Technicolor plans partial animation spin-off, VFX Biz
Paris-based Technicolor announced its 2021 business split at Thursday’s board meeting, confirming its intention to list and spin-off a majority of its animation/visual effects operations, Technicolor Creative Studios. Technicolor achieved its 2021 guidance for the full year, with adjusted EBITDA reaching €268 million (€95 million adjusted, free cash flow of €2 million). Turnover fell by 1.7% at constant exchange rates, but TCS recorded a strong improvement in its turnover.
“2021 was a year of great success despite a volatile business environment, and we once again proved our ability to react quickly and effectively to unexpected challenges. The efforts of our dedicated teams enabled us to achieve our 2021 objectives, and I would like to thank everyone around the world who contributed to this excellent result. The outlook is strong and today I am happy to confirm our guidance for 2022,” CEO Richard Moat said in a statement. .
“…After a thorough review, we have determined that the continuation of the partial demerger of TCS from the Group as well as the full refinancing of the existing debt will be the solution that best aligns strategy, value creation and financial objectives for all Technicolor stakeholders. We are convinced that this operation is a unique opportunity to guarantee both TCS and Technicolor Ex-TCS the adequate capital structure to support their developments, their long-term ambitions and their organic growth. Executing these transactions will allow both companies to pursue their own strategic agendas, be more agile and ultimately thrive as independent businesses.
The proposed split resulted in a board-approved plan to list Technicolor Creative Studios, selling the larger group a 65% stake in TCS. The “Technicolor Ex-TCS” division, comprising Connected Home and DVD Services, should retain up to 35% of the capital of TCS. This spin-off will allow TCS to focus on its own strategic agenda and growth trajectory. The VFX activity will be listed on Euronext Paris.
Demand for Technicolor Creative Studios’ cutting-edge VFX art and technology is expected to continue to grow significantly throughout 2022. The division won several new projects, resulting in approximately two-thirds of the revenue pipeline from MPC and Mikros Animation are already committed to 2022. Significant investments in artist recruitment, retention and training (including TCS Academy programs) will continue.
Following the appointment of Christian Roberton as President in 2020, TCS studios have been integrated under dedicated business lines with MPC (film & episodic VFX), The Mill (advertising), Mikros (animation) and Technicolor Games. These specialties are supported by growing markets and the opportunity to explore new areas such as metaverse projects. Roberton will be appointed Managing Director of the new independent entity TCS, based in Paris, and Anne Bouverot will be proposed as Chairman of the Board of Directors.
Mikros’ latest animation credits include PAW Patrol: The Movie and The movie Spongebob Squarepants: The Sponge on the Run. The studio is currently recruiting for upcoming projects Thelma the Unicorn for Netflix, The Tiger’s Apprentice for Paramount and Ozi with GCI Films.
MPC recently used its quarter-century of VFX experience to add dazzle to Godzilla vs. Kong, Cruel, Ghostbusters: Afterlife and Ridley Scott The last duel. Upcoming projects include sonic the hedgehog 2 (Sony), Chip ‘n Dale Rescue Rangers (Disney+); The Lion King 2, Disenchanted and the live remakes of The little Mermaid and Pinocchio for Disney; and Guillermo del Toro Pinocchio for Netflix.
Full report of Technicolor’s Board of Directors for 2021/2022 is available here.