TECHNICOLOR - 2012: A robust performance

TECHNICOLOR - 2012: A robust performance 
ISSY-LES-MOULINEAUX CEDEX, FRANCE -- (Marketwire) -- 02/22/13 --  
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
EUR3.5 billion, driven by Connected Home and Technology. 
-    Adjusted EBITDA[2] at EUR512 million, exceeding objectives. 
-     Net profit of  EUR17 million excluding  EU antitrust fine; 
net loss of EUR22 million including EUR38.6 million EU antitrust fine. 
-    Group Free cash flow[3] up 31% at EUR106 million, exceeding
objectives. 
-     Net  debt  at  nominal  value  (non  IFRS)  at  EUR839 
million at December 31, 2012, a reduction of EUR291 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 EUR314 million. 
-    Net profit of EUR4 million including the EUR38.6 million EU
antitrust fine. 
-    Group Free Cash Flow more than doubled at EUR104 million. 


 
+----------------+ +----------------------------+ +-----------------------+
|In EUR 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 pr
ograms 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 EUR264 million; 
* Increase of the Group's cash position to EUR397 million at
end December 
2012 compared to EUR370 million at end December
2011; 
* Net debt at nominal value (non IFRS) reduced by EUR291
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] (EUR498 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 Cas
h Flow,  above 30%, before one-off
payments for legacy litigation (mainly the EU antitrust fine for
EUR38.6 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 EUR40 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 EUR2.2
billion. 
* Consequently, the statutory equity of Technicolor SA amounted to
EUR2.0     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 Stephane 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 Autorite des marches
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   Y  
www.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 EUR(58) million in the second half of 2012 (EUR(240) million in H2
2011). 


 
+-------------------+ +-------------------------+ +-----------------------+
|In EUR 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  EUR1,933 million compared  with EUR1,891
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 EUR476
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 EUR314
million in the second  half of 2012 compared  with EUR308 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 EUR207 million compared to EUR195 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 EUR149 million in the
second half of 2012 compared  with a loss of EUR45 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 EUR17 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 EUR(81) million  compared to  EUR(95) million  in the 
second half  of 2011. The financial
result included net interest
charges of EUR69 million in the second half of 2012,
compared to
EUR75 million in the second half of 2011. 
-    Net result was a profit of EUR4 million in the second half of
2012, compared to  a loss of EUR212 million in the  second half of
2011. This figure includes the EUR38.6 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  EUR17 million
 litigation provision
mentioned above. 
Sustained Operating Cash Flow from continuing operations in H2 2012 
-    Operating cash flow from continuing operations amounted to
EUR211 million in the  second half of  2012, an increase of  EUR12
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 EUR73 million, a EUR8.5 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 EUR31 million,  or
1.6% of  revenues, broadly  stable compared to the second half of
2011. 
Group Free Cash Flow above EUR100 million in H2 2012 
-     Group Free Cash Flow amounted to EUR104 million in H2 2012,
compared to EUR49 million in H2 2011. 
-    Main impacts on Group Free Cash Flow are as follows: 
* Cash financial charges amounted to EUR56 million in H2 2012; 
* Other cash charges, mainly related to tax, pensions and
non-current items 
amounted to EUR49 million in H2 2012; 
* Free Cash Flow from continuing operations amounted to EUR106
million, while 
Free Cash Flow from discontinued operations
resulted in a cash charge of EUR2     million. 
Significant net debt reduction 
-     Nominal gross debt (non IFRS)  amounted to EUR1,236 million
(EUR1,115 
million IFRS)  at end December 2012 compared to  EUR1,500
million (EUR1,327 million IFRS) at end  December  2011, a  reduction 
of  EUR264  million. This improvement reflected
prepayments  of 
EUR162  million  related  to  the capital increases and
Broadcast
disposal,  scheduled  senior  debt  repayments  of  EUR58 
million, other net debt repayments  of EUR8 million,  excess free
cash  flow of EUR25  million in 2011 and a foreign exchange impact of
EUR11 million. 
-     The Group's cash position  also improved and amounted  to
EUR397 million at end  December  2012 compared  to  EUR370  million 
at end December 2011 reflecting
strong  free cash flow generation of
EUR106 million in 2012, positive contribution
of  the capital
increases of EUR179 million, debt reimbursement for EUR(253) million
(nominal basis) and others for EUR(5) million. 
-     Net  debt  at  nominal  value  (non  IFRS)  amounted  to
EUR839 million at end December 2012 compared to EUR1,130 million at
end December 2011, a decrease of EUR291 million. 
-     Net  debt  as  per  consolidated  financial statements (IFRS)
amounted to EUR718 million  at  end  December  2012 compared  to 
EUR957 million at end December
2011, a decrease of EUR239 million. 
-     Technicolor has received a  firm offer for a  new EUR50
million receivables
backed  credit facility replacing  the existing
EUR100m  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 |           4.53x           |
|                  above 3.65x                |                           |
+---------------------------------------------+---------------------------+
|Leverage       Net debt/EBITDA below 2.25x   |           1.41x           |
+---------------------------------------------+---------------------------+
|Capital expenditure (in EUR 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 EUR 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 EUR 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 EUR279
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  EUR515
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
EUR150 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 Se
rvices financial indicators 


 
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In EUR 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 EUR973
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 EUR132 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 EUR199 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 EUR 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 EUR 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 EUR671
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 EUR12 million in  the second half
of 2012 compared to EUR(17) million  in the second half of 2011 and
EUR(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 EUR27 million,  a gap of EUR5
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 EUR1,244
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 EUR1 million in the full
year  2012 compared  to  EUR(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
EUR326 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 EUR 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 EUR 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 EUR 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 EUR1 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 EUR 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 EUR6 million and EUR3 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 EUR 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
EUR(36)  million for the full  year of 2012 (EUR(266) million for  the
full year of
2011).
+----------------------------------+-----+-----+-------+-----+-----+------+
|In EUR 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 operating                 |(175)|  (5)|   +170|(189)| (10)|  +179|
|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] 
Contacts 
Press: +33 1 41 86 53 93 
technicolorpressoffice@technicolor.com 
Investor relations: +33 1 41 86 55 95 
investor.relations@technicolor.com
 
 
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