TECHNICOLOR CLOSES 2021 WITH A STRONG PERFORMANCE,
READY TO ENTER A NEW CHAPTER OF VALUE CREATION
- 2021, a year of significant achievement
- Strong 2022 outlook
- New phase to enhance the full potential of the Technicolor business and create value for all stakeholders
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Dear Shareholders,
2021 was a year of significant achievement in financial and operational terms. Despite the unpredictable business environment, we have yet again proved our ability to react quickly and efficiently, producing strong financial and operating results, and positioning Technicolor on a growth trajectory for the years to come. The efforts of our dedicated and talented teams have enabled us to continue delivering the best products and services to our clients, allowing us to achieve our 2021 guidance. Today, we have solid foundations for long-term growth and believe that now is the right moment to begin a new chapter as we position all of our business divisions for future success.
A SUCCESSFUL TRANSFORMATION IMPROVING EFFICIENCIES AND RESULTS
Over the past two years, we have been successfully executing a transformational strategy to improve the Group’s operational and financial performance. As a result, Technicolor has a portfolio of three leading and profitable businesses, operated by a renewed and experienced management team: |
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Technicolor Creative Studios (TCS) provides visual effects services using the highest quality artistry and cutting-edge technology within the entire industry. Under Christian Roberton’s leadership, we have reorganized and integrated our studios under dedicated service lines to serve our clients more efficiently: MPC for Film & Episodic, The Mill for Advertising, Mikros for Animation and Technicolor for Games. |
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Connected Home, under Luis Martinez-Amago’s leadership, has implemented several initiatives aiming at improving efficiencies and reducing costs. As a result of these initiatives, we are well-positioned to address strong customer demand despite also navigating an environment impacted by supply chain constraints and the semiconductor crisis. |
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DVD Services, led by David Holliday, has repositioned the disc business to focus strongly on profitability and is in parallel expanding into new future-growth businesses by leveraging existing assets, know-how and customer relationships. |
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A NEW CHAPTER FOR TECHNICOLOR
Today, we are writing a new page of Technicolor’s history, aiming at creating value for all Technicolor stakeholders. |
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We intend to spin-off (65%) of TCS. This should help reduce the conglomerate discount affecting TCH shares, and reduce the complexity of the group, allowing both new entities to focus on their growth story without competing for resources. |
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We have the opportunity, thanks to the support of our key shareholders, and the issuance of fully backstopped Mandatory Convertible Notes, to significantly decrease the financial debt, and complete a full refinancing of both entities, leading to a significant reduction of the current interest burden. |
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With the partial spin-off of TCS, we intend to create two independent market leaders in their respective sectors: |
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TCS will apply for a listing on the Euronext Paris stock exchange, and will be a global leader in VFX, offering an attractive “pure play” equity story in a market with burgeoning growth. |
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Technicolor ex-TCS will be the leader in Connected Home devices as it leverages its position in existing and new markets, and in DVD Services as global leader in Disc, with specialty manufacturing and supply chain to two growth stories. |
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As Technicolor shareholders, you will receive TCS shares, while remaining shareholders of Technicolor Ex-TCS. So, you will have exposure to two growth stories.
Existing lenders will be refunded early, and the financial profile of each company will be significantly de-risked. The refinancing package will include the issuance of €300 million Mandatory Convertible Notes to be converted into Technicolor shares after the vote of Technicolor’s shareholders at the General Meeting approving the spin-off of TCS.
The refinancing and the spin-off are expected to be completed by Q3 2022, subject to (i) the shareholders’ approval of the issuance of the MCN, (ii) the shareholders’ approval of the terms of the spin-off, (iii) the completion of the refinancing discussions with creditors on terms satisfactory to Technicolor Ex-TCS and TCS and (iv) customary conditions, consultations and regulatory approvals.
We are confident that the proposed spin-off and refinancing will allow both companies to thrive as independent businesses, and compete in a more agile manner within their respective sectors. Both entities will have a capital structure that supports their viability, long-term ambitions and organic growth to the benefit of their employees, shareholders, customers and suppliers. Ultimately, this will enable each of them to unlock enhanced value for all Technicolor stakeholders.
We are excited to be entering this new chapter with you. Your loyalty and support have been and remain key assets for our group. Together with our team, we are fully committed to making this new phase a success, one of which we can be proud.
Thank you for your trust.
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![](img/pg_anne-bouverot.jpg) |
![](img/pg_richard-moat.jpg) |
Anne Bouverot |
Richard Moat |
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