TECHNICOLOR : MEMORY PRICING VOLATILITY AND ITS IMPACT ON FY 2017 PERFORMANCE
(Thomson Reuters ONE) -
PRESS RELEASE
memory pricing volatility and
its impact on fy 2017 performance
Paris (France), 29 June 2017 - As previously indicated, Technicolor (Euronext
Paris: TCH; OTCQX: TCLRY) expects the profitability of the Connected Home
segment to be affected by memory costs increases. Following the most recent
market price increases for DRAM and Flash memories, and with continued upward
pressure expected for the near future while the Group had previously assumed an
easing starting in the second half of 2017, Technicolor now anticipates that
this will represent an additional negative impact at the Adjusted EBITDA level
of around ?40 million compared to its previous expectations.
* DRAM pricing, which increased by more than 45% at the end of the first
quarter of 2017 compared to the fourth quarter of 2016, increased by an
additional 15% at the end of the second quarter compared to the first
quarter. Further increases are expected for the rest of 2017, albeit at a
slower pace.
* Flash memories pricing, which were flat at the end of the first quarter of
2017 compared to the fourth quarter of 2016, increased by 5% at the end of
the second quarter compared to the first quarter. Double digit increases are
expected for the rest of 2017.
As a result, considering what was already anticipated in the previous guidance
and the additional impact announced today, Technicolor now expects a net
negative impact on the Adjusted EBITDA of Connected Home of c. ?30 million in
the first half of 2017 compared to last year, which would represent a margin
impact above 200bps. For the second half of 2017, the impact, in the event there
is no success in ongoing mitigation actions, is expected to be around ?50
million compared to last year.
Excluding the aforementioned costs increases, the operational performance of the
various divisions is in line with Group's expectations:
* Production Services has been ramping up capacity and hiring additional
creative talent in the first half of 2017 to deliver new projects. As a
result, double digit revenue growth is expected in the second half;
* In line with prior years, DVD Services will generate most of its earnings in
the second half due to the seasonality of this activity;
* Connected Home revenues are expected to decline by around 10% in the first
half of 2017 due to the unfavorable comparison to the first half of 2016
(e.g. Mexico, Canada, Europe.). The continued growth in shipments of North
American flagship products and the solid pipeline of new product
introduction in Europe are expected to result into revenue growth above 15%
in the second half of 2017 and as such revenue growth for the full year;
* Licensing revenues are expected to be in line with management expectations,
but significantly down compared to the first half of 2016 as these included
one-off revenues and with the end of several Digital TV Licensing agreements
linked to starting discussions related to the joint licensing program with
Sony. The timeline of its ongoing licensing discussions is expected to
result in new agreements being signed in the second half of 2017.
As a result of the memory pricing increases, Technicolor is revising its full
year 2017 Adjusted EBITDA objective, which is now expected to be in the range of
?420 million to ?480 million and (versus ?460 million - ?520 million expected
previously).
The Group maintains its free cash flow objective (in excess of ?150 million
before cash impacts of the Cathode Ray Tube cartel case settlements). These
objectives are calculated at constant rate.
DRAM and Flash memory price increases are market data. All figures and data for
the first half of 2017 are estimated and unaudited as the interim closing has
not yet started.
The Group will hold a conference call today at 6:30 pm CEST. The conference call
details are as follows:
Please dial the access number
France: 0170770942
UK: +44 2033679453
US (free): +1 8554027763
The replay will be available today at the latest by 9pm (CEST) on our website
http://www.technicolor.com/en/who-we-are/investor-center
Technicolor will publish 2017 first half results on July 26, 2017 after market
close and will hold a conference call on July 27 at 9:00 am CEST.
###
Warning: Forward Looking Statements
This press release contains certain statements that constitute "forward-looking
statements", including but not limited to statements that are predictions of or
indicate future events, trends, plans or objectives, based on certain
assumptions or which do not directly relate to historical or current facts. Such
forward-looking statements are based on management's current expectations and
beliefs and are subject to a number of risks and uncertainties that could cause
actual results to differ materially from the future results expressed,
forecasted or implied by such forward-looking statements. For a more complete
list and description of such risks and uncertainties, refer to Technicolor's
filings with the French Autorité des marchés financiers.
###
About Technicolor
Technicolor, a worldwide technology leader in the media and entertainment
sector, is at the forefront of digital innovation. Our world class research and
innovation laboratories enable us to lead the market in delivering advanced
video services to content creators and distributors. We also benefit from an
extensive intellectual property portfolio focused on imaging and sound
technologies. Our commitment: supporting the delivery of exciting new
experiences for consumers in theaters, homes and on-the-go.
www.technicolor.com - Follow us: (at)Technicolor - linkedin.com/company/technicolor
Technicolor shares are on the NYSE Euronext Paris exchange (TCH) and traded in
the USA on the OTCQX marketplace (OTCQX: TCLRY).
Investor Relations
Emilie Megel: +33 1 41 86 61 48
Emilie.megel(at)technicolor.com
Christophe Le Mignan: +33 1 41 86 58 83
Christophe.lemignan(at)technicolor.com
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Source: TECHNICOLOR via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 29.06.2017 - 17:45 Uhr
Sprache: Deutsch
News-ID 550567
Anzahl Zeichen: 7714
contact information:
Town:
Issy-les-Moulineaux Cedex
Kategorie:
Business News
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