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Technicolor has announced Q3 group revenues of €1.14 billion (versus €877 million a year ago). Frederic Rose, Chief Executive Officer of Technicolor, commented: “Our third quarter revenues have been solid as we continued to perform well and win major new awards across all our activities. We confirm our objectives for 2016 and remain strongly focused on operational execution.”
Connected Home revenues amounted to €606 million in the third quarter of 2016, up 82 per cent at constant currency year-on-year.
In North America, Technicolor recorded a solid performance in the quarter, in particular with Comcast and Charter, and secured additional awards with key accounts, for broadband products. The Group is not only participating in most of the major running programs with its top US operators, but also working with them on major new upcoming programs in video and broadband,
In Europe-Middle East and Africa, Technicolor performed very well, while making good progress with key accounts in the Region, in particular for next generation broadband products.
Revenues in Latin America were affected by the persistent economic situation in Brazil, but benefitted from solid traction with customers in Mexico. The Group has also secured new set-top boxes wins with ATT LATAM.
In Asia-Pacific, Technicolor recorded strong revenue growth driven by the shipment of broadband products to Telstra and China Telecom, offsetting the impact of lower shipments in certain countries, including India. Technicolor secured additional awards during the quarter in the Region, including the first DOCSIS 3.1 ever awarded in Asia-Pacific and a new OTT set-top-box in India.
Production Services revenues amounted to €185 million in the third quarter of 2016, up by 36 per cent at constant currency compared to the third quarter of 2015 driven by high double-digit growth in VFX for Advertising. Growth was also supported by continued strong momentum in all Visual Effects and Animation activities, which recorded outstanding sales performance during the quarter while Postproduction remained broadly stable.
Technicolor continued to maintain a very solid pipeline in VFX for feature films, with two new projects awarded to MPC during the quarter, Blade Runner 2049 and Justice League. VFX for episodic series continued to perform extremely well during the quarter as Mr. X expanded its capacities. Animation and Games activities continued to grow strongly, driven by a significant rise in the number of Animation projects and deepened relationships with Game companies. Overall, Technicolor continues to benefit from its multi brand strategy and strengthened its positions across the different market segments. Technicolor continued to demonstrate its leadership position in new immersive experiences, with projects such as “The Ben-Hur 360º Experience” developed by Mr. X and “The Modern Games” VR film for The New York Times developed by The Mill.
DVD Services revenues amounted to €300 million in the third quarter of 2016. Notwithstanding a c. 18 per cent volume increase, revenues were only up 7 per cent at constant currency compared to the third quarter of 2015, due to the mix, reduced packaging complexity and lower games related distribution activities. Revenue growth primarily resulted from the new customer additions secured in the fourth quarter of 2015, as year-on-year volume comparisons were challenged by a particularly strong third quarter in 2015 for studio customer new release activity, which included multiple mega hits such as Jurassic World, Furious 7, Mad Max Fury Road, Inside Out, and Avengers 2 Age of Ultron. Key theatrical titles produced in the third quarter of 2016 included Finding Dory, The Legend of Tarzan, and X-Men: Apocalypse. Games replication volumes were up slightly in the third quarter mostly reflecting the shift of production timing for a major annually recurring Xbox One title into the fourth quarter of 2016. Key games titles included FIFA 17 and BioShock: The Collection.
Technology revenues amounted to €43 million in the third quarter of 2016, down 63.7 per cent at constant currency compared to the third quarter of 2015. This decrease was mainly due to the sharp decline in MPEGLA revenues, which decreased by €60 million year-on-year. Negotiations on a number of licensing agreements continued to progress. Trademark licensing revenues were lower due to the insolvency of a RCA licensee.