CORPORATE PRESS RELEASE
Technicolor Creative Studios
First Half 2023 Business
Update1
Company’s
transformation on track
PARIS
(FRANCE), JULY
26,
2023 – Technicolor Creative
Studios (Euronext Paris: TCHCS) (the “Company”) today announced its
first half 2023 business update.
-
Half year
revenues of
€302.7 million, down
-25.9% at current rate (-24.3% at constant rate) due to slower
recovery and industry challenges.
-
Half year adjusted EBITDA
after
lease2 of €-15.7 million, down €58.9 million
compared to H1 2022 mainly reflecting revenue decrease.
-
Further progress in the implementation of the Re*Imagined
program with a focus on improving operational performance
and commercial drive.
-
Completion of the Refinancing,
including €170 million new money injection.
-
Continuous investments in talents, R&D and
Technology to provide clients with the best possible
service and further improve working environments.
-
Implementation of the share capital
reduction decided by shareholders general meeting through
decrease of Technicolor Creative Studios’ par value of the shares
from €1 to €0.01.
Caroline Parot, Chief Executive Officer
of Technicolor Creative Studios, said: “The first half of
2023 saw the acceleration of our Company’s profound transformation.
We have been streamlining our processes and improving our
operational efficiency all with the aim of achieving ever-greater
client satisfaction. Yet, industry wide issues are slowing our
recovery journey and strikes in Hollywood challenge our pipeline of
projects.In this context, I want to extend my heartfelt
appreciation to our valued clients and partners. Their continued
trust and support are instrumental in driving us forward. I am
equally grateful for the dedication of our exceptional team. Their
talent and passion are the driving force behind our transformation
and the industry recognition we continue to receive.”
Hugues de Nicolay, Chief Financial
Officer of Technicolor Creative Studios, said: “Our
transformation plan is progressing well. The set of measures taken
including cost optimization, IT system integration partly offset
the impact of revenue decline on the adjusted EBITDA after lease.
Although our Company’s operational turnaround is already visible
across our organization, our figures do not yet fully reflect the
benefit of our recovery plan”.
H1
2023 FINANCIAL
HIGHLIGHTS
Revenues
H1 2023 |
H1 2022 |
% Change |
% Change at constant currency |
in million € |
122.8 |
213 |
-42% |
-40% |
MPC |
81 |
56 |
+44.7% |
+47% |
Mikros Animation |
91.7 |
132 |
-30.5% |
-30% |
The Mill |
7.3 |
6 |
+21.5% |
+20% |
Technicolor Games |
302.7 |
408.7 |
-25.9% |
-24.3% |
Total |
Technicolor Creative Studios
revenues amounted to €302.7 million in the first half of 2023, down
-25.9% at current rate (down -24.3% at constant rate) compared to
the same period in 2022. This decrease mainly includes the
reduction of the pipeline compared to H1 2022 (post covid recovery
year).
At MPC, first half 2023
revenues amounted to €122.8 million, down -42% at current rate
compared to the same period last year (down -40% at constant rate).
This underperformance reflects the expected lower activity compared
to a high H1 2022.
At Mikros Animation, first half
2023 revenues amounted to €81 million, up +44.7% at current rate,
compared to the same period last year (up +47% at constant rate).
This significant growth was driven by a low H1 2022 with major
feature animation projects ramping up in H2/2022 for deliveries in
H1/2023.
At The Mill, first half 2023
advertising revenues amounted to €91.7 million, representing a
-30.5% decrease at current rate (down -30% at constant rate)
compared to the same period in 2022. Activity was restricted by an
unfavorable macroeconomic environment with decelerating advertising
spending, increased competition compared to H1 2022.
At Technicolor Games, first
half 2023 revenues amounted to €7.3 million, up +23.5% at current
rate compared to the prior-year period (up +20% at constant rate).
This growth is the result of an increased activity from existing
and new clients such as Sega, Sumo, GamFreak and Netease.
Adjusted EBITDA after lease
In million € |
H1 2023 |
H1 2022 |
Var |
Revenue |
302.7 |
408.7 |
-106 |
Adjusted
EBITDA after lease |
-15.8 |
43.2 |
-58.9 |
In % of revenue |
-5% |
11% |
n.a. |
In first half 2023, adjusted EBITDA after lease
decreased by €58.9 million to €-15.8 million. The cost actions
taken as part of the Re*Imagined program – and notably variable
costs – partly offset the reduction of activity.
In light of the current writers and actors
strike in Hollywood that started early May 2023, the Company is
dedicated to address the impact on its business activities and has
already started to adapt its business plan and strategy
consequently.
Successful completion
of the Refinancing
Technicolor Creative Studios announced on June
9, 2023, the successful completion of its refinancing including a
new money financing for a total principal amount of approximately
170 million euros. A first refinancing tranche of 85,000,000 euros
has been drawn at the beginning of April and a second refinancing
tranche of 85,000,000 euros has been granted early June.
Following the Refinancing, by a decision of the
Board of Directors of July 25, 2023, adopted pursuant to the
twenty-eight resolution approved by the Combined General Meeting of
May 15, 2023, the par value of each of the Company’s shares has
been decreased from one euro (€1) to one euro cent (€0.01) and the
share capital is as a result reduced from twenty-five million five
hundred and eleven thousand eight hundred and twenty-two euros
(€25,511,822) to two hundred and fifty-five thousand one hundred
and eighteen euros and twenty-two cents (€255,118.22).
This technical share capital decrease, which was
approved by the General Meeting on May 15, 2023, will have no
impact on the stock price of the Company’s shares, or on the number
of shares in circulation. As a result of this share capital
reduction, the Company’s share capital remains composed of
twenty-five million five hundred and eleven thousand eight hundred
and twenty-two (25,511,822) ordinary shares.
Standalone cash and net
debt at June 30,
2023
In millions of euros |
IFRS Debt |
Financial
Debt3 |
(532) |
Operating
Leases |
(139) |
Liquidity4 |
99 |
FURTHER PROGRESS ON THE
IMPLEMENTATION OF THE
RE*IMAGINED PROGRAM
Technicolor Creative Studios is making progress
in advancing the Re*Imagined program with greater operational and
governance controls, gains in operation process improvements,
resource management and workforce planning which are in line with
expectations. Further opportunities for value creation continue at
pace, to drive the recovery of the business and its transition back
to sustained growth. The Company also pursued its cost reductions
plan at an accelerated rate across all functions.
H1 2023
KEY BUSINESS HIGHLIGHTS
MPC: In the first half of the
year, MPC contributed to the successful release of highly
anticipated movies and major franchise productions. Selected
highlight MPC projects delivered include Disney’s The Little
Mermaid, Paramount’s Transformers: Rise of the Beasts, Marvel’s
Ant-Man and the Wasp: Quantumania, and Netflix/MGM’s Vikings:
Valhalla season 2. The remarkable quality of MPC’s work was once
again recognized by several industry awards and nominations,
including a BAFTA TV Craft Award for Special, Visual & Graphic
Effects for HBO’s House of the Dragon and an Emmy Award nomination
for Outstanding Special Visual Effects In A Single Episode for
Netflix’s Wednesday - A Murder of Woes.
Mikros
Animation: A great highlight of the first
semester of 2023 was a special screening of Teenage Mutant Ninja
Turtles: Mutant Mayhem work in progress version and Ozi, Voice of
the Forest at the Annecy International Animation Film Festival.
Both films received very enthusiastic acclaims. The Mikros
Animation team handled creative development of Ozi animated
feature, from concept to delivery. Additional half year highlights
include the successful delivery of Paramount’s The Tiger's
Apprentice.
The Mill: The Brand welcomed a
newly appointed President, Mark Benson, to harness The Mill’s
portfolio activities – from VFX, design, experience, and creative
production – to provide innovative opportunities for clients.
Overall, the first half of 2023 saw a host of groundbreaking
projects from The Mill including Nike ‘Women’s World Cup’ and BMW
“’The Last Beach Chair’ campaigns. The Brand also won – among
others – three AICP Awards, and two Webby Awards for HBO
‘DracARys’, including the People’s Voice Winner, ‘Technical
Achievement in the Metaverse, Immersive and Virtual’; rewarding the
excellence our teams.
Technicolor Games: In the first
half of the year, the Brand contributed to AAA game releases for
emblematic clients including Capcom’s Street Fighter 6 and Warner
Bros. Games’ Hogwarts Legacy. Under the leadership of Andy Emery,
appointed President of Technicolor Games in the first quarter 2023,
the Brand is further developing Technicolor Creative Studios’
gaming business, at a time of increasing demand for higher quality
graphics and greater complexity of games.
CONTINUOUS INVESTMENTS IN
PEOPLE, R&D AND
TECHNOLOGY
The Company has been focused on successfully
retaining its key talent and will pursue its ambitious retention
strategy, which includes investment in its Academy programs to
further train and develop talent, mentoring programs, and mobility
opportunities across geographies and Businesses.
Technicolor Creative Studios also continues to
invest in innovation and technology to further enhance creativity.
During Q4 2023, the Company will launch its new Creators Lab in
Culver City, CA, USA. This “smart stage”, replacing the traditional
green screen, will be focusing on new production techniques and
tools as part of the investment in the future of filmmaking. This
space will act as a showroom for clients, filmmakers, showrunners,
commercial directors, VFX supervisors, and more. It will also be a
place to explore, experiment, upskill & reskill our
talents.
***
Financial Calendar
Technicolor Creative Studios will issue the June
30, 2023, unaudited financial statements in September 2023.
***
ABOUT TECHNICOLOR CREATIVE
STUDIOS Technicolor Creative Studios shares are
admitted to trading on the regulated market of Euronext Paris
(TCHCS)
Technicolor Creative Studios is a creative
technology company providing world-class production expertise
driven by one purpose: The realization of ambitious and
extraordinary ideas. Home to a network of award-winning studios,
MPC, The Mill, Mikros Animation and Technicolor Games, we inspire
creative companies across the world to produce their most iconic
work. Our global teams of artists and technologists partner
with the creative community across film, television, animation,
gaming, brand experience and advertising to bring the universal art
of storytelling to audiences everywhere.
www.technicolorcreative.com
***
Investor Relations
Contact:investor.relations@technicolor.com
Corporate press:Teneo: tcs@teneo.com
1 H1 unaudited financial statements will be published in
September 2023.
2 Adjusted EBITDA after lease corresponds to
Adjusted EBITA after lease adding back Depreciation and
amortization, excluding depreciation of usage-based IT costs,
operating leases assets depreciation and Amortization of
intangibles that arose from acquisitions or disposals (PPA
amortization) and non-cash income and expense such as
equity-settled share-based payments, including capital lease
depreciation.3 Including New Money, Reinstated Term Loan,
Convertible Bond, Capital leases, accrued interest and subordinated
debt4 Including Cash and €40 million RCF
- TCS - First Half 2023 Business Update
Technicolor Creative Stu... (EU:TCHCS)
Historical Stock Chart
From Apr 2024 to May 2024
Technicolor Creative Stu... (EU:TCHCS)
Historical Stock Chart
From May 2023 to May 2024