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Technicolor — Growing animation in performance

Vantiva (PAR: VANTI)

Last close As at 21/12/2024

EUR0.14

— 0.00 (−0.71%)

Market capitalisation

EUR69m

More on this equity

Research: TMT

Technicolor — Growing animation in performance

Technicolor’s Q121 figures show (constant currency) revenue up 3.6% on prior year, buoyed by continued strong demand in Connected Home. The outlook for Production Services is considerably improved as filming gets underway and projects are greenlit. Full year and FY22 earnings guidance is maintained, with margins set to improve after earlier streamlining and ongoing cost control. Following FY20’s financial restructure, the equity proportion of Technicolor’s enterprise value is no longer greatly overshadowed by the debt. With improving cash flow, a revaluation of the equity seems underway, with the share price up 72% year-to-date.

Fiona Orford-Williams

Written by

Fiona Orford-Williams

Director, TMT

TMT

Technicolor

Growing animation in performance

Q1 results

Media

14 May 2021

Price

€3.11

Market cap

€733m

US$1.21/€

Net debt (IFRS, including leases) at end March 2021 (€m)

1,074

Shares in issue

235.8m

Free float

100%

Code

TCH

Primary exchange

Euronext

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(1.8)

54.9

(50.8)

Rel (local)

(4.7)

38.1

(64.2)

52-week high/low

€5.71

€1.16

Business description

Technicolor is a worldwide technology leader operating in the media and entertainment industry. Its activities fall into three business segments: Production Services, DVD Services and Connected Home.

Next events

Half year

End July

Analysts

Fiona Orford-Williams

+44 (0)20 3077 5739

Dan Gardiner

+44 (0)20 3077 5700

Technicolor is a research client of Edison Investment Research Limited

Technicolor’s Q121 figures show (constant currency) revenue up 3.6% on prior year, buoyed by continued strong demand in Connected Home. The outlook for Production Services is considerably improved as filming gets underway and projects are greenlit. Full year and FY22 earnings guidance is maintained, with margins set to improve after earlier streamlining and ongoing cost control. Following FY20’s financial restructure, the equity proportion of Technicolor’s enterprise value is no longer greatly overshadowed by the debt. With improving cash flow, a revaluation of the equity seems underway, with the share price up 72% year-to-date.

Year end

Revenue (€m)

EBITDA
(€m)

EBITA
(€m)

PBT*
(€m)

EPS*
(€)

EV/EBITDA
(x)

12/19

3,800

325

42

(73)

(4.92)

5.6

12/20

3,006

167

(56)

(43)

(0.38)

10.8

12/21e

2,933

270

60

(3)

(0.03)

6.7

12/22e

3,255

385

180

117

0.46

4.7

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Encouraging signs across the portfolio

Demand for high-quality broadband gateways continues to be strong in North America and is improving in Eurasia as people’s digital domestic consumption continues to rise. The limiting factor is the availability of memory and processing componentry. Here, the group’s leading market position gives some protection on supply and some leverage on passing through additional costs. Production Services is also benefiting from a good recovery in demand, with MPC Episodic particularly busy with projects for streamers. DVD Services revenues were down less than expected, with EBITDA margins starting to lift as pricing improvements from contract renegotiations kick in.

Profits and cash weighted to H2

Our forecasts continue to be aligned with management guidance, which was adjusted for the disposal of Post Production in April. Guidance also has sufficient leeway to cater for the impact of the component situation in Connected Home. Profits and cash flow are likely to be skewed to the second half, with cash flow benefiting from a more normalised working capital position in Connected Home and a resumption of down payments in Production Services. Our model points to a year-end net debt position of €837m, which would be 3.1x adjusted EBITDA, well within management’s target of less than 4.0x.

Valuation: Revaluation underway

Since the completion of the financial restructuring in September 2020, the shares have risen from €1.16. The valuation is now starting to reflect improving underlying trading, albeit that the equity remains dominated by the value of the debt (although no longer dwarfed). As confidence grows that guidance on profitability and cash generation can be achieved, we would expect the rating to improve further.

Q121 shows a turnaround is underway

We show the Q1 figures below at constant currency but note that adverse forex movements mean that at current rates, revenues would be down 3.7% on the prior year.

During this quarter, Production Service’s activities were still overshadowed by the impact of the pandemic, with Connected Home generating 60% of group revenues and 65% of adjusted EBITDA. On a group basis, adjusted EBITA almost reached break even.

Group free cash flow (before financials and tax) improved from an outflow of €314m in Q120 to an outflow of €196m, which reflects a significant improvement in the working capital position. For the full year, management continues to expect that this figure will be around break even.

Segmental performances and prospects are discussed separately below.

Exhibit 1: Summary Q120 results

€m

Production Services

Change
y-o-y

DVD Services

Change
y-o-y

Connected Home

Change
y-o-y

Corporate & Other

Change
y-o-y

Group

Change
y-o-y

Revenue

140

-16.6%

139

-7.7%

428

+18.3%

5

-40.3%

711

+3.6%

Adjusted EBITDA

14

+29.5%

4

N/A

28

+90.5%

(3)

N/A

43

+71.7%

Margin

9.7%

3.1%

6.4%

(48.7%)

6.0%

Adjusted EBITA

(2)

N/A

(6)

N/A

10

N/A

(4)

-81.3%

(1)

+97.8%

Margin

(1.5%)

(4.2%)

2.4%

(65.6%)

(0.1%)

Source: Company accounts. Note: Changes at constant currency.

Connected Home (60% of Q121 revenue): Trading and outlook

As might be expected, the revenue growth within Connected Home stemmed from strong demand for domestic broadband, particularly in North America, which represented 62% of segmental revenues and where revenues were ahead by 34.4% at constant currency. Cable customers are still looking to upgrade their broadband to cope with stepped up demand from home working, home education and entertainment.

There was also good growth in Europe, the Middle East and Africa (+24.5%) and in Asia-Pacific (+37.7%). Latin America continues to be a very challenging market, with the twin impacts of weak currency and continuing severe community COVID-19 cases.

EBITDA margins of 6.4% compare to Q120 at 4.1%, boosted by the cost reductions from the transformation plan as discussed in previous reports.

The key issue for Connected Home is the availability and pricing of componentry, a well-documented problem across many industries stemming from supply and distribution issues exacerbated by the pandemic. This is expected to persist at least through Q2 and Q3 before plateauing in Q421. Supply squeezes are a recurring issue, and this iteration is broader than simply memory. However, Connected Home is an important supplier to the cable companies, who themselves are anxious not to disappoint their own customers, putting the group in a stronger position than some smaller players, particularly in terms of passing through a proportion of cost increases.

Management is confident that the demand side of the equation will continue to be strong, with continued upgrades in Wi-Fi technologies and higher speeds.

DVD Services (20% of Q121 revenue): Trading and outlook

Disc volumes continued their decline, down 10.7% in volumes on Q120. However, the segmental revenue decline was lower at -7.7% at constant currency. This mostly reflects the pricing renegotiations achieved last year, along with some benefit from handling of logistics for non-disc products.

With a severely depleted programme of studio releases, this represents a relatively strong performance, driven by good demand for library titles.

The revised pricing agreements also helped improve the achieved adjusted EBITDA margin, which was 3.1% from 0.6% in Q120. We would expect further progress here over the rest of the year, reflecting the realignment of the physical estate as well as the benefit of higher volumes as release schedules replenish.

Production Services (20% of Q121 revenues): Trading and outlook

With the disposal of Post Production, this segment is to be rebadged as Technicolor Creative Services, leveraging the brand’s fame.

Like-for-like revenues were unsurprisingly soft in the quarter, down 16.6% at constant currency, as the comparative period was prior to the drastic impact of lockdowns on live filming for the film and TV industry. Within this, however, it is notable that MPC Episodic, which works primarily with the major streaming companies, doubled its revenues. Adjusted EBITDA margins climbed from 6.2% in Q120 to 9.7% Q121, as efficiencies within the transformation plan are starting to take effect.

Prospects for the rest of the year are on an improving trajectory as the industry reopens and with underlying thirst for content a constant. Much work continues to be done in rebuilding as a more efficient concern, with much more co-operation behind the brand frontages in areas such as R&D and technology. The group held onto its key talent through the pandemic, but the industry runs with a meaningful contingent of freelance labour and it is likely that there may be some pressure on wage inflation here. However, it is worth noting that the group recruits globally, with India a key location, so there is potential for some substitution from the highest labour cost territories.

Production schedules are looking strong through the remainder of the year and well into FY22 as content companies look to refill their hoppers. 90% of the segment’s FY21 budget for film and episodic is already in place.

The appointment of Andrea Miloro as head of Mikros Animation is potentially important and is a clear commitment from management to build share in the animation segment. Andrea Miloro is a well-known industry figure, having been co-president of Fox Animation and previously holding various senior production roles at Fox/BlueSky Studios and Sony Pictures Animation.

Exhibit 2: Financial summary

€m

2019

2020

2021e

2022e

Year-end 31 December

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

3,800

3,006

2,933

3,255

Cost of Sales

(3,375)

(2,725)

(2,575)

(2,830)

Gross Profit

425

281

358

425

EBITDA

 

 

325

167

270

385

EBITA

 

 

42

(56)

60

180

Amortisation of acquired intangibles

(54)

(41)

(41)

(41)

Exceptionals

(79)

(151)

(10)

(10)

Reported operating profit

(121)

(264)

27

147

Net Interest

(84)

77

(81)

(81)

Joint ventures & associates (post tax)

(1)

0

0

0

Exceptionals

0

155

0

0

Profit Before Tax (norm)

 

 

(73)

(43)

(3)

117

Profit Before Tax (reported)

 

 

(206)

(188)

(54)

66

Reported tax

(3)

(5)

(5)

(5)

Profit After Tax (norm)

(75)

(48)

(8)

112

Profit After Tax (reported)

(208)

(193)

(59)

61

Minority interests

0

0

0

0

Discontinued operations

(22)

(15)

0

0

Net income (normalised)

(75)

(48)

(8)

113

Net income (reported)

(230)

(207)

(59)

61

Average Number of Shares Outstanding (m)

15

126

241

247

EPS - normalised (c)

 

 

(492.18)

(38.38)

(3.18)

45.73

EPS - normalised fully diluted (c)

 

 

(492.18)

(33.64)

(2.97)

42.67

Dividend per share (c)

0.00

0.00

0.00

0.00

Revenue growth (%)

(5)

(21)

(2)

11

Gross Margin (%)

11.2

9.4

12.2

13.1

EBITDA Margin (%)

8.6

5.6

9.2

11.8

EBITA Margin (%)

1.1

(1.9)

2.1

5.5


BALANCE SHEET

Fixed Assets

 

 

2,082

1,674

1,606

1,538

Intangible Assets

1,483

1,251

1,185

1,119

Tangible Assets

476

288

286

284

Investments & other

40

62

62

62

Deferred tax and other

84

72

72

72

Current Assets

 

 

1,127

1,344

1,319

1,549

Stocks

243

195

190

211

Debtors

507

425

415

460

Cash & cash equivalents

64

330

321

484

Other

312

394

394

394

Current Liabilities

 

 

(1,542)

(1,379)

(1,326)

(1,406)

Creditors

(825)

(710)

(657)

(737)

Tax and social security

(41)

(21)

(21)

(21)

Short term borrowings

(95)

(72)

(72)

(72)

Other

(581)

(576)

(576)

(576)

Long Term Liabilities

 

 

(1,631)

(1,466)

(1,482)

(1,498)

Long term borrowings

(1,203)

(1,070)

(1,086)

(1,102)

Deferred tax

(27)

(15)

(15)

(15)

Other long term liabilities

(401)

(381)

(381)

(381)

Net Assets

 

 

37

172

118

183

Minority interests

0

0

0

0

Shareholders' equity

 

 

37

172

118

183

CASH FLOW

Net profit

(208)

(193)

(59)

61

Depreciation and amortisation

322

263

213

213

Working capital

(69)

(101)

(38)

15

Tax and interest

(76)

(41)

(66)

(66)

Exceptional & other

101

(9)

56

86

Operating cash flow

 

 

70

(81)

106

309

Capex

(169)

(138)

(145)

(145)

Acquisitions/disposals

(2)

0

30

0

Equity financing

1

60

0

0

Dividends

0

0

0

0

Other

3

5

0

0

Net Cash Flow

(97)

(154)

(9)

164

Opening net debt/(cash)

 

 

733

1,234

812

837

FX

(16)

0

0

Discontinued

(35)

(23)

0

0

Other non-cash movements

(369)

615

(16)

(16)

Closing net debt/(cash)

 

 

1,234

812

837

690

Source: Company accounts, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by Technicolor and prepared and issued by Edison, in consideration of a fee payable by Technicolor. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

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London +44 (0)20 3077 5700

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United Kingdom

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1185 Avenue of the Americas

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Technicolor and prepared and issued by Edison, in consideration of a fee payable by Technicolor. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Verve Group — ID-less targeting solutions

Research: Metals & Mining

Newmont Corporation — Fast out of the blocks

Notwithstanding continued low-level coronavirus induced disruptions, Newmont’s financial results were materially better than Edison’s forecasts for Q121 largely as a consequence of an effective tax rate that was substantially lower than both our forecast and also Newmont’s guidance for the full year. Significantly, the company maintained its quarterly dividend, indicating management’s confidence in both its improving production profile as well as the gold price. This note updates our forecasts for FY21 in the light of Q1 results, as well as prevailing metals prices and assumptions regarding the treatment of tax.

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