Technicolor said it's no longer considering any strategic M&A and also lowered its outlook for full-year EBITDA. The company said that it is "not engaged in any strategic discussions including any related to the Connected Home business". This follows the announcement in November that it was looking at possible deals.
The announcement was made in a statement saying that the company will prepay its EUR 90 million loan from the European Investment Bank by the end of 2018. This leaves the group free of covenants, as its remaining senior secured term loans due in 2023 are covenant-free.
The lack of covenants may prove important, as Technicolor lowered its forecast for adjusted EBITDA in 2018, to EUR 265-275 million at constant exchange rates. Technicolor noted that this is in line with the consensus to date. The company previously forecast adjusted EBITDA this year broadly stable compared to 2017, when it reported a figure of EUR 291 million.
Technicolor said the outlook is based on continued growth in the Production Services business, in particular in Film & TV Visual Effects, the acceleration of the Connected Home unit's transformation program and residual revenues from the Patent Licensing business, offsetting a difficult end of the year in the DVD market.
