Technicolor

EU: TCH

€39m market cap

€2.59 last close

Technicolor is a worldwide technology leader operating in the media and entertainment industry. Its activities are organised in three business segments, Production Services, DVD Services and Connected Home.

Investment summary

Technicolor’s H120 results were consistent with management’s base level guidance given ahead of the EGM to approve the refinancing. Our model reflects this scenario. The rights issue is now in progress, with subscription terms of 43 new shares for every six existing shares, at a price of €2.98. The subscription period closes on 11 September. Debt holders will pay €3.58/share in the debt-to-equity swap. With firm steps now taken along the route to a much-strengthened balance sheet, the focus can shift towards rebuilding profitability; leveraging Technicolor’s leading market positions across its three businesses.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2018A 3988.0 266.0 7.0 (306.94) N/A N/A
2019A 3800.0 325.0 (73.0) (492.18) N/A N/A
2020E 3100.0 169.0 (142.0) (138.61) N/A N/A
2021E 3460.0 338.0 37.0 7.61 33.1 N/A
Industry outlook

COVID-19 has highlighted the importance of reliable domestic broadband and high-quality wi-fi as homes increasingly act as devolved workplaces alongside greater content consumption. This is unlikely to change as the global economy reopens. In Production Services, the group is utilising government furlough schemes wherever it can to preserve its skill base for the live content industry, which is slowly re-emerging. Animation demand is still strong. Fresh, high-quality content will be crucial to reinforce the attractiveness of those platforms to subscribers and advertisers.

Last updated on 09/07/2020
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Sector
TMT
Share price graph
Balance sheet
Forecast net debt (€m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (6.0) (54.0) (88.0)
Relative* (6.8) (58.0) (86.3)
52-week high/low €1.0/€0.2
*% relative to local index
Key management
Anne Bouverot Chairman
Richard Moat CEO
Laurent Carozzi CFO
Emilie Megel VP Investor Relations