TECHNICOLOR - 2012: A robust performance

Marketwired

ISSY-LES-MOULINEAUX CEDEX, FRANCE--(Marketwire - Feb 22, 2013) -


2012: A robust performance

* Revenue growth driven by Technology and Connected Home

* Adj. EBITDA and Free Cash Flow generation exceeding objectives and upvs. 2011

* Significant deleveraging and sharp reduction in net debt

* Return to net profit in H2 2012


FY 2012 Financial Highlights

· Revenue growth at constant scope[1] and currency: up 2.2% atEUR3.5 billion,driven by Connected Home and Technology.

· Adjusted EBITDA[2] at EUR512 million, exceeding objectives.

· Net profit of EUR17 million excluding EU antitrust fine; netloss of EUR22 million including EUR38.6 million EU antitrust fine.

· Group Free cash flow[3] up 31% at EUR106 million, exceedingobjectives.

· Net debt at nominal value (non IFRS) at EUR839 millionat December31, 2012, a reduction of EUR291 million compared to end December 2011.

H2 2012 Financial Highlights

· Group revenues up 3.4% at constant scope and currency.Excluding legacyactivities[4] which affected Entertainment Services performance, revenueswereup 7.2% at constant rate.

· Adjusted EBITDA at EUR314 million.

· Net profit of EUR4 million including the EUR38.6 million EUantitrust fine.

· Group Free Cash Flow more than doubled at EUR104 million.


+----------------+ +----------------------------+ +-----------------------+
|In EUR million | | Second Half | | Full Year |
+----------------+ +-----+------+---------------+ +-----+------+----------+
| | |2011 | 2012 | Change, | |2011 | 2012 | Change, |
| | | | | reported | | | | reported |
+----------------+ +-----+------+---------------+ +-----+------+----------+
|Group revenues | | | | | | | | |
|from continuing | | | | | | | | |
|operations | |1,891| 1,934| +2.2%| |3,450| 3,580| +3.8%|
| | | | | | | | | |
|Change at | | | | | | | | |
|constant | | | | | | | | |
|currency | | | | | | | | |
|(%) | | |(0.8)%| | | |(0.2)%| |
| | | | | | | | | |
|Change at | | | | | | | | |
|constant rate | | | | | | | | |
|and scope | | | +3.4%| | | | +2.2%| |
+----------------+ +-----+------+---------------+ +-----+------+----------+
|Adjusted EBITDA | | | | | | | | |
|from continuing | | | | | | | | |
|operations | | 308| 314| +2.0%| | 475| 512| +7.8%|
| | | | | | | | | |
|As a % of | | | | | | | | |
|revenues | |16.3%| 16.2%| (0.1)pt| |13.8%| 14.3%| +0.5pt|
+----------------+ +-----+------+---------------+ +-----+------+----------+
|Net Income | |(212)| 4| +217| |(324)| (22)| +302|
+----------------+ +-----+------+---------------+ +-----+------+----------+
|Group Free cash | | | | | | | | |
|flow | | 49| 104| +55| | 81| 106| +25|
+----------------+ +-----+------+---------------+ +-----+------+----------+
|Cash position at| | | | | | | | |
|31 December | | | | | | 370| 397| +7.3%|
| | | | | | | | | |
|Net Debt IFRS at| | | | | | | | |
|31 December | | | | | | 957| 718| (24.9)%|
| | | | | | | | | |
|Net Debt non | | | | | | | | |
|IFRS at 31 | | | | | | | | |
|December | | | | | |1,130| 839| (25.8)%|
+----------------+ +-----+------+---------------+ +-----+------+----------+

Technicolor, on track to deliver on Amplify 2015

A strong 2012 business performance

* Technology: Solid growth in revenues driven particularly by the record performance of patent licensing programs and sustained MPEG LArevenues;

* Entertainment Services: Resiliency of DVD activities, whichoutperformed the market in 2012; strong reduction in exposure to legacy activities;growth in Digital Creative Services despite some softness in H2;

* Connected Home: Strong revenue growth driven by emerging markets;turnaround plan on track with a return to adjusted EBITDA positive in second halfof 2012 and breakeven in FY 2012.

A strengthened financial position

* Technicolor's financial structure significantly improved in the secondhalf of 2012 as a result of the capital increases completed in the thirdquarter and the significant positive free cash flow generation achieved by theGroup in 2012.

* Nominal gross debt (non IFRS) reduced by EUR264 million;

* Increase of the Group's cash position to EUR397 million at endDecember 2012 compared to EUR370 million at end December 2011;

* Net debt at nominal value (non IFRS) reduced by EUR291 million.

* Technicolor significantly deleveraged its balance sheet in 2012 withNet Debt to adjusted EBITDA ratio (as per Group's covenants) stronglyimproved to 1.41x versus 1.97x the previous year.


Ramping up new growth areas in 2012

* Sustained pace of Intellectual Property production and continued contribution to standards;

* Launch of Color and Image Certification programs in Technologylicensing and development of the Cinestyle offer to target prosumers, leveraging on Technicolor's technology expertise in color fidelity and imageenhancement and its Hollywood name recognition;

* Launch of innovative solutions to address expanding digital markets andmore specifically M-GO, the Group's digital initiative which aims atbecoming consumers' first stop to find and watch satisfying entertainmentcontent, and Magic Ruby, the Group's second-screen initiative, offeringbroadcasters and advertisers new monetization solutions;

* Launch of several new added value services for content creators, in particular on-set services and Cineglass, an end-to-end digitalsolution platform for content creators and distributors.

2013 objectives

· Growth of adj. EBITDA between 5% to 10% compared to FY 2012 adj.EBITDA atconstant scope[5] (EUR498 million):

o Licensing adj. EBITDA broadly stable vs. FY 2012 assuming anotheryear ofstrong contracts;

o Continued improvement of Connected Home adj. EBITDA and return topositivefree cash flow generation in this segment;

o Improved profitability in Entertainment Services reflecting costactionsimplemented in H2 2012;

o Continued increase in operating expenses for M-GO and newgrowthinitiatives.

· Strong growth in Free Cash Flow, above 30%, before one-offpayments forlegacy litigation (mainly the EU antitrust fine for EUR38.6 million).

· Net debt to adj. EBITDA ratio (as per Group's covenants)below 1.25x atend December 2013.

Confirmed value of Technicolor's Intellectual Property portfolio:

* Technicolor SA has increased its statutory shareholders' equity inDecember 2012, ahead of its legal obligation, through the intra-group transferof Thomson Licensing SAS, the owner of all Technicolor patents. The saleby Technicolor SA to a fully-owned subsidiary at market value resulted ina material non cash profit as the shares were previously registered attheir historical value of EUR40 million.

* Technicolor chose NERA Economic Consulting, a division of Marsh &McLennan Group, as an independent firm to value Thomson Licensing SAS. NERAperformed the valuation using the DCF approach as the principal method, backed-upby a Market Multiple approach and achieved an average value of ThomsonLicensing SAS of EUR2.2 billion.

* Consequently, the statutory equity of Technicolor SA amounted to EUR2.0 billion at the end of 2012. This intra-group transaction had no impacton the Group's consolidated financial statements.


Frederic Rose, Chief Executive Officer of Technicolor, stated:

"Our 2012 results demonstrate that Technicolor is fully on track to achieveitsAmplify 2015 strategic roadmap and capture new opportunities todeliver anenhanced media experience to consumers and prosumers. With highersales,improved profitability, free cash-flow above our targets and astrengthenedbalance sheet, 2012 was a year of significant financial andstrategicachievements for Technicolor. Our strong operational performancedemonstratesthe robustness of our business model and our capacity to innovate".


An analyst conference call hosted by Frederic Rose, CEO, andStéphane Rougeot,CFO and SEVP Strategy, will be held on Friday, February 22, 2013 at 3:00 pmCET.


Financial Calendar


+------------------+-----------------+
| Q1 2013 Revenues | April 26, 2013 |
+------------------+-----------------+
| AGM 2013 | May 23 2013 |
+------------------+-----------------+
| H1 2013 Results | July 26 2013 |
+------------------+-----------------+
| Q3 2013 | 25 October 2013 |
+------------------+-----------------+


Warning: Forward Looking Statements

This press release contains certain statements that constitute"forward-looking statements", including but not limited to statements thatare predictions of orindicate future events, trends, plans or objectives, based oncertainassumptions or which do not directly relate to historical or current facts.Suchforward-looking statements are based on management's currentexpectations andbeliefs and are subject to a number of risks and uncertainties that couldcauseactual results to differ materially from the future resultsexpressed,forecasted or implied by such forward-looking statements. For a morecompletelist and description of such risks and uncertainties, refer toTechnicolor'sfilings with the French Autorité des marchés financiers.


About Technicolor

Technicolor, a worldwide technology leader in the media andentertainmentsector, is at the forefront of digital innovation. Our world classresearch andinnovation laboratories enable us to lead the market in deliveringadvancedvideo services to content creators and distributors. We also benefitfrom anextensive intellectual property portfolio focused on imaging andsoundtechnologies, based on a thriving licensing business. Our commitment:supportingthe delivery of exciting new experiences for consumers in theaters,homes andon-the-go. Euronext Paris: TCH Ÿ www.technicolor.com


Fourth quarter and second half of 2012 financial highlights

Paris (France), 22 February 2013 - The Board of Directors ofTechnicolor(Euronext Paris: TCH) met yesterday to review the Group's full year2012results.

Summary of consolidated results for the second half and full year of2012(unaudited)

All figures are preliminary and subject to final completion of reviewprocedures.

Technicolor is presenting, in addition to published results and with theaim toprovide a more comparable view of the evolution of its operatingperformancecompared with 2011, a set of adjusted indicators which exclude thefollowingitems as per the statement of operations of our consolidatedfinancialstatements:

· Restructuring charges;

· Net impairment charges;

· Other income and expenses (other non-current items).

These adjustments, the reconciliation of which is detailed on page 23,amountedto an impact on Group EBIT from continuing operations of EUR(58) millionin thesecond half of 2012 (EUR(240) million in H2 2011).


+-------------------+ +-------------------------+ +-----------------------+
|In EUR million | | Second Half | | Full Year |
+-------------------+ +-----+------+------------+ +-----+------+----------+
| | |2011 | 2012 | Change, | |2011 | 2012 | Change, |
| | | | | reported | | | | reported |
+-------------------+ +-----+------+------------+ +-----+------+----------+
|Group revenues from| | | | | | | | |
|continuing | | | | | | | | |
|operations | |1,891| 1,933| +2.2%| |3,450| 3,580| +3.8%|
| | | | | | | | | |
|Change at constant | | | | | | | | |
|currency (%) | | |(0.8)%| | | |(0.2)%| |
+-------------------+ +-----+------+------------+ +-----+------+----------+
|Group gross margin | | 436| 476| +9.0%| | 736| 830| +12.8%|
| | | | | | | | | |
|As a % of revenues | |23.1%| 24.6%| +1.5pt| |21.3%| 23.2%| +1.9pt|
+-------------------+ +-----+------+------------+ +-----+------+----------+
|Adjusted EBITDA | | | | | | | | |
|from continuing | | | | | | | | |
|operations | | 308| 314| +2.0%| | 475| 512| +7.8%|
| | | | | | | | | |
|As a % of revenues | |16.3%| 16.2%| (0.1)pt| |13.8%| 14.3%| +0.5pt|
+-------------------+ +-----+------+------------+ +-----+------+----------+
|Adjusted EBIT from | | | | | | | | |
|continuing | | | | | | | | |
|operations | | 195| 207| +6.3%| | 232| 301| +29.5%|
| | | | | | | | | |
|As a % of revenues | |10.3%| 10.7%| +0.4pt| | 6.7%| 8.4%| +1.7pt|
+-------------------+ +-----+------+------------+ +-----+------+----------+
|EBIT from | | | | | | | | |
|continuing | | | | | | | | |
|operations | | (45)| 149| +194| | (33)| 264| +296|
| | | | | | | | | |
|Financial result | | (95)| (81)| +14| |(187)| (197)| (9)|
| | | | | | | | | |
|Share of | | | | | | | | |
|profit/(loss) from | | | | | | | | |
|associates | | 1| (1)| (2)| | 0| (5)| (6)|
| | | | | | | | | |
|Income tax | | (70)| (27)| +43| | (83)| (49)| +34|
+-------------------+ +-----+------+------------+ +-----+------+----------+
|Profit/(loss) from | | | | | | | | |
|continuing | | | | | | | | |
|operations | |(209)| 40| +249| |(303)| 13| +316|
+-------------------+ +-----+------+------------+ +-----+------+----------+
|Loss from | | | | | | | | |
|discontinued | | | | | | | | |
|operations | | (3)| (35)| (32)| | (21)| (35)| (14)|
| | | | | | | | | |
|Net income | |(212)| 4| +217| |(324)| (22)| +302|
+-------------------+ +-----+------+------------+ +-----+------+----------+
|Operating cash flow| | | | | | | | |
|from continuing | | | | | | | | |
|operations[6] | | 199| 211| +12| | 261| 312| +51|
| | | | | | | | | |
|Group Free cash | | | | | | | | |
|flow | | 49| 104| +54| | 81| 106| +25|
+-------------------+ +-----+------+------------+ +-----+------+----------+
|Net financial debt | | | | |
|(IFRS) | | 957| 718| (239)|
| | | | | |
|Net financial debt | | | | |
|at nominal value | | | | |
|(non IFRS) | |1,130| 839| (291)|
+-------------------+ +-----+------+----------+


Stable operating profitability in H2 2012

· In the second half of 2012, revenues from continuingoperations amountedto EUR1,933 million compared with EUR1,891 million in the second halfof 2011, a2.2% increase at current currency but a 0.8% decrease at constantcurrency. Atconstant scope and currency, revenues were up 3.4%.

· In the second half of 2012, gross margin amounted to EUR476million, up 9%at current currency, and represented 24.6% of revenues, an improvement of1.5points year-on-year.

· Adjusted EBITDA from continuing operations amounted to EUR314million in thesecond half of 2012 compared with EUR308 million in the second half of2011, a2.0% increase year-on-year at current currency, with adjusted EBITDAmargin of16.2% of revenues, broadly stable.

· This improvement in adjusted EBITDA was driven by increasedTechnologyprofitability generated by strong Licensing performance and thereturn ofConnected Home to positive adjusted EBITDA, which offset the weakerperformancein Entertainment Services. Corporate costs increased year-on-year,as thereduction in costs of transversal functions was offset by higherincentiveprogram costs related to the strong financial improvement recordedyear-on-year, increased costs for growth initiatives and a negativecomparison base versus.2011 that included several positive non-recurring impacts.

Positive net result in H2 2012, despite the European Union antitrust fine

· In the second half of 2012, adjusted EBIT from continuingoperationsamounted to EUR207 million compared to EUR195 million in the second half of2011, anincrease in margin of 0.4 point driven by lower depreciation &amortizationexpenses.

· EBIT from continuing operations totaled EUR149 million in thesecond half of2012 compared with a loss of EUR45 million in the second half of 2011.EBIT fromcontinuing operations included in the second half of 2012 a provisionrelated tolitigation with a third party for EUR17 million and restructuring costs(includingthe closure of Thomson Angers operations) just above 1% of revenues, downfrom3.8% of revenues in the second half of 2011.

· In the second half of 2012, the Group's financial resultamounted to EUR(81)million compared to EUR(95) million in the second half of 2011. Thefinancialresult included net interest charges of EUR69 million in the second half of2012,compared to EUR75 million in the second half of 2011.

· Net result was a profit of EUR4 million in the second half of2012, comparedto a loss of EUR212 million in the second half of 2011. This figureincludes theEUR38.6 million antitrust fine imposed by the European Commission,classified as a"Net loss from discontinued operations", as it related to abusinessdiscontinued by the Group in 2005, and the EUR17 million litigationprovisionmentioned above.

Sustained Operating Cash Flow from continuing operations in H2 2012

· Operating cash flow from continuing operations amounted toEUR211 million inthe second half of 2012, an increase of EUR12 million compared with thesecondhalf of 2011, and represented 10.9% of revenues, a year-on-year increase of0.4point. In the second half of 2012, cash outflow for net capitalexpendituresamounted to EUR73 million, a EUR8.5 million year-on-year decreaseresulting mostlyfrom a decrease in capital expenditure in Creative Services,reflecting thecompletion of sizeable investments. Cash outflow related torestructuringamounted to EUR31 million, or 1.6% of revenues, broadly stable comparedto thesecond half of 2011.


Group Free Cash Flow above EUR100 million in H2 2012

· Group Free Cash Flow amounted to EUR104 million in H2 2012,compared to EUR49million in H2 2011.

· Main impacts on Group Free Cash Flow are as follows:

* Cash financial charges amounted to EUR56 million in H2 2012;

* Other cash charges, mainly related to tax, pensions and non-currentitems amounted to EUR49 million in H2 2012;

* Free Cash Flow from continuing operations amounted to EUR106 million,while Free Cash Flow from discontinued operations resulted in a cash chargeof EUR2 million.

Significant net debt reduction

· Nominal gross debt (non IFRS) amounted to EUR1,236 million(EUR1,115 millionIFRS) at end December 2012 compared to EUR1,500 million (EUR1,327 millionIFRS) atend December 2011, a reduction of EUR264 million. This improvementreflectedprepayments of EUR162 million related to the capital increases andBroadcastdisposal, scheduled senior debt repayments of EUR58 million, othernet debtrepayments of EUR8 million, excess free cash flow of EUR25 million in2011 and aforeign exchange impact of EUR11 million.

· The Group's cash position also improved and amounted toEUR397 million atend December 2012 compared to EUR370 million at end December 2011reflectingstrong free cash flow generation of EUR106 million in 2012, positivecontributionof the capital increases of EUR179 million, debt reimbursement forEUR(253) million(nominal basis) and others for EUR(5) million.

· Net debt at nominal value (non IFRS) amounted toEUR839 million atend December 2012 compared to EUR1,130 million at end December 2011, adecrease ofEUR291 million.

· Net debt as per consolidated financial statements (IFRS)amounted toEUR718 million at end December 2012 compared to EUR957 million at endDecember2011, a decrease of EUR239 million.

· Technicolor has received a firm offer for a new EUR50 millionreceivablesbacked credit facility replacing the existing EUR100m facility whichexpires inApril 2013. The replacement facility, at improved terms versus the existingone,is currently under negotiation. Technicolor's other receivables backedcreditfacility, a $125 million facility with Wells Fargo in the U.S, was amendedin Q12012, extending the maturity to 2016 and improving the terms andconditions.

Financial covenants

As of December 31, 2012, the Group met its financial covenants.



+---------------------------------------------+---------------------------+
|Covenants* |Actual on 31 December, 2012|
+---------------------------------------------+---------------------------+
|Interest cover EBITDA/Financial Interests | 4.53x |
| above 3.65x | |
+---------------------------------------------+---------------------------+
|Leverage Net debt/EBITDA below 2.25x | 1.41x |
+---------------------------------------------+---------------------------+
|Capital expenditure (in EUR million) | 140 |
+---------------------------------------------+---------------------------+

* For the calculation of covenants, the definition of EBITDA as per thecreditagreements is the same as the definition of adjusted EBITDA detailed inappendixon page 23.


Fourth quarter, second half and full year of 2012 segment review

Summary of Group financial indicators by segment (unaudited)



+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In EUR million | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Group revenues* | | 1,054| 1,005| | 1,891| 1,933| | 3,450| 3,580|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | (4.7)%| | | +2.2%| | | +3.8%|
| | | | | | | | | | |
|Change at constant | | | (6.2)%| | | (0.8)%| | | (0.2)%|
|currency (%) | | | | | | | | | |
| | | | | | | | | | |
|o/w Technology | | 130| 150| | 237| 279| | 456| 515|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | +15.7%| | | +17.6%| | | +12.9%|
| | | | | | | | | | |
|Change at constant | | | +20.0%| | | +23.3%| | | +13.5%|
|currency (%) | | | | | | | | | |
| | | | | | | | | | |
|o/w Entertainment | | 594| 524| | 1,048| 973| | 1,832| 1,730|
|Services | | | | | | | | | |
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | |(11.8)%| | | (7.2)%| | | (5.6)%|
| | | | | | | | | | |
|Change at constant | | |(15.1)%| | |(12.4)%| | |(11.0)%|
|currency (%) | | | | | | | | | |
| | | | | | | | | | |
|o/w Digital | | | | | | | | | |
|Delivery | | 329| 330| | 604| 681| | 1,157| 1,334|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | +0.3%| | | +12.8%| | | +15.3%|
| | | | | | | | | | |
|Change at constant | | | (0.4)%| | | +10.0%| | | +12.0%|
|currency (%) | | | | | | | | | |
| | | | | | | | | | |
|o/w Connected Home | | 283| 326| | 517| 671| | 989| 1,244|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | +15.1%| | | +29.9%| | | +25.7%|
| | | | | | | | | | |
|Change at constant | | | +14.2%| | | +26.6%| | | +22.0%|
|currency (%) | | | | | | | | | |
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBITDA* | | | | | 308| 314| | 475| 512|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | | | | +2.0%| | | +7.8%|
| | | | | | | | | | |
|As % of revenues | | | | | 16.3%| 16.2%| | 13.8%| 14.3%|
| | | | | | | | | | |
|o/w Technology | | | | | 183| 222| | 346| 400|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | | | | +21.7%| | | +15.7%|
| | | | | | | | | | |
|As % of revenues | | | | | 77.2%| 79.8%| | 75.9%| 77.8%|
| | | | | | | | | | |
|o/w Entertainment | | | | | 163| 132| | 230| 199|
|Services | | | | | | | | | |
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | | | |(18.8)%| | |(13.3)%|
| | | | | | | | | | |
|As % of revenues | | | | | 15.6%| 13.6%| | 12.5%| 11.5%|
| | | | | | | | | | |
|o/w Digital | | | | | | | | | |
|Delivery | | | | | (2)| 15| | (20)| 14|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | | | | nm| | | nm|
| | | | | | | | | | |
|As % of revenues | | | | | (0.4)%| 2.1%| | (1.7)%| 1.1%|
| | | | | | | | | | |
|o/w Connected Home | | | | | (17)| 12| | (43)| 1|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | | | | nm| | | nm|
| | | | | | | | | | |
|As % of revenues | | | | | (3.4)%| 1.8%| | (4.4)%| 0.1%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBIT* | | | | | 195| 207| | 232| 301|
| | | | | | | | | | |
|As % of revenues | | | | | 10.3%| 10.7%| | 6.7%| 8.4%|
| | | | | | | | | | |
|o/w Technology | | | | | 180| 225| | 337| 400|
| | | | | | | | | | |
|As % of revenues | | | | | 76.1%| 80.7%| | 73.9%| 77.8%|
| | | | | | | | | | |
|o/w Entertainment | | | | | 75| 39| | 53| 26|
|Services | | | | | | | | | |
| | | | | | | | | | |
|As % of revenues | | | | | 7.1%| 4.0%| | 2.9%| 1.5%|
| | | | | | | | | | |
|o/w Digital | | | | | | | | | |
|Delivery | | | | | (23)| (0)| | (73)| (20)|
| | | | | | | | | | |
|As % of revenues | | | | | (3.9)%| 0.0%| | (6.3)%| (1.5)%|
| | | | | | | | | | |
|o/w Connected Home | | | | | (32)| (2)| | (81)| (34)|
| | | | | | | | | | |
|As % of revenues | | | | | (6.2)%| (0.2)%| | (8.2)%| (2.7)%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
* Continuing operations.


Technology


Technology financial indicators


+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In EUR million | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Revenues | | 130| 150| | 237| 279| | 456| 515|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | 15.7%| | | 17.6%| | | +12.9%|
| | | | | | | | | | |
|Change at constant | | | 20.0%| | | 23.3%| | | +13.5%|
|currency (%) | | | | | | | | | |
| | | | | | | | | | |
|o/w Licensing | | | | | | | | | |
|revenues | | 129| 150| | 234| 278| | 451| 512|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | 16.6%| | | 18.4%| | | +13.6%|
| | | | | | | | | | |
|Change at constant | | | 20.9%| | | 24.2%| | | +14.2%|
|currency (%) | | | | | | | | | |
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBITDA | | | | | 183| 222| | 346| 400|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | | | | 21.7%| | | +15.7%|
| | | | | | | | | | |
|As % of revenues | | | | | 77.2%| 79.8%| | 75.9%| 77.8%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBIT | | | | | 180| 225| | 337| 400|
| | | | | | | | | | |
|As % of revenues | | | | | 76.1%| 80.7%| | 73.9%| 77.8%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|EBIT | | | | | 186| 225| | 343| 403|
| | | | | | | | | | |
|As % of revenues | | | | | 78.3%| 80.7%| | 75.2%| 78.3%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+

In the second half of 2012, Technology revenues reached EUR279 million, up17.6%at current currency and up 23.3% at constant currency compared to thesecondhalf of 2011. adjusted EBITDA margin for the Technology segmentincreased by2.6 points year-on-year to 79.8% of revenues, driven by a particularlystrongperformance in Licensing, as well as continuing cost optimization.

For the full year 2012, Technology revenues totaled EUR515 million, up12.9% atcurrent currency and up 13.5% at constant currency compared to the fullyear2011, with Licensing revenues recording an all-time high. As a result,adjustedEBITDA margin for the Technology segment rose by 1.9 pointsyear-on-year to 77.8% of revenues.

Q4 2012 Revenue Highlights

In the fourth quarter of 2012, Technology revenues amounted to EUR150million, up15.7% at current currency and up 20.0% at constant currency comparedto thefourth quarter of 2011.

Licensing

In the fourth quarter of 2012, Licensing revenues recorded year-on-yeargrowthof 20.9% at constant currency, as a result of the strong performanceof theGroup's non MPEG LA patent Licensing programs. In line with the trendsof thethird quarter of 2012, the patent licensing programs experienced stronggrowth,notably across the Digital TV programs, benefiting from additional newcontractsand contract renewals, along with good volume performances by someof theGroup's licensees in the fourth quarter of 2012.

Research and Innovation ("R&I") activities in 2012

In 2012, the Research and Innovation ("R&I") division sustained the pace ofhighquality Intellectual Property production and its contributions inkeystandardization bodies.

Over 2012, R&I significantly increased its contribution tostandards,representing Technicolor in more than 10 Standardization bodies, includingMPEG,ATSC, DVB, SMPTE, DVB & VQEG.

R&I focused on areas where Technicolor has strong differentiation,specificallyin High Efficiency Video Coding ("HEVC") and MPEG/ITU, in codingsound andimage. HEVC is the next generation video compression standard jointlydevelopedbetween MPEG and ITU-T VCEG. Technicolor has participated from theoutset,chairing or co-chairing core experiments during development of thestandard andcontributing innovative technologies. Technicolor was instrumental inthecreation of the Main10 profile for improved video quality, likely to playa keyrole in Ultra-High Definition (UHD). A further extension of thestandard,Scalable HEVC (SHVC) is at the centre of new activity in R&I,underlining thecommitment of Technicolor to the evolution of industry standards.Similarly, R&Ihas developed ground-breaking technology to underpin its activeparticipation inthe MPEG Call for Proposal on 3D Audio Coding. This standard isenvisaged todeliver a highly immersive audio experience to home theaters andpersonaldevices, bringing incomparable quality to the combined Home andConsumerElectronic markets.

Technicolor also significantly increased its investment in ATSC 3.0(AdvancedTelevision Systems Committee). This project capitalizes onTechnicolor'sexisting and developing technologies, in which Technicolor is oneof thehistorical participants. Specifically, Technicolor's interests arefocused onthe physical, transport and application layers, including audio/videocoding.

In 2012, Technicolor filed 444 priority applications with respect tonewinventions. The maintained pace of filings underpins the commitment tofocus onhigh quality patents in targeted technology areas (such as Video andAudioCompression, Image enhancement, Networking, Content security&Privacy), creating long term monetization opportunities for PatentLicensingand Technology Licensing. Technicolor was also granted 2,300 patents in2012compared to 2,000 granted patents on average per year over the 2004-2011period.At the end of 2012, over 66% of Technicolor's patent portfolio has alifetime of10 years or more.

R&I significantly raised its scientific excellence and reputation in2012.Scientific excellence is measured through publications (that in turnlead tostrong Intellectual Property differentiation) and collaboration with thebestacademic research institutions worldwide. R&I published in 2012 morethan 40articles in top tier scientific events (per the international researchcommunityranking). Collaborations have been established with four among thetop sixuniversities (per the Shanghai ranking): Berkeley, Stanford, MIT, andCambridge.In France, the IP agreement with INRIA, a public research institute, hasbeenrenewed.


Entertainment Services

Entertainment Services include Creative Services, DVD Services and IZ-ONMedia(formerly PRN). Technicolor has been developing new technologysolutions tosupport the transition of its customers to digital and is managing itsdigitalcreative services business to capture growth opportunities, whilelimitingexposure to fast declining legacy activities. Therefore, Technicoloris nowpresenting the performances of its Creative Services business in twocategories:Digital Creative Services (Digital Production, Digital PostproductionandDistribution, Digital Cinema) and legacy activities (Photochemicalfilm,Compression & Authoring, Tape duplication).

Entertainment Services financial indicators


+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In EUR million | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Revenues | | 594| 524| | 1,048| 973| | 1,832| 1,730|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | |(11.8)%| | | (7.2)%| | | (5.6)%|
| | | | | | | | | | |
|Change at constant | | |(15.1%)| | |(12.4)%| | |(11.0)%|
|currency (%) | | | | | | | | | |
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBITDA | | | | | 163| 132| | 230| 199|
| | | | | | | | | | |
|Change as reported | | | | | | | | | |
|(%) | | | | | |(18.8)%| | |(13.3)%|
| | | | | | | | | | |
|As % of revenues | | | | | 15.6%| 13.6%| | 12.5%| 11.5%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBIT | | | | | 75| 39| | 53| 26|
| | | | | | | | | | |
|As % of revenues | | | | | 7.1%| 4.0%| | 2.9%| 1.5%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|EBIT | | | | | 10| 29| | (29)| 12|
| | | | | | | | | | |
|As % of revenues | | | | | 0.9%| 3.0%| | (1.6)%| 0.7%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+

In the second half of 2012, Entertainment Services revenues totaledEUR973million, down 7.2% at current currency and down 12.4% at constantcurrency.Excluding legacy activities, revenues were down 2.4% at currentcurrency anddown 7.9% at constant currency reflecting some softness in DigitalProductionand Digital Cinema and a revenue decrease in DVD Services largely drivenby thedecline in Standard Definition volumes. In the second half of 2012,combinedStandard Definition DVD and Blu-ray™ volumes decreased by 5%, withBlu-ray™ growth of 26% and Games growth of 8%. Adjusted EBITDAamounted to EUR132million or 13.6% of revenues, down 2.0 points, due to the revenue decline.

In the full year of 2012, Entertainment Services experienced adecrease inrevenues largely due to legacy activities, which represented in 2012 only5% ofthe Group's total revenues compared to 8% in full year 2011. Excludinglegacyactivities, revenues were flat at current currency and down 5.8% atconstantcurrency. Adjusted EBITDA amounted to EUR199 million in full year 2012 or amarginof 11.5%, down 1.0 point compared to full year 2011. Performances bydivisionare as follows:

* Creative Services experienced a year-on-year decrease in revenues, with continued weakness in legacy activities partly offset by slight growthin Digital Creative Services revenues, despite some softness in the secondhalf of the year. The activity of Visual Effects ("VFX") for feature film recorded a weak performance due to the delay in some sizeable projects, leading to a particularly low level of VFX activity for feature filmsin the London facilities.

The Group implemented cost reduction measures in its CreativeServicesdivision in the second half of 2012 to mitigate the impact of lower saleson itsprofitability. Profitability has been progressively restored and in thefourthquarter adjusted EBITDA margin recorded a decrease of only 0.5 pointcompared tothe fourth quarter of 2011 despite the softness experienced in the quarter.

* In DVD Services, a total of 1.45 billion units were replicated in 2012,a 6% decrease compared to the full year 2011, which benefited fromseveral successful Harry Potter-related releases. Blu-ray™ shipmentsaccelerated throughout the year and Standard Definition DVD volumes were resilientin the North American market - despite continued pressure in the TV-DVD category.

For the full year 2012, adjusted EBITDA margin for DVD Servicesremainedstable, despite an 8% year-on-year contraction in revenues and a slightmargindecline in the second half of 2012. This performance was driven bymultiplefactors, including an improved products mix, the positive impact of ongoingcostsavings initiatives and efficiency improvement programs, andreduction ofoffload, which offset specific customer price reductions. The DVDServicesdivision posted solid free cash flow generation in the second half of2012,largely due to continuing focus on cost savings and tight management ofworkingcapital requirements.

* In 2012, IZ-ON Media experienced a decline in revenues resulting from aweak US advertising market during the course of the year which has impactedits contribution to the adjusted EBITDA margin.

Creative Services - Q4 2012 Revenue Highlights

In the fourth quarter of 2012, Creative Services recorded a year-on-yeardeclinein revenues, due to the sharp drop of legacy activities and continuedweaknessin VFX for feature films. The Group continued to take actions to adjust itscostbase to lower revenues and changing activity mix.

Digital Creative Services

* Digital Production activities recorded a year-on-year decrease inrevenues in the fourth quarter of 2012, reflecting softness in Visual Effects("VFX") for feature films, offset in part by stable revenues in VFX forcommercials. The softness in feature film VFX activities was due to delays in some sizeable projects that impacted the London facility, while customerworkload was ramping up at the Vancouver facility. Commercial VFX activitiesrecorded stable revenues following three quarters of strong performance,especially at Los Angeles and New York facilities.

In the fourth quarter of 2012, VFX teams completed work on Man ofSteel(Warner), while continuing work on Maleficent (Disney), The SeventhSon(Warner), The Lone Ranger (Disney) and 47 Ronin (Universal). They alsostartedwork on Percy Jackson: Sea of Monsters (Fox). VFX teams won the BAFTAaward forLife of Pi (Fox), and have been nominated for Oscars for theirwork onPrometheus (Fox) and Life of Pi. This was another demonstration ofTechnicolor'sexcellence in servicing its studio customers.

* Digital Postproduction and Distribution Services activities experienced mixed trends in the fourth quarter of 2012, following several straight quarters of sustained revenue growth. Sound activities continued toexpand at a fast pace, thanks to the ramp-up of the Group's new facilities,notably in Hollywood, whereas Video activities suffered from market softness.During the quarter Hollywood Postproduction teams maintained their leadingposition in Broadcast TV series, and gained market share with tent-pole movies.


Technicolor's excellence in servicing was also demonstrated as the Groupserved19 projects that have received Oscar nominations, including 6 of the 9filmsnominated for the Best Picture Oscar and award nominations for its soundmixingteam on Skyfall (Sony).

Digital Distribution Services activities delivered another quarter ofstrongyear-on-year revenue growth in the fourth quarter of 2012, benefitingfromcontinued work on the catalogs of titles of major Over-the-Top andVideo-on-Demand players, as well as initial work on new delivery formatsforin-flight entertainment.

* Digital Cinema activities reported a slight year-on-year revenuedecline in the fourth quarter of 2012, with a significant rebound in volume offsetby specific customer price reductions given early in the year. At the endof December 2012, digital screen penetration was 84% in North America and70% in Europe.

Legacy activities

As expected, legacy activities continued to decline sharply in thefourthquarter of 2012, in particular photochemical film activities withphotochemicalfilm footage down 59% and revenues down 40% year-on-year. Technicolorcontinuedin the quarter to reduce its exposure to such activities, whichrepresented4.3% of Group revenues.

DVD Services - Q4 2012 Revenue Highlights

In the fourth quarter of 2012, combined Standard Definition DVD andBlu-ray™ volumes decreased by 8% compared to the fourth quarter of 2011.This decline wasdriven by a decrease in Standard DVD volumes, attributable to an overallweakertitle release slate year-on-year, as well as a challenging comparisonbase inEurope, which benefited from the release of multi-disc and specialeditioncollector's box-sets for the Harry Potter franchise in the fourthquarter of2011.

These factors were partially offset by strengthening growth in Blu-ray™,withvolumes up 27% in the fourth quarter of 2012 following a 25% increasein thethird quarter of 2012, as well as stronger Games shipments, driven byseveralmajor title releases for Microsoft's Xbox video game console. Majortitlesproduced in the fourth quarter of 2012 included Brave (Walt Disney), TheDarkKnight Rises (Warner Bros.), Ted (Universal) and ParanormalActivity 4(Paramount).

DVD / Blu-ray™ volumes


+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In million units | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Total Volumes | | 529| 487| | 947| 895| | 1540| 1,454|
| | | | | | | | | | |
|Change (%) | | | (8)%| | | (5)%| | | (6)%|
| | | | | | | | | | |
|o/w SD-DVD | | | | | | | | | |
|(Standard | | 423| 365| | 772| 691| | 1270| 1,160|
|Definition) | | | | | | | | | |
| | | | | | | | | | |
|Change (%) | | | (14)%| | | (10)%| | | (9)%|
| | | | | | | | | | |
|o/w Blu-ray™ | | 57| 72| | 101| 127| | 152| 182|
| | | | | | | | | | |
|Change (%) | | | +27%| | | +26%| | | +19%|
| | | | | | | | | | |
|Games | | 38| 40| | 57| 62| | 85| 88|
| | | | | | | | | | |
|Change (%) | | | +6%| | | +8%| | | +4%|
| | | | | | | | | | |
|Software and Kiosk | | 10| 9| | 16| 15| | 33| 25|
| | | | | | | | | | |
|Change (%) | | | (9%)| | | (10)%| | | (25)%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+

Digital Delivery

Following the sale of the Broadcast Services, the SmartVision(television-over-IP) businesses and the Cirpack softswitchoperations (voice-over-IP), Technicolor has renamed the existing"Digital Delivery" segment to "ConnectedHome". The business review is focused on Connected Home activities.DigitalDelivery financial indicators are presented for reconciliation purposes.

Digital Delivery financial indicators


+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In EUR million | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Revenues | | 329| 330| | 604| 681| | 1,157| 1,334|
| | | | | | | | | | |
|Change, as reported| | | | | | | | | |
|(%) | | | 0.3%| | | 12.8%| | | 15.3%|
| | | | | | | | | | |
|Change at constant | | | (0.4)%| | | 10.0%| | | 12.0%|
|currency (%) | | | | | | | | | |
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBITDA | | | | | (2)| 15| | (20)| 14|
| | | | | | | | | | |
|As % of revenues | | | | | (0.4)%| 2.1%| | (1.7)%| 1.1%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+


Connected Home financial indicators

+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In EUR million | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Revenues | | 283| 326| | 517| 671| | 989| 1,244|
| | | | | | | | | | |
|Change, as reported| | | | | | | | | |
| (%) | | | 15.1%| | | 29.9%| | | 25.7%|
| | | | | | | | | | |
|Change at constant | | | 14.2%| | | 26.6%| | | 22.0%|
|currency (%) | | | | | | | | | |
+-------------------+-+-------+-------+-+-------+-------+-+-------+-------+
|Adjusted EBITDA | | | | | (17)| 12| | (43)| 1|
| | | | | | | | | | |
|As % of revenues | | | | | (3.4)%| 1.8%| | (4.4)%| 0.1%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Adjusted EBIT | | | | | (32)| (2)| | (81)| (34)|
| | | | | | | | | | |
|As % of revenues | | | | | (6.2%)| (0.2)%| | (8.2%)| (2.7)%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|EBIT | | | | | (183)| (43)| | (242)| (56)|
| | | | | | | | | | |
|As % of revenues | | | | |(35.5)%| (6.5)%| |(24.4)%| (4.5)%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+


In the second half of 2012, Connected Home revenues totaled EUR671million, up29.9% at current currency and up 26.6% at constant currency comparedto thesecond half of 2011. This performance was primarily driven by sustained customerdemand across Latin America, strong growth in the Asia-Pacific region, aswellas increasing mix of higher-end Cable devices in North America. ConnectedHomeadjusted EBITDA amounted to EUR12 million in the second half of 2012compared toEUR(17) million in the second half of 2011 and EUR(12) million in thefirst half of2012, due to very strong revenue growth and the benefit of costsavingsinitiatives. Gross margin improved by 3.5 points at 14.5% in the secondhalf of2012, driven by Connected Home's new customer wins for solutions andservicesacross all regions over the period and cost savings initiatives completedin thesecond half of 2012. Cost savings achieved in full year 2012 amountedto EUR27million, a gap of EUR5 million compared to the target announced inDecember 2011and mainly due to some delay in the restructuring in Europe.

For the full year 2012, Connected Home revenues were EUR1,244 million, up25.7% atcurrent currency and up 22.0% at constant currency compared to the fullyear2011, driven by record product volumes of more than 30 million units(+27%), anall-time high. Connected Home adjusted EBITDA amounted to EUR1 million inthe fullyear 2012 compared to EUR(43) million in the full year 2011,reflecting thepositive outcome of the turnaround plan launched by the Group in December2011.This performance was in line with the Group's objective to achieveadjustedEBITDA breakeven for the Connected Home segment in 2012. Gross marginalsoimproved by 2.6 points year-on-year to 13.0%. Free cash flow wasimpacted byrestructuring expenses associated with cost reduction actions initiated aspartof the turnaround plan of the Connected Home segment and by operatingworkingcapital needs associated with the significant growth of the business in2012.

Connected Home - Q4 2012 Revenue Highlights

In the fourth quarter of 2012, Connected Home revenues amounted to EUR326million,up 15.1% at current currency and up 14.2% at constant currency comparedto thefourth quarter of 2011, confirming the solid trend experienced in thesecond andthird quarters of 2012 (revenues up in double-digits). Thisperformanceprincipally reflected strong customer demand across emergingmarkets,particularly in Latin America and Asia-Pacific, as well as improvedoverallproduct mix in North America, driven by Cable customers.

* In North America, Connected Home product volumes recorded ayear-on-year decline in the fourth quarter of 2012, reflecting softershipments in Satellite set top boxes and digital-to-analog Cable adaptors. Overall product mix however significantly improved year-on-year, driven bygrowing contribution from new products introduced in the third quarter of 2012and higher-end devices in Cable, partly offset by weaker deliveries of HDPVRs in Satellite compared to the prior-year quarter.

* In Latin America, global demand was strong in the fourth quarter of2012, as reflected by double-digit year-on-year growth in Connected Home product volumes, driven by stronger shipments of Satellite set top boxes, particularly in Brazil, as well as increased deliveries of broadband gateways to Telecom customers, especially in Mexico. However overallproduct mix was less favorable year-on-year, principally as a result of adecreased proportion of HD devices in total volumes compared to the prior-year quarter.

* In Europe, Middle-East and Africa, Connected Home products posted aslight year-on-year volume decline in the fourth quarter of 2012, as stronggrowth in shipments of Telecom broadband gateways and Cable modems largelyoffset softer set top box deliveries, due primarily to the phase-out of some Satellite and Telecom devices. Overall product mix was slightly loweryear-on-year, driven principally by a reduced contribution of HD set topboxes in total shipments compared to the prior-year quarter.

* In Asia-Pacific, customer demand remained at a high level across theregion in the fourth quarter of 2012, as reflected by more than a three-fold increase in Connected Home product volumes year-on-year, primarily as a result of a sharp growth in set top box shipments to Satellitecustomers, especially in India and Malaysia and new high-end solutions deliveredto Telecom customers, in particular in Australia.


Connected Home Product Volumes


+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|In million units | |Q4 2011|Q4 2012| |H2 2011|H2 2012| |FY 2011|FY 2012|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
|Total Connected | | | | | | | | | |
|Home | | 6.4| 7.9| | 11.6| 15.7| | 23.7| 30.1|
| | | | | | | | | | |
|Product Volumes* | | | | | | | | | |
| | | | | | | | | | |
|Change (%) | | | +22%| | | +35%| | | +27%|
| | | | | | | | | | |
|o/w North America | | 1.9| 1.1| | 3.5| 2.8| | 7.7| 6.8|
| | | | | | | | | | |
| Change (%) | | | (39)%| | | (19)%| | | (12)%|
| | | | | | | | | | |
| Latin America | | 2.9| 3.8| | 4.7| 7.6| | 8.9| 13.7|
| | | | | | | | | | |
| Change (%) | | | +31%| | | +63%| | | +53%|
| | | | | | | | | | |
| Europe, | | | | | | | | | |
| Middle-East | | 1.3| 1.3| | 2.4| 2.5| | 4.9| 5.4|
| and Africa | | | | | | | | | |
| | | | | | | | | | |
| Change (%) | | | (2)%| | | +2%| | | +10%|
| | | | | | | | | | |
| Asia-Pacific | | 0.4| 1.7| | 1.0| 2.8| | 2.2| 4.3|
| | | | | | | | | | |
| Change (%) | | | +311%| | | +172%| | | +99%|
+-------------------+ +-------+-------+ +-------+-------+ +-------+-------+
* Including tablets and other connected devices


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

-----------------------------
(in EUR million) Year ended December 31,
-----------------------------
Unaudited 2012 2011
---------------- ------------
Continuing operations

Revenues 3,580 3,450

Cost of sales (2,750) (2,714)
---------------- ------------
Gross margin 830 736
---------------- ------------


Selling and administrative expenses (397) (376)

Research and development expenses (132) (128)

Restructuring costs (29) (83)

Net impairment losses on non-current operating (10) (188)
assets

Other income (expense) 2 6
---------------- ------------
Profit (loss) from continuing operations before 264 (33)
tax and net finance income (expense)
---------------- ------------


Interest income 4 5

Interest expense (149) (154)

Other financial income (expense) (52) (38)
---------------- ------------
Net finance income (expense) (197) (187)
---------------- ------------


Share of loss from associates (5) -

Income tax (49) (83)
---------------- ------------
Profit (loss) from continuing operations 13 (303)
---------------- ------------


Discontinued operations

Net loss from discontinued operations (35) (21)


---------------- ------------
Net income (loss) (22) (324)
---------------- ------------
Attributable to:

- Equity holders (20) (323)

- Non-controlling interests (2) (1)


-----------------------------
Year ended December 31,
----------------------------
-
(in euros, except number of shares) 2012 2011
---------------- ------------


Weighted average number of shares outstanding 275,885,374 211,364,435
(basic net of treasury shares held) (1)
---------------- ------------


Earnings (loss) per share from continuing
operations

- basic 0.05 (1.4)

- diluted 0.05 (1.3)



- basic (0.12) (0.1)

- diluted (0.12) (0.1)

Total earnings (loss) per share

- basic (0.07) (1.5)

- diluted (0.07) (1.4)
---------------- ------------

1. According to IAS 33.26 and IAS 33.27b, the weighted average number of
shares
outstanding was adjusted in 2012 and 2011 to take into account the
share
capital increase with preferential subscription rights that occurred on
August 14, 2012. The 2011 earnings (loss) per share was adjusted
accordingly.     UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

----------------------- ------------------
( in EUR million) Unaudited December December 31, 2011
31, 2012
----------------------- ------------------
ASSETS



Non-current assets

Property, plant and equipment 350 401

Goodwill 478 481

Other intangible assets 433 459

Investments in associates and 18 14
joint ventures

Investments and available- 7 7
for-sale financial assets

Derivative financial
instruments - 1

Contract advances and up- 42 49
front prepaid discount

Deferred tax assets 388 394

Income tax receivable 20 20

Other non-current assets 66 67

Cash collateral and security 15 14
deposits


----------------------- ------------------
Total non-current assets 1,817 1,907
----------------------- ------------------


Current assets:

Inventories 112 118

Trade accounts and notes 526 585
receivable

Income tax receivable 12 13

Other current assets 340 325

Cash collateral and security
deposits 29 35

Cash and cash equivalents 397 370

Assets classified as held for 4 66
sale


----------------------- ------------------
Total current assets 1,420 1,512
----------------------- ------------------

----------------------- ------------------
Total assets 3,237 3,419
----------------------- ------------------



UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

---------------------- ------------------
(in EUR million) Unaudited December December 31, 2011
31, 2012
---------------------- ------------------
EQUITY AND LIABILITIES



Shareholders' equity:

Common stock (335,543,841
shares at December 31, 2012 335 224
with nominal value of EUR1 per
share)

Treasury shares (156) (156)

Additional paid-in capital 940 857

Subordinated perpetual notes 500 500

Notes redeemable in shares - 13

Other reserves - 60

Retained earnings (accumulated (1,142) (1,122)
deficit)

Cumulative translation (240) (225)
adjustment


---------------------- ------------------
Shareholders' equity 237 151
---------------------- ------------------


Non-controlling interests 4 4


---------------------- ------------------
Total equity 241 155
---------------------- ------------------


Non-current liabilities:

Borrowings 1,019 1,242

Retirement benefits
obligations 353 349

Restructuring provisions 1 2

Other provisions 76 83

Deferred tax liabilities 158 167

Other non-current liabilities 96 97


---------------------- ------------------
Total non-current liabilities 1,703 1,940
---------------------- ------------------


Current liabilities:

Borrowings 96 85

Derivative financial
instruments - 1

Retirement benefits
obligations 35 37

Restructuring provisions 45 79

Other provisions 78 58

Trade accounts and notes
payable 445 499

Accrued employee expenses 164 138

Income tax payable 13 14

Other current liabilities 414 361

Liabilities classified as held
for sale 3 52


---------------------- ------------------
Total current liabilities 1,293 1,324
---------------------- ------------------
Total liabilities 2,996 3,264
---------------------- ------------------

---------------------- ------------------
Total equity and liabilities 3,237 3,419
---------------------- ------------------



UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

------------------
(in EUR million) Year ended
December 31
------------------
Unaudited 2012 2011
---------------- ------
Net income (loss) (22) (324)

Loss from discontinued operations (35) (21)

Profit (loss) from continuing operations 13 (303)
---------------- ------
Summary adjustments to reconcile profit from continuing
operations to cash generated from continuing operations

Depreciation and amortization 219 261

Impairment of assets ((1)) 16 191

Net changes in provisions (75) 1

Gain on asset disposals - (8)

Interest (income) and expense 145 149

Other non-cash items (including tax) 77 80

Changes in working capital and other assets and 26 20
liabilities

Cash generated from continuing operations 421 391

Interest paid (117) (124)

Interest received 4 5

Income tax paid (49) (7)

Net operating cash generated from continuing activities 259 265

Net operating cash used in discontinued operations (6) (19)
-------------------------------------------------------- ----------- ------
Net cash from operating activities (I) 253 246
-------------------------------------------------------- ----------- ------


Acquisition of subsidiaries, associates and (10) (12)
investments, net of cash acquired

Net cash impact from sale of investments 17 14

Purchases of property, plant and equipment (PPE) (80) (106)

Proceeds from sale of PPE and intangible assets 2 5

Purchases of intangible assets including capitalization (69) (64)
of development costs

Cash collateral and security deposits granted to third (4) (7)
parties

Cash collateral and security deposits reimbursed by 8 31
third parties

Loans (granted to) / reimbursed by third parties (1) 1

Net investing cash used in continuing activities (137) (138)

Net investing cash used in discontinued operations (5) (20)
-------------------------------------------------------- ----------- ------
Net cash used in investing activities (II) (142) (158)
-------------------------------------------------------- ----------- ------


Increase in capital (net of fees paid) 179 -

Changes in ownership interests with no gain / loss of - 3
control, net of transaction fees

Proceeds from borrowings 2 4

Repayments of borrowings (255) (55)

Fees paid linked to the debt and capital restructuring (1) (9)

Hedge accounting 2 -

Net financing cash generated used in continuing (73) (57)
activities

Net financing cash used in discontinued operations - -
-------------------------------------------------------- ----------- ------
Net cash used in financing activities (III) (73) (57)
-------------------------------------------------------- ----------- ------
Net increase in cash and cash equivalents (I+II+III) 38 31
-------------------------------------------------------- ----------- ------
Cash and cash equivalents at beginning of year 370 332
-------------------------------------------------------- ----------- ------
Exchange gains/(losses) on cash and cash equivalents (11) 7
-------------------------------------------------------- ----------- ------
Cash and cash equivalents at end of year 397 370
-------------------------------------------------------- ----------- ------

(1) Including EUR6 million and EUR3 million of impairment of assets as
part of restructuring plans in 2012 and 2011, respectively.     Summary of consolidated results at constant scope (unaudited)


At constant scope: excluding Broadcast Services activities, sold by the
Group in July 2012, as well as IPTV/VoIP activities.

+----------------+ +---------------------------+ +------------------------+
|In EUR million | | Second Half | | Full Year |
+----------------+ +-----+-----+---------------+ +-----+-----+------------+
| | |2011 |2012 | Change, | |2011 |2012 | Change, |
| | | | | reported | | | | reported |
+----------------+ +-----+-----+---------------+ +-----+-----+------------+
|Group revenues | | | | | | | | |
|from continuing | | | | | | | | |
|operations | |1,804|1,923| +6.6%| |3,282|3,489| +6.3%|
| | | | | | | | | |
|Change at | | | | | | | | |
|constant | | | | | | | | |
|currency (%) | | |+3.4%| | | |+2.2%| |
+----------------+ +-----+-----+---------------+ +-----+-----+------------+
|Group gross | | | | | | | | |
|margin | | 415| 469| +13.0%| | 703| 800| +13.9%|
| | | | | | | | | |
|As a % of | | | | | | | | |
|revenues | |23.0%|24.4%| +1.4pt| |21.4%|22.9%| +1.5pt|
+----------------+ +-----+-----+---------------+ +-----+-----+------------+
|Adjusted EBITDA | | | | | | | | |
|from continuing | | | | | | | | |
|operations | | 293| 312| +6.5%| | 452| 498| +10.3%|
| | | | | | | | | |
|As a % of | | | | | | | | |
|revenues | |16.2%|16.2%| 0.0pt| |13.8%|14.3%| +0.5pt|
+----------------+ +-----+-----+---------------+ +-----+-----+------------+
|Adjusted EBIT | | | | | | | | |
|from | | | | | | | | |
|continuing | | | | | | | | |
|operations | | 186| 206| +10.6%| | 225| 287| +27.8%|
| | | | | | | | | |
|As a % of | | | | | | | | |
|revenues | |10.3%|10.7%| +0.4pt| | 6.8%| 8.2%| +1.4pt|
+----------------+ +-----+-----+---------------+ +-----+-----+------------+
|EBIT from | | | | | | | | |
|continuing | | | | | | | | |
|operations | | (37)| 152| +189| | (23)| 263| +286|
+----------------+ +-----+-----+---------------+ +-----+-----+------------+


Reconciliation of adjusted indicators


Technicolor is presenting, in addition to published results and with the
aim to
provide a more comparable view of the evolution of its operating
performance
compared with 2011, a set of adjusted indicators which exclude the
following
items as per the statement of operations of our consolidated
financial
statements:

· Restructuring charges;

· Net impairment charges;

· Other income and expenses (other non-current items).

These adjustments, the reconciliation of which is detailed in the
following
table, amounted to an impact on the Group EBIT from continuing
operations of
EUR(36) million for the full year of 2012 (EUR(266) million for the
full year of
2011).
+----------------------------------+-----+-----+-------+-----+-----+------+
|In EUR million |H2 11|H2 12| Change|FY 11|FY 12|Change|
+----------------------------------+-----+-----+-------+-----+-----+------+
|EBIT from continuing operations | (45)| 149| +194| (33)| 264| +297|
+----------------------------------+-----+-----+-------+-----+-----+------+
|Restructuring charges, net | (73)| (21)| +52| (83)| (29)| +55|
| | | | | | | |
|Net impairment losses on non- | | | | | | |
|current operating |(175)| (5)| +170|(189)| (10)| +179|
|assets | | | | | | |
| | | | | | | |
|Other income / (expense) | 8| (32)| (40)| 6| 3| (4)|
+----------------------------------+-----+-----+-------+-----+-----+------+
|Adjusted EBIT from continuing | 195| 207| +12| 232| 301| +68|
|operations | | | | | | |
| | | | | | | |
|As a % of revenues |10.3%|10.7%| +0.4pt| 6.7%| 8.4%|+1.7pt|
+----------------------------------+-----+-----+-------+-----+-----+------+
|Depreciation and amortization | | | | | | |
|(D&A)* | 113| 107| (6)| 243| 211| (32)|
+----------------------------------+-----+-----+-------+-----+-----+------+
|Adjusted EBITDA from continuing | 308| 314| +6| 475| 512| +37|
|operations | | | | | | |
| | | | | | | |
|As a % of revenues |16.3%|16.2%|(0.1)pt|13.8%|14.3%|+0.5pt|
+----------------------------------+-----+-----+-------+-----+-----+------+
* Including impact of provisions for risks, litigations and warranties.


---------------------------------------------------------------------------

[1] At constant scope: excluding Broadcast Services and IPTV activities
sold in
2012, and VoIP activities sold in January 2013

[2] EBIT from continuing operations excluding other income (expense), and
Depreciation & Amortization (including impact of provisions for risks,
litigations and warranties)

[3] Free Cash Flow from both continuing operations and discontinued
operations

[4] Legacy activities include photochemical film, compression & authoring
and
tape duplication

[5] Adjusted EBITDA at constant scope excluding Broadcast Services and IPTV
activities sold in 2012, and VoIP activities sold in January 2013 (see
table
page 22)

[6] Operating cash flow from continuing operations is defined as adjusted
EBITDA
minus net capex and restructuring cash out.

Technicolor - 2012: A robust performance:http://hugin.info/143597/R/1680312/548980.pdf


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Source: TECHNICOLOR via Thomson Reuters ONE

[HUG#1680312]

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