Slide 1: Technicolor Q4 2021 results
February 24, 2022 technicolor.com
Slide 2: Forward looking statements
FORWARD LOOKING STATEMENTS This presentation 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
Slide 3: Technicolor
technicolor
Slide 4: Key highlights
KEY HIGHLIGHTS Intention to list and spin off 65% of Technicolor Creative Intention to further the Group now has solid Studios through a deleverage while foundations, operating 3 Strong business distribution-in-kind refinancing performance to Technicolor Technicolor’s Sale of Trademark profitable bu
Slide 5: 2021 guidance achieved
2021 GUIDANCE ACHIEVED Guidance the Group continued to In € million made in June 2020 develop and execute its 2020a 2021e 2021a 2021 transformation program: @constant rate (2) improving operational and Adj. Continuing 163 270 268 272 financial performance, EBITDA sustained by strong demand Adj. Cont
Slide 6: 2022 guidance confirmed
2022 GUIDANCE CONFIRMED • Revenues from continuing operations are expected to grow • Adjusted EBITDA from continuing operations of €375m 2022 • • Adjusted EBITA from continuing operations of €175m FCF(1) from continuing operations of €230m guidance • Run-rate cost savings target of €325m by 2022, wi
Slide 7: Technicolor
technicolor
Slide 8: TCS in 2021: another year of outstanding success
TCS IN 2021: ANOTHER YEAR OF OUTSTANDING SUCCESS 30+ THEATRICAL AND 60+ STREAMING / EPISODIC CONTRIBUTION TO OVER PROJECTS 3,000 PROJECTS VISUAL BRITISH CREATIVE KINSALE VISUAL ACADEMY CANNES LIA BAFTA EFFECTS ARROWS CIRCLE SHARK EFFECTS AWARDS LIONS WARDS SOCIETY AWARDS AWARDS AWARDS SOCIETY 2 1 1
Slide 9: TCS in 2021: a more efficient and integrated organization
TCS IN 2021: A FURTHER STEP TOWARDS A MORE EFFICIENT AND INTEGRATED ORGANIZATION Creation of Technicolor Creative Studios (previously Production Services), organized into 4 focused business lines led by 4 experienced managers Christian Roberton Tom Williams Josh Mandel Andrea Miloro Jeaneane Falker
Slide 10: TCS financial performance: strong post-lockdown recovery
TCS FINANCIAL PERFORMANCE: STRONG POST-LOCKDOWN RECOVERY AND BURGEONING DEMAND FOR CONTENT 2021: IMPROVED FINANCIAL PERFORMANCE 2022 OUTLOOK REVENUES (in € million) ADJUSTED EBITDA (in € million) EBITDA MARGIN (in %) Demand for TCS VFX and 629 Animation services of the highest quality artistry and
Slide 11: Connected Home in 2021: agile response to semiconductor crisis
CONNECTED HOME IN 2021: BUSINESS SUCCESS DRIVEN BY AGILE RESPONSE TO SEMICONDUCTOR CRISIS STRONG ACTIVITY IN NORTH AMERICA WITH MAJOR CABLE OPERATORS FOR CONTINUED INNOVATION BROADBAND SOLUTIONS Wi-Fi 6/6E: Several projects to DOCSIS 3.1: milestone of over 20m RDK design the next-generation of CPE b
Slide 12: Connected Home: financial performance
CONNECTED HOME: FINANCIAL PERFORMANCE 2021: A CHALLENGING YEAR EFFICIENTLY MANAGED 2022 OUTLOOK REVENUES (in € million) ADJUSTED EBITDA (in € million) EBITDA MARGIN (in %) Demand for Connected Home Broadband broadband boxes is expected to 1,764 Video 6.0% 6.7% remain strong 1,544 +0.7pp 375 (10.0)
Slide 13: DVD Services in 2021: commercial successes and operational efficiencies
DVD SERVICES IN 2021: A YEAR OF COMMERCIAL SUCCESSES AND OPERATIONAL EFFICIENCIES DISC BUSINESS: CONTINUING NEW GROWTH BUSINESSES: RESILIENCE OF BACK CATALOG KEY COMMERCIAL SUCCESSES DISC VOLUMES BREAKDOWN (in m of units) ACTIVE, MULTIFACETED DIVERSIFICATION → Volumes only down 2.7% YoY compared to
Slide 14: DVD Services in 2021
DVD SERVICES IN 2021 2021: SHOWING THE RESULTS OF OUR OPERATIONAL RESTRUCTURING 2022: OUTLOOK REVENUES (in € million) ADJUSTED EBITDA (in € million) EBITDA MARGIN (in %) Improving 706 701 format mix +2.0pp 9.5% +1.6% @ 7.5% H2 constant rate H2 67 Cost efficiencies, to 404 418 53 mitigate anticip
Slide 15: Technicolor
technicolor
Slide 16: Key figures full year – Group
KEY FIGURES FULL YEAR – GROUP vs. LY vs. LY Forex impact at constant rate 2021 2020 (a) (b) (c=a+b) (in € million) Current rate LY rate LY rate Current rate LY rate Revenues 2,898 2,957 3,006 (108) (3.6)% +58 (50) (1.7)% Adjusted EBITDA 268 272 163 +106 +64.9% +4 +109 +67.2% in % of Revenues 9.3% 9.
Slide 17: Group profile revenue evolution
GROUP PROFILE REVENUE EVOLUTION FY REVENUES BY SEGMENT REVENUE EVOLUTION FY 2021 REVENUES: €2,898m REVENUES DOWN 1.7% AT CONSTANT EXCHANGE RATE 162 12 FY 2021 3,006 2,898 (177) 1 53% (47) Connected 59% (58) Home 24% FY 2020 23% DVD Services 1% 17% 1% 22% Corporate & Technicolor Other Creative Studio
Slide 18: Adjusted EBITDA bridge vs. LY
ADJUSTED EBITDA BRIDGE VS. LY EBITDA BY SEGMENT EBITDA GROWTH +€109m €268m % margin @ constant rate +67.2% at constant rate +9.3% Margin up 3.9pp % margin 103 6.7% €163m +5.4% 15 0 (4) 67 9.5% 106 (0) 6.0% 94 272 268 113 7.5% 53 17.9% 163 18 3.6% (14) (14) FY 2020 Technicolor Connected DVD Services
Slide 19: From adjusted EBITDA to EBIT in summary
FROM ADJUSTED EBITDA TO EBIT IN SUMMARY vs. LY vs. LY 2021 2020 at constant rate (a) Forex impact (c=a+b) (b) in € million Current rate LY rate LY rate Current rate LY rate Adjusted EBITDA 268 272 163 +106 +4 +109 D&A(1) & Reserves(2) w/o PPA amortization (173) (176) (222) +49 (3) +45 Adjusted EBITA
Slide 20: From EBIT to net result Group
FROM EBIT TO NET RESULT GROUP vs. LY vs. LY 2021 2020 at constant rate (a) Forex impact (c=a+b) (b) in € million Current rate LY rate LY rate Current rate LY rate EBIT Continuing 30 28 (267) +297 (2) +295 Net Interest Expense (126) (127) (78) (48) (1) (49) Other Financial (0) 0 155 (155) +0 (155) Ne
Slide 21: Free cash flow from continuing operations
FREE CASH FLOW FROM CONTINUING OPERATIONS FREE CASH FLOW FROM CONTINUING OPERATIONS: FY 2021 VS. FY 2020 (86) (82) +6 +2 (24) (10) +4 +16 (4) +9 (190) +109 FCF FY 2020 EBITDA Net Net ∆ WC/OAL Rendering Financial Tax Pensions FCF FY 2021 Forex FCF FY 2021 as published ADJ Capex Restructuring and Othe
Slide 22: Liquidity
LIQUIDITY at December 31, 2021 and $110m (€97m) available €27m used at December 31, 2021 on CH-France’s €40m committed factoring line * The availability of this credit line varies depending on the amount of receivables. 22 C3 - Restricted Natixis
Slide 23: Technicolor
technicolor
Slide 24: Contemplated transactions
CONTEMPLATED TRANSACTIONS TCH SHAREHOLDERS 100% (incl. MCN subscribers) 65% Technicolor Ex-TCS TCS Connected Home + DVD Services Technicolor Creative Studios Spin-off: 35% creating two Listing: EURONEXT Paris Proposed Listing: EURONEXT Paris independent market HQ: Paris HQ: Paris leaders in
Slide 25: Spin-off rationale
SPIN-OFF RATIONALE Create Ensure both entities Opportunity to further have a capital structure that can support their to Technicolor while each viability, shareholders by creating an independent TCS, a with a more focused unique pure play story in strategy and freedom the exponentially-growing reimb
Slide 26: Intention to fully refinance the Group's debt
INTENTION TO FULLY REFINANCE THE GROUP’S DEBT ENVISAGED UNLOCK the possibility REFINANCING PACKAGE of refinancing existing expensive debt at Issuance of €300m Mandatory Convertible Notes which would attractive conditions be converted into Technicolor shares: ➔ Mandatory conversion into Technicolor s
Slide 27: Envisaged transaction timeline
ENVISAGED TRANSACTION TIMELINE EGM approving If spin-off approved: issuance of the Capital Markets Conversion of Mandatory Mandatory Days Convertible Notes into Convertible Notes Technicolor shares End of May / End of June Early Q2-22 May 5th 2022 After June 30th Q3 2022 early June 2022 AGM Listing
Slide 28: TCS and Technicolor Ex-TCS
TCS and 4 __ TECHNICOLOR EX-TCS TWO ADERS LEAD makers In thei technicolor
Slide 29: Technicolor Ex-TCS
Slide 30: TCS: world's leading independent provider of creative visual arts services
TCS: WORLD'S LEADING INDEPENDENT PROVIDER OF CREATIVE VISUAL ARTS SERVICES The SpongeBob Movie: Sponge on the Run The Lion King Award-winning teams of artists and technologists partnering with the creative community across Feature Film, Episodic, Animation, Brand Experience & Advertising, and Gaming
Slide 31: Four complementary business lines – greater than the sum of the parts
FOUR COMPLEMENTARY BUSINESS LINES – GREATER THAN THE SUM OF THE PARTS A worldwide leader in Film & Episodic Global creative partner for High quality, end-to-end animation A leading provider of external VFX with the highest quality artistry agencies, production companies services, from concept art to
Slide 32: As an independent entity, TCS will accelerate execution of its strategic agenda
AS AN INDEPENDENT ENTITY, TCS WILL BE ABLE TO ACCELERATE THE EXECUTION OF ITS STRATEGIC AGENDA Expand Capacity To Geographic Expansion of Expand Capacity and Meet Strong Demand The Mill into New Markets Add New Services To For VFX and High-end Scale Technicolor CG Animation Scale direct-to-brand G
Slide 33: Strong fundamentals underpinning TCS growth
STRONG FUNDAMENTALS UNDERPINNING TCS GROWTH Positioned for Accelerated Leadership Position in Tech- Structural Growth in a Enabled Content Creation with Large and Growing TAM* an Award-Winning Portfolio Global Footprint with Long-Standing and Deeply Highly Skilled and Cemented Relationships
Slide 34: Slide 34
Slide 35: Technicolor Ex-TCS positioned to leverage leadership in existing and new markets
TECHNICOLOR EX-TCS IS IDEALLY POSITIONED TO LEVERAGE ITS LEADERSHIP IN EXISTING AND NEW MARKETS CONNECTED HOME (“CH”) DVD SERVICES Specialist manufacturing and supply chain services GLOBAL LEADER IN CUSTOMER-PREMISES EQUIPMENT LEADER IN DISC, WITH SPECIALIST MANUFACTURING AND SUPPLY CHAIN SERVICES D
Slide 36: Technicolor value proposition
TECHNICOLOR VALUE PROPOSITION As a Market Technicolor is Great Opportunity Stronger Balance Experienced Leader, Highly Strategic to Expand Sheet Management Technicolor has to its Customers, the Total to Support Strategic Team Developed Highly Creating Strong Addressable Market Priorities in Both Div
Slide 37: Connected Home: bringing connectivity and content to the heart of the home
CONNECTED HOME: BRINGING CONNECTIVITY AND CONTENT TO THE HEART OF THE HOME CONNECTED HOME IS OFFERING TO LEADING SERVICE PROVIDERS… … THE BEST PRODUCTS WITH LEADING TECHNOLOGIES Broadband Gateways to deliver flawless connectivity and Selected Broadband Customers Wi-Fi Extenders to deliver gigabit se
Slide 38: Connected Home: successfully repositioned between 2018 and 2020
CONNECTED HOME: SUCCESSFULLY REPOSITIONED BETWEEN 2018 AND 2020 ACHIEVEMENTS TRANSFORMATION PLAN BUSINESS REPOSITIONING → Priority in Broadband #1 IN OUR TARGET SEGMENTS: BROADBAND AND ANDROID TV → Focus on Android TV in Video Segment SIMPLIFICATION FOR EFFICIENCY INCREASED PRODUCTIVITY AND PROFITAB
Slide 39: Connected Home: ready for growth
CONNECTED HOME: READY FOR GROWTH OBJECTIVES GROWTH PLAN GROWTH IN CORE BUSINESS → Growth in Broadband → Focus on Android TV in Video Segment LEADERSHIP IN BROADBAND GROWING FASTER THAN THE MARKET DIVERSIFICATION INTO IoT FOR VERTICALS LEADERSHIP IN ANDROID TV PROVIDING → Digital transformation of en
Slide 40: DVD Services: transition towards specialist manufacturing and supply-chain services
DVD SERVICES: TRANSITION TOWARDS SPECIALIST MANUFACTURING & SUPPLY-CHAIN SERVICES BUSINESS WITH A CLEAR STRATEGY, FOLLOWING A 24-MONTH TRANSFORMATION Leveraging assets and driving new growth → Significant and successful international turnaround experience → Successful pivoting from disc REPOSITIONIN
Slide 41: DVD Services today: global No. 1 for U.S. studios, new growth businesses
SPECIALIST DVD SERVICES TODAY: GLOBAL MANUFACTURING SERVICES NON-DISC NO1 FOR U.S. STUDIOS, GREAT NEW UNIQUE KNOW-HOW, MANUFACTURING CAPABILITIES AND DISTRIBUTION FACILITIES SERVING NORTH GROWTH BUSINESSES AMERICA, EUROPE AND AUSTRALASIA Transition from only ‘disc’ Manufacturing capabilities inclu
Slide 42: Non-disc: manufacturing and supply chain services
NON-DISC: MANUFACTURING AND SUPPLY CHAIN SERVICES: EXPLOITING UNIQUE ASSETS AND DRIVING GROWTH TRAJECTORY SELECTED GROWTH-ORIENTED MARKET SEGMENTS Strategic Evolution → DVD Services has leveraged its talents, facilities and supply chain infrastructure (originally developed to service the 1st Antibio
Slide 43: Technicolor
technicolor
Slide 44: Technicolor Creative Studios full year profitability
TECHNICOLOR CREATIVE STUDIOS FULL YEAR PROFITABILITY vs. LY vs. LY 2021 2020 at constant rate (a) Forex impact (b) (c=a+b) Technicolor Creative Studios Current rate LY rate LY rate Current rate LY rate in € million Revenues 629 629 513 +116 +22.6% (0) +116 +22.5% Adjusted EBITDA 113 112 18 +94 ns (0
Slide 45: Connected Home full year profitability
CONNECTED HOME FULL YEAR PROFITABILITY vs. LY vs. LY 2021 2020 at constant rate (a) Forex impact (b) (c=a+b) Connected Home Current rate LY rate LY rate Current rate LY rate in € million Revenues 1,544 1,586 1,764 (219) (12.4)% +42 (177) (10.0)% Adjusted EBITDA 103 106 106 (3) (2.7)% +3 (0) (0.0)% i
Slide 46: DVD Services full year profitability
DVD SERVICES FULL YEAR PROFITABILITY vs. LY vs. LY 2021 2020 at constant rate (a) Forex impact (b) (c=a+b) DVD Services Current rate LY rate LY rate Current rate LY rate in € million Revenues 701 718 706 (5) (0.7)% +17 +12 +1.6% Adjusted EBITDA 67 68 53 +14 +25.9% +1 +15 +28.3% in % of Revenues 9.5%
Slide 47: Debt structure
DEBT STRUCTURE Nominal Nominal rate Repayment Moodys/ In million currency Currency IFRS Amount Type of rate (1) Final maturity Amount Type S&P rating New Money Notes EUR 371 380 Floating 12.00%(2) Bullet Jun. 30, 2024 Caa1/B New Money Term Loans USD 112 115 Floating 12.15%(3) Bullet Jun. 30, 2024 Ca
Slide 48: Mandatory convertible notes | key terms
MANDATORY CONVERTIBLE NOTES | KEY TERMS Item Description Issuer • Technicolor S.A. Issue amount • €300m Conversion Price • €2.60 per share, representing 3-month VWAP at signature of the commitment letter minus 5% discount Maturity Date • Earlier of 6 months after the latest maturity date of the new
Slide 49: C3 - Restricted Natixis
C3 - Restricted Natixis