TECHNICOLOR

TRADING COMMENTARY FOR THE FIRST QUARTER OF 2017

PRESS RELEASE

Technicolor: trading commentary

Performance in line with Group's expectations

2017 objectives confirmed

Paris (France), 27 April 2017 - Technicolor (Euronext Paris: TCH; OTCQX: TCLRY) today reports its trading commentary for the first quarter of 2017.

Technicolor's performance in the first quarter was in line with Group's expectations and the outlook for 2017 remains unchanged.

During the first quarter, revenues were down year-over-year, as expected, due to an unfavorable comparison basis in the Connected Home and Technology segments.

In the Connected Home segment, the level of activity with the largest operators of the US has been solid, fueled by the roll-out of several flagship products, as exemplified by the large volumes of WorldBox delivered to Charter and shipment of a new high-end video product to AT&T initiated during the quarter. Overall performance was, however, weaker than last year due to the very low level of activity in Mexico in line with 2016 fourth quarter trends and a lower performance in Europe. Revenues were impacted negatively in Europe during the quarter due to delays in shipments to a large customer and by the end of a number of large deployments. Besides, Technicolor continued to record solid commercial successes and won several new contracts, including a large number of awards for OTT products based on Android TV. In total, the Group has won 20 contracts for OTT set-top boxes in the past 18 months, representing close to 50% of the worldwide awards for this category of products.

The market environment for Production Services continues to flourish with strong demand for premium content across the different market segments. The Group demonstrated its continued leadership position in delivering visual effects for premium content and recognized with the Oscar for best visual effect for the Jungle Book at the 2017 Academy Awards. In addition, the Group is achieving significant growth rates in Animation and Games due to the ramp-up of several long feature animation projects and an extended scope of services for its Game customers.  

In the physical media segment, overall disc volumes were down, in line with Group's expectations and reflected a weaker slate of releases compared to the first quarter of 2016 that benefited from the record setting performance of Star Wars: The Force Awakens, and from a higher number of AAA Games releases.

The Technology segment made good progress in its licensing programs during the quarter. Revenues were down compared to the first quarter of 2016 which benefited from the signing of several major licensing agreements, including a one-time lump-sum agreement - making for a challenging comparable.  Demonstrating the strength of Technicolor's IP portfolio and ability to protect its intellectual property, patent infringement suits were filed in both Germany and France against Samsung Electronics Corporation during the first quarter, illustrating Technicolor's commitment to enforce its intellectual property rights, when and where necessary.