• Revenues excluding exited activities ¹ : up 7.5% at current rate, up 3.2% at constant rate
• Two strategic acquisitions and major IP transaction announced in Q3 2015
• Solid financial situation at end September, with improvement of credit profile
• Successful new debt issuance completed in early October

PARIS, Oct. 20, 2015 (GLOBE NEWSWIRE) -- Technicolor (Euronext Paris: TCH; OTCQX: TCLRY) announces today its revenues for the third quarter of 2015.

Frederic Rose, Chief Executive Officer of Technicolor, stated:

"We are well on our way to achieve our 2015 objectives based on our solid third quarter revenue performance. In addition, while focusing on execution across our businesses, we announced major strategic milestones, with The Mill and Cisco Connected Devices, which will strongly accelerate the delivery of our Drive 2020 objectives."

Key points

• Solid revenue performance in Technology; joint licensing agreement signed with Sony for Digital TV and Computer Display Monitor underscoring Technicolor's IP expertise;
• Double-digit revenue growth in Production Services, driven by Visual Effects and Animation activities; broadening brand portfolio with the addition of The Mill, the world's largest visual effects and content creation studio for Advertising and Brands;
• Revenue growth in DVD Services, driven by strong Blu-ray^TM volumes,confirming consumer appetite for packaged media when compelling content is available;
• Revenue decline in Connected Home, as expected, due to ongoing consolidation in North America and tougher market conditions in Brazil, partly offset by double-digit revenue growth in Europe, Middle East and Africa and Asia Pacific; Cisco Connected Devices acquisition well on track, with closing expected before year end;
  
   
• Net nominal debt at €946 million at end September, reflecting the acquisition costs of The Mill and higher working capital requirements to support a strong level of activity in the fourth quarter;
• Credit rating maintained (B1 by Moody's, B+ by S&P), with outlook improved from stable to positive by Moody's and confirmed at stable by S&P;
• Successful completion of the syndication of c.€375 million aggregate principal amount incremental term loan to finance the acquisitions of The Mill and Cisco Connected Devices.

2015 objectives

• Technicolor confirms its Adjusted EBITDA and Free Cash Flow objectives for 2015, without including any impact of the acquisition of Cisco Connected Devices that is expected to close before the end of the fourth quarter.
  • Adjusted EBITDA between €560 million and €590 million;
  • Free Cash Flow of at least €230 million;
• The Group now expects to achieve a leverage ratio (Net Debt/Adj. EBITDA) below 1.7x at end December 2015, which includes the impact on its net debt of the acquisitions of The Mill and Cisco Connected Devices.
• Technicolor will update its financial objectives related to its Drive 2020 strategy as part of its full year 2015 results release.

Segment review - Q3 2015 revenue highlights

Group revenues by segment

Technology revenues amounted to €121 million in the third quarter of 2015, up 4.6% at current currency compared to the third quarter of 2014. Licensing revenues stood at €117 million in the quarter, up €5 million year-on-year at current currency. This increase reflected higher revenues from the MPEG LA pool, due to favorable €/US$ exchange rate fluctuations, as well as a good performance of the Group's direct licensing programs that benefited from the contribution of new contracts signed in prior quarters.

During the third quarter, Technicolor and Sony announced a joint patent licensing program for Digital TV ("DTV") and Computer Display Monitor ("CDM"). Technicolor will be the exclusive licensing agent of the combined portfolio that covers DTV and CDM. Through this agreement, the Group not only secures long term revenues in its DTV program and will generate incremental revenues in the field of CDM, but also demonstrates its agility to develop ad-hoc partnerships in IP.

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Entertainment Services revenues (excluding exited activities) reached €423 million in the third quarter of 2015, up 28.1% at current currency compared to the third quarter of 2014. This performance resulted from a sustained level of activity in Visual Effects and Animation activities in Production Services, as well as increased volumes related to a strong slate of Studio new releases in DVD Services.

• Production Services recorded a strong double-digit increase in revenues in the third quarter of 2015 compared to the third quarter of 2014. Revenues excluding exited activities were up by over 40% year-on-year at constant currency. This performance was driven by double-digit organic growth in revenues, reflecting another record quarter in Visual Effects ("VFX") activities under the MPC brand, and by the additions of Mr. X, OuiDo Productions, Mikros Images, and The Mill (acquired on 15 September 2015). This increased level of activity was supported by feature films, advertising and animation activities, while

     Postproduction revenues were broadly stable in the quarter, and slightly lower in North America due to fewer theatrical and TV productions.

     In the third quarter, VFX teams completed work on The Martian (Fox), Goosebumps (Sony), Fantastic Four (Fox) and Pan (Warner), while pursuing work on a number of Theatrical projects, including Jungle Book (Disney), Batman v Superman: Dawn of Justice (Warner), Monster Trucks (Paramount), X-Men: Apocalypse (Fox), 007 Spectre (Sony), The Finest Hours (Disney) and Tarzan (Warner). VFX teams also started working on new projects such as Independence Day: Resurgence (Fox) and Ghostbusters 3 (Sony). In the third quarter, Postproduction teams completed work on Theatrical projects including Ant-Man (Disney/Marvel), Fantastic Four (Fox), The Intern (Warner), Burnt (Weinstein) and Bridge of Spies (Disney). Postproduction teams also continued work on premium TV series, including Vampire Diaries (CW), Criminal Minds (CBS), Scandal (ABC), Heroes Reborn (NBC) and iZombie (CW) for leading TV broadcasters, as well as on original TV content such as Mozart In The Jungle (Amazon), Narcos (Netflix) and Sense8 (Netflix) for Over-the-Top ("OTT") services providers.