Universal Registration Document 2021

3 RISKS, LITIGATION, AND CONTROLS RISK FACTORS

ECONOMIC, GEOPOLITICAL & SOCIAL ENVIRONMENT

[103-1 Economic performance] [103-2 Economic performance] Risk identification Any further deterioration in the macroeconomic and geopolitical environment may adversely affect supply chain, consumer confidence, licensing revenue, disposable income and spending, and result in decreased volumes for some of the Group’s products/services or increased demand for lower-end products at the expense of higher-end products/services we provide. For example, Technicolor is well established in Latin America through the Connected Home and DVD Services segment, and the economic uncertainties as well as impact on the value of local currency in this area may negatively impact the revenue and results. In addition, local labor regulations forbidding more flexible types of contracts could induce more benefit charges and thus increase the total cost of labor. More specifically, pandemic and/or other natural disasters directly impact employees, facilities, talent recruitment, clients, vendors and operations, along with upstream impacts (shift to streaming platforms, loss of theatrical exhibition) on our businesses. For instance, as governments restrict immigration and limit talent mobility, some employees are also reluctant to move to certain countries. Supply chain disruption may not be covered by insurance as a result of market tightening. Also, Technicolor Creative Studios activities have been set up certain locations attractive to its customers, for production related tax incentives as an example. Any material change to the incentive programs available in such locations may impact significantly the decisions by customers on where they outsource production services like VFX and Animation. Furthermore, weakness in general economic conditions may result in an increasing number of the Group’s customers becoming delinquent on their obligations to the Group or being unable to pay, which in turn could result in a higher level of receivables write-offs. Any prolonged global economic downturn may therefore have adverse effects on the Group’s operating results or financial condition. Recent events such as the exit of the United Kingdom from the European Union, Commercial War between the United States of America and China, or Hong Kong political instability may have negative impacts on the Group performance.

Risk monitoring and management

The Group’s presence in geographically diversified markets makes it less sensitive to adverse economic conditions in a given market; particularly during a global pandemic where certain key markets have returned to relative normalcy more quickly than others. Risks concerning the regulatory, political and social environment are managed by each business and at the Group level by the Strategy Committee, either in a decentralized form for risks specific to a given activity, or through support functions. They are regularly reviewed in detail by Group Management as part of the Monthly or Quarterly Business Review meetings. Specific to Covid-19, the Group established a Covid task force that immediately prepared and circulated a Covid-19 playbook and continues to convene weekly to monitor the impact of the pandemic on the Group’s operations and coordinates actions required to ensure best practices and compliance with local regulations. Regarding the impact of general economic conditions on customers, the Group’s Finance Department has long-standing policies in place for regular monitoring of debtors and credit checks on new clients. Technicolor Creative Studios remains in constant communications with immigration counsel and People & Talent to stay abreast of the latest regulations impacting talent mobility across borders.

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2021