CORPORATE PRESS RELEASE
UNAUDITED COMBINED
FINANCIALS
Technicolor Creative Studios 9-month 2023
Business Update
PARIS (FRANCE), OCTOBER 25,
2023 – Technicolor Creative Studios (Euronext Paris:
TCHCS) (the “Company”) today announced its nine-month and third
quarter 2023 business update.
- Strengthening the
leadership structure to further deliver on the transformation
plan
- Impact of strikes in
Hollywood and unfavourable macroeconomic environment led to
reduction of activity for the first nine-month of 2023:
- 9-month revenues of €414.4 million,
down -33.6% at current rate compared to the same period last year,
and as expected;
- Q3 2023 revenues down -48.1%
year-on-year to €111.7 million;
- Strong creative performance
and commercial successes across the four Studios.
- Renewed confidence from
majority shareholders and creditors with:
- An additional circa €30
million of new money injection and waivers granted pursuant to the
existing financings to provide additional cash flexibility to
Technicolor Creative Studios
- Delisting of Technicolor
Creative Studios from Euronext Paris on track
- Public tender offer filed with the
Autorité des Marchés Financiers (AMF) on October 18th.
Caroline Parot, Chief Executive Officer
of Technicolor Creative Studios, said: “The first nine
months of 2023 saw substantial progress in Technicolor Creative
Studios’ transformation journey. In an unfavorable market
environment – with a still ongoing actors strike in Hollywood – our
focus has been to support our clients as they are preparing for
production restart, and we stand ready to seize new business
opportunities as the market picks up. Technicolor Creative Studios’
long-term perspectives remain attractive, and we are grateful to
our shareholders and creditors for their trust. In addition to the
new financing, we are now engaged in a delisting process which
should enable the Company to tackle with agility and confidence the
major transformation it has initiated, to better serve its clients
and ultimately reinforce its market leading position.”
STRENGTHENING THE LEADERSHIP STRUCTURE TO FURTHER
DELIVER ON THE TRANSFORMATION PLAN
Technicolor Creative Studios has decided to
reinforce its Executive Committee to optimize performance and
efficiency, with:
- The creation of a Chief Commercial
Officer role to develop and implement the Company’s commercial,
growth, and marketing strategies. Jean-Paul Burge, former Global
President of MPC, will be in charge of this newly created
responsibility. Christian Roberton has taken over as President of
MPC, in addition of his role as Deputy CEO of the Company.
- The appointment of Michael Masset
as Chief People Officer.
- The extension of Stéphanie Fougou’s
portfolio of responsibilities with the inclusion of the Company’s
corporate communications.
This new management structure is going to ensure
Technicolor Creative Studios will complete its transformation plan
at a sustained pace.
The Company remains committed to achieve its
ambition to be the first-choice digital services production partner
for the world’s most creative companies.
Q3 2023 FINANCIAL
HIGHLIGHTS
Revenues
Q3 2023 |
Q3 2022 |
% Change |
% Change at constant currency |
in € million |
9M 2023 |
9M 2022 |
% Change |
% Change at constant currency |
44.8 |
103.7 |
-56.8% |
-54.0% |
MPC |
167.5 |
316.7 |
-47.1% |
-44.6% |
22.7 |
42.5 |
-46.6% |
-43.1% |
Mikros Animation |
103.7 |
99.0 |
4.7% |
7.8% |
40.0 |
65.2 |
-38.7% |
-35.1% |
The Mill |
131.7 |
197.6 |
-33.4% |
-32.0% |
4.2 |
3.5 |
20.0% |
25.7% |
Technicolor Games |
11.4 |
9.7 |
17.5% |
19.6% |
111.7 |
215.2 |
-48.1% |
-44.8% |
Total |
414.4 |
623.9 |
-33.6% |
-31.4% |
Technicolor Creative Studios Q3
2023 revenues decreased by -48.1% at current rate (-44.8% at
constant rate) to €111.7 million. Revenues amounted to €414.4
million in the first nine months of 2023, down -33.6% at current
rate (-31.4% at constant rate) compared to the same period in 2022.
This decrease mainly results from the reduction of the project
pipeline compared to the first nine months of 2022 – which saw
significant demand for original content in the post Covid recovery
year – and from a broader market slowdown.
At MPC, Q3 2023 revenues were
down -56.8% year-on-year to €44.8 million, while 9-month 2023
revenues amounted to €167.5 million, down -47.1% at current rate
(-44.6% at constant rate). This underperformance reflects the
expected lower activity compared to a high first half 2022, and the
delay of order intake due to the strikes in Hollywood.
At Mikros Animation, Q3 2023
revenues were down -46.6% year-on-year to €22.7 million. The
quarter saw the win of new projects, which will materialize in
revenues over the next 2 years. 9-month 2023 revenues amounted to
€103.7 million, up 4.7% at current rate (+7.8% at constant rate).
This growth was driven by major feature animation projects
deliveries in first half 2023.
At The Mill, Q3 2023 revenues
dropped by -38.7% at current rate (-35.1% at constant rate) to €40
million. 9-month 2023 revenues amounted to €131.7 million,
representing a -33.4% decrease at current rate (down -32.0% at
constant rate) compared to the same period in 2022. Activity was
restricted by an unfavorable macroeconomic environment with
decelerating VFX advertising spending and increasing
competition.
At Technicolor Games, Q3 2023
revenues were up 20% at current rate year-on-year to €4.2 million,
while 9-month 2023 revenues amounted to €11.4 million, up by 17.5%
at current rate (up 19.6% at constant rate) compared to the same
period in 2022.
Cash and debt at the end of September
2023
Liquidity (Cash and cash equivalents) at the end
of September 2023 amounted to €46 million (with the €40 million RCF
fully drawn).
Net financial debt at nominal value amounted to
€6451 million at the end of September 2023, compared with €577
million at the end of June 2023. IFRS net debt amounted to €678
million as of September 30, 2023, compared with €610 million as of
June 30, 2023.
Q3 2023 KEY BUSINESS
HIGHLIGHTS
MPC: In Q3 of 2023, MPC
contributed to the successful release of highly anticipated movies
and episodic productions. Some of the projects included Strays, The
Last Voyage of Demeter and The Nun II. MPC was recognized with
several industry awards including wins at the AEAF (Australian
Effects & Animation Festival) Awards for House of the Dragon,
Prehistoric Planet 2 and Guillermo del Toro’s Pinocchio, and an
Ariel Award for Bardo.
Mikros Animation: Two of the
Brand’s high-profile projects were released theatrically around the
world in Q3. Paw Patrol: The Mighty Movie was released in late
September and opened as the #1 film in the United States and many
international territories. Teenage Mutant Ninja Turtles: Mutant
Mayhem was released in August. Both films have been commercial and
critical successes.
The Mill: In Q3, the Brand
contributed to remarkable 3D billboards for brands like Samsung,
Jeep, Transformers, and HBO's House of the Dragons. The Mill is
also the go-to producer for the MSG Sphere in Las Vegas, with
projects like Marco Brambilla's U2 concert installation. Iconic
productions include the iPhone 15 launch campaign and
collaborations with Mercedes-Benz and League of Legends. The Mill
has garnered numerous awards including the Best Automotive
Advertisement at the International Motor Film Festival for "Nascar
75th Anniversary" and secured 9 AEAF Awards.
Technicolor Games: The Studio
contributed to several major Q3 releases, including EA Sports FC 24
marking the continuation of a 15-year partnership, Ubisoft’s The
Crew Motorfest, Focus Entertainment’s Atlas Fallen, EA’s Madden NFL
24, and 2K’s NBA 2K24. The division is continuing its expansion and
will rely on the newly opened Mumbai Office.
RENEWED CONFIDENCE OF SHAREHOLDERS WITH
NEW MONEY INJECTION AND DELISTING PROJECT
As announced on October 2, 2023, by the Company,
its shareholders and creditors have decided to demonstrate their
support and have renewed their confidence in the future prospects
of Technicolor Creative Studios.
- The main shareholders and creditors
of the Company granted an extra circa €30 million cash, pursuant to
the existing new money facilities agreement.
- Granting additional cash
flexibility to Technicolor Creative Studios by, among others,
consent that cash interest on main debt instruments (New Money
(loans and bonds) and Reinstated debt) owed in H2 2023 and H1 and
H2 2024, will be converted to PIK interest, for c.€48 million.
- In addition, on October 18th, four
shareholders, acting in concert with a group of shareholders and
creditors of the Company (holding together 94,822% of the capital),
filed, a public tender offer (“offre publique d’achat simplifiée”)
for the shares of the Company (the “Offer”) with the Autorité des
Marchés Financiers (AMF). The Offer, for a cash consideration of
1.63 euro per Technicolor Creative Studios share, dividends
included, will be subject to the AMF’s approval and will be
followed, the required conditions of capital and voting rights
being already met, by a squeeze-out.
- The projected delisting of the
Company along with these new financing arrangements attest to the
strength of Technicolor Creative Studios’ shareholder support.
In addition to the new circa €30 million cash
injection, Technicolor Creative Studios confirms its intention to
seek, in the short term, further financing options from various
sources to address its future liquidity needs. In that context, the
Company intends to deepen and accelerate its strategic review
announced in March and June 2023.
The Board of Directors will release an informed
opinion on the terms of the Offer in due course, in light of the
work of A2EF (represented by Mrs. Sonia Bonnet-Bernard), appointed
as independent expert by the Board of Directors on October 2nd,
2023, to opine on the financial terms of the Offer and, as the case
may be, the squeeze-out.
The contemplated delisting process is on track
and further information will be provided in due course. Detailed
information on the delisting process is available on the Company’s
website:
https://www.technicolorcreative.com/investor-center/public-tender-offer/
***
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 Excluding 170 M€ of subordinated
debt and operating lease2 On October 2, 2023, based on a total of
25,511,822 Technicolor Creative Studios shares and theoretical
voting rights, as communicated by the Company on July 31, 2023.
Taking into account the dilution resulting from the conversion of
all the convertible bonds into shares and the exercise of all the
share warrants issued on June 8, 2023, by Technicolor Creative
Studios and held by the members of the Concert, the Concert holds
97.10% of the share capital and voting rights, on a fully diluted
basis.
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