Technicolor reports second half 2012 results

Friday, February 22nd, 2013 
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Connected Home: Volume exceeding 30m units, an all-time high

PARIS, France — The Board of Directors of Technicolor (Euronext Paris: TCH) met yesterday to review the Group’s full year 2012 results.

Technology: Solid growth in revenues driven particularly by the record performance of patent licensing programs and sustained MPEG LA revenues;

Entertainment Services: Resiliency of DVD activities, which outperformed the market in 2012; strong reduction in exposure to legacy activities; growth in Digital Creative Services despite some softness in H2;

Connected Home: Strong revenue growth driven by emerging markets; turnaround plan on track with a return to adjusted EBITDA positive in second half of 2012 and breakeven in FY 2012.

In the second half of 2012, Connected Home revenues totaled €671 million, up 29.9% at current currency and up 26.6% at constant currency compared to the second half of 2011.

In the fourth quarter of 2012, Connected Home revenues amounted to €326 million, up 15.1% at current currency and up 14.2% at constant currency compared to the fourth quarter of 2011, confirming the solid trend experienced in the second and third quarters of 2012 (revenues up in double-digits). This performance principally reflected strong customer demand across emerging markets, particularly in Latin America and Asia-Pacific, as well as improved overall product mix in North America, driven by Cable customers.

  • In North America, Connected Home product volumes recorded a year-on-year decline in the fourth quarter of 2012, reflecting softer shipments in Satellite set top boxes and digital-to-analog Cable adaptors. Overall product mix however significantly improved year-on-year, driven by growing contribution from new products introduced in the third quarter of 2012 and higher-end devices in Cable, partly offset by weaker deliveries of HD PVRs in Satellite compared to the prior-year quarter.
  • In Latin America, global demand was strong in the fourth quarter of 2012, as reflected by double-digit year-on-year growth in Connected Home product volumes, driven by stronger shipments of Satellite set top boxes, particularly in Brazil, as well as increased deliveries of broadband gateways to Telecom customers, especially in Mexico. However overall product mix was less favorable year-on-year, principally as a result of a decreased proportion of HD devices in total volumes compared to the prior-year quarter.
  • In Europe, Middle-East and Africa, Connected Home products posted a slight year-on-year volume decline in the fourth quarter of 2012, as strong growth in shipments of Telecom broadband gateways and Cable modems largely offset softer set top box deliveries, due primarily to the phase-out of some Satellite and Telecom devices. Overall product mix was slightly lower year-on-year, driven principally by a reduced contribution of HD set top boxes in total shipments compared to the prior-year quarter.
  • In Asia-Pacific, customer demand remained at a high level across the region in the fourth quarter of 2012, as reflected by more than a three-fold increase in Connected Home product volumes year-on-year, primarily as a result of a sharp growth in set top box shipments to Satellite customers, especially in India and Malaysia and new high-end solutions delivered to Telecom customers, in particular in Australia.

Connected Home Product Volumes

In million units                       Q4 2011  Q4 2012  H2 2011  H2 2012  FY 2011  FY 2012
                                       -------  -------  -------  -------  -------  -------
Total Connected Home Product Volumes*      6.4      7.9     11.6     15.7     23.7     30.1
Change (%)                                         +22%              +35%              +27%
o/w North America                          1.9      1.1      3.5      2.8      7.7      6.8
    Change (%)                                    (39)%             (19)%             (12)%
    Latin America                          2.9      3.8      4.7      7.6      8.9     13.7
    Change (%)                                     +31%              +63%              +53%
    Europe, Middle-East and Africa         1.3      1.3      2.4      2.5      4.9      5.4
    Change (%)                                     (2)%               +2%              +10%
    Asia-Pacific                           0.4      1.7      1.0      2.8      2.2      4.3
    Change (%)                                    +311%             +172%              +99%

* Including tablets and other connected devices

                                              STB  Gateways**     Tablets       Total
                                       ----------  ----------  ----------  ----------
           Market Structure            2011  2012  2011  2012  2011  2012  2011  2012
                                       ----  ----  ----  ----  ----  ----  ----  ----
NAM        50% cable STBs               7.3   6.2   0.4   0.4     -   0.2   7.7   6.8
LATAM      45% satellite STBs           4.7   8.8   4.3   4.8     -     -   8.9  13.7
EMEA       30% cable STBs               0.8   0.5   4.1   4.8     -     -   4.9   5.4
APAC       largest segments are         0.9   3.0   1.1   1.1   0.1   0.2   2.2   4.3
           cable STBs and Telco GWs

** including modems and routers