technicolor - 2019 Universal registration document

2 OPERATING AND FINANCIAL REVIEW AND PROSPECTS LIQUIDITY AND CAPITAL RESOURCES

NET CASH USED IN INVESTING ACTIVITIES Continuing operations Net investing cash used in continuing activities was €171 million in 2019 compared to €156 million in 2018, and included: net capital expenditures, which amounted to €169 million in 2019 • (compared to €162 million in 2018), due to cash expended relating to tangible and intangible capital expenditures. In 2019, net capital expenditure amounted to €62 million in the Production Services segment and was mainly related to intangible asset spending and production capacity increase, €36 million in the DVD Services segment, mainly from patents and €68 million in the Connected Home segment, mainly due to capitalized R&D projects; acquisition of businesses (net of cash acquired), which amounted to • €(3) million in 2019, compared to €1 million in 2018; proceeds from sales of equity holdings, which amounted to €1 million • in 2019 compared to €5 million in 2018 (net of cash in companies disposed of). NET CASH USED IN FINANCING ACTIVITIES Continuing operations Net financing cash used in continuing activities was €26 million in 2019 compared to €96 million in 2018. In 2019, the net cash used includes mainly payment of leases. In 2018, the net cash used was mainly related to the prepayment of the loan from European Investment Bank (”EIB”) for €90 million and normal scheduled repayments for €3 million.

For more information, please refer to note 11.2 to the Group’s consolidated financial statements. Discontinued operations Net cash used in discontinued operations was €33 million in 2019 compared to €105 million of cash generated in 2018. In 2019, it was mainly related to cash costs of the Research and Innovation activity disposal. In 2018, it was mainly related to the initial payment regarding the disposal of the Patent Licensing business in July. Financial resources 2.3.3 Gross financial IFRS debt (excluding the impact of IFRS 16) totalled €1,026 million at the end of 2019, compared with €1,024 million at the end of 2018. At December 31, 2019, financial debt consisted primarily of €980 million of term loans issued in 2016 and 2017. At December 31, 2018, financial debt consisted primarily of €978 million of term loans issued in 2016 and 2017. Financial debt due within one year amounted to €95 million at the end of 2019 and €20 million at the end of 2018. At December 31, 2019 the Group had €65 million of cash and deposits, compared with €291 million at December 31, 2018. For more detailed information on the Group’s debt, please refer to note 8.3 to the Group’s consolidated financial statements. The table below summarizes Technicolor’s financial debt and liquidity at December 31, 2019.

Amount at December 31, 2019 excl. IFRS 16 (in million euros)

Amount at December 31, 2019 (in million euros)

Existence of hedges

Type of interest rate

First maturity

Term Loans

Floating

980

980

2020 2020 2020

Yes No No

Lease Liabilities

Fixed

312

40

Other debt

Various

6

6

TOTAL DEBT

1,298

1,026

Available cash and deposits Committed credit facilities (1)

Floating Floating

65

65

0 to 1 month

No

361

361

TOTAL LIQUIDITY

426

426

Availability varies depending on the amount of receivables (please refer to note 8.2.3). (1)

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019