TECHNICOLOR

Q3 2018 TRADING COMMENTARY

PRESS RELEASE

Technicolor: Q3 2018 trading commentary

Paris (France), 24 October 2018 - Technicolor (Euronext Paris: TCH; OTCQX: TCLRY) today reports its trading commentary for the third quarter of 2018.

Technicolor's third quarter results were stable despite a challenging environment, while at constant exchange rates, sales slightly increased versus the third quarter 2017.

Technicolor confirms its expectations for an Adjusted EBITDA from continuing operations broadly stable at constant exchange rates compared to 2017. This expectation is due to the positive impact of the Connected Home transformation plan, coupled with significant cost control actions across the Group offsetting additional market pressures.

Entertainment Services

For the quarter, revenues are in line with last year at current and constant exchange rates. Year to date, and at constant exchange rates, revenues are slightly below last year, with growth at Production Services not completely offsetting DVD Services revenue decline.

• Production Services: Mid-single digit revenue growth during the quarter:
  • Film & TV Visual Effects ("VFX"): Record quarter with exceptionally strong double-digit revenue growth year-on-year, and a robust pipeline of future projects continuing into 2019. VFX teams completed six major film/TV projects during the third quarter while continuing to work on an additional 25+ film/TV projects. Mill Film successfully opened for business in Montreal (Canada) and Adelaide (Australia); and Technicolor continued hiring additional talent, particularly in India and Canada, to expand its capacities;
  • Advertising VFX: Mid-single digit revenue growth year-on-year. Technicolor pursued hiring new talents and adapting its cost/organizational structure to match the rapidly evolving market conditions. The Advertising businesses also continued to garner numerous industry accolades for their work, including seven Clio Awards;
  • Postproduction: Revenues down compared to prior year;
  • Animation & Games: Lower revenues compared to prior year due to production schedule impacts. The Animation team continued work on M6's Asterix - The Secret of the magic potion and Paramount's The Spongebob Movie: It's a wonderful Sponge, in addition to seven episodic series. The Games team contributed to numerous AAA titles, include EA's Madden NFL 19, NHL 19, and FIFA 19, which all released in Q3.

• DVD Services: Overall disc replication volumes were down year-on-year in the third quarter. The negative impacts on sales of lower Standard Definition, Games and CD volumes were partially offset by increasing demand for higher Blu-ray^TM and Ultra HD formats.
  • Blu-ray^TM volumes up 9%;
  • Standard Definition volumes down 20% due to weaker catalog activity and changes in selected studio customers' merchandising strategies.

Connected Home