TECHNICOLOR - First quarter 2013 revenues: Robust revenue growth of 2.2% at constant scope and currency

TECHNICOLOR - First quarter 2013 revenues: Robust revenue growth of 2.2% at 
constant scope and currency 
PARIS -- (Marketwired) -- 04/26/13 --  
PRESS RELEASE 
First quarter 2013 revenues: 
Robust revenue growth of 2.2% at constant scope and
currency 
Paris   (France),   26 April 2013 -   The  Board  of  Directors  of
Technicolor
(Euronext Paris: TCH)  met yesterday to review  the
Group's revenues (unaudited)
for the first quarter of 2013. 
Q1 2013 revenue highlights 
In the first quarter of 2013, Group revenues from continuing
operations amounted
to  EUR775 million, up 2.1% at constant scope[1]
and current currency and up 2.2% at  constant  scope  and  currency 
compared  to  the  first  quarter  of 2012
revenues[2]. 
* Technology: Another quarter of solid Licensing revenues, driven
by good     performance of the different licensing programs. 
* Entertainment Services: Slightly higher revenues year-on-year
excluding     legacy activities, with sustained growth in DVD Services
revenues and robust 
level of activities in Digital Creative
Services. 
* Connected Home: Strong performance in line with the momentum
recorded in H2     2012. 


 
+------------------------------+ +-----------+-----------+----------------+
|In EUR million                | |    Q1 2012|    Q1 2013|      Change, at|
|                              | |           |           |  constant scope|
|                              | |(unaudited)|(unaudited)|and currency (%)|
+------------------------------+ +-----------+-----------+----------------+
|Group revenues from continuing| |        800|        775|           +2.2%|
|operations                    | |           |           |                |
|                              | |           |           |                |
|Change as reported (%)        | |           |     (3.2)%|                |
|                              | |           |           |                |
|Change at constant currency   | |           |     (3.1)%|                |
|(%)                           | |           |           |                |
|                              | |           |           |                |
|o/w Technology                | |      
  121|        125|          (1.5)%|
|                              | |           |           |                |
|    Change as reported (%)    | |           |      +3.3%|                |
|                              | |           |           |                |
|    Change at constant        | |           |     (1.5)%|                |
|    currency (%)              | |           |           |                |
|                              | |           |           |                |
|    Entertainment Services    | |        395|        376|          (5.4)%|
|                              | |           |           |                |
|    Change as reported (%)    | |           |     (4.9)%|                |
|                              | |           |           |                |
|    Change at constant        | |           |     (5.4)%|                |
|    currency (%)              | |           |           |                |
|                              | |           |           |                |
|    Connected Home            | |        242|        274|          +16.3%|
|                              | |           |           |                |
|    Change as reported (%)    | |           |       +13%|                |
|                              | |           |           |                |
|    Change at constant        | |           |     +16.3%|                |
|    currency (%)              | |           |           |                |
|                              | |           |           |                |
|    Digital Delivery          | |         42|          0|               -|
|    (activities disposed)     | |           |           |                |
+------------------------------+ +-----------+-----------+----------------+

 
Financial Structure update 
-    Gross debt at the  end of March 2013 amounted  to EUR1,222
million at nominal value  and  EUR1,107 million  on  an  IFRS  basis,
 a decrease of respectively EUR14 million  and EUR8 million  compared
to the  end of December 2012, mainly resulting
from  EUR36 million 
of  debt  repayments  partly  offset  by  the  impact of the
appreciation  of the US dollar.  The level of  cash was lower
compared to end of December 2012 mostly due to debt repayments and
the payment of the EUR38.6 million
EU antitrust fine in March 2013. 
- Technicolor  has put in  place a new  EUR50 million receivables
backed committed credit  facility with Natixis  replacing the
previous  facility which expired in April  2013. This new  facility, 
at  improved  terms  versus  the previous one,
matures in April 2016. 
2013 objectives confirmed 
-     Growth of adj. EBITDA of between 5% to 10% compared to FY 2012
adj. EBITDA at constant scope[3] (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 Cash Flow,  above 30%, before one-off
payments for legacy litigation (particularly the EU antitrust fine
for EUR38.6 million). 
-        Net debt  to adj.  EBITDA ratio  (as per  the Group's
covenants) below 1.25x at end-December 2013. 
Frederic Rose, Chief Executive Officer of Technicolor, stated: 
"This  quarter was marked by robust  revenue growth resulting from
our continued
focus  on execution.  This good  performance was  driven
by  sustained Licensing
revenues,  a great performance in Connected
Home  and revenue growth in our core
Entertainment  Services. We 
have increased  market shares  across our different
businesses and
maintained our focus on innovation to support their growth and to
further  strengthen our intellectual property. We are on track to
deliver on our 2013 commitments." 
An  analyst conference call  hosted by Frederic  Rose, CEO and
Stephane Rougeot, CFO and SEVP Strategy will be held on Friday, 26
April 2013 at 4:00pm CET. 
Financial Calendar 


 
+------------------+-----------------+
| AGM 2013         | May 23 2013     |
+------------------+-----------------+
| H1 2013 Results  | July 26 2013    |
+------------------+-----------------+
| Q3 2013 Revenues | 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  r
isks 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 
Review by segment for the first quarter of 2013 
Technology 


 
+---------------------------------------+   +---------+---------+
| In EUR million                        |   | Q1 2012 | Q1 2013 |
+---------------------------------------+   +---------+---------+
| Revenues                              |   |     121 |     125 |
|                                       |   |         |         |
| Change as reported (%)                |   |         |   +3.3% |
|                                       |   |         |         |
| Change at constant currency (%)       |   |         |  (1.5)% |
|                                       |   |         |         |
| o/w   Licensing revenues              |   |     121 |     125 |
|                                       |   |         |         |
|       Change as reported (%)          |   |         |   +3.6% |
|                                       |   |         |         |
|       Change at constant currency (%) |   |         |  (1.3)% |
+---------------------------------------+   +---------+---------+

  
In  the first quarter of 2013, Technology  revenues amounted to EUR125
million, up 3.3% at  current currency  and down  1.5% at constant 
currency compared to the first  quarter of  2012. This performance 
reflected the  quality of the Group's
Licensing division, whose
quarterly revenues once again exceeded EUR100 million. 
Licensing 
In  the first quarter  of 2013, Licensing revenues  amounted to
EUR125 million, up 3.6% at  current currency  compared to  the first 
quarter of  2012. At constant
currency,  Licensing revenues  were
down  1.3% year-on-year, as  softer revenues
generated  by the MPEG
LA pool were  mostly offset by a sustained performance of the  other 
patent  licensing  programs.  The  Group's Digital TV program
posted
another  quarter of strong growth, driven by new contracts and
contract renewals
in the second half of 2012. 
Research and Innovation 
R&I  continued  its  focus  in  the  first  quarter  on  delivering
high quality
intellectual  property, increasing  significantly its 
level of disclosures. R&I made  also several advances  with metadata,
in  particular around new techniques
for  on-set metadata.  R&I also 
continued to  sharpen exploration of laboratory
research  relating
emotional feedback (via bio-sensors) to viewer interest level
of 
films and  commercials and  deployed algorithms  with audiences
viewing four
full  length films in regular theaters. Such viewer
participation in Technicolor
research  is complemented by  targeted
collaborative activity  with some studios
and  directors  aimed  at 
rendering  the  technology  valuable  both to content
creators  and
to viewers. Bringing such research elements together underpins the
objective of making viewing of content comfortable in the expanding
ecosystem of format  diversity and also in rendering  the choice of
content uniquely personal
and intuitive. 
Regarding  M-GO, the Group has been  improving overall technical
capabilities on the  basis of beta testing feedback. Technicolor
initiated first marketing tests
and  has been working closely with 
its consumer electronic partners to complete
integration  in their 
devices. Preloaded  devices are  expected to  be
launched
progressively  during the  second quarter.  M-GO is  also
continuing discussions
with additional device manufacturers. 
Entertainment Services 


 
+---------------------------------------+   +---------+---------+
| In EUR million                        |   | Q1 2012 | Q1 2013 |
+---------------------------------------+   +---------+---------+
| Revenues                              |   |     395 |     376 |
|                                       |   |         |         |
| Change as reported (%)                |   |         |  (4.9)% |
|                                       |   |         |         |
| Change at constant currency (%)       |   |         |  (5.4)% |
|                                       |   |         |         |
| Revenues excluding legacy activities* |   |     345 |     352 |
|                                       |   |         |         |
| Change as reported (%)                |   |         |   +2.2% |
|                                       |   |         |         |
| Change at constant currency (%)       |   |         |   +1.8% |
+---------------------------------------+   +---------+---------+

 
*  Legacy  activities  include  mainly  photochemical  film  and
compression  & authoring activities. 
In  the  first  quarter  of  2013, Entertainment  Services  revenues
amounted to EUR376 million,  down 4.9% at current currency  and down
5.4% at constant currency
compared  with  the  first  quarter  of
2012. Excluding legacy activities, whose
revenues  at constant 
currency declined  by half  in the quarter, Entertainment
Services 
revenues  were  up  2.2% at  current  currency and up 1.8% at
constant
currency compared to the first quarter of 2012, due to a
good performance in DVD Services, driven by sustained volume growth,
particularly for Blu-ray(TM) discs,
which offset lower Creative
Services revenues. 
DVD Services 
In  the first  quarter of  2013, combined Standard  DVD and 
Blu-ray(TM) volumes
increased  by 9%, driven by stable SD-DVD volume
in combination with strong Blu-ray(TM)  growth of almost 100% over
the first quarter of 2012. Volume growth was supported  in part by a
strong slate of new release titles in the quarter, which
mainly 
included  The  Hobbit:  An  Unexpected  Journey (Warner), Wreck-It-Ralph
(Disney),    Les    Miserables    (Universal),    Rise    of   
the Guardians
(Paramount/DreamWorks)  and Django Unchained 
(Weinstein). Growth in Blu- ray(TM)
volumes  in the first quarter was
further bolstered by selective share increases
across  the existing 
customer base.   In addition,  the ongoing popularity with
consumers 
of multi-disc DVD/Blu-ray(TM) "combo-packs" and other special
edition
sets  has continued to help drive strong disc replication
demand for both SD-DVD
and  Blu-ray(TM). Games volumes declined by
4.2 million units compared to a very
strong  first quarter of  2012,
which included a  larger release slate of titles
from  several key
publishers. This reduction was partially offset by an increase
in
Software related volumes. 
DVD and Blu-ray(TM) Volumes 


 
+----------------------------------------+   +---------+---------+
| In million units                       |   | Q1 2012 | Q1 2013 |
+----------------------------------------+   +---------+---------+
 
| Total Volumes                          |   |     297 |     322 |
|                                        |   |         |         |
| Change (%)                             |   |         |     +9% |
|                                        |   |         |         |
| o/w   SD-DVD (Standard Definition DVD) |   |     248 |     249 |
|                                        |   |         |         |
|       Change (%)                       |   |         |     +0% |
|                                        |   |         |         |
|       BD (Blu-ray(TM))                 |   |      27 |      54 |
|                                        |   |         |         |
|       Change (%)                       |   |         |    +98% |
|                                        |   |         |         |
|       Games                            |   |      16 |      12 |
|                                        |   |         |         |
|       Change (%)                       |   |         |   (26)% |
|                                        |   |         |         |
|       Software and Kiosk               |   |       6 |       7 |
|                                        |   |         |         |
|       Change (%)                       |   |         |    +34% |
+----------------------------------------+   +---------+---------+

 
Creative Services 
In  the first quarter of 2013, Creative Services recorded a
year-on-year decline
in revenues, due to a 54% revenue drop at
constant currency in legacy activities
and  a weak level of activity
in  January and February in Digital Production. In the quarter, the
Group continued to focus its Digital Postproduction and
Digital
Distribution  Services on  their core  strengths, in 
particular video and sound
activities   in   Postproduction  and 
work  on  digital  content libraries  in Distribution. The Group
expects the overall Digital Creative Services activities
to rebound
in the next quarter. 
Digital Creative Services 
* Digital Production activities recorded a year-on-year decline in
revenues in     the first quarter of 2013, reflecting a lower level
of activity in January 
and February in Visual Effects ("VFX") for
feature films due to the delay in     some sizeable projects.
However, Commercial VFX activities performed     strongly in the
first quarter of 2013, especially in the United States. In 
particular, the introduction of new services in New York strengthened
the 
Group's market share in this key advertising market. Based on
the current 
solid backlog, Digital Production activities are
expected to rebound in the 
next quarter. In the first quarter of
2013, VFX teams continued to work on 
Maleficent (Disney), Lone
Ranger (Disney) and 7(th) Son (Warner).     Technicolor was also
honored with the Academy Award (R) for visual effects on     Life of
Pi (Fox), further demonstrating its excellence in servicing its    
studio customers. 
* Digital Postproduction revenues reported growth in the first
quarter of     2013 compared to the first quarter of 2012. The Group
posted solid revenue 
growth in North America driven by a strong
level of activity in particular 
in Video with market share gains
both in Theatrical and Broadcast. However, 
this good performance
was partly offset by the continued weakness of the 
European
markets and the resulting revenue decrease in the region, in    
particular in Italy. During the first quarter of 2013, Digital    
Postproduction teams continued to work on movies such as G.I. Joe:   
 Retaliation and World War Z (Paramount), Gravity (Warner) and
Oblivion     (Universal) in Theatrical, as well as on successful TV
series such as Mad 
Men Season 5 (AMC), Scandal Season 2 (ABC) and
The Following Season 1 (Fox) 
in Broadcast. 
* Digital Distribution Services posted revenue growth in the first
quarter of     2013 compared to last year. The continued sustained
level of work on digital 
content libraries for Major Studios and
Distributors, Video-on-Demand and 
Over-the-Top aggregators
compensated the significant revenue decline in     Localization
Services (subtitling), in particular in North America as a    
consequence of the subcontracting agreement of the Compression &
Authoring 
activity in the third quarter of 2012. 
* Digital Cinema activities recorded volume growth year-on-year but
revenues 
were affected by the price reductions granted to some
key customers in     2012. At the end of March 2013, digital screen
penetration was 84% in North 
America and 74% in Europe. 
Legacy activities 
As expected, legacy activities continued to decline sharply in the
first quarter
of  2013, and represented  at the  end of  March 2013
only  3% of Group revenues
compared  to 6.3% in  the first  quarter
of  2012. The subcontracting agreements
implemented  in 2011 and 2012
allowed to mitigate  the impact of this sharp drop
on the Group's
profitability. 
Connected Home 
Following  the sale of  the Broadcast Services  and the SmartVision
(television-over-IP)  businesses in 2012, and the  disposal of
Cirpack softswitch operations
(voice-over-IP)  in  2013, the  Group 
renamed  the  existing "Digital Delivery"
segment to "Connected
Home". The business review is focused on Connected
Home. 


 
+---------------------------------+   +---------+---------+
| In EUR million                  |   | Q1 2012 | Q1 2013 |
+---------------------------------+   +---------+---------+
| Proforma revenues               |   |     242 |     274 |
|                                 |   |         |         |
| Change as reported (%)          |   |         |  +13.0% |
|                                 |   |         |         |
| Change at constant currency (%) |   |         |  +16.3% |
+---------------------------------+   +---------+---------+

 
In  the first quarter of 2013, Connected  Home revenues totaled EUR274
million, up 13% at  current currency and up 16.3% at constant
currency compared to the first
quarter  of 2012, marking the  fourth
straight quarter  of double-digit year-on-year  growth. This
performance principally  reflected continued strong demand in
emerging markets, particularly Brazil and Mexico in Latin America, as
well as in India,  combined  with  some  volume  growth  in Europe. In
North America, lower
shipments were partially offset by further
improvement in overall product mix. 
Technicolor  continues to  expect double-digit  year-on-year growth
in Connected
Home  revenues  for  2013, in  line  with  the  first 
quarter  trend, driven by sustained demand and market share gains in
the fast-growing emerging markets, as well  as the ramp-up of
higher-end devices launched in 2012 and the introduction
of  new
products in the course of 2013, notably starting in the third quarter
of 2013 for  Cable customers in North America. The turnaround plan of
the Connected
Home  segment, launched in December  2011, is on track
and  the Group expects to post  annualized cost savings  of
approximately EUR45 million  in 2013 compared to 2011 cost  base.  As
 a  result,  Technicolor  confirms  it  anticipates
further
improvement  in adjusted EBITDA  for Connected Home  and a
return  to a positive
free cash flow generation in this segment in
2013. 
* In North America, Connected Home product volumes declined
significantly in 
the first quarter of 2013, reflecting a drop in
set top box shipments     related to the phase-out of some Satellite
products, reduced deliveries of 
digital-to-analog Cable adaptors
and the timing of new product introductions 
(expected to occur in
the third quarter of 2013), offset in part by strong 
growth in
volumes of Cable gateways. Overall product mix improved strongly 
year-on-year, benefiting from increased contribution of higher-end
devices 
in Cable, partly offset by lower shipments of High
Definition PVRs in     Satellite compared to last year. 
* In Latin America, Connected Home product volumes recorded
 another
quarter of     double digit growth, driven by sustained customer
demand and market share 
gains across the region. This performance
reflected increased shipments of 
Satellite set top boxes,
particularly in Brazil, as well as stronger     deliveries of Telecom
products such as broadband gateways, especially in 
Mexico.
Overall product mix improved year-on-year, due to higher proportion 
of High Definition products compared to last year. 
* In Europe, Middle-East and Africa, Connected Home product volumes
were up in     the first quarter of 2013, due to sustained growth in
shipments of Cable 
modems, partly offset by softness in
deliveries of other product categories. 
Overall product mix was
lower year-on-year, as a result of a less favorable 
product mix
in Telecom, offset in part by improvements in Satellite and     Cable
compared to last year. 
* In Asia-Pacific, Connected Home product volumes experienced very
strong     growth in the first quarter of 2013, driven principally by
buoyant customer 
demand for set top boxes, particularly in India.
Overall product mix was 
lower year-on-year, due to weaker
proportion of High Definition products 
compared to last year. 
Connected Home Product Volumes 


 
+--------------------------------------+   +---------+---------+
| In million units                     |   | Q1 2012 | Q1 2013 |
+--------------------------------------+   +---------+---------+
| Total Volumes*                       |   |     6.3 |     7.1 |
|                                      |   |         |         |
| Change (%)                           |   |         |    +12% |
|                                      |   |         |         |
| o/w   North America                  |   |     2.0 |     0.6 |
|                                      |   |         |         |
|       Change (%)                     |   |         |   (69)% |
|                                      |   |         |         |
|       Latin America                  |   |     2.5 |     3.7 |
|                                      |   |         |         |
|       Change (%)                     |   |         |    +46% |
|                                      |   |         |         |
|       Europe, Middle-East and Africa |   |     1.3 |     1.3 |
|                                      |   |         |         |
|       Change (%)                     |   |         |     +4% |
|                                      |   |         |         |
|       Asia-Pacific                   |   |     0.5 |     1.4 |
|                                      |   |         |         |
|       Change (%)                     |   |         |   +182% |
+--------------------------------------+   +---------+---------+

 
* Including tablets and other connected devices 
APPENDIX 
Following  the sale of  the Broadcast Services  and the SmartVision
(television-over-IP  or IPTV)  businesses in  2012, and the 
disposal of  Cirpack softswitch
operations  (voice-over-IP or  VoIP)
in  2013, Technicolor renamed  the existing
"Digital Delivery"
segment "Connected Home". 
The  following  table  provides  proforma  information on quarterly
revenues per segment  for 2012 and the  first quarter of  2013
(excluding Broadcast Services,
IPTV and VoIP activities). 


 
+----------------------+ +-----+-----+-----+-----+-----+-----+-----+-----+
|In EUR million        | |Q1 12|Q2 12|H1 12|Q3 12|Q4 12|H2 12|FY 12|Q1 13|
+----------------------+ +-----+-----+-----+-----+-----+-----+-----+-----+
|Technology            | |  121|  115|  236|  128|  150|  279|  515|  125|
|                      | |     |     |     |     |     |     |     |     |
|Entertainment Services| |  395|  362|  757|  449|  524|  973|1,730|  376|
|                      | |     |     |     |     |     |     |     |     |
|Connected Home        | |  242|  330|  572|  345|  326|  671|1,244|  274|
|                      | |     |     |     |     |     |     |     |     |
|Other                 | |    0|    0|    0|    0|    1|    1|    1|    0|
|                      | |     |     |     |     |     |     |     |     |
|Group revenues*       | |  759|  807|1,566|  922|1,001|1,923|3,489|  775|
+----------------------+ +-----+-----+-----+-----+-----+-----+-----+-----+

 
* From continuing
operations 
---------------------------------------------------------------------------
----- 
[1]  Excluding the  Broadcast Services  and the SmartVision
(television- over-IP)
businesses, sold in 2012, and the Cirpack
softswitch operations (voice- over-IP),
sold  in 2013. Those
activities contributed EUR42 million of revenues in the first quarter
of 2012 (no contribution in the first quarter of 2013). 
[2] On a reported basis, including disposals, revenues were down 3.2%
at current
currency and down 3.1% at constant currency. 
[3]  Adjusted EBITDA at constant scope  excluding the Broadcast
Services and the SmartVision  (television-over-IP)  businesses,  sold 
in  2012, and  the Cirpack
softswitch operations (voice-over-IP),
sold in 2013. 
Technicolor - Q1 2013 Revenues:
http://hugin.info/143597/R/1696686/558899.pdf 
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