Universal Registration Document 2021

RISKS, LITIGATION, AND CONTROLS RISK FACTORS

CUSTOMER CONCENTRATION AND CONTRACT NEGOTIATION

Risk identification

Risk monitoring and management

The division monitors these contractual arrangements through a robust customer offer review process, including Investment Committee/Management reviews to ensure that risks are adequately monitored and mitigated. Contract renewal timing is tracked proactively by the division’s PCA team and its Senior Management Team. In 2021, the division proactively renegotiated an early contract extension with a major studio, through June 2025. Specific to disc volume, the Senior Management Team constantly looks for opportunities to attract additional volume. More broadly, the division continues to try and attract small and mid-sized video, game, and music disc customers. The division proactively collaborates with all industry participants to maintain the viability of the physical media home entertainment ecosystem across its customers and retailers. An example of this collaboration and stickiness is the division’s continued manufacturing support for all its Studio customers. The number of suppliers/manufacturers for optical media continues to decrease over time. Technicolor’s commitment to this sector is well understood and appreciated by all its customers. The Division is actively pursuing multiple initiatives to diversify its business activities and thereby further reduce the risk associated with a concentrated customer base. These initiatives include an existing and ongoing effort to grow supply chain related services (warehousing, fulfillment, transportation, etc .) for customers outside the Media & Entertainment industry, as well as an initiative of actively diversifying its manufacturing activity to include vinyl, and polymer-based microfluidic devices for use in diagnostics, life science and other applications. To mitigate the risks inherent to its suppliers, the Sourcing Department has established procedures for operational and contractual monitoring of principal suppliers including raw materials used in the production and transportation of DVD and Blu-ray™ discs/products. All the main sites have a Business Continuity Plan, and the reactivity of the organization is enhanced by Transversal Incident Response Plans which were tested successfully in 2021. These plans aim at minimizing the impact of any incident or supply chain disruption. The quality of the manufacturing and supply-chain process is constantly monitored, and each production facility has developed a high expertise in ensuring robust industrial processes. The division tracks quality performance with a wide variety of KPIs. In addition, covering its internal operations, the DVD Services Division, and the Group have insurance coverage that mitigates the risk of business disruption in case of natural disaster or other types of disaster such as fire in major production sites. Risk monitoring and management

The DVD Services Division operates in a specialized market with a limited number of significant customers. A significant percentage of the division’s revenue is derived from its major customers. In 2021, the division’s top 5 customers accounted for approximately 61% of the segment’s revenue, which represents approximately 15% of the Group’s consolidated revenue. The DVD Services Division, has signed multi-year contracts with all its major customers, which involve multiple contractual arrangements with varying terms, conditions, and expiration dates. In addition, the division’s strategy has included acquiring competitors, increasing volume/scale, and driving cost reductions via automation and site consolidations. The division’s operating results could be adversely affected, if its customers decide to terminate these contractual arrangements (in accordance with their terms), or if the division is unable to renew them when they expire or renew them on significantly less favorable terms.

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SUPPLY CHAIN AND MANUFACTURING

[103-1 Procurement practices] [103-2 Procurement practices] Risk identification Manufacturing and Distribution facilities are subject to operational risks, including mechanical and IT system failure, theft of assets while in transit, work stoppage, transportation disruption and capacity shortage, customs blockages/delays, and natural disasters. For instance, transport demand in peak season triples as compared to low season requirements. The DVD Services Division’s inability to obtain timely delivery of raw materials of acceptable quantity and quality could result in material delays, increased costs, and reductions in shipments of its products, any of which could increase its operating costs, harm customer relationships, or materially and adversely affect the DVD Services Division’s business and results of operations. See more details on suppliers’ dependency in the risk related to “Raw material and other key input dependency”.

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2021

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