Universal Registration Document 2021

3 RISKS, LITIGATION, AND CONTROLS RISK FACTORS

SUPPLIER AND KEY COMPONENT DEPENDENCY

[103-1 Procurement practices] [103-2 Procurement practices] In 2020, tensions have appeared on the Integrated Circuits (ICs) market, leading to significant extension of delivery lead times (e.g., from 18 weeks beginning of 2020 to 26 weeks in 2020 H2, and extending even more to 50 weeks for the majority of IC purchasing in 2021), increasing challenges to deliver to our customers. These products are used in a much broader range of products than for the Connected Home business, such as smartphones, PCs, tablets, automotive applications and the global imbalance between supply and demand has created a material price increase of their costs. The difficulty in mitigating this risk can significantly impact the profitability of Connected Home. Currently, supplier dependency is aggravated by the pandemic and current market given electronic demand surge, shortage across many categories, supply chain disruption, limited capacity of semiconductors and surge demand for non-Chinese manufacturing which may adversely affect activities of Connected Home. SPECIFIC RISKS RELATED TO THE RUSSIAN-UKRAINIAN CONFLICT This information is not included in the management report approved by the Board of Directors on February 24, 2022. Even more recently and after the close of the fiscal year, Russia's invasion of Ukraine on February 24, 2022, have brought additional concerns to the semiconductors market. Ukraine and Russia are major exporters of various minerals and noble gas for semiconductor chip manufacturing, as well as, other raw materials used for cables, wires, terminals, batteries, and plastic housing in relation to the petrochemical products and its price increase. While it appears Asian chip manufacturers presently have sufficient supply, if the war continues it could limit access to the natural resources used as inputs to manufacture chips, placing upward pressure on pricing due to supply constraints.

In 2020, the Company implemented an automated supplier risk assessment tool, and is investing in an additional Supply Chain risk monitoring tool. Deployment of these tools will improve the assessment of current supply base, risk, and opportunities’ robustness with category strategy development. Furthermore, enterprise level agility is increased by introducing Weekly Sourcing and procurement meetings led by Category Director to focus on supply issues, actions and monitor and assess component risks. In addition Weekly or “breaking news” reports are distributed to CH management to monitor market risk, mitigation plan and progress, while development of PowerBI Dashboard enables us to monitor high risk components in product – including single source, old technology and unique usage risk. Connected Home is in regular communication with its key suppliers to assess the impact of the war in Ukraine on their operations. Currently, the chip suppliers and suppliers of other components relying on raw materials (that could be impacted by the war in Ukraine) appear to have sufficient inventory to satisfy demand. To ensure business continuity, suppliers are activating secondary sources of inputs to secure future needs. Connected Home is actively collaborating with suppliers to secure pricing and assess potential of raw material pull-in to mitigate future price increases. In addition, Connected Home is monitoring the impact of rising oil prices on petrochemicals and working with suppliers to ensure continuity of supply.

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2021