technicolor - 2020 Universal Registration Document

6 FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 8 - Financial assets, financing liabilities & derivative financial instruments

8.2.3

LIQUIDITY RISK AND MANAGEMENT OF FINANCING AND OF CAPITAL STRUCTURE

Liquidity risk materialized in 2020 due to the deterioration of the Group’s financial position and in particular due to its negative cash flow in 2018 and 2019 and the impacts of the Covid-19 pandemic starting in the 1 st half of 2020. At June 30, 2020 the Group obtained a waiver of the financial covenant that otherwise would not have been met under the RCF and Wells Fargo credit line agreements. In view of this situation, the Group implemented a financial restructuring as described in note 1.1. The characteristics of the debt restructuring took into account the Group’s financial forecasts through the end of 2022 and as such the Group believes that it has sufficient liquidity, including a cushion for contingencies, throughout this period. The tables below show the future contractual cash flow obligations due on the Group’s financial liabilities. The interest rate flows due on floating rate instruments are calculated based on the rates in effect at December 31, 2020 and December 31, 2019, respectively.

Liquidity risk is the risk of not being able to meet upcoming financial obligations. In order to reduce this risk, the Group pursues policies with the objectives of having continued uninterrupted access to the financial markets at reasonable conditions. These policies are developed based on regular reviews and analysis of its capital structure, including the relative proportion of debt and equity in the context of market conditions and the Group’s financial objectives and projections. Among other things these reviews take into account the Group’s debt maturity schedule, covenants, forecast cash flows, access to financial markets and projected financing needs. To implement these policies, the Group uses various long-term and committed financings which may include equity (see note 7.1), debt (see note 8.3), subordinated debt (see note 7.2.2) and committed credit lines.

At December 31, 2020

There after

Total 1,016

2021-H1 2021-H2 2022 2023 2024 2025

(in million euros)

New Money/Reinstated Debt – principal New Money/Reinstated Debt – accrued interest New Money/Reinstated Debt – PIK interest

-

- - -

- - -

- - -

1,016

- - -

- - -

16

-

16 16

-

16 17

Lease liabilities

33

23

36

22

12

35 178

Other debt

-

-

1

-

-

-

-

1

Total debt principal payments

49

23

37

22 1,049

12

35 1,227

(85)

IFRS Adjustment DEBT IN IFRS

1,142

Floating rate NM/Reinstated Debt – cash interest Floating rate NM/Reinstated Debt – PIK interest

22

23

47

50 54

- -

196 178

-

-

-

-

178

Lease liabilities – interest Other debt – interest

6

5

8

6

5

3

33

-

-

-

-

-

-

-

TOTAL INTEREST PAYMENTS FINANCIAL DERIVATIVES

28

28

55 56 237

3

407

2

-

-

-

-

-

-

2

TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2020 242