technicolor - 2018 Registration document

1 PRESENTATION OF THE GROUP ORGANIZATION AND BUSINESS OVERVIEW

REVENUES BY REGION

REVENUES BY PRODUCT

Latin America Europe, Middle-East & Africa 21 % (vs. 18% in 2017) 15 % (vs. 14% in 2017) 18 % (vs. 12% in 2017)

Video 49 % (vs. 65% in 2017) 51 % (vs. 35% in 2017)

Asia-Pacific

Broadband

North America 46 % (vs. 56% in 2017)

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, 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.

By Geography •

Europe, Middle-East & Africa

North America €1,033 million €1,364 million

Latin America €327 million €324 million

Asia-Pacific €398 million €297 million

Revenues

2018 2017

€460 million €434 million

Volumes (in million units)

Video

4.425 7.153 11.578

3.165 4.465 7.630

6.036 3.559 9.596

8.088

Broadband

2.161

Total

10.249

solid growth in South Korea and Japan, where Technicolor has decided to grow its position, following acquisitions of LG and Pioneer activities in the NSP market. Transformation Plan • During 2018, Connected Home decided to launch a three-year transformation program to adapt itself to 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 c.€50 million still to be spent, with an average pay-back of less than 15 months. It should enable Connected Home to improve overall profitability and be more competitive to increase its market share.

Connected Home recorded strong commercial activity in 2018 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 AndroidTV 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. In 2018, Connected Home recorded

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TECHNICOLOR REGISTRATION DOCUMENT 2018