Posted on September 26, 2022 at 5:50 pmUpdated on September 26, 2022 at 6:31 pm
A new “pure player” in audiovisual production appears on the Paris Stock Exchange. Heir to a French-American company with more than a century of history, Technicolor (ex-Thomson) is finalizing this week the unfolding of its activities in the production and post-production of special effects. A promising market niche as Hollywood studios, streaming platforms and ad players are driving the boom in global demand for animated images.
With more than 11,000 employees in 11 countries (including 800 in Paris but also several thousand in India), Technicolor is one of the world leaders in visual effects (in the jargon, “VFX” for “visual effects”) along with other California-based bands like ILM. These are subcontractors little known to the general public, but whose specialized know-how is highly demanded for the needs of commercials or even for Netflix series and Hollywood movies. The TCS teams are, for example, behind the feature film “La Pat’Patrouille” (Paramount) released last year, or the latest “Pinocchio” (Disney).
Stock split
On Tuesday, the long-planned spin-off will finally materialize with the first day of trading for the shares of a new company, renamed “Technicolor Creative Studios” (TCS) and which will bring together the audiovisual production activities of the former Technicolor, of which he also maintains the brand. As for the former parent company, its part specializing in home automation and connected boxes (telecoms and android boxes) as well as in the manufacture of DVDs and vinyl is still a company listed in Paris, now called Vantiva.
As part of this listing process, 65% of TCS shares are distributed to Vantiva shareholders, who retain 35%. A participation valued at 383 million euros and that could be sold over time. Important detail: the share split occurs after the conversion into shares of 300 million euros of convertible bonds and the refinancing of more than 1,000 million of debt. For its debut, TCS finds itself with a debt of 623 million euros.
409 million euros of turnover in the first half
TCS recorded revenues of 409 million euros in the first half, 44% more. If he does not give a quantified target in terms of revenue, he has the ambition to double his gross operating surplus (Ebitda) to reach between 140 and 160 million euros next year. At the moment no dividend is planned and the priority is to improve the debt profile.
Beyond the purely economic aspects, TCS’s commitment with this spin-off is to better promote these activities. “There are real opportunities for us,” says Christian Roberton, its CEO, according to whom demand remains high for its four poles: The Mill (advertising videos), MPS (special effects for films and series), the film studio Parisian animation company Mikros and finally teams specializing in video games.
battle for talent
But in a very competitive context, one of the main challenges for TCS is, without a doubt, the recruitment and retention of creative teams. “It is essential to have the necessary talent to meet the demand,” explains Christian Roberton. How is this achieved in a booming sector and where the best is hoarding? To do this, TCS has training programs that allowed it to recruit 1,200 “artists” last year. And now that the group is publicly traded, it will also be able to offer compensation in shares.