TECHNICOLOR_REGISTRATION_DOCUMENT_2017

- 1 PRESENTATION OF THE GROUP Organization & business overview

Approximately 8,500 people (including approximately 6,200 digital artists) worked for the Production Services Division at the end of December 2017 in India (36%), Canada (22%), USA (18%), UK. (15%), France (8%) and Other (1%). Industry trends and market position The demand for high-end content creation has increased significantly over the past few years, driven by the strong development of premium original content across all segments, particularly by OTT providers like Netflix and Amazon; in addition to continued growth from the U.S. major studios on VFX-heavy feature film tentpoles and franchises like Disney’s Marvel Cinematic Universe and Warner Bros., DC Extended Universe. As a global market leader in Film & TV VFX, Technicolor continues to focus its resources in these activities to benefit from the market growth and volume. For the first time, global digital advertising spends exceeded that of traditional television in 2017 (source: IPG’s Magna); and rapidly evolving consumer Technology choices are driving new ad, content and device formats, accelerating audience fragmentation and complexity. Technicolor’s Advertising businesses are well-positioned to address this market evolution and utilize emerging technologies to create the high-end imagery required by advertisers across all screens, strengthening its leadership in high-end Advertising content creation. The digital postproduction market is relatively mature, and the demand is mainly driven by new theatrical and TV productions. Technicolor focuses on key talent production hubs to increase its market share with tentpole movies, while reinforcing its leading position on premium content for TV broadcasters and OTT providers. While the major studios’ Computer generated animated films lead the Feature Animation box office, there is growth in the number of mid-level budgeted animated features, like DreamWorks Animation’s Captain Underpants, being produced each year as studios have

become more open to outsourcing Feature Animation services. The Games services market is expanding as mobile game developers have become a more relevant market as mobile game art quality increases. Broadening the Group’s position in these two emerging markets is a key element of the Technicolor growth strategy. Through its portfolio of brands, Technicolor is the leading VFX and Postproduction services provider for feature films, TV/OTT, games and advertising worldwide. Key customers and Main competitors Technicolor’s customer base includes major and independent film studios, and non-studio customers such as TV broadcasters, independent content producers, game developers/publishers and OTT service providers developing their own original content. In the past few years the Group has been strategically strengthening its market position with leading studios while also increasing its collaborations with non-studio customers. In Film & TV VFX , Technicolor’s key competitors are ILM, Weta ■ Digital, Double Negative/Prime Focus, and Framestore. In Advertising VFX , key competitors include Method (Deluxe), ■ Framestore, the in-house production arms of the global advertising holding companies (e.g., WPP’s Hogarth, Publicis’ Prodigious, IPG’s Craft, Omnicom’s eg+ Worldwide, etc.), and many local boutiques. In Postproduction Services , key competitors include Deluxe, ■ FotoKem, several boutique vendors, as well as the in-house facilities of certain major Studios, depending on market segment and geography. In CG Animation & Games services , key competitors are Animal ■ Logic, Sony Pictures Imageworks, Cinesite, Ilion Animation Studios, Reel FX, Bardel Entertainment, CGCG, DQ Entertainment, Virtuos Ltd.. and Keywords Studios.

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TECHNICOLOR

REGISTRATION DOCUMENT 2017