amortization (D&A)* | 113| 107| (6)| 243| 211| (32)|
+---------------------------------------+-----+-----+-------+-----+-----+------+
|Adjusted EBITDA from continuing | 308| 314| +6| 475| 512| +37|
|operations | | | | | | |
| | | | | | | |
|As a % of revenues |16.3%|16.2%|(0.1)pt|13.8%|14.3%|+0.5pt|
+---------------------------------------+-----+-----+-------+-----+-----+------+
* Including impact of provisions for risks, litigations and warranties.
--------------------------------------------------------------------------------
[1] At constant scope: excluding Broadcast Services and IPTV activities sold in
2012, and VoIP activities sold in January 2013
[2] EBIT from continuing operations excluding other income (expense), and
Depreciation & Amortization (including impact of provisions for risks,
litigations and warranties)
[3] Free Cash Flow from both continuing operations and discontinued operations
[4] Legacy activities include photochemical film, compression & authoring and
tape duplication
[5] Adjusted EBITDA at constant scope excluding Broadcast Services and IPTV
activities sold in 2012, and VoIP activities sold in January 2013 (see table
page 22)
[6] Operating cash flow from continuing operations is defined as adjusted EBITDA
minus net capex and restructuring cash out.
Technicolor - 2012: A robust performance:
http://hugin.info/143597/R/1680312/548980.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: TECHNICOLOR via Thomson Reuters ONE
[HUG#1680312]
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