Slide 1: H1 2016 Results
H1 technicolor.com technicolor FEEL THE WONDER.
Slide 2: Forward looking statements
Forward looking statements ► THIS PRESENTATION contains ► SUCH FORWARD-LOOKING ► FOR A MORE COMPLETE certain statements that constitute STATEMENTS are based on LIST and description of such "forward-looking statements", management's current risks and uncertainties, refer including but not limited to
Slide 3: Agenda
Agenda Pages 5 to 12 Pages 13 to 14 Pages 15 to 22 Pages 23 to 24 Pages 25 to 29 Operating Licensing H1 2016 2016 Guidance Appendix Businesses Business Financial Results 3 H1 2016 RESULTS
Slide 4: H1 2016 highlights
H1 2016 highlights SOLID FREE 67% OF 86% OF LICENSING CASH FLOW TRANSFORMATION ADJ. EBITDA COMING ADJ. EBITDA COMING GENERATION ON TRACK FROM OPERATING AND ACCELERATED FROM NON MPEG LA BUSINESSES DELEVERAGING 2016 OBJECTIVES CONFIRMED INTEGRATION OF 2015 ACQUISITIONS AHEAD Further improvement in Ope
Slide 5: Operating Businesses
Slide 6: Connected Home (CH) – Revenue highlights
Connected Home (CH) – Revenue highlights Revenues (€m) Revenues by product (€m) Change at constant currency 1,378 +114.0% 588 +74.4% 1,378 652 357 652 790 +161.9% 295 H1 2015 H1 2016 H1 2015 H1 2016 Video Broadband Revenues by region (€m) Change at constant currency REVENUES HIGHLIGHTS +260.4% ► Cha
Slide 7: Connected Home (CH) – Adj. EBITDA highlights
Connected Home (CH) – Adj. EBITDA highlights Adj. EBITDA (€m) & Margin (%) ADJ. EBITDA HIGHLIGHTS ► Strengthened financial profile following change in scale 7.7% ► Gross margin at 16.4% in H1 2016, up by 0.6 point vs. H1 2015 ► Adj. EBITDA up by €78 million vs. H1 2015 106 ► Adj. EBITDA margin at 7.
Slide 8: CH - Strong commercial activity in Q2 2016
CH - Strong commercial activity in Q2 2016 VIDEO BROADBAND ► Solid pipeline of new STB contracts in Q2, ► Solid pipeline of fixed BB wins in Q2 across including OTT boxes geographies 1 US CABLE OPERATOR 1 US TELECOM O P E R AT O R 1 US OTT PANAMERICANA 8 H1 2016 RESULTS
Slide 9: CH – Focus on integration
CH – Focus on integration ► Supply chain migration successfully concluded in July ► Further progress in synergy implementation, with R&D efficiency measures launched at the end of June ► Successful absorption of the acquisition at the working capital level through rigorous inventory management 9 H1
Slide 10: Entertainment Services – Highlights
Entertainment Services – Highlights Revenues* (€m) Adj. EBITDA* (€m) Change at constant currency 863 & Margin (%) +35.4% 651 369 Production 8.2% 249 Services 9.2% 494 71 DVD Services 402 60 H1 2015 H1 2016 H1 2015 H1 2016 PRODUCTION SERVICES HIGHLIGHTS ADJ. EBITDA HIGHLIGHTS ► Revenues up by 53.8% a
Slide 11: Continued growth in Production Services
Continued growth in Production Services INCREASED pipeline of projects with major wins in all market segments during H1 2016 GROWING customer base EXPANDING capacity worldwide 11 H1 2016 RESULTS
Slide 12: DVD Services volume trends in Q2 2016
DVD Services volume trends in Q2 2016 Overall disc volumes 610 STRONG GROWTH IN BLU-RAYTM In million units 500 55 4 130 VOLUMES 100 229 272 ► Blu-rayTM disc volumes: + c.30% 2 29 vs. H1 2015 41 56 396 425 185 187 ► Overall Games volumes: + c.19% driven by ongoing growth of Xbox One demand Q2 2015 Q2
Slide 13: Licensing Business
USINESS
Slide 14: Technology – Highlights
Technology – Highlights Revenues* (€m) Adj. EBITDA* (€m) Change at constant currency & Margin (%) 258 (30.6)% 81.2% 177 MPEG LA 158 18 73.9% MPEG LA 158 18 158 Licensing 100 Licensing 112 and R&I 51 H1 2015 H1 2016 H1 2015 H1 2016 REVENUES HIGHLIGHTS ADJ. EBITDA HIGHLIGHTS ► Strong level of activity
Slide 15: H1 2016 Financial Results
H1 2016 AL RESULTS
Slide 16: H1 2016 financial highlights
H1 2016 financial highlights Revenues* (€m) Adj. EBITDA* (€m) Change as reported H1 2016 vs. H1 2015 & Margin (%) H1 2016 vs. H1 2015 Change at constant rate Change at constant rate +51.6% 11.0% +8.4% 15.4% +49.3% 2,420 250 265 1,621 H1 2015 H1 2016 H1 2015 H1 2016 Adj. EBIT* before PPA** amortizati
Slide 17: Solid free cash flow generation and deleveraging
Solid free cash flow generation and deleveraging Operating Cash Flow from Continuing Operations (€m) Group FCF (€m) Change as reported Change as reported +7.3% 208 224 (16.2)% 117 98 H1 2015 H1 2016 H1 2015 H1 2016 Nominal Net Debt (€m) Change as reported ► Senior debt voluntary prepayments: ‒ €100m
Slide 18: Strong free cash flow generation
Strong free cash flow generation In €m (74) (47) 66 (33) (40) 265 (21) 224 (18) 98 H1 2016 Net capex Net restruc. Δ WC & OAL H1 2016 Financial Tax Pensions and FCF H1 2016 Adj. EBITDA Op. CF others (discontinued) Group FCF 18 H1 2016 RESULTS
Slide 19: Key items from Adj. EBIT to net income
Key items from Adj. EBIT to net income SUMMARY OF KEY ITEMS (IN € MILLION) ► Costs related to 2015 acquisitions: — PPA amortization: €18m — Integration costs and R&D write-offs €16m ► Increase in financial costs: — Borrowing costs: €12m — Forex and others: €12m ► CRT* legacy litigation: €50m 19 H1 2
Slide 20: H1 2016 – From Adj. EBITDA to EBIT
H1 2016 – From Adj. EBITDA to EBIT (in € million) H1 2015 H1 2016 Change* Adj. EBITDA** 250 265 +15 D&A*** (91) (94) (3) Adj. EBIT** before PPA amortization 159 171 +12 PPA amortization 0 (18) (18) Adj. EBIT** 159 154 (5) Non-current 12 (12) (24) Restructuring costs (31) (39) (8) R&D write-offs (9)
Slide 21: H1 2016 – EBIT to net income
H1 2016 – EBIT to net income (in € million) H1 2015 H1 2016 Change* EBIT** 132 95 (37) Financial result (44) (73) (29) Income tax (29) (30) (1) Share of profit/(loss) from associates 1 0 (1) Profit/loss from 60 (8) (68) continuing operations Discontinued operations (12) (44) (32) Net income 48 (52)
Slide 22: Net nominal debt evolution (non IFRS)
Net nominal debt evolution (non IFRS) In €m Cash in 01 Jan. 2016 Net 30 Jun. 2016 on disposal Debt Group FCF acquisition repayment (24) Dividend Other Forex 18 (40) 98 (25) 4 18 Cash 434 position 385 Gross nominal 1,370 1,330 debt Term loan debt Other debt mandatory repayment repayment (34) (6) Net
Slide 23: 2016 Guidance
FEEL THE WONDER
Slide 24: 2016 objectives confirmed
2016 objectives confirmed FREE CASH FLOW Adj. EBITDA Adj. EBITDA breakdown Net Debt to Adj. EBITDA Operating Businesses: > €475m Technology: > €200m Corporate and Other: c. €(80)m 24 H1 2016 RESULTS
Slide 25: Appendix
FEEL THE WONDER
Slide 26: Q2 and H1 2016 revenues by segment
Q2 and H1 2016 revenues by segment Δ% Δ% Δ% Δ% (in € million) H1 2015 H1 2016 Current Constant Q2 2015 Q2 2016 Current Constant currency currency currency currency Connected Home 652 1,378 +111.4% +114.0% 335 680 +102.9% +106.7% Entertainment 651 863 +32.6% 35.4% 313 413 +31.9% +36.3% Services Techn
Slide 27: H1 2016 – Revenues & Adj. EBITDA
H1 2016 – Revenues & Adj. EBITDA Revenues* (€m) Adj. EBITDA* (€m) (79) (58) (38) 974 (79) 95 (1) 6 (6) 2,420 265 1,621 250 H1 2015 Operating Technology Exited Forex H1 2016 H1 2015 Operating Technology Exited Corporate & Forex H1 2016 revenues businesses activities** impact revenues Adj. EBITDA busi
Slide 28: H1 2016 – Foreign exchange exposure
H1 2016 – Foreign exchange exposure H1 2016 group revenues H1 2016 group cost base by currency by currency USD 24% EUR 27% CAD GBP 7% 60% AUD 58% 7% 4% BRL 4% 2% 2% Others 2% 1% 1% 1% ► Increased exposure to the US dollar ► The cost base largely matched the revenue base, with very limited discrepanc
Slide 29: Debt structure and “non-cash” liquidity
Debt structure and “non-cash” liquidity (in millions) Issuer Nominal Debt IFRS Debt Term Loan B - $ Tech Finance $918 $876 ► Average rate in H1 2016 Term Loan B - € Tech Finance €477 €447 ▬ IFRS: 6.56% Total senior debt €1,305 €1,238 ▬ Nominal: 4.97% Other debt €25 €25 Gross debt €1,330 €1,263 Cash