- Solid Q4 2014 activity with revenues of
€981 million, up €22 million YoY[1] (excl. legacy),
driven by an all-time record quarter in direct licensing
revenues
- Strong FY 2014 financial performance with Group free
cash flow at €230 million, up more than 50% YoY. Leverage
ratio[2] at 1.18x
- Net income of €128 million. Dividend to be proposed to
the General Meeting of Shareholders
- Launch of new strategic plan, Drive 2020, following
completion of Amplify 2015
PARIS, Feb. 19, 2015 (GLOBE NEWSWIRE)
-- Technicolor (Euronext Paris: TCH; OTCQX: TCLRY)
announces today its results for the full year 2014.
Frederic Rose, Chief Executive Officer of
Technicolor, stated:
"I am extremely proud of the work done by
everyone in Technicolor to deliver a fantastic performance in 2014
resulting in a positive net income and the initiation of a
dividend. As we now embark on our Drive 2020 strategic plan,
we will remain fully focused on creating shareholder value as a
leader in media and entertainment services, developing and
monetizing video and audio technologies."
Key points
- Strengthened market positions driven by organic growth
in Production Services and Connected Home. Solid performance in
Licensing with a high level of bilateral direct agreements. DVD
Services impacted by weak 2014 box office.
- Continued innovation: 696 priority applications
filed in 2014 compared to 509 in 2013. World first commercial
deployment of 4K set-top-boxes. Launch of the UHD
Alliance.
- Another year of improved profitability: Adjusted EBITDA
at €550 million, a 16.5% margin (up 1 point) and Adjusted EBIT
at €368 million, a margin of 11% (up
1.2 points).
- Sound financial structure: deleveraging objective
achieved one year early driven by record year of free cash flow
resulting from the profitability improvement, tight working capital
management and further reduction in financial
charges.
- The payment of a dividend will be proposed by the Board
of Directors to the 2015 Annual General Meeting given visibility of
free cash flow objectives.
- Launch of Drive 2020, the Group's new plan that aims at
extending Technicolor's leadership in Media &
Entertainment technology solutions, with best-in class operating
businesses.
2015 objectives
Since last year, the Group has decided to
accelerate its investments in targeted growth areas, as well as
into new business initiatives highly relevant in terms of
technology and IP generation (e.g. HDR, M-GO, Virdata.). In
addition, as part of the Drive 2020 strategic plan, the Group has
reviewed its activity portfolio and expects to proceed with some
small-size divestments or deconsolidation of business lines that
are not key contributors to its strategic objectives.
As a result, the Group has adjusted its 2015
objective and now expects an Adjusted EBITDA between
€560 million and €590 million. The Group expects to
generate at least €230 million of free cash flow, which will
result in a cumulated free cash flow over the 2012-2015 period well
above €700 million, by far exceeding its Amplify 2015 free
cash flow objective. As a result, the Group expects to achieve a
leverage ratio of around 0.75x at end December 2015.
Strategy
In 2012, Technicolor launched its Amplify 2015
strategic framework to increase its free cash flow generation,
deleverage its balance sheet and accelerate its efforts in
technology innovation. With the strong set of 2014 results
published today, Technicolor has exceeded its financial objectives
for both free cash flow and leverage ratio, notwithstanding
strategic investments in next-generation video and audio
technologies and services. With the completion of Amplify 2015,
Technicolor has restored its financial foundation, and benefits
from a reinvigorated innovation and IP engine, and strong operating
businesses with leading market positions.
The emergence of next-generation video and audio
technologies, coupled with the growth of digital content powered by
Over-The-Top ("OTT") services, is fundamentally changing not only
the way consumers experience content, but the way content itself is
created. These trends will have a significant impact on the current
media and entertainment ecosystem: proliferation of content
available across a wide variety of devices, and growth in consumer
media usage across all forms of content, with increased demand for
higher quality, ubiquitous and personalized consumption
experiences. Technicolor is competitively positioned to take
advantage of these shifts through its leading global and trusted
position as a service and technology provider to content creators,
network service providers and consumer electronics manufacturers.
Technicolor builds upon its strong presence in content creation
services, its innovation in OTT markets in M-GO and Connected Home,
and its role in developing and licensing next-generation video and
audio technologies.
Technicolor today announces the launch of its
new strategic plan, Drive 2020, to deliver its vision of the Group
as a leader in Media & Entertainment Services, developing and
monetizing next-generation video and audio technologies.
Drive 2020 is based on the following strategic objectives:
- Capture growth opportunities in the Media & Entertainment
services market through sustained innovation in next generation
video and audio technologies and experiences;
- Create relevant new and valuable IP assets in Media and
Entertainment from direct research investments and the operating
businesses of the Group;
3. Deepen the
competitive advantages of Technicolor's operating businesses,
further fueling the Group's IP portfolio.
Technicolor will continue to focus on improving
its free cash flow generation and promoting operational excellence
across its activities to support the execution of Drive 2020.
The implementation of Drive 2020 strategic
objectives is designed to strengthen the competitive advantage of
each business division:
- In its Technology segment, Technicolor will expand its
market-leading patent licensing platform building upon its
increasing IP assets portfolio. The Group intends to grow its
direct licensing program and will also develop new licensing models
and further enhance the deployment, value and monetization of its
IP and technology portfolio, particularly in next-generation video
and audio technologies. For M-GO, Technicolor will continue to
drive platform innovation, technology and IP development in
next-generation video technologies. Through its growing number of
partners, M-GO will expand its offering, building greater scale,
and increasing geographic reach, organically and via
partnerships.
- In Production Services, Technicolor will extend its current
industry-leading position and grow its global service and
technology platform from its current industry-leading position in
creative skills and technology to capture share in rapidly growing
film, TV and advertising segments and expand in OTT, games and
animation markets. Technicolor will offer best-in-class technology
innovation to current and emerging market segments, and will help
drive adoption of Technicolor technology across the Media and
Entertainment ecosystem.
- For DVD Services, Technicolor will retain its market-leading
position and best-in-class operational efficiencies and maintain a
solid financial contribution.
- For Connected Home, in addition to driving organic growth and
innovation, Technicolor will seek to strengthen its efforts in
emerging markets, particularly in Asia. The Group will also aim to
leverage its current key customer relationships and product
development expertise to provide a broader range of products and
services, including OTT devices. Technicolor will continue to seek
value-creative consolidation opportunities.
As part of Drive 2020, Technicolor will
dynamically adapt its portfolio of activities to focus on market
leading, profitable and strategically competitive assets, with the
objective to reinforce its operational and technology positions and
expand its addressable markets and capabilities.
With its restored financial health and
confidence in operational execution, Technicolor benefits from
greater financial flexibility to accelerate the execution of Drive
2020. The Group will target, as appropriate, external opportunities
to acquire or develop new technologies, expand into larger
addressable markets, such as in Technology and in Production
Services.
Technicolor will continue to focus on free cash
flow generation and maintain credit lines to secure temporary
liquidity needs and cushion, therefore securing ample liquidity.
The Group will also seek to maintain or improve its S&P (B+)
and Moody's (B2) credit ratings.
Drive 2020 objectives
The Group anticipates to reach an adjusted
EBITDA of around €400 million and a free cash flow comprised
between €160 million and €200 million in 2017, which will
be the low point in terms of financial performance due to the end
of the MPEG-LA licensing program.
Technicolor has set the objective to return by
2020 to an adjusted EBITDA above €500 million with a free cash
flow in excess of €250 million.
All objectives are at constant rate and
perimeter.
Proposed dividend
The Board of Directors of Technicolor has
decided to propose to the 2015 Annual General Meeting of
Shareholders the payment of a cash dividend of
€0.05 per share in relation with the 2014 financial year.
The initiation of a yearly dividend payment demonstrates the
Group's confidence in its prospects. The Board will consider every
year the balance sheet structure and economic development of
Technicolor to maintain or grow its dividend payment. If approved,
the time schedule related to the dividend payment will be as
follows:
- Ex-dividend date: 20/05/2015;
- Dividend record date: 21/05/2015;
- Payment date of dividend: 22/05/2015.
Technicolor shares will trade ex-dividend as
from the beginning of the trading session on 20 May 2015.
Holders of Technicolor shares on 20 May 2015, who would
not have previously sold their shares will be able to freely trade
their shares on the stock exchange as from such date and will not
need to block their shares until the payment date of the dividend
to benefit from such dividend.
Annual General Meeting 2015
At its meeting yesterday, the Board of Directors
of Technicolor convened the annual general shareholders' meeting on
9 April, 2015, in lieu of 21 May, so as to be able to
move forward swiftly with the implementation of the new strategic
plan.
(Full version in PDF)
[1] Year-on-Year.
[2] Nominal net debt / Adjusted EBITDA.
PDF Version http://hugin.info/143597/R/1895647/672303.pdf
HUG#1895647
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