Buoyed by its Connected Homes segment which more than doubled its revenue, Technicolor Group (Technicolor, Group) reported a 57 percent revenue jump on constant currency basis for the quarter ended 31 March 2016 (Q1-2016, current quarter) as compared to Q1-2015. Except for its Technology segment which reported a 4.9 per cent year-on-year (YoY) decline in the current quarter vis-à-vis Q1-2015, all the other segments reported a hike in revenue. Further, Technicolor closed the acquisitions of Cisco Connected Devices and The Mill, which had a positive impact on prior-year result comparison.
Technicolor CEO Fredric Rose said, “Our significant customer wins in the first quarter demonstrate the successful start to integrating our 2015 acquisitions. This puts us in good stead to achieve our financial objectives.”
Technicolor Group reported revenue of €1,262 million in Q1-2016, which as 56.7 percent more than €805 million in Q1-2015.
Connected Home
Connected Home revenues amounted to €698 million in Q1-2016, including a €396 million contribution of Cisco Connected Devices. Technicolor says that excluding Cisco Connected Devices, Connected Home recorded year-over-year (YoY) revenue growth in all regions, except for Latin America. Revenues in North America, EMEA and APAC regions were up 26 percent year-on-year at constant currency. Latin America revenues were impacted by the Brazilian crisis and recorded a sharp drop of 45 percent year-on-year at constant currency.
Within Connected Home, by product, Video revenue went up by 2.65 times YoY to €428 million in Q1-2016 as compared to €164 million. Broadband revenue increased 81 percent to €270 million in the current quarter to €164 million in the corresponding year ago quarter.
Entertainment Services
Entertainment Services revenues amounted to €450 million in Q1-2016, up 34.6 percent at constant currency compared €338 million to Q1-2015. This performance reflected a strong double-digit growth in Production Services, including the contribution of last year’s acquisitions, combined with increased DVD Services revenues.
Production Services revenues amounted to €179 million in Q1-2016, up by more than 50 percent at constant currency compared to the first quarter of 2015. This strong performance resulted from a double-digit organic revenue growth and the additions of OuiDo, Mikros Image and The Mill.
The level of activity in Visual Effects for feature films was stable year-on-year as the Group started ramping up new titles in the current quarter and thus fully offset the completion of large-scale projects in Q3-2015.
DVD Services revenues amounted to €272 million in the current quarter, up 25.2 percent at constant currency compared to Q1-2015. This performance was driven by a 24.6 percent year-on-year growth in total volumes from 271 million in Q1-2015 to 337.5 million, reflecting new customer additions secured in 2015, as well as selected key new release theatrical titles produced in the Q1-2016. During the period, DVD volumes increased by c.12 percent, while Blu-ray disc volumes were up c.26 percent compared Q1-2015. Overall Games volumes increased by c.6 percent year-on-year, as growth in Xbox One Blu-ray games volumes was tempered somewhat by the ongoing (and largely complete) shift in demand from the prior generation DVD based Xbox console. CD volumes were up substantially in the first quarter, due primarily to last year’s new customer additions.
The company reveals that key theatrical titles produced in the current quarter included Star Wars: The Force Awakens (Disney), Spectre (Fox), as well as The Hunger Games: Mockingjay – Part 2 (Lionsgate), while key games titles included Tom Clancy’s The Division (Ubisoft) and Quantum Break (Microsoft).
Technology
Licensing revenues amounted to €112 million in Q1-2016, down €6 million at current currency compared to Q1-2015. This decrease was due to a €62 million decline in MPEG LA revenues, which was partially compensated by a strong quarter in Patent Licensing, driven by Video Coding and Digital TV activities. In Video Coding, the strong performance was driven by the first material licensing agreement for the use of its HEVC patent portfolio that Technicolor signed with a leading technology company in early February.
In the current quarter, Technicolor slightly increased its Trademark Licensing revenues and continued to make additional progress in the dissemination of its High Dynamic Range (HDR) technology. Technicolor says that several silicon manufacturers have started to embed its technologies, for TVs or set-top boxes, and chips will be available by the end of this year.
