Nothing was spared Richard Moat. Arrived at the head of Technicolor in November 2019, he only had a few months to accomplish his mission: to save the group from bankruptcy. Only a few months to complete a capital increase of 425 million euros. « The company was doing well, it just needed to be recapitalised », assures the businessman today. The last chance operation was completed when the pandemic broke out which trapped him in Paris, where the headquarters are located, a stone’s throw from the town hall.
While the borders are gradually reopening, Richard Moat will be able to complete his work and proceed with the cutting of the old Thomson, a project which he presented to investors last February: on the one hand, animation cinema and effects specials, grouped together in Technicolor Creative Studios (TCS), which will be IPO by the third quarter of 2022. On the other, everything else: the connected home, boxes for cable operators – Comcast in the United States , or Bouygues Telecom in France -, the manufacture of vinyls and DVDs. In short, the current TCH listed on the Paris Stock Exchange.
Killer team
Small problem: a fracture of the tibia after a bad fall on skis has somewhat limited, recently, the movements of Richard Moat. But man is a special animal. At 67, he has earned a reputation as a restructuring specialist. Holder of Irish and British passports, he rolled his bump everywhere from Dublin to Bangkok, via Bucharest, mainly in the world of telecoms.
« Financially, we are in good condition for the IPO. » Richard Moat, CEO of Technicolor.
In particular, he reorganized operators in the United Kingdom and Denmark, then the Irish Eir, in a state of bankruptcy, before handing over control to Xavier Niel in 2017. « I have the toolbox to transform a business and make it profitable, » he said. He came to Technicolor with a strong team: Tim Spence, who accompanied him in his previous restructurings; David Holliday, an old acquaintance, veteran of telecoms; as well as a specialist in cost reduction programs, who had supported him in Ireland.
Despite planetary confinement and small health incidents, Richard Moat piloted change at very high speed and succeeded in raising the bar. He even managed to reinterest financial analysts who had turned away from the value, tired of the repeated rescue operations launched over the past twenty years to try to keep the company alive. As early as March 2021, the research office Kepler Cheuvreux published an analysis welcoming the work of the new management team: « We consider Technicolor to be an interesting story of transformation since the group has secured its financial structure and taken significant measures to reduce its cost base, » the analyst wrote.
Flash debt relief
The debt, which reached 1.6 billion euros in 2019, has been reduced to 600 million. This horse remedy has also made it possible to stem the fall in turnover, which fell from 4.4 billion in 2017 to 2.9 billion last year. All trades are now profitable, while the group had to absorb the double shock of the decline in activity in the cinema industry and the difficulties in supplying components. It sold its post-production division in April 2021 for 31 million. And he is in the process of finalizing the sale, for 100 million, of his trademark licensing business.
The DVD services division had suffered for several years from the rapid decline in volumes with the advent of streaming platforms. It underwent severe restructuring with, in particular, the closure of thirteen sites. Employees have obviously paid a heavy price for this fitness operation: in less than two years, 5,000 of them have left the group. The global workforce now stands at 18,000, two-thirds of whom are employed in TCS.
“Financially, we are in good condition for the IPO,” said Richard Moat. On May 5, when presenting the results for the first quarter, he confirmed the objectives for 2022, with turnover up 6.6%, to 755 million over three months and Ebitda up 39% over one year. year, at 55 million. The fruit of the transformation, but above all the translation of the good health of TCS, which has been driving the bulk of the group’s growth for several years with a multitude of special effects contracts, where it has established itself as the world leader. Its references are impressive: West Side Story, Guardians of the Galaxy, the next Top Gun: Maverick, or even 1917, for which TCS won the Oscar for best visual effects. Performances that justify the expected valuation of the entity, around 2 billion euros, or about three times the current value of the Technicolor group.
Full order book
Also present in the worlds of advertising, animated films and video games, TCS has a well-filled order book, and Richard Moat expects annual growth of 20% in the segment. Once out of debt, the special effects champion will once again be able to strengthen itself through external growth, under the leadership of Briton Christian Robertson, the current head of the special effects division. Richard Moat will retain the management of the « Remain Co » group, the nickname given to the remaining activities: the connected home and DVD services. The historic Technicolor, restructured and cleaned up, will keep 35% of TCS after its IPO. A participation intended to be sold to finish reducing the group’s debt and to consider growth. Thus, after several decades of suffering and wandering, Thomson, the former French technological flagship, can rest in peace.
A welcome vinyl renaissance
Netflix, which was for a long time the best ally of the good old DVD, will finally have had its skin by becoming the world champion of streaming.
The disc, in the process of rapid disappearance, experienced a start during confinement, a period conducive to the revision of nanars or classics. But for several years, Technicolor has been managing decline. In this very depressed context, the group still had a good surprise: the great comeback of vinyl. The global market was worth $1.7 billion last year, according to Imarc Group, and could reach $2.6 billion by 2027. Technicolor’s plant in Guadalajara, Mexico, started production mid -April, adding to the capacities of its Polish site. Against all odds, the group found a way to use its excess production and logistics capacities. He manufactures, packs and ships. The group now wants to position itself as a solid leader in this market.
Hoping for the volumes.
626 million euros in turnover.
With a multitude of contracts in special effects, where it imposes itself as a world leader (photo from the film Top Gun: Maverick), this branch, soon to be listed on the Paris Stock Exchange, is responsible for most of the group’s growth.
(Paramount Pictures/SP)
2.2 billion euros in turnover.
This division brings together the activities of the current TCH: the connected home, boxes for cable operators (in photos: 10G Fiber box, WiFi 6 repeater and Android TV sound bar), vinyl manufacturing and DVD services.
(Technicolor/SP)
Gilles Fontaine
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