PRESS RELEASE
Technicolor Creative Studios
– Point Date
on the activity
you
-
The e
estimates
for’
Adjusted EBITDA
after rents
by Technicolor Creative Studios
are
downgraded
at
45-
6
5
million euros at
x
budget rate
and
Where
50-70
million euros at
x
real rate
s
for 2022
-
The difficulties of the second half of 2022 will also affect 2023
-
Estimate
preliminary
of
adjusted EBITDA after the
oyers
for
2023
:
st
able or
up slightly
compared to the planned landing
for
2022
PARIS (
FRANCE),
THE
15
NOVEMBER
2022
– Technicolor Creative Studios (Euronext Paris: TCHCS) today informs the market on the expected landing for 2022 and on its preliminary estimates for 2023.
Technicolor Creative Studios continues to benefit from strong demand for original content from its customers, including MPC and The Mill. However, this demand is colliding with VFX production capacity which is still being impacted by an unprecedented level of employee attrition.
Since this summer, the Group has identified and implemented numerous actions. However, the expected improvements in recruiting, attrition and efficiency are not materializing at the expected rate, preventing Technicolor Creative Studios from delivering on time or at the costs initially anticipated:
Recently, many high-margin sales could not be made at The Mill, due to a lack of senior team resources;
Some major projects at MPC are affected by reduced production efficiencies, leading to delivery delays, additional expenses and lower margins.
In addition to the numerous actions already implemented since the summer, the Group is actively working on a broader transformation program encompassing the recruitment of several new key senior employees, associated with further optimization of processes and monitoring parameters, and the transfer of a larger volume of production to India; more details will be communicated when the results of the 3
th
quarter on November 30. Operational metrics are improving and aiming to exceed historical performance. However, activity will continue to be impacted in the fourth quarter of 2022 and probably throughout 2023.
As a result of the above, Technicolor Creative Studios is revising its expectations for Adjusted EBITDA after rentals (new definition)
1
as following :
For 2022: estimates are revised downwards from €120-130 million previously to €45-65 million at budget rates
2
or 50-70 million euros at real rates
3
;Preliminary estimate for 2023: stable or slightly increasing
4
compared to the planned landing in 2022, compared to 140-160 million euros previously estimated.
An audio webcast presented by Christian Roberton, Chief Executive Officer and Laurent Carozzi, Chief Financial Officer will take place today, November 15, 2022 at 6:30 p.m. CET.
Audio Webcast Link for audio webcast: Conf Call Nov 2022 |
Conf e rence call (Please use this option only if you wish to ask questions over the phone) Dial the access number below 10 minutes before the start of the conference:
|
Calendar
financial
indicative
Third quarter 2022 | November 30, 2022 |
***
Disclaimer: Forward-Looking Statements
This press release contains certain statements that constitute “forward-looking statements”, including without limitation statements announcing or relating to future events, trends, plans or objectives, based on certain assumptions as well as all statements that do not do not relate directly to a historical or proven fact. These forward-looking statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties, which could cause actual results to differ materially from the anticipated results expressed or implied by the forward-looking statements. To obtain more information on these risks and uncertainties, you can consult the documents filed by Technicolor
and Technicolor Creative Studios
with the Financial Markets Authority.
The prospectus prepared by Technicolor Creative Studios relating to the admission of its shares to trading on the regulated market of Euronext in Paris within the framework of the proposed distribution of 65% of the shares
Technicolor Creative Studios
by TSA to its shareholders, approved by the AMF on August 1, 2022 under number 22-331, is available free of charge and on request at the company’s registered office, 8-10 rue du Renard, 75004 Paris, France , or on the AMF websites (
https://www.amf-france.org
)
and
by Technicolor Creative Studios (
https://www.technicolorcreative.com/investors/
).
***
ABOUT TECH
NICOLOR CREATIVE STUDIOS
The actions of
Technicolor Creative Studios
are admitted to listing
on the regulated market of
Euronext Paris (
symbol
:
CHCS)
Technicolor Creative Studios is a creative technology company offering world-class production expertise, driven by one goal: the realization of ambitious and extraordinary ideas. Bringing together a network of award-winning studios, MPC, The Mill, Mikros Animation and Technicolor Games, we inspire creative businesses around the world to produce their most iconic works.
Our international teams of artists and technology experts partner with the creative community in film, television, animation, video games, brand experience and advertising to bring the universal art of storytelling to audiences around the world.
www.technicolorcreative.com
***
R
investor relations
:
Alexandra Fichelson: [email protected]
Hurry
:
Image 7: [email protected]
1
Adjusted EBITDA after rents (new definition) corresponds to Adjusted EBITA after rents (new definition) to which amortization and depreciation are added, excluding amortization of IT costs based on use, amortization of assets relating to operating rents
,
income statement items with no impact on cash, such as share allocation plans settled in equity instruments.
Adjusted EBITA after rents (new definition) corresponds to EBIT positively adjusted for amortization of intangible assets resulting from acquisitions or disposals (PPA), restructuring costs, other non-recurring items comprising other income (expenses), losses net values of non-current operating assets, capital gains or losses on disposals, and negatively by
I
a difference between the payments of operating lease debts and the impairment of assets relating to operating leases.
2
The estimates communicated on
1
er
August 2022
at the budget rate
were a
Adjusted EBITDA after rents (new definition) of 120-130 million euros
for 2022
2022 and 140-160 million euros
for
2023,
taking into account assumptions
of d
e-synergies
and assumptions
macroeconomic conditions, including an exchange rate of EUR/USD of 1.15, EUR/CAD of 1.52 and EUR/GBP of 0.89.
Technicolor Creative Studios’ results are sensitive to the evolution of its main currencies –
notably the US dollar, the Canadian dollar and the pound sterling – which have evolved favorably since the beginning of the year. Hedging arrangements are in place to mitigate foreign exchange risks.
3
With the following exchange rate assumptions: EUR/USD of 1,
0
5, EUR/CAD of 1,
3
5, EUR/GBP of 0.8
5
.
4
With the following exchange rate assumptions: EUR/USD of
1.0
0
EUR/CAD of 1.3
1
EUR/GBP of 0.8
6
.
The 2023 estimates also include an estimate of the costs associated with the transformation plan
and de-synergy costs.
Attachment
Nov.15-2022-TCS-Pointadate – FINAL