Technicolor

EU: TCH

€314.8m market cap

€0.76 last close

Technicolor is a worldwide technology leader operating in the media and entertainment industry. Its activities are organised in two business segments, Entertainment Services (the combined Production and DVD Services businesses) and Connected Home.

Investment summary

Technicolor is a leading global player in each of its three core businesses: Production Services, DVD Services and Connected Home, all of which have challenges and opportunities. Our view is that management has a strategy to mitigate the former and take advantage of the latter. H119 will likely prove the earnings nadir, with capacity constraints in Production Services and component pricing pressure – now unwinding – in Connected Home, which will also be reflected in the cash flow. We expect cash flow and operating margins to start to rebuild in H219 and through FY20. The current price is well below peer- and DCF-derived valuations.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 4253.0 341.0 7.0 1.93 39.4 N/A
2018A 3988.0 266.0 (3.0) (.97) N/A N/A
2019E 3825.0 239.0 (30.0) (5.06) N/A N/A
2020E 3815.0 295.0 21.0 (1.13) N/A N/A
Last updated on 17/07/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (€m) 741
Forecast gearing ratio (%) 396
Price performance
%
1m
3m
12m
Actual (6.1) (35.4) (29.4)
Relative* (9.1) (35.2) (30.2)
52-week high/low €1.3/€0.8
*% relative to local index
Key management
Bruce Hack Chairman
Frederic Rose CEO
Laurent Carozzi CFO
Emilie Megel VP Investor Relations