technicolor - 2019 Universal registration document

3 RISKS, LITIGATION, AND CONTROLS RISK FACTORS

COMPETITION

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GRI [103-1 Market presence] [103-2 Market presence] Risk identification

Risk monitoring and management

The Group’s products and services are subject to intense competition. Although the Group has leading positions in many of its market segments, the competitors are sometimes part of groups which are significantly larger than Technicolor, and thus may have greater resources, including greater financial, technical, marketing and other resources. These groups may include customers who already have, or may develop, in-house capabilities to supply the products or services which Technicolor offers, such as studio customers who have in-house production services. If the Group’s competitors or customers use their greater size and resources to place additional competitive pressure on Technicolor, the Group’s operations may be materially and adversely affected. In addition, rapid technological innovation and changing business models within the Connected Home and DVD Services markets may allow new participants, who now have access to technical solutions that respond to clients’ specific technical needs, to enter into certain markets, who may in turn offer alternative products, technologies and services potentially at lower costs, thereby decreasing the market share size or market of current market participants. Furthermore, the rapide decline of the DVD market may have a significant negative impact on the Group performance. GRI [103-1 Socioeconomic compliance] [103-2 Socioeconomic compliance] Risk identification The Group’s activities do not create, as of the date of this document, any particular exposure to a specific sectorial regulation that could have an impact on its financial position. However, since the Group operates in a large number of countries, it must deal with various and complex regulations put in place by various national and international governments, authorities, and organizations. Any major change in these laws and regulations could impact the Group's businesses. Despite its best efforts, the Group may have to face proven or unproven allegations that it has failed to comply with national or international regulations, and this could have a negative impact on its reputation, growth outlook and financial performance. In addition, any major change in these laws and regulations could impact the Group’s businesses.

To identify changing market conditions and minimize the exposure to related risks, the Group regularly reviews the market, competitive landscape, and the market positioning throughout the year. It also frequently reviews the Strategic Plan/objectives (with a focus on sales forecasts versus actual) through in depth Divisional Quarterly Business Review meetings and Group level Strategic Committee (comprised of Board Members) and adjusts when appropriate based on changing market conditions.

LEGAL COMPLIANCE

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Risk monitoring and management

To limit its exposure to such risks, the Group develops Compliance programs to cover issues common to its businesses. These programs are reviewed on a regular basis with the Board of Directors. Under the impetus of the Management and through the actions of the Compliance Officer, the Group seeks to constantly improve its programs and employee awareness initiatives and to put in place procedures for preventing and handling potential risks in this regard. Moreover, the Company audits its subsidiaries around the world on a regular basis and consults outside experts to validate the compliance with applicable regulations, of various aspects of its operations. Technicolor conducts a compliance approach across the Group, building on its Code of Ethics and culture of integrity. This compliance program sets down general rules and procedures that must be respected by all employees and entities, on the basis of which a series of business specific and as applicable, local procedures is then defined. These procedures are then translated and adapted in line with local regulations and culture. In 2018, the Group updated and improved its existing Code of Ethics.

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019