Slide 1: Full Year 2013 Results
Full Year 2013 Results February 2014 Frederic Rose, CEO Stéphane Rougeot, CFO
Slide 2: Agenda
Agenda 1. FY2013 Key Highlights 2 2. FY2013 Financial Performance 3-11 3. Halfway through Amplify 2015 strategic roadmap 12-24 4. Inventing the future 25-30 5. Objectives and key take-aways 31-34 1
Slide 3: FY 2013 Key Highlights
FY 2013 Key Highlights Revenue: +5.2% core growth (excl. legacy) at constant rate Strong operating execution Adj. EBITDA: €537m, +10.4% at constant rate Net Income (excl. costs related to the refinancing transaction): €69m Group Free Cash flow: €153m,+45% Reinforced Cash conversion rate: 28% of Adj.
Slide 4: FY 2013 Financial Performance
FY 2013 Financial Performance technicolor =
Slide 5: FY 2013 – Financial Performance Highlights
FY 2013 – Financial Performance Highlights Revenues* (€m) Adj. EBITDA( €m) Adj. EBIT (€m) Forex impact & Margin (%) Forex impact & Margin (%) 338 Forex impact 3,362 €(119)m 537 €(13)m €(7)m 3,308 498 10% 16% Change at 14% Change at 287 Change at constant rate constant rate constant rate +5.2% +10.4%
Slide 6: Technology – FY 2013: steady contribution
Technology – FY 2013: steady contribution Revenues, €m Adj. EBITDA, €m Key Business Achievements Change at constant rates & Margin 400 Sustained renewals and new 78% +14% -5% 346 355 contracts in existing licensing 73% programs, in particular Digital TV 76% 456 515 485 Significant progress in smartp
Slide 7: Entertainment Services – FY 2013: performance in line with market leadership
Entertainment Services – FY 2013: performance in line with market leadership Revenues (excl. legacy), €m Adj. EBITDA, €m Key Business Achievements Change at constant rates & Margin -6% +2% 230 230 Resilient DVD Services 13% 199 14% Overall DVD Volumes reached 12% 1.48bn units, 2nd best year ever 1
Slide 8: Connected Home - FY 2013: growth and cash generation
Connected Home - FY 2013: growth and cash generation Revenues, €m Adj. EBITDA, €m & Change at constant rates Key Business Achievements Margin 41 3% +22% +14% Strong commercial pipeline Revenue growth in all regions in (43) 1 FY 2013 1,244 1,346 989 Deployments in H2 of new higher end devices in
Slide 9: FY 2013 – Adj. EBITDA increase driven by strong operating execution
FY 2013 – Adj. EBITDA increase driven by strong operating execution 13 (13) 39 (14) 537 512 498 2012 Adj Change in 2012 Adj Businesses Corporate Forex Impact 2013 Adj EBITDA perimeter EBITDA Contribution & other EBITDA as reported at constant scope 8
Slide 10: Net profit excl. costs related to the refinancing increased by €91m vs. 2012
Net profit excl. costs related to the refinancing increased by €91m vs. 2012 (in € million) FY 2012 FY 2013 Variation Adjusted EBIT 287 338 +51 Restructuring Costs (29) (68) (39) Net Impairment Losses (10) (31) (21) EBIT 263 226 (37) Financial Costs (197) (127) +70 Refinancing Costs - (161) (161) Sh
Slide 11: 153M€ of free cash flow generation, up 45% YoY
153M€ of free cash flow generation, up 45% YoY (114) (49) (18) (84) 537 (80) 374 (39) 153 2013 Net capital Net OCF* Change in Financial Tax, Pensions EU antitrust Group FCF Adjusted expenditures restructuring working and Others fine payment EBITDA capital & OAL Significant decrease in net capex: d
Slide 12: Gross nominal debt decreasing by €145 million
Gross nominal debt decreasing by €145 million New Debt Group FCF restructuring fees 31 Dec. 2012 31 Dec. 2013 Senior Debt repayments Other Disinvesting +153 (131) Forex +4 Cash (124) 397 (25) +33 position 307 Gross 1,091 1,236 Nominal Scheduled Accrued interests & Debt Forex Other Debt Debt Repaymen
Slide 13: Halfway through Amplify 2015 roadmap
alfway through Amplify 2015 roadmap technicolor =
Slide 14: Well on track to deliver Amplify 2015 objectives
Well on track to deliver Amplify 2015 objectives Amplify 2015 2011 2012 2013 2014 2015 objectives Adjusted €452m €498m €537m > €600m EBITDA* €81m Annual €106m €153m Group FCF over 2012-2015 Cumulative €259m > €500m Nominal Net 2.44x Debt / Adj. 1.64x 1.46x < 0.9x EBITDA 13 *Adj. EBITDA is at constan
Slide 15: Halfway through Our Strategic Roadmap Implementation
Halfway through Our Strategic Roadmap Implementation 2012-2013 Priority applications1 up 25% in 2 years Boost innovation Large number of innovative solutions and products launched in the market (M-GO, Qeo, Virdata, Ultravisual, new high-end Connected Home products, etc) Sustained renewals and
Slide 16: Innovation & Licensing – Growing IP Generation and Portfolio
Innovation & Licensing – Growing IP Generation and Portfolio Growing IP internally Selected IP acquisition A of priority applications Number +25% 507 Sony patents related to technologies for 444 smartphones & tablets (LTE, WCDMA, UMTS, WiFi, 406 haptics, software, user interface, LCD & Amoled) T
Slide 17: Innovation & Licensing – Developments in Patent and Technology Licensing
Innovation & Licensing – Developments in Patent and Technology Licensing APatent Licensing Preparing the future Existing programs Active participation in standardization bodies to Strong renewal rate in Digital TV program promote our technologies Progression in other bilateral programs, incl.
Slide 18: Innovative Solutions – Benefiting from high-growth Markets and early IP positions
Innovative Solutions – Benefiting from high-growth Markets and early IP positions Value proposition Large and high growth markets Technology and IP: +200 patent Filings in 2013 Latest movies and just released TV 8bn$ video market in US in 2013 Everywhere and Ultra HD video shows on any device, subsc
Slide 19: Innovative Solutions – Active Partnerships to Boost Market Penetration
Innovative Solutions – Active Partnerships to Boost Market Penetration Digital Content Solutions Digital Life Solutions Deep integration and 1-click Joining forces to offer best access to content communication framework for the IoT 4K streaming Seamless transactional VOD service Ultra-scalable Guara
Slide 20: Entertainment Services – Strengthened Positions in all Market Segments
Established businesses Entertainment Services – Strengthened Positions in all Market Segments A diversified customer base Key 2013 achievements DVD Services - confirmed resiliency Near record volumes at 1.48bn Multi-year contractual renewals with 3 Major Studio customers Full support for the X
Slide 21: Entertainment Services – Award-winning Talents and Innovations Driving Growth
Leverage Existing Assets Entertainment Services – Award-winning Talents and Innovations Driving Growth Increasing share of services Leading innovations on tent-pole movies Full offer of digitization and automation of workflows Introduction of new services: on set, 4K, restoration… On-location & Digi
Slide 22: Connected Home – Regained Confidence from Clients and Excellence in Execution
Established businesses Connected Home – Regained Confidence from Clients and Excellence in Execution Restoring market share gains Excellence in execution Key 2013 achievements Outperforming the market (value based) +22.0% Supply chain performance: on-time Market share gains in North America +13.7% d
Slide 23: Connected Home – Innovation to Benefit from the Next Refresh Cycle
Established businesses Connected Home – Innovation to Benefit from the Next Refresh Cycle Innovation focus Preparing for next generation Video and Internet of Wi-Fi leadership Things HEVC / 4K expertise Homeware platform for STB and GW Android-based devices, applications & user Agile software develo
Slide 24: Strong Confidence in Capacity to Outperform 2015 FCF and Deleveraging Goals
Strong Confidence in Capacity to Outperform 2015 FCF and Deleveraging Goals Stronger Free Cash Flow €500M Recovered financial flexibility generation 2015 Nominal gross debt reduced by €409m in 2 years 100% of Restructured Debt refinanced, incl. transaction announced in Feb 2014 2014 2014e- betwe
Slide 25: Renewed Financial Flexibility to Support Growth and Innovation
Renewed Financial Flexibility to Support Growth and Innovation Higher Cash conversion rate Improved financial profile (€m) 2,305 538 512 475 1,477 784 29% 1,391 21% 839 17% 1,130 1,521 81 106 153 638 261 0 10% 2011 2012 2013 2014 At end 2011 At end 2012 02/19/2014 Adj EBITDA FCF FCF/Adj. EBITDA Mark
Slide 26: Inventing the future
Inventing the future technicolor =
Slide 27: Strength of our Business Model
Strength of our Business Model from market positions on our operating businesses from confrontation to concrete expertise in selected domains market pain points (video, sound, interoperability, machine learning) Technology Operating development businesses and licensing through business from convergi
Slide 28: Framework to Deliver Value Beyond 2015
Framework to Deliver Value Beyond 2015 Key Performance Indicators Generate Innovative solutions & incremental value services from existing assets and Market share gains businesses Cost optimization Cash generation Key performance indicators Immersive Media Develop new activities in Growt
Slide 29: Immersive Media Technologies
Immersive Media Technologies Deliver premium quality content everywhere with next generation technologies* in video and audio compression, rendering & adaptation Technicolor Competitive Position Key Execution Levers #4 worldwide patent holders in video technologies Get support from major content
Slide 30: Context-Aware Entertainment
Context-Aware Entertainment Build a true personalized experience by offering new features and interaction with entertainment content Technicolor Competitive Position Key Execution Levers Existing capabilities at M-Go and Connected Home Develop new generation of UI/UX, machine learning and Tech
Slide 31: Digital Life
Digital Life Enrich consumer’s life by integrating and exploiting connected devices, sensors, applications, data and analytics Technicolor Competitive Position Key Execution Levers Technology expertise in communication, interoperability, Innovation in local networks, device and app data fusion,
Slide 32: Objectives and key take-aways
Objectives and key take-aways technicolor =
Slide 33: 2014 guidance and Amplify 2015 objectives
2014 guidance and Amplify 2015 objectives Adj. EBITDA between Free cash Flow between Net debt / Adj. EBITDA €550m-€575m in 2014 €180m-€200m in 2014 below 1.2x at end 2014 Technicolor confirms it Technicolor upgrades its Technicolor revises its expects to achieve its free cash flow generation leverag
Slide 34: Key take-aways
Key take-aways Strength of our business model: a technology leader that creates value through operating businesses and licensing technologies Improved performance across all metrics: increased profitability, strong cash generation, material deleveraging Leading market positions of our operating busi
Slide 35: Thank You
rs a technicolor == —_ 1 THANK Y@U
Slide 36: Appendix
Appendix technicolor =
Slide 37: Q4 2013 – Highlights
Q4 2013 – Highlights Q4 2013 Revenues, €m Technology Revenues, €m Entertainment Services Connected Home Revenues, €m Revenues, €m 1,001 979 524 +16.1%* 356 150 (10.1)%* 135 487 326 +4.5%** 959 958 +1.3%** 482 466 Q4 12 Q4 13 Q4 12 Q4 13 Q4 12 Q4 13 Q4 12 Q4 13 Legacy Legacy Q4 2013 DVD Volumes (m un
Slide 38: Semester Revenues by Division – at constant scope and rate
Semester Revenues by Division – at constant scope and rate Δ% Δ% (in € million) At constant scope H1 2013 Constant H2 2013 Constant Currency Currency Technology 227 (3.3)% 258 (7.3)% Entertainment Services 732 (2.5)% 885 (4.3)% excluding legacy activities 680 +4.2% 850 +0.3% Connected Home 630 +13.1
Slide 39: Semester Adjusted EBITDA by Division – at constant scope and rate
Semester Adjusted EBITDA by Division – at constant scope and rate Δ% Δ% (in € million) At constant scope H1 2013 Constant H2 2013 Constant Currency Currency Technology 164 (8.2%) 191 (14.2)% Entertainment Services 84 +27.5% 146 +15.3% Connected Home 2 - 39 +257.1% Total from continuing operations* 2
Slide 40: Net profit excl. costs related to the refinancing increased by €91m vs. 2012
Net profit excl. costs related to the refinancing increased by €91m vs. 2012 (in € million) 2H 2012 2H 2013 Change FY 2012 FY 2013 Change Adjusted EBIT 206 227 (21) 287 338 +51 Restructuring Costs (21) (49) (27) (29) (68) (39) Net Impairment Losses (5) (29) (25) (10) (31) (21) EBIT 152 137 (15) 263