TECHNICOLOR

Q1 2018 TRADING COMMENTARY

PRESS RELEASE

Technicolor: Q1 2018 trading commentary

Paris (France), 25 April 2018 - Technicolor (Euronext Paris: TCH; OTCQX: TCLRY) today reports its trading commentary for the first quarter of 2018.

Technicolor's first quarter performance is in line, as expected, with last year at constant currency rate but affected by the dollar weakness versus the euro over the quarter (current rate).

Market conditions are overall aligned with expectations. For Connected Home, margin pressures remain, but management actions are being implemented to significantly reduce the effects of future component price increases, starting in the third quarter.

Technicolor confirms its expectations for an Adjusted EBITDA from continuing operations broadly stable at constant rate compared to 2017.

Entertainment Services

• Production Services: single digit revenue growth reflecting:
  • Film & TV Visual Effects ("VFX"): double digit revenue growth. VFX teams completed seven major film projects during the first quarter while continuing to work on an additional 10+ film projects and seven TV series. They also won several new contract awards from customers during the quarter. As a result, Technicolor continued hiring additional talent to support its brands while further optimizing its resource allocation, including the announced opening of Mill Film;
  • Advertising VFX: single digit revenue growth, with MPC and The Mill brands achieving a solid level of activity during the quarter, driven by a strong project pipeline in the US. With three awards won at the Visual Effects Society awards show and 31 nominations for the upcoming British Arrows and Creative Circle awards in the UK, Technicolor's leading creative expertise is once again widely recognized;
  • Postproduction: solid level of activity in the US and in the UK, continuous progress with streaming customers, but softness in France in the first quarter;
  • Animation & Games: lower revenues compared to prior year due to production schedule impacts. The Animation team delivered two long feature projects in February, Sherlock Gnomes (Paramount) and Sgt. Stubby (Fun Academy) and started production of the new Astérix (M6) animated feature, while working on seven episodic series.

• DVD Services: lower revenues compared to prior year, broadly in line with Group's expectations. Moving forward, volumes are expected to benefit materially from the Sony DAC outsourcing agreement:
  • Blu-ray^TM volumes up 15% driven by strong performance of several major Disney releases (Star Wars: Last Jedi, Coco and Thor: Ragnarok);
  • Standard Definition volumes down 17% due to weaker catalog activity for selected customers and selected packaging configuration changes at one large Studio customer;
  • CD volumes down, and Games volumes broadly stable, but not material as the first quarter is always a slow period for AAA Games releases.

Connected Home