technicolor - 2018 Registration document

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

LIQUIDITY AND CAPITAL RESOURCES

December 31, 2017 Published

December 31, 2017 Re-presented*

December 31, 2018

(in million euros)

Adjusted EBITDA from continuing operations Changes in working capital and other assets and liabilities

291

341

266

72

71

2

Pension cash usage of the period

(27) (40) (46)

(27) (40) (46) (13) (33) 255 (51) 2

(26) (43) (42)

Restructuring provisions – cash usage of the period

Interest paid

Interest received Income tax paid

2

3

2

(9)

(14) (28)

Other items

(34)

Net operating cash generated from continuing activities Purchases of property, plant and equipment (PPE) Proceeds from sale of PPE and intangible assets Purchases of intangible assets including capitalization of development costs Net operating cash used in discontinued activities

209 (52)

118

(68)

1

1

-

(95)

(95)

(94)

(39)

(85)

(4)

Free Cash Flow

24

24

(48)

2017 amounts are re-presented to reflect the impact of Discontinued Operations (*)

LIQUIDITY AND CAPITAL RESOURCES 2.3 GRI [103-2 Economic performance] [201-1]

KEY LIQUIDITY RESOURCES 2.3.1.2 To meet its cash requirements, the Group’s main sources of liquidity consist of: cash and cash equivalents: the amount of cash and cash equivalents • was €291 million at December 31, 2018. In addition, €21 million in cash collateral and security deposits was outstanding at December 31, 2018 to secure credit facilities and other Group obligations; cash generated from operating activities: in accordance with the • Group’s debt documentation, the Group is required to use a portion of its excess cash to repay debt. For more information, please refer to note 8.3.3 to the Group’s consolidated financial statements; proceeds from sales of assets: in accordance with the Group’s debt • documentation, the proceeds from the sale of assets must be used in some cases to repay debt; committed credit lines: at December 31, 2018 the Group had two • confirmed credit lines with maturity greater than 1 year for a total amount of €359 million. One of the credit lines for an amount of €109 million is secured by trade receivables and the availability of this line varies depending on the amount of receivables. For more information about the Group’s credit lines please refer to note 8.2.3 to the Group’s consolidated financial statements.

This section should be read in conjunction with Chapter 3: “Risk Factors”, section 3.1.1.: “Market Risk” of this Registration Document and note 8 to the consolidated financial statements. Overview 2.3.1 PRINCIPAL CASH REQUIREMENTS 2.3.1.1 The main cash requirements of the Group arise from the following: working capital requirements from continuing operations: the • working capital requirements of the Group are based in particular on the level of inventories, receivables and payables; losses relating to discontinued operations: the Group must also • fund the losses and cash requirements, if any, of its discontinued operations. For more information on the risks associated with the sale of these activities please refer to Chapter 3: “Risks, litigation and controls” section 3.1: “Risk factors” of this Registration Document; capital expenditures: the Group must regularly invest in capital • equipment to operate its businesses; repayment or refinancing of debt: at each debt maturity date, the • Group must either repay or refinance the maturing amounts; dividends: in 2018 no dividends have been paid, but the Group may • have to fund future dividends.

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TECHNICOLOR REGISTRATION DOCUMENT 2018