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Technicolor Reports Q3 2013 Results, Blu-ray Pleases

Technicolor SA announced financial and production results for its third quarter 2013.

According to the statement, Technicolor’s revenues were €881 million (US $1.22 billion) in the quarter, down 4.4% compared to Q3 2012.

On the optical disc replication front, Technicolor reported that “in the third quarter of 2013, combined Standard DVD and Blu-ray volumes increased by 3%, reflecting the continued resiliency of SD-DVD volumes, combined with sustained Blu-ray growth of 26% compared to the third quarter of 2012. Volume growth in the quarter was driven in part by a strong slate of new release titles, including Iron Man 3 (Disney), World War Z (Paramount), The Great Gatsby (Warner), and Oblivion (Universal). The ongoing use of multi-disc DVD/Blu-ray ‘combo-pack’ configurations further supported both SD-DVD and Blu-ray volumes during the period. Game volumes rose by 25% compared to the third quarter of 2012, driven principally by the very successful launch of Grand Theft Auto V (Rockstar Games/Take-Two Interactive).”

Additionally, “in the first nine months of 2013, combined Standard DVD and Blu-ray volumes recorded year-on-year growth of 5%, with SD-DVD demand holding steady and Blu-ray disc unit shipments expanding 55% compared to the same period of 2012.”

In terms of raw numbers, the company manufactured roughly 314 million DVDs in the third quarter of 2013 (down 4% from the same period in 2012) as well as 69 million Blu-ray discs (up 26% over Q3 2012).

Disc Replication Services (rounded)

Millions of units Q3 2012 Q3 2013 Change
DVD 326 314 -4%
Blu-ray Disc (BD) 55 69 26%
Games 22 28 25%
Software and Kiosk 5 8 49%
Total 409 419 3%

Currency conversion as of Oct 25, 2013.

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Unedited press release follows:

Third quarter 2013 revenues from continuing operations

+1.2% at constant currency, +3.9% excluding legacy activities. Solid Licensing revenues, profitable growth and market share gains in Connected Home and Entertainment Services. Technicolor reconfirms its 2013 objectives

In € million

Q3 2012

Q3 2013

Change, reported

9M 2012

9M 2013

Change, reported

Group revenues from continuing operations[1]







Change at constant rate (%)



Change at constant rate excluding legacy[2] (%)



o/w Technology







Change at constant rate (%)



Entertainment Services







Change at constant rate (%)



Change at constant rate excl. legacy (%)



Connected Home







Change at constant rate (%)



[1] Excluding the Broadcast Services and the SmartVision (television-over-IP) businesses, sold in 2012, and the Cirpack softswitch operations (voice-over-IP), sold in 2013. Those activities contributed €6 million to revenues in the third quarter of 2012 (no contribution in the third quarter of 2013). On a reported basis, including disposals, revenues were down 5.1% at current currency and up 0.5% at constant currency year-over-year.

[2] Legacy activities include mainly photochemical film and compression & authoring activities.

Frederic Rose, Chief Executive Officer of Technicolor, stated:

“This quarter puts us well on track to deliver our 2013 EBITDA, free cash flow and net debt objectives. As we continue to deliver solid operational results, we remain focused on strengthening our core competencies and seeking out new opportunities in next generation video and audio technologies. In parallel, our Connected Home and Entertainment Services activities continued to generate profitable growth and gain market share, while our Licensing activities delivered another robust performance.”

Q3 2013 revenue highlights

• Technology: another quarter of revenues well above €100 million, highlighting the strength of the Licensing division.

• Entertainment Services: sustained performance in Digital Creative Services, particularly in VFX, with strong double-digit growth, offset by slightly lower DVD Services revenues.

• Connected Home: sixth straight quarter of double-digit year-on-year growth, driven by very strong volume growth and improved product mix in North America, and double-digit revenue growth in EMEA.

Financial structure update

• Senior gross debt at the end of September 2013 amounted to €1,083 million at nominal value, a decrease of €100 million compared to the end of June 2013, reflecting €67 million of debt repayment as part of the refinancing, €10 million of normal senior debt repayment and a positive currency impact of €23 million, as a result of the depreciation of the US dollar versus the euro. The Group’s cash position declined due to the cash-out related to the refinancing.

2013 objectives confirmed

• Growth of adjusted EBITDA between 5% to 10% compared to FY 2012 adjusted EBITDA at constant scope[1] (€498 million).

• Strong growth in Free Cash Flow, above 30%, before one-off payments for legacy litigation (in particular the EU antitrust fine for €38.6 million).

• Net debt (at nominal value) to adjusted EBITDA ratio below 1.6x at the end of December 2013.

An analyst conference call hosted by Frederic Rose, CEO and Stéphane Rougeot, CFO and SEVP Strategy will be held on Friday, 25 October 2013 at 4:00pm CEST.

Financial Calendar
FY 2013 Results 20 February 2014
Q1 2014 Revenues 25 April 2014

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, based on a thriving licensing business. Our commitment: supporting the delivery of exciting new experiences for consumers in theaters, homes and on-the-go. Euronext Paris: TCH Ÿ