technicolor - 2020 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 (excluding China), 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.

COVID-19 SITUATION UPDATE Connected Home is operational due to the early adoption of a remote work model that successfully moved all non-engineering employees off site to ensure key engineering facilities remain safe and open. Covid-19 has impacted our customers across the world as home installations were restricted and new product launches delayed. Video has been more impacted than Broadband, due to self-install kits being more readily available for gateways than for STBs. Manufacturing capabilities have been constrained for most of the year, and lead times are increasing drastically for several component families. Logistics will continue to be constrained well into 2021.

By Geography

Europe, Middle-East & Africa

North America

Latin America

Asia-Pacific

2020 2019 Video

Revenues

980 865

336 453

206 307

242 357

(in million euros)

Volumes

3.437 7.269

1.852 3.732 5.534

4.544 1.587 6.131

5.898 0.667 6.565

Broadband

(in million units)

TOTAL

10.706

Connected Home recorded strong commercial activity in 2020 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 Android TV 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. Transformation Plan During 2018, Connected Home decided to launch a three-year transformation program to adapt itself to prevailing 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 become more competitive, thereby increasing its market share. At the end of December 2020, the division completed successfully the transformation plan launched in 2018. Selective investments in key customers, and a platform-based products approach focused on broadband and Android TV segments, combined with strategic partnerships with key suppliers and aggressive investment in process re-engineering, have generated a significant increase in the productivity and competitiveness of Connected Home in the market place. Connected Home has improved its margins and its market share over the last years, despite facing many market, industry and global challenges. Connected Home continued to launch programs during 2020 to improve productivity and efficiencies in all parts of its operation.

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2020