Universal Registration Document 2021

3 RISKS, LITIGATION, AND CONTROLS RISK FACTORS

LABOR FORCE AVAILABILITY

[103-1 Employment] [103-2 Employment]

Risk identification

Risk monitoring and management

For temporary labor, the division utilizes a multi-faceted approach to minimize potential risks of labor shortage, including maintaining relationships with multiple staffing agencies in each major operating area, establishing and maintaining direct relationships with local seasonal workers, and proactively seeking alternative labor pools wherever possible. The division is proud to offer a clean, safe work environment and its long-term contracts enable it to provide year-round work. The division has increased its focus on the employee experience to differentiate it from other employers. The division did have to increase pay rates for selected job areas in 2021 to fulfill requisite staffing levels.

Given the seasonality of its business, DVD Services relies heavily on temporary labor resources during peak periods. Insufficient temporary labor resources could cause work slowdowns or stoppages leading to the inability to adequately meet customer service levels and demand and create material adverse effect on the division’s business, financial condition, operations or prospects. Overall, in 2021, Technicolor employed between 2,100 and 3,300 full-time equivalent temporary labor resources depending on the time of the year. In addition, local employment environments could be impacted by regulatory actions such as minimum wage requirements and employer competition, which may have an impact on the division’s ability to hire the required number of temporary labor resources. These factors make it challenging to scale-up and quickly flex temp labor during peak periods, while on the other hand, external factors such as the pandemic and periodic governmental stimulus packages are inherently reducing the pool of labor force availability. Lastly, higher than expected labor costs, may result in a deterioration of the operating margin of DVD Services.

Financial risks 3.1.3 [102-15]

LIQUIDITY

Risk identification

Risk monitoring and management

To manage this risk, the Group’s treasury management is centralized. The central treasury team manages current and forecasted financing needs and has established policies aimed at securing continued and uninterrupted access to the financial markets on reasonable terms. To meet liquidity needs the Group puts in place confirmed credit facilities and executes borrowings on the banking and financial markets and raises equity in the capital markets. In order to monitor the Group’s liquidity, the Treasury Department monitors the relative proportion of the Group’s debt and equity, its credit ratings (corporate ratings at December 31, 2021: S&P: CCC+ stable outlook/Moody’s: Caa2 positive outlook), the outlook for the financial markets and it uses the Group’s consolidated cash forecasts to track the ability to meet scheduled debt payments (see note 8.2.3 for the Group’s debt maturity schedule) and other future financing needs and to respect the covenants in its debt documentation. The results of this monitoring are reported regularly to the Chief Financial Officer, the Audit Committee, and the Board of Directors.

Liquidity is the risk of not having funds to meet future financial obligations. This risk can arise if the Group’s financial position deteriorates limiting its access to financial markets or if suppliers reduce payment terms. In order to identify and quantify this risk the Group has put in place regular cash forecasting, on a short-term 13-week basis, as well as monthly cash forecasts covering longer periods. This forecasting allows the Group to compare its forecasted liquidity with its forecasted cash needs, in particular working capital requirements, investments, and debt repayments.

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2021