Press Release
First half 2023 Results
H1 RESULTS IN LINE WITH GROUP’S
ANTICIPATIONSREVENUE: €1,038 million (vs €1,193 million in H1
2022)ADJUSTED EBITDA: €49 million (vs €73 million in H1 2022)FCF 1:
- €74 million (vs -€21 million in H1 2022)GUIDANCE 2023
MAINTAINED
Paris (France)
– July 27, 2023
- Vantiva (Euronext Paris: VANTI) is announcing its
results for the first half of 2023. These results have been
approved by the Board of Directors today and limited review
procedures on the consolidated financial statements have been
carried out.
Vantiva's results for
the first half of 2023 are in line with the Group's expectations,
but as anticipated down on last year. The decline stems mainly from
weaker activity in both divisions due to less favorable economic
conditions and a high basis of comparison. Connected Home’s
customers are experiencing a high level of inventories due to
weaker demand, and SCS is suffering lower DVD demand than expected.
The Group continues to apply strict cost control and efficiency
measures to offset the impact of the lower volumes. Therefore, the
full-year guidance is maintained.
- Revenues decreased
by 12.9% to €1,038 million (-13.3% at constant exchange rate).
- Adjusted EBITDA at
€49 million vs €73 million in H1 2022, representing 4.7% of
revenues (vs 6.1% in H1 2022) largely explained by lower
volume.
- Adjusted EBITA at
€9 million (vs €22 million in H1 2022).
- The structural decrease in the DVD
demand was stronger than expected and triggered a review of SCS’
legacy and growth activities assumptions. This review has led to a
€133 million impairment of SCS’ goodwill.
- Net result
from continuing operations was
negative at -€227 million vs -75 million in H1 2022.
- Group net result
was negative at €229 million vs -14 million in H1 2022 as loss from
discontinued operations stood at -€2 million versus a gain of €62
million in H1 2022.
- Capex increased by
37.9% to €44 million to support new products development at
Connected Home and to increase vinyl capacity.
- Free
Cash Flow, before financial and tax, was
negative at - €74 million vs - €21 million in H1 2022.
- At the end of
the semester, Vantiva held a cash position of €39
million.
- Total net
debt (w/o capital lease) amounted to €378 million in nominal
terms.
- The Group is
working on new sources of financing, better suited
to the seasonal nature of its business than the current line of
credit.
Luis Martinez-Amago, Chief Executive
Officer of Vantiva,
said:
“Our first-half results in line with our
expectations, but down compared to last year. As anticipated, we
experienced a more difficult environment and weaker demand from
some of our clients in the Connected Home sector. The latter are
seeing high inventory levels coming from a strong 2022, and weaker
consumer demand this year. The DVD activity is still suffering from
a structural decline, more severe than expected in H1. However, our
productivity improvements and diversification strategy will
gradually turn around this activity. We expect some recovery in H2
and this combined with the positive impact of the efficiency
measures taken allow us to confirm the guidance for the full year.
Moreover, I would like to thank all our employees for their
contribution to this goal. The Group is fully focused on
implementing our diversification plans, productivity improvements
and preparing the next generation of products that will drive the
business in the future as proven by the first successes of our
Wi-Fi 7 and DOCSIS 4.0 offers.”
I- H1 2023 Key
Highlights & 2023 Outlook
|
|
|
|
|
In € million, continuing operations |
H1 2023 |
H1 2022 |
Change at current rate |
Change at constant Rate |
Revenues |
1,038 |
1,193 |
(12.9)% |
(13.3)% |
Adjusted
EBITDA |
49 |
73 |
(32.4)% |
(33.3)% |
As a % of revenues |
4.7% |
6,1% |
(137)bps |
(141)bps |
Adjusted
EBITA |
9 |
22 |
(58.5)% |
(60.0)% |
Free Cash Flow before Financial & Tax |
(74) |
(21) |
(53) |
|
2022 amounts restated considering Technicolor
Creatives Studios accounted for as discontinued operations
H1 2023 Key Highlights
The demand from some of our large
Connected Home customers has been lower than in
the previous year as the global economic environment makes them
cautious, especially regarding their inventory management. This has
been particularly true in the North America and APAC regions which
had enjoyed strong business trends a year ago. The decrease in
optical discs demand has been more severe than expected. Beyond the
structural decline, demand suffered from excess inventory built by
our customers during the chips crisis. On the other hand, the ramp
up of vinyl production ramp up has mitigated this negative effect
to some extent. The Group continues to take the measures necessary
to defend its profitability.
Vantiva revenues totaled €1,038 million, down
12.9% (-13.3% at constant exchange rate).Connected
Home revenues amounted to €807 million for the half, a
decrease of 10% (-10.3% at constant exchange rate). Supply
Chain Solutions revenues were €231 million, down 21.9%
(-22.4% at constant exchange rate).
Adjusted EBITDA, despite strict cost control in
both divisions, has been negatively impacted by this volume decline
and fell by €24 million to amount to €49 million in the semester vs
€73 million in H1 2022. Connected Home contributed
€56 million (versus €70 million in the previous year) to adjusted
EBITDA while Supply Chain Solutions contributed €7
million (versus €15 million in H1 last year).
FCF, before financial and tax for the half was
negative by -€74 million, showing a €53 million deterioration over
last year, due to lower EBITDA, higher capex and a less favorable
change in working capital.
Outlook 2023
For the second part of the year Vantiva expects
some recovery in demand and positive impact from the actions
implemented to preserve profitability. Revenues of
Connected Home division, as planned, are expected
to be down compared to last year. Broadband products should grow
somewhat but video devices will continue to decline.The DVD
business will still be under pressure, but we expect some
normalization in the demand in H2. SCS’ full year
revenue is likely to remain below last year’s level.Against this
backdrop and, thanks to its operational efficiency, the Group is
maintaining its targets for FY 2023:
- EBITDA > €140m
- EBITA > €45m
- FCF 2 > €50m
II- Segment Review – H1
2023 Results HighlightsConnected Home
Revenues breakdown by product
In € million |
H1 2023 |
H1 2022 |
Change at current rate |
Change at constant rate |
Revenues |
807 |
897 |
(10.0)% |
(10.3)% |
o/w by
product |
|
|
|
|
Broadband |
647 |
694 |
(6.8)% |
(7.5)% |
Video |
160 |
202 |
(20.8)% |
(19.7)% |
EBITDA
adj |
56 |
70 |
(19)% |
(19.8)% |
As a % of revenues |
7.0% |
7.8% |
|
|
Connected Home revenues
contributed 78% of Group revenues (75% in H1 22) and totaled €807
million in the semester, down 10%. At constant exchange rate, the
decrease would have been -10.3% compared with H1 2022. Sales of
broadband products in our largest region, North America, were down
as operators cautiously managed their level of inventories and in
Asia Pacific revenues have been penalized by a change of product
generation. LATAM and EMEA reported double digit growth thanks to
fiber which remains the growth driver. Cable demand has been
slightly down and xDSL in decline. Globally Broadband revenues were
down 6.8% in the period, whereas Video revenues decreased by 20.8%.
LATAM has been particularly hit by weak demand for satellite TV
devices.
Adjusted EBITDA of the division
amounted to €56 million (vs €70 million in H1 22), or 7% of
revenues (vs 7.8% in H1 22). Despite the drop in revenues, the
division has been able to limit the margin decline to 80 basis
points thanks to strict cost control and operational efficiency.
Chips availability has improved materially and lead-times are
getting better, but prices remain high.
Supply Chain Solutions
In € million |
H1 2023 |
H1 2022 |
Change atcurrent rate |
Change atconstant rate |
Revenues |
231 |
296 |
(21.9)% |
(22.4)% |
o/w by
activity |
|
|
|
|
Disc |
193 |
265 |
(27.1)% |
(27.5)% |
Growth
activities |
38 |
30 |
24.0% |
22.9% |
EBITDA |
7 |
15 |
(55.0)% |
(55.2)% |
As a % of revenues |
3.0% |
5.2% |
|
|
Supply Chain
Solutions revenues totaled €231 million in the
period, down 21.9% from H1 2022. At constant exchange rate the
decline would have been 22.4%. The structural decline of the
optical disc activity, has been amplified by a less favorable
economic environment and inventory adjustments, especially in the
US. This has led the major studios to reduce orders for optical
discs and associated services. Globally Discs revenues were down
27.1% in the half.
The diversification activities performed better
showing 24.0% revenue growth, but this was not enough to compensate
for the 40% volume decline in discs. In contrast, the production of
vinyl has benefited from higher capacity and the ramp up is
accelerating.
Adjusted EBITDA of the division
amounted to €7 million (vs €15m in H1 22), or 3.0% of revenues
(5.2% in H1 22). Margin decline came from the lower volumes in
optical discs, distribution and freight activities while the
development of the diversification activities has not been strong
enough to offset the impact of the optical discs decline.
Corporate & Other
In € million |
H1 2023 |
H1 2022 |
Change atcurrent rate |
Change atconstant rate |
Revenues |
0 |
0 |
|
|
EBITDA |
(14) |
(12) |
nm |
nm |
As a % of revenues |
ns |
ns |
|
|
2022 amounts restated considering Technicolor
Creatives Studios accounted for as discontinued operations.
Corporate & Other have no more revenues and
the corporate costs explain the EBITDA negative contribution of €14
million vs €12 million in H1 2022.
III- Results
analysisP&L analysis
In € million |
H1 2023 |
H1 2022 |
Change at current rate |
Change at constant rate |
Revenues from continuing operations |
1,038 |
1,193 |
(12.9)% |
(13.3)% |
Adjusted
EBITDA from continuing operations |
49 |
73 |
(32.4)% |
(33.3)% |
As a % of
revenues |
4,7% |
6,1% |
(137)bps |
(141)bps |
D&A & Reserves1, w/o PPA amortization |
(40) |
(51) |
21% |
21.6% |
Adjusted
EBITA from continuing operations |
9 |
22 |
(58.5)% |
(60.0)% |
As a % of
revenues |
0.9% |
1.9% |
(97)bps |
(100)bps |
PPA amortization |
(13) |
(16) |
16.1% |
17.0% |
Non-recurring items |
(146) |
(17) |
nm |
nm |
EBIT from continuing operations |
(150) |
(11) |
nm |
nm |
As a % of
revenues |
(14.5)% |
(0.9)% |
na |
na |
Net financial
income (loss) |
(55) |
(61) |
(10.0)% |
(10.5)% |
Income tax |
3 |
(4) |
nm |
nm |
Gain (loss) from associates |
(25) |
0 |
nm |
nm |
Profit
(loss) from continuing operations |
(227) |
(75) |
nm |
nm |
Net gain (loss) from discontinued operations |
(2) |
62 |
nm |
nm |
Net income (loss) |
(229) |
(14) |
nm |
nm |
1Risk, litigation and warranty reserves
2022 amounts restated considering Technicolor
Creatives Studios accounted for as discontinued operations.
H1 Revenues stood at €1,038
million, representing a 12.9% decrease (-13.3% at constant exchange
rate) The decrease of Connected Home (-10%) was
driven by the North America and APAC regions where some large
customers reduced their business in order to avoid developing a too
high level of inventories. SCS suffered from the
decrease of DVD demand, largely in the US partly due to inventories
adjustment from the major studios.
H1 Adjusted EBITDA amounted to
€49 million, down 32,4% year-on-year and represented 4,7% of the
revenues. Both division’s contributions fell in the first half,
being impacted by lower volume, and the corporate costs were
slightly higher than a year ago.
H1 Adjusted EBITA of €9 million
represented a €13 million year-on-year decrease, despite lower
depreciation.
PPA amortization was slightly
down at -€13 million versus -€16 in H1 2022.
Non-recurring items amounted to
-€146 million versus -€17 million a year ago:
- restructuring
costs accounting for -€8 million versus -€6 million in H1
2022.
- other income and
expenses of -€4 million showed an improvement over H1 2022 of €5
million.
- net impairment
stood at -€135 million (versus -€2 million) mostly because of the
€133 million impairment of SCS’ goodwill.
EBIT from continuing operations
was a -€150 million loss compared to -€11 million.
The financial result totaled
-€55 million in the first half, compared to -€61 million in H1
2022. This improvement stems from the financial interest costs,
which decreased by €34 million. However, part of this improvement
has been offset by the fair value adjustment of the TCS’ shares
from the date of their deconsolidation, the 8th of June, to the end
of the semester.
Income tax is a positive of €3
million, thanks to deferred tax in Mexico, whereas it was a
negative of €4 million a year ago.
Result from associated is
negative of 25 million mostly resulting from a depreciation of our
stake in TCS from the first of January to the deconsolidation
date.
Net loss from continued
operations amounted to -€227 million compared to -€75
million in H1 2022.
Result of discontinued
operations showed a small loss of €2 million.
Group net result therefore is a
loss of €229 million in the half, compared to a loss of -€14
million in H1 2022.
FCF and debt analysis
In € million |
H1 2023 |
H1 2022 |
Change at current rate |
Change at constant rate |
Adjusted
EBITDA from continuing operations |
49 |
73 |
(32.4)% |
(33.3)% |
Capex |
(44) |
(32) |
37.9% |
36.5% |
Non-recurring
items (cash impact) |
(26) |
(29) |
(9.4)% |
(9.2%) |
Change in working capital and other assets and liabilities |
(54) |
(34) |
(20) |
|
Free Cash Flow from continuing operations before
Tax & Financial |
(74) |
(21) |
(53) |
na |
2022 amounts restated considering Technicolor
Creatives Studios accounted for as discontinued operations.
|
30/06/2023 |
31/12/2022 |
Nominal gross debt (including Lease debt) |
487 |
449 |
Cash and cash equivalent |
(39) |
(167) |
Net
financial debt at nominal value (non IFRS) |
448 |
282 |
IFRS adjustment |
(9) |
(19) |
Net financial debt (IFRS) |
439 |
263 |
2022 amounts restated considering Technicolor
Creatives Studios accounted for as discontinued operations.
Capex increased 37.9% and
reached €44 million in the semester as Connected
Home is investing in new products, including IOT for
verticals, and SCS in additional capacity for vinyl production.
Free Cash
Flow3 went from -€21 million to -€74
million. This significant downgrade reflects the lower EBITDA (-€24
million), higher capex (-€12 million) and other change in working
capital (-€20 million).
The cash position at the end of
June 2023 was €39 million reflecting the working capital
seasonality.
Appendix
Debt details
In € million
Line |
Characteristics |
Nominal |
IFRS amount |
Nominal Rate |
IFRS Rate |
Barclays |
Cash: Euribor 3M + 2.50% & PIK |
250 |
241 |
9.0% |
13.3% |
Angelo Gordon |
Cash: Euribor 3M + 4.00% & PIK |
125 |
117 |
12.5% |
17.6% |
Wells Fargo |
WF Prime +2.0% |
29 |
29 |
10.7% |
10.7% |
Operating Lease |
|
70 |
70 |
13.9% |
13.9% |
Capital Lease |
|
0 |
0 |
1.0% |
1.0% |
Other |
|
13 |
20 |
0.0% |
0.0% |
Total Debt |
|
487 |
478 |
10.5% |
13.7% |
Cash & Cash Equivalents |
|
39 |
39 |
|
|
Net Debt |
|
448 |
439 |
|
|
IFRS 16 impact
|
|
|
|
|
Actual H1 23 (incl IFRS 16) |
|
|
|
Actual H1 23(excl. IFRS16) |
|
|
|
IFRS16 impact |
|
|
|
In € million |
|
|
Actual |
|
|
|
Actual |
|
|
|
Actual |
|
|
|
|
|
Current rate |
|
|
|
Current rate |
|
|
|
Current rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALES |
|
|
1,038 |
|
|
|
1,038 |
|
|
|
+0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA ADJ |
|
|
49 |
|
|
|
34 |
|
|
|
+15 |
|
|
|
|
|
|
4.7% |
|
|
|
3.3% |
|
|
|
1.5% |
|
|
|
EBITA |
|
|
9 |
|
|
|
6 |
|
|
|
+3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Cash Flow |
|
|
(5) |
|
|
|
(20) |
|
|
|
+15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FCF before Financial & Tax |
|
|
(74) |
|
|
|
(89) |
|
|
|
+15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FCF after Financial & Tax |
|
|
(104) |
|
|
|
(115) |
|
|
|
+10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 amounts restated considering Technicolor Creatives Studios
accounted for as discontinued operations.
Reconciliation of adjusted
operating indicators
In addition to published results, and with the
aim of providing a more comparable view of the evolution of its
operating performance in H1 2023 compared to last year. Vantiva is
presenting a set of adjusted indicators which exclude the following
items as per the statement of operations of the Group’s
consolidated financial statements:
- net
restructuring costs;
- net impairment
charges;
- other income and
expenses (other non-current items).
In € million |
H1 2023 |
H1 2022 |
Change1 |
EBIT from continuing operations |
(150) |
(11) |
(139) |
Restructuring
charges, net |
(8) |
(6) |
(2) |
Net impairment
gain (losses) on non-current operating assets |
(135) |
(2) |
(133) |
Other income
(expense) |
(4) |
(9) |
5 |
PPA
amortization |
(13) |
(16) |
3 |
Adjusted EBITA from continuing operations |
9 |
22 |
(13) |
Depreciation and
amortization (“D&A”) |
(40) |
(51) |
11 |
Adjusted EBITDA from continuing operations |
49 |
73 |
(24) |
1 Variation at current rates2022 amounts restated considering
Technicolor Creatives Studios accounted for as discontinued
operations. |
|
|
|
The caption “Adjusted EBITDA” corresponds to the profit
(loss) from continuing operations before tax and net financial
income (expense), net of other income (expense), depreciation and
amortization (including impact of provision for risks, litigation
and warranties).
The caption “Adjusted EBITA” corresponds to the profit
(loss) from continuing operations before tax and net financial
income (expense), net of other income (expense) and amortization of
purchase accounting items.
Termination
of ADS program (TCLRY)
The Company terminated the Deposit Agreement
relating to its American Depositary Shares (ADS).As a result of
such termination and in accordance with the provisions of the
depositary agreement, ADS holders are required to exchange their
ADS against Company shares prior to August 15, 2023, date of
effectiveness of the termination.ADS holders are requested to
organize the exchange of their ADS with the depositary prior to
August 15, 2023.If you have any questions about such termination,
please call Citibank, N.A. at 1-877-248-4237.
###
Warning: Forward Looking
Statements
This press release contains certain statements
that constitute "forward-looking statements", including but not
limited to statements that are predictions of or indicate future
events, trends, plans or objectives, based on certain assumptions
or which do not directly relate to historical or current facts.
Such forward-looking statements are based on management's current
expectations and beliefs and are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from the future results expressed, forecasted, or implied by such
forward-looking statements. For a more complete list and
description of such risks and uncertainties, refer to Vantiva’s
filings with the French Autorité des marchés financiers. 2021
Universal Registration Document (Document d’enregistrement
universel) has been filed with the French Autorité des marchés
financiers (AMF) on April 26, 2023, under number D-23-0337.
###
About Vantiva
Pushing the Edge
Vantiva shares are admitted to trading on the
regulated market of Euronext Paris (VANTI).
Vantiva, formerly known as Technicolor, is
headquartered in Paris, France. It is an independent company which
is a global technology leader in designing, developing and
supplying innovative products and solutions that connect consumers
around the world to the content and services they love – whether at
home, at work or in other smart spaces. Vantiva has also earned a
solid reputation for optimizing supply chain performance by
leveraging its decades-long expertise in high-precision
manufacturing, logistics, fulfillment and distribution. With
operations throughout the Americas, Asia Pacific and EMEA, Vantiva
is recognized as a strategic partner by leading firms across
various vertical industries, including network service providers,
software companies and video game creators for over 25 years. The
group’s relationships with the film and entertainment industry goes
back over 100 years by providing end-to-end solutions for its
clients.
Vantiva is committed to the highest standards of
corporate social responsibility and sustainability across all
aspects of their operations.
For more information, please visit vantiva.com
and follow Vantiva on LinkedIn and Twitter.
Contacts
Vantiva Investor
Relations Image
7 for Vantiva –
Corporateinvestor.relations@vantiva.com vantiva.press@image7.fr
1 Before interest and tax.2 Before interest and
tax.3 Before interest and tax.
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