Slide 1: Technicolor – Feel the Wonder
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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: Executive summary
EXECUTIVE financial performance second half performance affected by memory was significantly better cost impact than first half performance financial structure at of the Group’s structure end of December 2017 on track with the planned disposal of Patent Licensing on operating businesses, Entertainme
Slide 4: Full year 2017 financial performance from continuing operations
PULL WEAR 2017 FINANCIAL PERFORMANCE FROM CONTINUING OPERATIONS . technicolor |ae Ce alll
Slide 5: Key indicators overview
Key indicators overview Adjusted EBITDA from continuing operations DOWN BY €68 MILLION VS. FY 2016 FY 16 CH w/o ► Attributable to the Connected Home segment as Adj. EBITDA ES Memory Memory impact Corp. & memory price increases negatively impacted its impact Other w/o R&I and FY 17 Adjusted EBITDA by
Slide 6: Adjusted EBITDA strong improvement in H2 vs. H1
Adjusted EBITDA strong improvement in H2 vs. H1 First Half Second Half Δ% Δ% (in € million) 2016 2017 Constant 2016 2017 Constant currency currency Entertainment Services 71 72 (1.3)% 167 159 (1.2)% As a % of revenues 8.2% 8.5% 30bps 15.1% 16.7% 160bps Connected Home 106 57 (47.6)% 111 80 (24.8)% As
Slide 7: Production Services FY performance
Production Services FY performance Revenues (€m) REVENUE HIGHLIGHTS ADJ. EBITDA HIGHLIGHTS ► Up 3% at constant rate ► Significant profitability improvement ► Broadly stable in H2 2017: in H2 2017, resulting in an Adjusted EBITDA increase on a full year basis • Film VFX projects delayed vs. 2016: fro
Slide 8: DVD Services FY performance
DVD Services FY performance Revenues (€m) REVENUE HIGHLIGHTS ADJ. EBITDA HIGHLIGHTS ► Down c.13% at constant currency ► Slightly down compared to 2016, compared to 2016 due to volume due to YoY margin improvement decrease reflecting: ► Reductions in volumes offset by: • 11% decrease in DVD and Blu-r
Slide 9: Connected Home FY performance
Connected Home FY performance Revenues (€m) REVENUE HIGHLIGHTS ADJ. EBITDA HIGHLIGHTS ► Revenue trends improved as expected ► Equivalent to 2016 excluding the compared to H1 memory impact ► Solid performance in a challenging ► Adj. EBITDA of €137 million, 2,637 2,419 business environment negatively
Slide 10: Corporate & Other FY performance
Corporate & Other FY performance UNALLOCATED CORPORATE CORPORATE FUNCTIONS, INCLUDING R&I ACTIVITIES COSTS REVIEW AND TRADEMARK LICENSING BUSINESS Adjusted EBITDA (€m) ► As part of the Group’s simplification process 2016 2017 ► Costs which support business activities reallocated to business division
Slide 11: FY 2017 – From Adj. EBITDA to EBIT
FY 2017 – From Adj. EBITDA to EBIT From Adj. EBITDA To EBIT (in € million) 2016 2017 Change* increase reflecting: Adj. EBITDA** 359 291 (68) ► Higher capitalized research of development expenses in the Connected Home segment following the high D&A (227) (238) ( 11 ) success rate in terms of commerci
Slide 12: FY 2017 – From EBIT to Net Income
FY 2017 – From EBIT to Net Income From EBIT To Net Income Significant improvement of (in € million) 2016 2017 Change* reflecting: ► Lower interest expense due to repayment of term loans EBIT** 76 (10) (86) (€50 million in 2017) and lower average interest rates (3.45% vs. 4.34%) Financial result (154
Slide 13: Key cash flow indicators
Key cash flow indicators (in € million) 2016 2017 Change FCF continuing 88 63 (25) Discontinued operations 160 (39) (198) o/w Patent Licensing 206 40 (166) CRT (48) (77) (29) Other 2 (2) (3) FCF for reconciliation 248 24 (223) (146) (40) 291 +72 (62) (9) (43) 63 2017 Net capex Net restruc. Δ WC & OA
Slide 14: Healthy Balance Sheet structure
Healthy Balance Sheet structure Nominal IFRS December 31, 2017 December 31, 2016 Issuer Type Curr Rate Formula Maturity Rate Rate Nominal IFRS Nominal IFRS Tech Finance Term Loan USD Libor w/ floor of 1% + 4.00% Jul-20 5.00% 6.42% - - 290 279 Tech Finance Term Loan EUR Euribor w/ floor of 1% + 4.00%
Slide 15: Strong Liquidity
Strong Liquidity Amount Liquidity at December 31, 2017 (m€) Cash on hand at December 31, 2017 year end 319 All committed credit lines undrawn at December 31, 2017 Committed credit facilities: Technicolor SA Revolving Credit Facility (€250m matures 250 December 2021) Crédit Agricole credit line (€35m
Slide 16: Group's simplification on track
GROUP’S SIMPLIFICATION ON TRACK technicolor
Slide 17: Sale of the Patent Licensing business
Sale of the Patent Licensing business ► Simplification of the Group’s structure ► Highly volatile and very lumpy ► Allocation of capital and resources to ► Difficult for a listed company operating businesses with operating businesses ► Exiting an increasingly complex activity ► Litigation has become
Slide 18: Impacts of the planned sale
Impacts of the planned sale ► Patent Licensing business financial information, now reported under discontinued operations ► Research and Innovation and Trademark Licensing now included in the Corporate & Other segment ► P&L has been represented under ► Balance sheet impact: transfer to “Assets held
Slide 19: Strategic priorities and assumptions in 2018
STRATEGIC PRIORITIES AND ASSUMPTIONS IN AVVS
Slide 20: Focus on developing operating businesses
Focus on developing operating businesses + + ► Benefit from growth ► Maximize cash ► Improve the profitability opportunities driven by: generation of the Connected Home • Original content increase activity: ► Continue to seize • Immersive content increase • Implementation of the further opportunitie
Slide 21: Entertainment Services strategic priorities
Entertainment Services strategic priorities PRODUCTION SERVICES DVD SERVICES + EXPAND market coverage both in terms of CUSTOMER + Reinforce MARKET LEADERSHIP position PENETRATION and INTERNATIONAL FOOTPRINT SONY DADC OUTSOURCING starting in Q2 2018 with manufacturing and packaging in North America
Slide 22: Connected Home strategic priorities
Connected Home strategic priorities CONNECTED HOME + CUSTOMER PORTFOLIO REVIEW IMPACTS: + IN ADDITION, THE DIVISION IS ► IMPLEMENTATION of 3 year transformation plan: IMPLEMENTING OPTIMIZATION MEASURES Special FOCUS ON major Cable customers in NORTH AMERICA where we are present in all ► Go further
Slide 23: 2018 Assumptions by segment
2018 Assumptions by segment ► Revenues by division ► Expected to decline by around 10% year-on-year ► Single digit revenue ► Revenues and Volumes ► Customer portfolio review expected to generate growth: flat or slightly up revenue loss of around €250 million • Very Strong VFX project compared to 201
Slide 24: Mid-term outlook
MID-TERM OUTLOOK
Slide 25: Mid-term outlook: Adj. EBITDA above €350 million
MID-TERM EXPECTED TO BE ABOVE €350 MILLION RELYING ON THE FOLLOWING DRIVERS: RUN RATE OF AT LEAST €130 + CONTINUED SINGLE DIGIT ORGANIC REVENUE growth in Production Services MILLION BY 2020 + RESILIENCY of DVD Services activity + GDP revenue growth for Connected Home with PROFITABILITY IMPROVEMENT t
Slide 26: Appendix
| J aN APPENDIX technicolor
Slide 27: 2017 – Revenues and Adj. EBITDA
2017 – Revenues and Adj. EBITDA REVENUES Adj. EBITDA Δ% Δ% Δ% Δ% (in € million) 2016 2017 Current Constant 2016 2017 Current Constant currency currency currency currency Production 765 766 +0.0% +3.0% Services 238 230 (3.1)% (1.2)% DVD Services 1,201 1,024 (14.7)% (12.9)% Connected Home 2,637 2,419
Slide 28: Free cash flow – IFRS reconciliation
Free cash flow – IFRS reconciliation December 31, 2016 December 31, 2016 December 31, (in € million) Published Represented 2017 Adjusted EBITDA 565 359 291 Changes in working capital and other assets and liabilities 106 56 72 Pension cash usage of the period (note 8.1) (28) (28) (27) Restructuring p
Slide 29: Net nominal debt evolution (non IFRS)
Cash Net nominal debt evolution (non IFRS) (in € million) FCF FCF New cash Net January 01 2017 December 31 2017 continuing disco. from debt acquisition Dividend Forex (25) Other +63 (39) +35 (25) Cash (39) (22) position 371 319 Gross nominal 1,083 1,103 debt (593) +556 (10) +90 (45) +22 Net debt at