technicolor - 2018 Registration document

PRESENTATION OF THE GROUP

ORGANIZATION AND BUSINESS OVERVIEW

TV Animation worked on the following shows: Alvin and The • Chipmunks seasons 3 & 4 (Nickelodeon/M6), Monchhichi season 1 (TF1), Spirit Riding Free seasons 2 & 3 (DreamWorks Animation/Netflix), Mickey and the Roadster Racers season 2 (Disney), The Boss Baby: Back in Business (DreamWorks Animation/Netflix), Elena of Avalor season 2 (Disney), Kung Fu Panda: The Paws of Destiny season 1 (DreamWorks Animation/Amazon), Dragons: Rescue Riders (DreamWorks Animation/Netflix); Technicolor Animation Productions (original content IP business) • in 2018 delivered approximately 30 commercial half hours and greenlit season 2 of Monchhichi and season 1 of Team DroniX; Games: Delivered NBA 2K19 (2K Sports/Take-Two), NHL 19 • (EA Sports), FIFA 19 (EA Sports), Assassin’s Creed Odyssey (Ubisoft), Call of Duty: Black Ops 4 (Activision), Starlink: Battle for Atlas (Ubisoft), Red Dead Redemption II (Rockstar Games), Overkill’s The Walking Dead (Starbreeze), Spyro Reignited Trilogy (Activision), God of War (Sony); The Group delivered approximately 2,600 minutes of animation • for leading animated TV shows and feature films. The Group also created 15,000 CG assets for top selling video games, animated TV series and feature films. Business overview Technicolor is the worldwide leader in replication, packaging and supply chain solutions for packaged media and related products serving global content producers across film, television, games and music. The Group provides turnkey integrated supply-chain solutions including mastering, replication, packaging, direct-to-retail and direct-to-consumer distribution of both new releases and catalog products, returns handling and freight management, as well as procurement and selected other inventory management and related services. DVD Services has established deeply integrated customer relationships and a highly scalable, optimized low cost operational platform. Technicolor runs strategically positioned key manufacturing facilities in Guadalajara (Mexico) and Piaseczno (Poland), while associated supply chain services (e.g. packaging and distribution) in the United States, Europe and Australia are supported by a multi-region/multi-site facility platform. In the U.S., the Group operates primarily from its Memphis (Tennessee) and Huntsville (Alabama) facilities, while continuing to grow its existing packaging and distribution platform in Mexicali (Mexico), located on the U.S. border. All Technicolor facilities and supply chain operations employ rigorous security processes to help ensure against piracy and other data loss of our customer’s valuable Intellectual Property. DVD SERVICES 1.2.1.2 GRI [102-2] [102-6] [103-1 Market presence] [103-2 Market presence] [103-3 Market presence]

Technicolor believes it has the most efficient cost base in the packaged media industry, and the Group continuously seeks to implement further operational and productivity improvements, including the ability to adjust to the heavily seasonal nature of the packaged media industry via the use of temporary labor and other cost variabilization strategies. Technicolor is also actively diversifying its business outside of packaged media, offering supply chain solutions, including transportation management and direct-to-consumer fulfillment services, for clients across a variety of segments, including consumer electronics and peripherals, educational materials, and gift cards. Industry trends and market position While at an industry level, global shipments of packaged media products have declined in recent years and are expected to continue to decline, Technicolor believes it is well positioned to outperform overall market trends, driven by increased penetration of existing customers and the addition of new customers. The package media business remains a large and profitable revenue source for content creators, and Technicolor believes there will be continuing significant consumer demand for physical ownership of content. Given a highly variable cost structure, activity optimization and cost reductions as well as ongoing revenue diversification efforts, Technicolor expects to maintain profitability in this maturing market environment. As a global market leader, Technicolor’s key customers include major Hollywood Studios such as Warner Bros., The Walt Disney Company, Paramount, Universal, Sony, Fox and Lionsgate, independent film studios, software and games publishers, and major music publishers. Most major customers are covered by multi-year contracts (generally, two to four years), which typically contain volume exclusivity and/or time commitments. Major client relationships typically consist of multiple contractual arrangements for specific types of services within specific geographical areas. DVD Services division-wide has launched initiatives to adapt distribution operations and related customer agreements in response to continued volume reduction and increasing order profile complexity. Customer contract renegotiations will occur over the next several years in line with specific renewal dates in order to move to volume-based pricing. In January 2018, Sony DADC announced that it outsourced to Technicolor a substantial majority of its CD, DVD and Blu-ray TM manufacturing, packaging and distribution requirements in both the North American and Australian markets. Sony DADC continues to maintain direct relationships with distributors and also continues to directly support its PlayStation customers. This outsourcing initiative started in the second quarter of 2018 with manufacturing services and will expand into distribution services in early 2019. Technicolor’s key competitors in the DVD market include Sony and Arvato, both of which now have the majority of their activity concentrated in the European market.

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TECHNICOLOR REGISTRATION DOCUMENT 2018