Content | 2 |
SHAREHOLDER MESSAGE | 4 |
FORWARD-LOOKING STATEMENTS | 5 |
OVERVIEW O F TECHNICOLOR in 2018 | 6 |
1. PRESENTATION OF THE GROUP | 9 |
1.1 OVERVIEW AND HISTORICAL BACKGROUND | 10 |
1.1.1 Overview | 10 |
1.1.2 Historical background | 12 |
1.2 ORGANIZATION AND BUSINESS OVERVIEW | 13 |
1.2.1 Entertainment Services | 13 |
1.2.2 Connected Home | 18 |
1.2.3 Corporate & Other | 21 |
1.2.4 Discontinued operations | 21 |
1.3 STRATEGY | 22 |
1.4 SHARE CAPITAL AND SHAREHOLDING | 23 |
1.4.1 Share capital | 23 |
1.4.2 Share buy back | 27 |
1.4.3 Delegations granted to the Board of Directors by the Shareholders’ Meetings | 28 |
1.4.4 Dividend policy | 29 |
2. OPERATING AND FINANCIAL REVIEW AND PROSPECTS | 31 |
2.1 SUMMARY OF RESULTS | 32 |
2.2 RESULTS OF OPERATIONS FOR 2017 AND 2018 | 32 |
2.2.1 Analysis of revenues from continuing operations | 33 |
2.2.2 Analysis of Adjusted EBITDA | 35 |
2.2.3 Analysis of operating expenses and profit (loss) from continuing operations before tax and net financial expense | 35 |
2.2.4 Net financial expense | 36 |
2.2.5 Income tax | 36 |
2.2.6 Profit (loss) from continuing operations | 37 |
2.2.7 Profit (loss) from discontinued operations | 37 |
2.2.8 Net income (loss) of the Group | 37 |
2.2.9 Adjusted indicators | 37 |
2.3 LIQUIDITY AND CAPITAL RESOURCES | 39 |
2.3.1 Overview | 39 |
2.3.2 Cash flow | 40 |
2.3.3 Financial resources | 41 |
2.4 STRATEGY UPDATE AND GUIDANCE | 43 |
2.5 EVENTS SUBSEQUENT TO DECEMBER 31, 2018 | 43 |
3. RISKS, LITIGATION, AND CONTROLS | 45 |
3.1 RISK FACTORS | 46 |
3.1.1 Operational risks | 46 |
3.1.2 Global market and industry risks | 52 |
3.1.3 Financial risks | 53 |
3.1.4 Corporate Social Responsibility and compliance | 55 |
3.2 LITIGATIONS | 58 |
3.2.1 Antitrust procedures | 58 |
3.2.2 Toxic tort lawsuits | 58 |
3.2.3 Other litigations | 58 |
3.3 INTERNAL CONTROL | 59 |
3.3.1 Objectives of internal control procedures and implementation | 59 |
3.3.2 General control environment | 59 |
3.3.3 Internal Audit | 61 |
3.3.4 Internal control procedures relating to the preparation and treatment of accounting and financial information | 61 |
3.3.5 Other internal control procedures | 63 |
3.4 INSURANCE | 64 |
4. CORPORATE GOVERNANCE AND COMPENSATION | 67 |
4.1 CORPORATE GOVERNANCE | 68 |
4.1.1 Board of Directors | 70 |
4.1.2 Preparation and organization of the Board of Directors’ work | 89 |
4.1.3 Regulated agreements | 98 |
4.1.4 Internal Board regulations | 99 |
4.1.5 Executive Commitee | 103 |
4.2 COMPENSATION | 105 |
4.2.1 Compensation and benefits of Corporate Officers | 105 |
4.2.2 Executive Committee compensation | 117 |
4.2.3 Stock options plans and performance or restricted shares plans | 117 |
5. DISCLOSURE ON EXTRA-FINANCIAL PERFORMANCE | 125 |
GRI SUSTAINABILITY REPORTING STANDARDS (GRI STANDARDS) AND DISCLOSURES | 126 |
5.1 CORPORATE SOCIAL RESPONSIBILITY’S CHALLENGES OF THE GROUP | 126 |
5.1.1 Business models | 126 |
5.1.2 The CSR risks | 127 |
5.1.3 The materiality matrix | 128 |
5.1.4 The approach to sustainability | 129 |
5.2 HUMAN CAPITAL | 130 |
5.2.1 Management and development of talent | 130 |
5.2.2 Management of business cycles | 138 |
5.2.3 Diversity and inclusiveness | 139 |
5.2.4 Business transformation and social dialogue | 140 |
5.2.5 Safety at work | 142 |
5.2.6 Absenteeism | 144 |
5.2.7 Community impact and regional development | 144 |
5.2.8 Relations with external stakeholders | 146 |
5.3 HUMAN RIGHTS AND WORKING CONDITIONS | 147 |
5.3.1 Human Rights and working conditions in the supply chain | 147 |
5.3.2 Fight against harassment and discrimination | 148 |
5.4 CLIMATE CHANGE | 149 |
5.4.1 Carbon emissions | 150 |
5.4.2 Energy efficiency | 152 |
5.4.3 Renewable energy | 153 |
5.5 CIRCULAR ECONOMY | 154 |
5.5.1 Recycling of waste and optimization of raw material | 155 |
5.5.2 Environmental footprint of products | 157 |
5.5.3 Sustainable water management | 157 |
5.5.4 Additional environmental aspects | 158 |
5.5.5 Data collection method and rationale | 160 |
5.6 SAFETY OF CUSTOMERS AND PROTECTION OF CONTENT | 163 |
5.6.1 Product compliance and ban of hazardous materials | 163 |
5.6.2 Content security, cyber risks and respect of Intellectual Property | 164 |
5.7 FAIRNESS OF BUSINESS PRACTICES | 165 |
5.7.1 Competition rules and anti-bribery | 165 |
5.7.2 Tax evasion | 165 |
5.8 CSR PERFORMANCE ASSESSMENT | 166 |
5.9 REPORT BY ONE OF THE STATUTORY AUDITORS, APPOINTED AS INDEPENDENT THIRD-PARTY, ON THE CONSOLIDATED NON FINANCIAL STATEMENT PUBLISHED IN THE GROUP MANAGEMENT REPORT | 167 |
5.10 VIGILANCE PLAN | 170 |
6. FINANCIAL STATEMENTS | 173 |
6.1 TECHNICOLOR 2018 CONSOLIDATED FINANCIAL STATEMENTS | 174 |
6.1.1 Consolidated statement of operations | 174 |
6.1.2 Consolidated statement of comprehensive income | 175 |
6.1.3 Consolidated statement of financial position | 176 |
6.1.4 Consolidated statement of cash flows | 178 |
6.1.5 Consolidated statement of changes in equity | 179 |
6.2 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 180 |
6.3 STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 | 249 |
6.4 TECHNICOLOR SA PARENT COMPANY FINANCIAL STATEMENTS | 254 |
6.4.1 Income statement | 254 |
6.4.2 Statement of financial position | 255 |
6.4.3 Statement of changes in equity | 256 |
6.5 NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS | 257 |
6.6 PARENT COMPANY FINANCIAL DATA OVER THE FIVE LAST YEARS (UNDER ARTICLES R. 225-81 AND R. 225-102 OF THE FRENCH COMMERCIAL CODE) | 278 |
6.7 STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 | 279 |
6.8 AUDITORS | 283 |
6.8.1 Table of Auditors’ fees | 283 |
6.8.2 Statutory Auditors | 283 |
6.8.3 Substitute Statutory Auditors | 283 |
7. ADDITIONAL INFORMATION | 285 |
7.1 COMPANY PROFILE | 286 |
7.2 LISTING INFORMATION | 286 |
7.2.1 Markets for the Company’s securities | 286 |
7.2.2 Listing on Euronext Paris | 287 |
7.3 NOTIFICATION OF INTERESTS ACQUIRED IN THE SHARE CAPITAL OF FRENCH COMPANIES IN 2018 AND 2017 | 288 |
7.3.1 Notification of interests acquired in the share capital of French companies in 2018 | 288 |
7.3.2 Notification of interests acquired in the share capital of French companies in 2017 | 288 |
7.4 MEMORANDUM AND BYLAWS | 288 |
7.4.1 Corporate purpose | 288 |
7.4.2 Board of Directors and Executive Committee members | 289 |
7.4.3 Rights, privileges and restrictions attached to shares | 289 |
7.4.4 Actions necessary to change the rights of shareholders | 289 |
7.4.5 Shareholders’ meetings | 289 |
7.4.6 Bylaws requirements for holdings exceeding certain percentages | 290 |
7.5 MATERIAL CONTRACTS | 290 |
7.6 ADDITIONAL TAX INFORMATION | 290 |
7.7 ORGANIZATION OF THE GROUP | 291 |
7.7.1 Legal organizational chart of the Group as of December 31, 2018 | 291 |
7.7.2 Operational organization | 293 |
7.8 PROPERTY, PLANT AND EQUIPMENT | 294 |
7.9 SUPPLIERS AND CUSTOMERS PAYMENT TERMS | 298 |
7.10 AVAILABLE DOCUMENTS | 298 |
7.11 SOURCES REGARDING COMPETITIVE POSITION | 299 |
7.12 PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE ANNUAL FINANCIAL REPORT | 299 |
7.12.1 Declaration by the person responsible for the Registration Document and the Annual Financial Report | 299 |
7.12.2 Person responsible for information | 299 |
8. REGISTRATION DOCUMENT CROSS | 301 |
Cross-reference table referring to the main headings required by Annex 1 of European Commission Regulation 809/2004 | 302 |
Annual Financial Report cross-reference table | 306 |
Cross-reference table referring to the elements of the management report | 306 |
Cross-reference table referring to the elements of the corporate governance repor | 308 |
Cross-reference table pursuant to Article L. 225-102-1 and Article R. 225-105 (disclosure on extra-financial performance) and Article L. 225-102-4 (vigilance plan) of the French Commercial Code | 309 |
Glossary | 313 |