technicolor - 2019 Universal registration document

1 PRESENTATION OF THE GROUP ORGANIZATION AND BUSINESS OVERVIEW

Customer concentration Technicolor’s customer base includes most of the largest Pay-TV operators and Network Service Providers worldwide. The Group’s top 20 customers make up approximatively 40% of the total market, and Technicolor holds a material market share position at each.

Technicolor’s main customers include America Movil, AT&T (DIRECTV), CenturyLink, Charter Comcast, Cox, Liberty Global, Megacable, Proximus, Tata Sky, Telecom Italia, Telefonica, Telstra, Telus and Vodafone.

By Geography

Europe, Middle-East & Africa

North America

Latin America

Asia-Pacific

Revenues

2019 2018 Video

865

453 460

307 327

357 398

1,033 1.666 7.257 8.923

(in million euros)

Volumes

2.496 4.691 7.187

5.339 2.999 8.338

9.906 1.033 10.939

Broadband

(in million units)

Total

Transformation Plan During 2018, Connected Home decided to launch a three-year transformation program to adapt itself to the market conditions and subsequent consolidation facing our industry. This program includes a customer “selectivity” plan to better achieve product synergies and develop stronger partnerships with key suppliers and partners to improve product costing, competitiveness, and time to market. The plan includes reducing the annual fixed cost structure by 40% over a three-year period, representing c. €140 million savings versus 2017. Total costs associated with this plan amount to c.€90 million, with an average pay-back of less than 15 months. It should enable Connected Home to improve overall profitability and be more competitive to increase its market share. The three-year transformation plan is also improving productivity; more than 82% of the operational cost savings target has already been achieved (on a run rate basis) at the end of December 2019. Connected Home has launched in 2019 two global programs to transform its way of piloting business: Revamp of supply chain processes and tools with a first wave to be • deployed in the first quarter 2020, to improve visibility, reliability and flexibility for its operations; Full evolution to a data driven company, by systematizing data driven • process, supported by real time tools and making data visible and available for the teams when they need it.

Connected Home recorded strong commercial activity in 2019 in North America, in particular with major cable operators in broadband solutions. Driven by this North American broadband activity, Connected Home has taken the undisputed worldwide leadership role in DOCSIS 3.1 deployments, both in volume and value. In Europe, Middle East and Africa, Connected Home continued to add new AndroidTV and DOCSIS 3.1 wins, both product groups adding revenue fuel for the coming years. The segment succeeded in maintaining its solid leadership in telecom and cable gateways and in all categories of Set-Top Box. Connected Home is well established in the Latin American region with many marquee CPE customers, driving a high market share both in value and volume. In Asia-Pacific, Connected Home is not present in all markets, preferring to focus where the segment can build solid market positions. The largest product categories of this market are digital satellite Set-Top Box and telecom broadband gateways. In 2018, Connected Home recorded solid growth in South Korea and Japan, where Technicolor has decided to grow its position, following acquisitions of LG and Pioneer activities in the NSP market.

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019