GRI [2-6 Activities, value chain and other business relationships] [3-3 Management of material topics: Economic performance]

As worldwide leader in the Media & Entertainment (“M&E”) sector, Technicolor operated through three significant operating businesses until the Spin-off of Technicolor Creative Studios ("TCS") activities that took place on the 27th of September 2022:

• •Connected Home is at the forefront of the design and supply of solutions enabling the delivery of digital video entertainment, data, voice and Smart Home services to Pay-TV operators and Network Services Providers including broadband modems and gateways, digital Set-Top Boxes, and other connected devices (“Connected Home”);
• •Supply Chain Solutions is the worldwide leader in replication, packaging and distribution for video, games and music CD, DVD, Blu-ray™ discs. The division is increasingly focused on diversifying its business outside of packaged media, offering end-to-end supply chain solutions, comprising distribution, fulfillment, freight brokerage, and transportation management services. Furthermore, this unit is accelerating development of new non-disc related manufacturing businesses, including production of polymer-based microfluidic devices for use in medical diagnostics and vinyl record production (“Supply Chain Solutions”);
• •Technicolor Creative Studios (TCS) is a leading provider of services to content creators, including MPC (Film and Episodic Visual Effects), The Mill (Advertising), Mikros Animation, and Technicolor Games (“Technicolor Creative Studios”).

Unallocated Corporate functions and all other unallocated activities, are presented within the division “Corporate & Other”. For more information, please refer to section 1.2: “Organization and Business Overview” of this Chapter.

The Trademark licensing activities were sold in May 2022.

Following the Spin-Off of TCS, Technicolor SA has been renamed Vantiva SA. 

The company now has two main business operating segments, Connected Home and Supply Chain Solutions, but remains the largest TCS shareholder with a 35% stake in the company. 

In the fiscal year 2022, Vantiva generated consolidated revenues from continuing operations of €2,776 million. As of December 31, 2022, the Group had 5,322 employees in 20 countries.

Vantiva is publicly listed on the Euronext Paris Exchange (VANTI) with a market capitalization of €72.8 million as of December 31, 2022, and an ADR traded in the USA on the OTC Pink marketplace (Ticker: TCLRY).

TCS announced a refinancing plan early April 2023, supported by Vantiva. For more details please refer to chapter 2.4 "Post cloture events".

GRI [2-6 Activities, value chain and other business relationships] [3-3 Management of material topics: Market presence]

On February 24 2022, Technicolor announced its intention to list TCS to enable its further growth and development, and to refinance the Group's existing debt. This operation, effective from the 27th of September 2022,  has resulted in the creation of two independent leaders.

TCS and Vantiva have distinct characteristics in terms of growth, margins, capital intensity, and cash flow generation. This transaction allows each entity to pursue its own strategic path independently, consistent with its underlying business dynamics and financial fundamentals. 

TCS is a global leader in VFX in a market experiencing exponential growth driven by burgeoning demand for contents. TCS has a Board of Directors and a management team independent from Vantiva. 

Vantiva, for its part,  will look to strengthen its market leader status in Connected Home and Supply Chain Solutions. The company has a stronger balance sheet following the refinancing, with lower leverage than before, hence de-risking its financial profile. Connected Home and Supply Chain Solutions will therefore be in a better position to reinforce their status as global players.

65% of TCS’ shares were distributed to Technicolor’s shareholders and TCS is now listed on Euronext market as Technicolor Creative Studios (Ticker:TCHCS).

Following this transaction, Technicolor, excluding TCS, has been renamed Vantiva.

Vantiva is now refocused on 2 major operational units: Connected Home (CH) and Supply Chain Solutions (SCS). Both are among the leading players on their respective markets and aim at expanding their business while improving their profitability.   

Vantiva remains the largest TCS shareholers with a 35% stake, but the two companies are independent and Vantiva management have no influence over the strategic or operational decisions of TCS. For the moment, the two companies are still supported by a “shared services centers” and a transitional service agreement. 

The profit warning issued by TCS late November 2022 had no operational impact on Vantiva, but the value of the 35% stake which Vantiva holds in TCS has significantly reduced, and hence Vantiva has not been able to pursue its deleveraging by selling the stake as  originally planned.

TCS announced early April 2023 a refinancing, supported by Vantiva. For more details, please refer to Chapter 2.4 "subsequent events".

GRI [2-6 Activities, value chain and other business relationships] [3-3 Management of material topics: Economic performance]

On February 24 2022, Technicolor announced its intention to list Technicolor Creative Studios to enable its further growth and development, creating two independent market leaders, and to refinance Technicolor’s existing debt.

This operation was approved by the AGM held on September 6, and 65% of TCS shares were distributed toTechnicolor shareholders on the 22nd of September. Technicolor Creative Studios first traded on Euronext on September 27, 2022.

The remaining company was renamed Vantiva and the latter remains TCS’ main shareholders with a 35% stake.

Vantiva’s strategy aims at reinforcing its leadership on its markets by offering its clients high quality products and services while generating enough cash to finance its future. 

In order to achieve this the Group’s main priorities are:

• •delivering state of the art products and services, offering high reliability and quality, for a competitive price;
• •designing innovative, ecofriendly and cost effective products and having them produced at the better costs;
• •developing strong and transparent partnerships with our key customers and suppliers;
• •expanding our addressable markets by adding products and services linked to our core competences and markets;
• •improving the group’s profitability and cash generation through business expansion and rigorous management;
• •Iivesting in promising new opportunities to secure the Group’s future growth.

• •continue to develop its Broadband leadership. The unit is consolidating its market leadership on Cable and xDSL while accelerating on Fiber and Wireless/5G technologies. Connected home is also at the forefront of the new generation of Wifi;
• •exploit the potential  in Android TV by adding features to the set top box like soundbar;
• •focus growth on scale customers using platform model;
• •leverage the Group’s connectivity know how to push into the IOT market for Verticals (enterprises).

• •continue significant business transformation, cost-optimization and automation in this specialist manufacturing, supply chain and fulfillment services division;
• •leverage the expertise, facilities, existing supply chain infrastructure and manufacturing capability and capacity to expand our presence within the four current strategically selected growth-oriented market segments: Microfluidics, Supply Chain Services & Fulfillment, Freight Brokerage, and Vinyl (record) Manufacturing and Distribution Services.

While conducting its daily operations, the Group is constantly reviewing various potential strategic options to further create value to its stakeholders.

GRI [2-6 Activities, value chain and other business relationships] [2-29 Approach to stakeholder engagement] [201-1]

In 2022, prior to the distribution in kind of the Technicolor Creative Studios shares (the “Distribution in Kind”) and the admission to trading on Euronext Paris of the said TCS shares, the Company carried out several transactions that impacted the amount of its share capital, in particular a significant capital increase following the conversion of convertible bonds into shares issued as part of the refinancing transactions.

Delayed delivery of LTIP 2019

On June 14, 2022, the 2019 Long-Term Incentive Plan (LTIP) expired at the end of a three-year vesting period.

In the absence of a sufficient level of equity to be able to deliver the vested shares, the Board of Directors decided to defer this delivery and to authorize the Chief Executive Officer to carry out the delivery, by way of increase in share capital, once the equity position has been restored.

On September 19, 2022, the Chief Executive Officer, acting under the delegation of the Board of Directors and having noted the existence of a sufficient level of equity, decided to issue at par 78,637 new shares, with a par value €0.01 (i.e. a capital increase of €786.37) and to deliver them to the beneficiaries of the LTIP 2019 who have satisfied the condition of uninterrupted presence within the Group for the entire duration of the Plan.

Accelerated delivery of LTIP 2020

As indicated in section 4.2.4.2 of this Universal Registration Document, conditional rights to receive performance shares were granted on December 17, 2020 and March 24, 2021 by the Board of Directors under the LTIP 2020, on the basis for the authorization granted by the General Meeting of June 30, 2020 under the 25th resolution.

In the context of Distribution, to retain the loyalty of the beneficiaries of these plans and align their interests with those of the shareholders, the Board of Directors wished to accelerate the vesting of the shares granted under this Plan by a few months and allow beneficiaries to benefit from the Distribution in Kind and thus receive Technicolor Creative Studios shares at the time of its implementation.

On the proposal of the Board of Directors, the Company’s General Meeting of September 6, 2022, approved the Distribution and, under the terms of the 12th resolution adopted on an extraordinary basis, approved the amendment with retroactive effect of the 25th resolution adopted by the General Meeting of June 30, 2020 and the option to reduce the initial vesting period to a minimum period of sixteen months, thus authorizing the necessary amendments to the regulations of the Plan.

The expiry of the minimum vesting period was thus shortened to August 30, 2022, i.e. seven days before the date of the General Meeting of September 6, 2022.

On September 19, 2022, the Chief Executive Officer, acting under the delegation of the Board of Directors and after the latter had assessed the level of achievement of the performance conditions of the Plan as adjusted(2), decided to issue at par 2,800,276 new shares, with a par value of €0.01 (i.e. a capital increase of €28,002.76), and deliver them to the beneficiaries of the LTIP 2020 having satisfied the condition of uninterrupted presence within the Group during the readjusted term of the Plan.

Accelerated delivery of the ASP 2020 

As indicated in section 4.2.4.2 of this Universal Registration Document, conditional rights to be received, subject to various conditions, additional performance shares were granted on April 15 and 23, 2021.

These rights were granted by the Board of Directors to six members of the Executive Committee of Technicolor SA, including the then Chief Executive Officer Richard Moat, as part of the Additional Shares Plan (ASP) 2020, on the basis of the authorization granted by the General Meeting of June 30, 2020 under the 26th resolution.

In the same way as for the LTIP 2020, the Board of Directors wished, in the context of the Distribution, to accelerate by a few months the vesting of the additional shares granted under this Plan, and thus allow the beneficiaries to participate in the transaction.

On the proposal of the Board of Directors, the Company’s General Meeting of September 6, 2022, approved the Distribution and, under the terms of the 13th resolution adopted on an extraordinary basis, approved the amendment with retroactive effect of the 26th resolution adopted by the General Meeting of June 30, 2020 and the option to reduce the initial vesting period to a minimum period of sixteen months, thus authorizing the necessary amendments to the regulations of the Plan.

The expiry of the minimum vesting period was thus shortened to August 30, 2022, i.e. seven days before the date of the General Meeting of September 6, 2022.

On September 19, 2022, the Chief Executive Officer, acting under the delegation of the Board of Directors and after the latter had assessed the level of achievement of the performance conditions of the Plan as adjusted(3), decided to issue at par 1,215,858 new shares, with a par value of €0.01 (i.e. a capital increase of €12,158.58), and deliver them to the beneficiaries of the ASP 2020 having satisfied the condition of uninterrupted presence within the Group during the readjusted term of the Plan.

On July 20, 2020, the Company’s General Meeting granted the Board of Directors several interdependent delegations of power to implement the transactions in the Company’s share capital intended to enable the restructuring of the debt, in accordance with the draft accelerated financial safeguard plan approved and registered in July 2020.

In accordance with these delegations of power, the Board of Directors was authorized to proceed within six (6) months to the issue and grant up to a maximum of 15,407,114 free warrants (BSA) for the benefit of the Company’s shareholders, exercizable for a period of four (4) years from the settlement-delivery date of the last of the Capital Increases, on the basis of one (1) warrant for one (1) existing share, it being understood that five (5) Shareholders warrants will give the right to subscribe to four (4) new ordinary shares, at a price of €3.58 per new share with a par value of €0.01 associated with an issue premium of €3.57 (the “Shareholders Warrants”).

These Shareholders Warrants were issued on September 22, 2020 and have been exercised since that date.

In the context of the proposed distribution in kind of 65% of the shares of Technicolor Creative Studios (TCS) and the admission to trading on Euronext Paris of the shares of TCS, the Board of Directors which met on July 28, 2022 with a view to preserve the interests of the holders of Company options and warrants, has delegated to the Chief Executive Officer the power to suspend the exercise of the securities giving access to the share capital issued by the Company, including the Shareholders Warrants, for a maximum period of three (3) months.

Using this delegation, the Chief Executive Officer suspended the exercise of the Shareholders Warrants as from September 6, 2022 at 12.01 a.m. Then once the refinancing and distribution transactions were completed, this suspension was lifted on October 6, 2022 at midnight.

The exercise of the warrants thus resumed, on the basis of an adjusted exercise parity, the holders of Shareholders Warrants can now subscribe to 10.489 new shares of the Company by exercising five (5) warrants for an overall unchanged exercise price of €14.32 (i.e. an implied subscription price of approximately €1.365 per new share).

Thus, for the financial year ended December 31, 2021, 74,170 Shareholders Warrants were exercised, resulting in the issuance of 91,739 new shares with a par value of €0.01 and an increase in share capital totalling €212,351.27, including a total issue premium of €211,433.88. This capital increase was recognised in two installments, by decision of the Chief Executive Officer acting on the delegation of the Board of Directors, on September 22, 2022 for the warrants exercised from January 1, 2022 until September 5, 2022, and on January 10, 2023 for warrants exercised between October 6, 2022 and December 31, 2022. The Company’s bylaws have been amended accordingly.

The Company’s General Shareholders' Meeting of May 6, 2022 decided:

• to issue with cancellation of preferential subscription rights 115,384,615 bonds convertible into ordinary shares of the Company for the benefit of named beneficiaries for a nominal amount of €2.60, i.e. a total nominal amount of €299,999,999, and net unit subscription price of €2.535 (“OCA”);
• that the OCAs issued pursuant to the aforementioned resolutions will give entitlement, in the event of conversion into shares, to a maximum of 115,384,615 new shares of the Company with a par value of €0.01 per share, i.e. a capital increase of €1,153,846.15.

The beneficiaries of these OCAs, in favour of which the preferential subscription right has been waived, are the following persons (hereinafter “the Beneficiaries”):

• •persons affiliated with Angelo, Gordon & Co., L.P. : 49,859,532 OCA;
• •Bpifrance Participations SA: 17,307,692 OCA;
• •persons affiliated with Barings Asset Management Limited: 10,384,615 OCA;
• •persons affiliated to affiliates of Credit Suisse Asset Management Limited and Credit Suisse Asset Management: 4,807,692 OCAs;
• •Briarwood Capital Partners LP : 10,679,885 OCA;
• •person affiliated with Farallon Capital Management (Glasswort Holdings LLC): 9,230,769 OCA;
• •persons affiliated with Goldman Sachs Asset Management (ELQ Lux Holding S.à.r.l., Special Situations 2021, LP and Special Situations 2021 Offshore Holdings II, LP) : 5,083,789 OCA; and
• •persons affiliated with Bain Capital High Income Partnership, LP (John Hancock Funds II Floating Rate Income Fund and Aare Issuer Designated Activity Company): 8,030,641 OCA.

The Board of Directors, at its meeting on September 6, 2022 and making use of the delegations of powers granted to it by the General Meeting of May 6, 2022, authorized the issuance of OCAs by the Company and decided that the OCAs would be issued on September 15, 2022, in accordance with the OCA subscription agreement.

At another meeting on September 22, 2022 and making use of the same delegations granted by the General Meeting, the Board of Directors noted that all the conditions precedent for the automatic conversion of the OCAs had been met and that this conversion, intended to result in the issuance of 115,384,615 new shares of the Company (the “New TSA Shares”), could thus be implemented ahead of the Distribution in Kind.

The Board has also sub-delegated to the Chief Executive Officer all powers to implement these decisions and, in particular, to record the completion of each of the capital increases that may result from the issue of the new TSA shares.

Using the aforementioned powers and pursuant to decisions taken on September 26, 2022, i.e. the day preceding the Distribution in Kind, the Chief Executive Officer:

• noted that all OCAs were subscribed by the Beneficiaries;
• noted that the OCA subscription was fully paid up in cash;
• noted that the 115,384,615 new TSA shares were fully paid up by offsetting the receivable represented by the 115,384,615 OCA held by the Beneficiaries;
• as a result, the Company recorded a capital increase for a total nominal amount of €1,153,846.15, increasing the amount of the Company’s share capital from €2,399,586.30 to €3,553,432.45, and the number of shares comprising the Company’s share capital being increased from 239,958,630 shares to 355,343,245 shares with a par value of €0.01 each; and
• decided to allocate the issue premium, in the amount of €291,346,152.88, to the “issue premium” account and to deduct the sums necessary to fund the legal reserve, the new TSA shares carry immediate dividend rights and being, from their creation, fully fungible with the Company’s existing ordinary shares.

At December 31, 2022, the Company’s share capital consisted of 355,395,680 shares with a par value of €0.01, fully paid-up (ISIN code FR0013505062) and all of the same class (see paragraph “Changes to the share capital”) of this chapter).

The table below shows the Company’s shareholding structure over the last three years:

No entity controls the Company and, to the Company’s knowledge, there are no shareholders’ agreements relating to the Company.

In accordance with Article L. 233-13 of the French Commercial Code, and to the Company’s knowledge, the following legal share ownership thresholds’ crossings were notified to the Company and to the Autorité des Marchés Financiers (AMF) during 2022 and until the publication of this Universal Registration Document.

To the Company’s knowledge, other than those mentioned above, no other shareholder held more than 5% of its share capital or voting rights as of December 31, 2022.

In addition, to the Company’s knowledge, no Corporate Officer (mandataire social) or Executive Committee member currently holds more than 1% of the Company’s share capital or voting rights, except for Bpifrance Participations (for further information on Board Members’ holdings see section 4.1.1.5: “Corporate Officers’ holdings in the Company’s share capital” under Chapter 4: “Corporate governance and compensation” of this Universal Registration Document).

In 2022, the main shareholding highlights are the strong increase in the shareholding of Angelo Gordon (26.9% of the capital), Bpifrance, which becomes the second largest shareholder of the company with 13% of the capital, and Briarwood Chase (10.4% of the capital), third largest shareholder. We also note the entry of Barings Asset Management (8.2% of the capital) and Farallon Capital Management (5.5%) in the top 5 shareholders.

Among the main sellers, we have Credit Suisse, which still held 6.3% of the capital, Davidson Kempner, Bardin Hill. Came Global Fund has exited the capital. Bain Capital, although having reduced its stake, still held 4.3% of the company as of November 30, 2022.

In 2021 and as main highlight of the shareholder base, Angelo, Gordon & Co., L.P., Bain Capital Credit, LP, Barings Asset Management Ltd. and, Credit Suisse Asset Management remained as principal shareholders of the Group.

2021 was also marked by the following changes in share capital and voting rights:

• •downwards since December 31, 2020:
  • •BNY Alcentra Group Holdings, Inc. decreases from 6.59% in 2020 to 0.35% in 2021,
  • •Barings Asset Management Ltd. decreases from 10.35% in 2020 to 7.90% in 2021,
  • •Credit Suisse Asset Management decreases from 12.08% in 2020 to 10.81% in 2021.
• •upwards since December 31, 2020:
  • •Angelo, Gordon & Co., LP increases from 5.15% in 2020 to 12.64% in 2021,
  • •Briarwood Chase Management LLC acquired 9.26% of the share capital and voting rights in 2021.

In 2020, share capital transactions led to numerous changes in Technicolor’s shareholder base.

During the financial year, new shareholders acquired the share capital:

• •Barings Asset Management Ltd. acquired 10.35% of the share capital and voting rights;
• •BNY Alcentra Group Holdings, Inc. acquired 6.60% of the share capital and voting rights;
• •Farallon Capital Management, L.L.C. acquired 6.18% of the share capital and voting rights;
• •Angelo, Gordon & Co., LP acquired 5.01% of the share capital and voting rights.

Some shareholders have considerably modified their holdings in the share capital and voting rights in 2020:

• •downwards since December 31, 2019:
  • •RWC Asset Management LLP decreased from 10.13% to 0.08%,
  • •JO Hambro Capital Management Limited decreased from an 8.48% stake to 0%,
  • •Kinney Asset Management, LLC decreased from 5.53% to 0%,
  • •Fidelity International decreased from 5.50% to 0.10%.
• •upwards since December 31, 2019:
  • •Credit Suisse Group AG increased from 1.46% to 12.08%,
  • •Bain Capital Credit increased from a 7.01% stake to 7.04%.

As of December 31, 2022, a total of 31,363 stock options are outstanding in the framework of Stock Options Plans, (for details of these plans, see Chapter 4: “Corporate governance and compensation”, section 4.2.4: “Stock Option Plans and Performance or Free Share Plans” of this Universal Registration Document). If all existing stock options were exercised, 31,363 shares would be issued, representing a 0.01% increase in the number of shares at December 31, 2022. Such an impact on share capital is, however, purely hypothetical. The two stock option plans still outstanding are largely out of the money and will expire in June and October 2023 respectively, the date on which the balance of the options still outstanding will be fully written off.

As of December 31, 2022, 2,665,074 free performance shares granted to the Chief Executive Officer of the Company under the 2022 Long-Term Incentive Plan (LTIP) were outstanding, which may be vested in whole or in part by their beneficiary depending on the performance conditions defined by said Plan as described in detail in Chapter 4: “Corporate Governance and Compensation”, section 4.2.4 “Stock Option Plans and Performance or Free Share Plans” of this Universal Registration Document). If all the shares granted under this Plan were issued, 2,665,074 shares would be issued. Vantiva’s share capital would then be composed of 358,060,754 ordinary shares, which would represent a 0.75% increase in the number of shares at December 31, 2022.

As of December 31, 2022, a total of 15,288,534 Shareholders Warrants (for more details on these Shareholders Warrants, see section 1.4.1.2 above in this chapter) could still be exercized. If all these Shareholders Warrants were exercized, 32,072,286 shares would be issued. Vantiva’s share capital would consist of 387,467,966 ordinary shares, which would represent a 9% increase in the number of shares at December 31, 2022.

The cumulative exercize of all the aforementioned stock options, the vesting of all the aforementioned shares and the exercize of all the aforementioned Shareholders Warrants would result in the issue of 34,768,723 shares. Vantiva’s share capital would then be composed of 390,164,103 ordinary shares, which would represent a 9.78% increase in the number of shares at December 31, 2022.

In addition, it should be noted that between December 31, 2022 and the date of publication of this Universal Registration Document, 7,995,223 free performance shares were granted and distributed among the members of the Vantiva Executive Committee under the 2022 Long-term Incentive Plan (LTIP) and are outstanding. These shares may be vested in whole or in part at the expiry of the Plan according to the performance conditions defined by said Plan as described in detail in Chapter 4: “Corporate Governance and Compensation”, section 4.2.4 “ Stock Option Plans and Performance or Free Share Plans” of this Universal Registration Document). If all the shares granted under this Plan were issued, this would result in an issue of 7,995,223 shares, representing an increase of 2.25% in the number of shares at December 31, 2022.

To Technicolor’s knowledge, no Company shares are pledged as of the date of publication of the Universal Registration Document.

Pursuant to Article L. 225-100-3 of the French Commercial Code, the agreements governing the New Money debt, and the Reinstated Term Loans to which Group companies are parties contain change of control clauses. For more information on these agreements, please refer to Chapter 2: “Operating and financial review and prospects”, section 2.3.3: “Financial resources” of this Universal Registration Document.

For 2021, financial figures in this Chapter have been restated to present Trademark Licensing and Technicolor Creative Studios as discontinued operations

GRI   [3-3 Management of material topics: Economic performance] [201-1]

Revenues from continuing operations totaled €2,776 million in 2022, up 23.4% at current currency and up 11.4% at constant currency compared to 2021. For more information, please refer to section 2.2.1: “Analysis of revenues from continuing operations” of this Chapter.

Adjusted EBITDA from continuing operations reached €161 million in 2022, up 14.3% at current currency and up 3.7% at constant currency compared to 2021. The Adjusted EBITDA margin amounted to 5.8%, down by 46 basis points (bps) year-on-year at current currency. This decline reflects a slightly lower margin for both divisions and the higher weight of Connected Home division in the group’s total as this division generates a lower margin than SCS in percentage terms. For more information, please refer to sections 2.2.2: “Analysis of Adjusted EBITDA and adjusted EBITA” and 2.2.10: “Adjusted indicators” of this Chapter.

Profit from continuing operations before tax and net finance costs was a loss of €11 million in 2022 compared to a loss of €13 million in 2021. For more information, please refer to section 2.2.3: “Analysis of operating expenses and profit (loss) from continuing operations before tax and net financial expense” of this Chapter.

The Group’s net financial result was an expense of €177 million in 2022 compared to an expense of €117 million in 2021. For more information, please refer to section 2.2.4: “Net financial expense” of this Chapter.

The Group’s total charge tax was €30 million in 2022 compared to a charge of €14 million in 2021. For more information, please refer to section 2.2.6: “Income tax” of this Chapter.

The Group Loss from associates was a loss of €311 million resulting from the write-down of TCS shares to market  value. For more information, please refer to section 2.2.5 ”Loss from associates” of this Chapter.

Loss from continuing operations was €529 million in 2022 compared to a loss of €143 million in 2021. For more information, please refer to section 2.2.7: “Profit (loss) from continuing operations” of this Chapter.

The result from discontinued operations was a profit of €680 million in 2022 compared to a profit of €4 million in 2021. For more information, please refer to section 2.2.8: “Profit (loss) from discontinued operations” of this Chapter.

The Group’s consolidated net income was a profit of €151 million in 2022 compared to a loss of €140 million in 2021. For more information, please refer to section 2.2.9: “Net income (loss) of the Group” of this Chapter.

GRI   [3-3 Management of material topics: Economic performance] [201-1]

For the full year 2022, Vantiva met its 2022 guidance, with adjusted EBITDA reaching €161 million, adjusted EBITA €55 million, and Free Cash Flow before Tax and Financial €88 million. The group’s growth has been fueled by higher broadband volumes thanks to the success of our Fiber and Wi-Fi 6 offerings, price increases to partially recover cost inflation, and improved product mix at the Connected Home division. Supply Chain Solutions’ performance has been negatively impacted by lower demand for optical discs against a strong base of comparison. 

Vantiva revenues totaled €2,776 million, up 23.4% (+11.4% at constant exchange rate). Connected Home revenues amounted to €2,120 million for the fiscal year, an increase of 37.3% (+23.3% at constant exchange rate). Supply Chain Solutions revenues were €655 million, down 6.6% (-14.3% at constant exchange rate).

Adjusted EBITDA improvement stems from the product mix-effect for Connected Home, better pass-through of additional costs versus last year, and strict cost control in both divisions.

The group’s adjusted EBITDA reached €161 million in the year, a €20 million improvement over last year. The margin dilution, from 6.3% to 5.8%, resulted from the higher contribution of the Connected Home division to the group’s adjusted EBITDA (+10pts) and a lower gross margin in percentage terms.

Connected Home contributed €135 million (versus €103 million last year) to adjusted EBITDA while Supply Chain Solutions contributed €56 million (versus €67 million last year).

FCF, before financial and tax, in the year was positive at €88 million, showing a €200 million improvement over last year, largely explained by the change in working capital. IFRS net debt amounted to €263 million as of December 31, 2022.

The Group’s results are presented in accordance with IFRS5. Consequently, the contributions of discontinued operations are disclosed on one line in the consolidated statements of operations, named “Net profit (loss) from discontinued operations” and are presented separately under section 2.2.7: “Profit (Loss) from Discontinued Operations” of this Chapter.

2022 Revenues stood at €2,776 million, representing a 23.4% increase (+11.4% at constant exchange rate). The United States remained the first market of the group with 58% of revenues compared to 52% the previous year. The strong improvement of Connected Home (+23.3%) at constant rate was driven by North America, broadband products, and forex, more than offsetting the decline of Supply Chain Solutions (-14.3%) at constant rate, which was hit by lower optical disc demand. 

Connected Home revenues contributed 76% of group revenues (69% in 2021) and totaled €2,120 million in 2022, up 37.3%. At constant exchange rate, the growth would have been +23.3% compared with 2021. This revenue development has been driven by the combined positive effect of pricing and product mix outweighing the volume decrease. Broadband business has been the main growth driver in the year representing 75% of revenues versus 64% the prior year, while demand for video devices suffered in some geographies, especially in India.

Globally, delivered units were down 4.4%, mostly due to a drop in demand in Asia Pacific, notably in India and for entry-level video products.

Supply Chain Solutions revenues totaled €655 million in 2022, down 6.6% from 2021. At constant exchange rate, the decline would have been 14.3%. Beyond the structural decline of the optical disc activity, the performance of the year has been severely impacted by the decline in demand from one major customer and a high base of comparison. Distribution and freight businesses were also down in the year. While growing, the other activities, have not been able to offset entirely this decline. The group has successfully launched vinyl production delivering its first 2 million albums in the year. Performance was however penalized by a slower intake of new vinyl presses than planned due to delivery delays, which prevented us from meeting the strong demand.

Supply Chain Solutions volumes were down 37.3% year-on-year compared to the previous year's annual decline of 2.7%.

Corporate & Other recorded revenues of €1 million versus €5 million last year as the group disposed of its licensing activities in May 2022.  

GRI   [3-3 Management of material topics: Economic performance] [201-1]

This section should be read in conjunction with Chapter 3: “Risks, Litigation, and Controls”, section 3.1.1: “Global market and industry risks” of this Universal Registration Document, and note 8 to the consolidated financial statements.

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 Universal 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 2022 no dividend was paid, but the Group may have to fund future dividends.

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 €167 million on December 31, 2022. In addition, €40 million in cash collateral and security deposits was outstanding on December 31, 2022, to secure credit facilities and other Group obligations;
• •Cash generated from operating activities;
• •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  the debt;
• •Committed credit lines: on December 31, 2022, the Group had one credit line for an amount of €117 million secured by trade receivables the availability of which varies depending on the amount of receivables. For more information about the Group’s credit lines please refer to note 8.5.5 to the Group’s consolidated financial statements.

GRI   [2-6 Activities, value chain and other business relationships] 

Technicolor Creative Studios Refinancing

Technicolor Creative Studios announced on March 8th 2023, before market opening, that it had reached with its main shareholders and lenders an agreement of principle for its refinancing. Vantiva is supporting this agreement. 

On April 3, 2023, following TCS's refinancing details announcement, Vantiva confirmed its participation in this plan for €10 million through a convertible bond issue, with an option for an additional €10 million. This operation has no impact on the company’s guidance. 

For more details on this refinancing plan, please refer to the TCS press release, available on its website.

GRI [2-4 Restatements of information] 

The pro forma consolidated financial information, which includes pro forma selected items of the consolidated statement of operations for the year ended December 31, 2022 reflects the impacts of the distribution of a 65% stake in Technicolor Creative Studios (TCS) to Technicolor shareholders (the “Distribution”) that occurred on September 27, 2022 and the refinancing of the Vantiva group closely linked to this Distribution (the “Refinancing”), considering the assumption that the Distribution and the Refinancing had taken place on January 1, 2022.

This pro forma consolidated financial is prepared in accordance with Appendix 20, “Pro forma information” of the Commission Delegated Regulation (EU) no. 2019/980 supplementing European Regulation no. 2017/1129, the recommendations issued by ESMA (ESMA 32-382-1138) and in accordance with Guideline no. 2021-02 of the French Financial Markets Authority (”Autorité des Marchés Financiers” or “AMF”).

The pro forma consolidated financial information, prepared for illustrative purposes only, presents a hypothetical situation, and therefore is not representative of the results of operations of the Vantiva group that would have been achieved if the Distribution had been finalized on January 1, 2022, or the future results of the Group.

GRI [2-5 External assurance]

To the General director,

In our capacity as statutory auditors of your company and in accordance with Regulation (EU) n°2017/1129 supplemented by the Commission Delegated Regulation (EU) n°2019/980, we hereby report to you on the pro forma financial information of Vantiva (the “Company”) for the year ended 31 December 2022 set out in section 2.6 of the universal registration document (document d’enregistrement universel) (the “Pro Forma Financial Information”).

The Pro Forma Financial Information has been prepared for the sole purpose of illustrating the impact of the distribution of a 65% stake in Technicolor Creative Studios (TCS) to Technicolor shareholders (the “Distribution”) that occurred on September 27, 2022 and the refinancing of the Vantiva group closely linked to this Distribution (the “Refinancing”) might have had on the consolidated income statement of the Company for the year ended 31 December 2022 had it taken place with effect from 1 January 2022. By its very nature, this information is based on a hypothetical situation and does not represent the financial position or performance that would have been reported, had the operation or event taken place at an earlier date than the actual or contemplated date.

It is your responsibility to prepare the Pro Forma Financial Information in accordance with the provisions of Regulation (EU) n°2017/1129 and ESMA’s recommendations on Pro Forma Financial Information.

It is our responsibility to express a conclusion, based on our work, in accordance with Annex 20, section 3 of Commission Delegated Regulation (EU) n°2019/980, as to the proper compilation of the Pro Forma Financial Information on the basis stated.

We performed those procedures that we deemed necessary according to the professional guidance of the French Institute of Statutory Auditors (“CNCC”) applicable to such engagement. These procedures, which did not include an audit or a review of the financial information used as a basis to prepare the Pro Forma Financial Information, mainly consisted in ensuring that the information used to prepare the Pro Forma Financial Information was consistent with the underlying financial information, as described in the notes to the Pro Forma Financial Information, reviewing the evidence supporting the pro forma adjustments and conducting interviews with the management of the Company to obtain the information and explanations that we deemed necessary.

In our opinion:

• •the Pro Forma Financial Information has been properly compiled on the basis stated;
• •that basis is consistent with the accounting policies of the issuer.

This report has been issued solely for the purposes of:

• •the approval of the universal registration document by the AMF
• •and, if applicable, the admission to trading on a regulated market, and/or a public offer, of securities of the Company in France and in other EU member states in which the prospectus approved by the AMF is notified;

and cannot be used for any other purpose.

The statutory auditors

Paris-La Défense and Courbevoie, April 13, 2023

Deloitte & Associés

Nadège Pineau
Partner

Mazars

Daniel Escudeiro
Partner

The first section of this Chapter describes the main risks identified by the Group that could affect its businesses, financial situation or sustainability. Additional risks which are either not identified, or which are considered today as minor, may also have a significant impact on the Group’s performance.

The next sections describe respectively litigations, internal controls, and insurance.

GRI [3-3 Management of material topics] 

The following risk factors are limited to risks which are specific to the Issuer and which are material for taking an informed investment decision, as corroborated by the content of the Issuer’s Universal Registration Document. In each category below, the Issuer, in its assessment, is taking into account the expected magnitude of the negative impact of such risks and the probability of their occurrence.

This description, made of explanations of each individual risk, managing and monitoring actions and completed with an indication of the risk trend, increasing , stable  and decreasing , is not intended to be exhaustive and potential investors should make their own independent evaluations of all risk factors and should also review the detailed information set out elsewhere in this Universal Registration Document (Document d’enregistrement universel).

The classification of the risks relating to business, financial, and market risks below are the result of a regular analysis as part of the Issuer’s internal risk management process which appears in part "Risk Management" of section 3.2.2 of this Universal Registration Document, after taking into account any mitigation measures resulting from such internal risk management process.

The risks that Vantiva considers to be the most significant are pointed out by one  on account of their occurrence probability and/or the seriousness of their prejudicial characteristics.

Top three risks faced by the Group:

• •Liquidity,
• •Indebtedness,
• •Supplier Dependency.

GRI [2-12 Role of the highest governance body in overseeing the management of impacts] [2-13 Delegation of responsibility for managing impacts] [2-16 Communication of critical concerns] [2-23 Policy commitments] [2-24 Embedding policy commitments] [205-1]

The internal control procedures mentioned in the present Chapter apply to the Company and to all its subsidiaries and are under the responsibility of each Vantiva employee.

The major components underlying the preparation of this report are:

• the French Loi de sécurité financière (Law regarding Financial Security);
• the Ordinance No. 2008-1278 of December 8, 2008;
• the AMF guidelines on risk management and internal control; and
• Article R. 225-105-1 of the French Commercial Code about disclosure of non-financial information related to Corporate Social Responsibility.

In March 2011, the Company voluntarily delisted from the New York Stock Exchange (NYSE). As a consequence, it is no longer subject to the Sarbanes Oxley Act obligations (SOX).

Following the delisting, the Group decided to maintain high standards of financial reporting discipline, capitalizing on the work undertaken previously. The internal control program was launched at the beginning of 2011 with the objective to maintain and expand the internal control scope beyond financial reporting through a risk-based approach. The 2022 annual campaign has been successfully performed and completed, and a new campaign has commenced in January 2023.

The Group’s internal control framework is designed to achieve the following main objectives:

• •application of the instructions and directional guidelines fixed by the Group’s management bodies in line with the Group’s overall objectives and the inherent risks;
• •correct functioning of internal control procedures, such as the ones pertaining to the security of its assets, as well as the operational, industrial, commercial and financial processes;
• •compliance with applicable laws and regulations;
• •reliability of financial and non-financial information obtained through the implementation of internal control procedures.

The internal control framework aims at preventing and mitigating risks arising from the Group’s management of business along with the risks of error or fraud, in particular, in areas of accounting, finance and social responsibility. As for every control system, it cannot provide an absolute guarantee that these risks are completely eliminated.

The internal control methodology is based on three pillars:

• •a risk-based approach which starts from the Group Risk Management program (see paragraph below “Risk Management”) and allows internal control to deploy its methodology on the main Group risks. In 2022, the risk and control referential was revisited and updated together with the evolution of risks; along with a clear classification distinction on Tier 1 and Tier 2 risks;
• •a self-assessment of controls implemented for the most significant entities, totaling the vast majority of the Group scope according to the relevant indicators (Revenue, contribution to EBITDA and other financial and non-financial indicators function of each nature of risk). In 2022, about 127 control owners were designated to perform a self-assessment of 1,289 controls over 49 financial and non-financial processes;
• •an independent testing managed by Internal Audit covering close to 20% of the self-assessed controls. This testing aims at providing assurance that the internal control framework is effective. Independent testers are composed of Internal Auditors, outsourced auditors and internally trained guest testers.

The internal control team ensures a continuous monitoring of the internal control campaign, through key performance indicators such as self-assessment and independent testing completion rates, deficiency rates (i.e., by division and by process), and risk severity classification of reported deficiencies. The internal control team communicates frequently with the internal control communities, ensuring training on the approach and the tools to be used. Regular updates on the program are made to the Audit Committee.

The management community is involved in the deficiency remediation and takes an active role in the implementation of corrective actions raised during the internal control campaign. Deficiencies with high, medium, and low severity are monitored and followed-up by Internal Auditors until remediation.

The “Corporate Insurance” Department arranges global insurance programs covering the major risks related to the Group's activities that are underwritten with well-known insurers via global brokers.

These programs, established at Group level, are implemented through a “Master” insurance policy that strengthens the coverage offered by local policies and provides “difference in conditions” and “difference in limits” over these policies.

The total amount of premiums represents less than 0.5% of the Group’s total sales by the end of 2022.

In addition, in partnership with its insurers, the Group has developed and maintained a loss prevention program to reduce its exposure to its assets and operating losses that may occur in case such risks should materialize. Thanks to this program, several key sites have obtained the “Highly Protected Risk” status (which is the best grade in the assessment implemented by the Group’s insurer) and the Group’s loss prevention level has globally improved.

The Group has established internal procedures and rules to manage contractual risk. It ensures, in conjunction with the Corporate Insurance team, that these rules are applied throughout the world.

The Group intends to continue its policy of comprehensive coverage for all its exposure to major risks, expand its coverage when necessary, and reduce costs through self-insurance when it is deemed appropriate.

To date, the Group does not have an insurance captive or reinsurance company.

GRI [2-9 Governance structure and composition]

The spin-off of Technicolor Group through the distribution of 65% of Technicolor Creative Studios (the "Distribution") was a major governance event for the remaining company in the split, which became Vantiva.

The governance of the Company has been profoundly redesigned for Distribution. The Board of Directors, on the recommendation of the Governance and Social Responsibility Committee, considered that the transformation of the Group had reached a decisive stage in the context of Distribution. Therefore, in order to ensure stability, the directors expressed their [unanimous] wish that Mr. Richard Moat take over the chairmanship of the Board of Directors in order to be able to continue to benefit from his successful experience at the head of the Group and to pursue the transformation process of the Company. In parallel, and in order to succeed Mr. Richard Moat, the Board of Directors, upon proposal of the Governance and Corporate Social Responsibility Committee, also decided that Mr. Luis Martinez-Amago, President of Technicolor's Connected Home division, would succeed Mr. Richard Moat as Chief Executive Officer of Vantiva as of the Distribution. This choice fully meets the need for continuity of the Group's key customers and suppliers in a context of major transformation.

As recommended by the Remuneration Committee and further approved by the Board of Directors, three members of previous Technicolor’s Board of Directors, Ms. Christine Laurens, Ms. Katherine Hays and Mr. Xavier Cauchois resigned to join the Board of Directors of the new listed company Technicolor Creative Studios.

Following a recruitment process and on the recommendation of the Governance and CSR Committee, the Board decided to appoint Ms. Laurence Lafont as a new Independent Director of Vantiva.

Taking into consideration the non-independence of Mr. Richard Moat as new Chairman, the Board of Directors revised its Internal Board Regulations and decided to appoint a Lead Independent Director in the person of Mr. Dominique d'Hinnin, entrusting him with specific missions in this new role.

Additional changes should be effective in the very near future with the finalization of the recruitment process lead by the Governance and CSR Committee, or at least two new Independent Directors.

On December 31, 2022, the Board of Directors was composed of 8 Directors including 2 Directors representing employees and 2 Observers.

GRI [2-19 Remuneration policies] [2-20 Process to determine remuneration] [201-3]

This report on the compensation policy for Corporate Officers (mandataires sociaux) was adopted on February 24, 2022, by the Board of Directors upon recommendation of the Remuneration & Talent Committee. It describes, in accordance with Article L. 22-10-8 of the French Commercial Code, the principles and criteria for the determination, allocation and distribution of the fixed, variable and exceptional items of the total remuneration and the benefits of all kinds that may be granted to Corporate Officers.

The Corporate Officers to whom this compensation policy is applicable are the Directors, the Chairperson of the Board of Directors and the Chief Executive Officer.

The compensation policy will apply from January 1, 2023, to all persons who hold a Corporate Officer position within the Company.

However, in exceptional circumstances and in accordance with Article L. 22-10-8 III Paragraph 2 of the French Commercial Code, the Board of Directors, upon recommendation of the Remuneration & Talent Committee, may deviate from the application of this compensation policy provided that such deviation is temporary, aligned with the Company’s interest, and necessary to ensure the Company’s future and sustainability. Exceptional circumstances may include an unforeseen change or event impacting the Group’s markets and/or competitive environment (market downturn, pandemic, etc.), a major change in the Group’s scope of consolidation following a merger, an acquisition, a Spin-Off or a disposal, the creation or termination of a significant business activity or a change in accounting principles, this list being non exhaustive. 

This report will be submitted to shareholders’ approval at the Annual General Meeting to be held to approve the financial statements for the fiscal year ended December 31, 2022.

The compensation policy applicable to Corporate Officers is determined by the Board of Directors on the basis of recommendations made by the Remuneration & Talent Committee and is reviewed annually. The Remuneration & Talent Committee is entirely comprised of Independent Directors, except for the Director representing employees in accordance with the AFEP-MEDEF recommendations. The Remuneration & Talent Committee may use the services of external advisors specialized in Corporate Officers’ compensation.

It also takes into account feedback from shareholders as mentioned below.

The compensation policy is determined in accordance with the recommendations of the AFEP-MEDEF Corporate Governance Code.

The Board of Directors ensures that the compensation policy is adapted to the Company’s strategy and context and that its purpose is to enhance Vantiva's medium and long-term performance and competitiveness. This policy respects Vantiva’s Corporate Interest (intérêt social) by aligning the Corporate Officers’ interests with those of its shareholders and makes sure that the compensation plan rewards Executive Management for good financial performance. When setting this policy, the Board of Directors bases its decisions on the following principles:

• •Consistency: the policy applicable to the compensation of the Chief Executive Officer is consistent with the General compensation policy that applies to the Group senior executives:
  • •the components of the compensation package are the same as those provided to Senior Executives (fixed compensation, variable compensation and Long-Term Plans),
  • •the financial performance criteria applicable to the Chief Executive Officer’s variable and long-term compensation are the same for the Chief Executive Officer and for other Executives.
• •Comparability: the General policy for the compensation of the Corporate Officers has been developed in light of market practices. To that effect, the Remuneration & Talent Committee established with the assistance of outside advisors a peer Group of listed companies which are comparable to Vantiva by size, industry and geographical presence. The peer Group’s composition is reviewed every year by the Remuneration & Talent Committee. The compensation levels of the executive director are regularly reviewed and compared with the median of this peer group to ensure that they remain both reasonable and sufficiently competitive. It reflects in particular:
  • •the Group’s strong presence in the US: the Group generates more than half of its revenues in the US, 4 members of the Executive Committee and the Group’s main competitors are US based,
  • •the business diversity of the Group: Vantiva being a worldwide leader operating in the Technology, Telecoms & Media industry, the peer group is made up of direct competitors, clients or adjacent markets in its key operating segments and considering comparable metrics, such as revenues and headcount.

• •Competitiveness: competitiveness of the compensation attributed to Corporate Officers is key in attracting, retaining and motivating the talents necessary to the Group’s success and the protection of shareholders’ interest. As such, it is considered by the Board of Directors when setting the compensation.
• •Balance: the Board of Directors and the Remuneration & Talent Committee ensure that there is a proper balance between (i) fixed and variable components of the compensation, (ii) short and long-term components and (iii) cash and equity-based components. The Chief Executive Officer’s compensation is made up of 3 main components: fixed, short-term variable and long-term variable compensation. These components aim to remunerate the work done by the Chief Executive Officer, tie compensation to the results achieved, and partly align the Chief Executive Officer’s interest with that of shareholders’.
• •Ambition: the purpose of the annual variable compensation is to incentivize Corporate Officers to achieve the annual performance objectives set for them by the Board of Directors, consistent with the Company’s strategy. All variable compensation plans are thus subject to challenging performance objectives for all beneficiaries who are around 1,500 worldwide. The financial objectives used are performance indicators set out by the Group in its financial communication. These quantifiable objectives are also the objectives used for determining the variable compensation of all Group employees who receive such variable compensation.
• Moreover, the Performance Shares awarded to the Management are subject to a continued presence condition in the Group and, as laid down in the Corporate Policy on the Purchase and Sale of Company Shares, Insider Trading and Protection of Inside Information, Corporate Officers who have been awarded stock options and/or performance shares (i) are not allowed to carry out risk hedging transactions pursuant to the AFEP-MEDEF Corporate Governance Code and (ii) are subject to black-out periods during which they must not exercise their options nor sell their vested shares.
• •Understandability of the rules and Transparency: the variable compensation and long-term compensation plans are linked to stringent and transparent criteria of quantifiable and qualitative performance for which targets are clearly defined and set out in advance.
• •Comprehensiveness: the Board of Directors and the Remuneration & Talent Committee take into consideration all components of the Corporate Officer’s compensation in their overall appraisal of the compensation.
• •Feedback from shareholders: in addition to the dialogue with shareholders in the area of compensation and governance and when reviewing the compensation policy for Corporate Officers, the Board of Directors pays specific attention to the feedback provided by the shareholders through the votes given to the say on pay resolutions at the General Meeting.
• In 2022, due to the context of the Spin-Off and the consecutive governance changes, the compensation policies were amended during the fiscal year.
• Say-on-pay "ex-ante" resolutions were submitted to the Shareholders twice, first at the Combined Annual General Meeting held on June 30, 2022 (for the compensation policies applicable to Technicolor Corporate Officers from January 1st, 2022 to September 27, 2022) and then at the Combined General Meeting held on September 6, 2022 (for the compensation policies applicable to Vantiva Corporate Officers from September 27, 2022).

These resolutions were all approved and receieved the following support from the shareholders.

The compensation policy applicable to Directors, which is based on a comparative study of the arrangements within comparable entities, aims to attract directors with a variety of profiles and skills, thereby contributing to the proper functioning of the Board of Directors. Compensation levels, as they are defined in the compensation policy, must remain both reasonable and competitive.

The Directors’ compensation policy is intended to determine how, within the overall budget voted by the Annual General Meeting, this amount is distributed among the members of the Board of Directors. 

The current total annual budget earmarked for compensating Directors, in the amount of €850,000, remained unchanged since the Annual General Meeting held on April 29, 2016.

It will be proposed at the 2023 Annual General Meeting to reduce this overall annual budget and to set it at €750,000.

The overall compensation awarded to Directors is made up of a fixed and variable compensation, and a travel allowance for Directors traveling overseas.

The levels of compensation, defined in the compensation policy, shall remain reasonable and competitive.

Directors are not eligible to any other compensation item such as stock-options, performance shares or any other long-term compensation items, nor will they benefit from any commitment in the event of termination of their duties.

It is also noted that the Directors must comply with an obligation to hold shares of the Company over their term of office in accordance with the Internal Board Regulations (see section 4.1.2.5 above) and should a Director fail to do so, 50% of his/her fixed compensation will be forfeited.

The Directors representing employees are not entitled to receive any compensation in their capacity as Director(1) and the share retention obligation does not apply to them.

The variable compensation, which is predominant, depends exclusively on the level of attendance of the Directors in the meetings of the Board and its committees.

The rules governing the allocation of the Directors’ compensation for 2023 are as follows:

• •a fixed compensation of €30,000 for each Director (prorated if the beginning or end of the term of office occurs during the year); 
• •a variable compensation of €3,000 for each meeting of the Board of Directors;
• •a fixed compensation for each Committee Chairperson (prorated if the beginning or end of the term of office occurs during the year) of:
  • •€15,000 for the Audit Committee’s Chairperson,
  • •€10,000 for the other committees’ Chairpersons;
• •a fixed compensation of €15,000 for the Lead Independent Director (prorated if the beginning or end of the term of office occurs during the year);
• •a variable compensation for each meeting of the Committee of:
  • •for the Audit Committee, €2,500,
  • •for the other committees, €1,500;
• •a travel allowance of €2,500 per Board Meeting requiring a Director to travel to one country from another within the Europe zone or within a single continent, or €4,000 per Board Meeting requiring a Director to travel outside the continent and in particular to or from the United States(2);
• •a maximum of €15,000 could be granted to Directors who handled a specific mission during the year.

It is also specified that: 

• •no variable compensation will be paid for meetings lasting less than one hour but with a cap for these unpaid meetings. Above two extraordinary meetings of less than 1 hour for the same instance (Board or Committee) in the year, variable compensation will be paid from the third meeting regardless of the actual duration of the meeting;
• •no compensation will be allocated to the Chief Executive Officer or to Directors who are employees in respect of their duties as a Director; 
• •all compensation items described above may be reduced by the Board of Directors if there are a great number of meetings, so as to comply with the overall compensation budget granted by the Annual Shareholders’ Meeting. 

In order to compensate retroactively the works performed by Mr. Dominique d'Hinnin as Lead Independent Director since the Distribution and until December 31, 2022, it is also proposed to allocate to him a specific compensation of €3,750 to be paid in 2023(3). 

According to section 16.4 of the Internal Board Regulations, Board Observers may be entitled to compensation, the amount of this compensation being determined by the Board upon recommendation of the Remuneration Committee, using the same principles as those applicable to Directors’ compensation(4).

The compensation policy applicable to the Chairperson of the Board of Directors is based on a comparative study of the arrangements in place within comparable entities that have adopted the same mode of governance as that of the Company and that have opted in favor of separating the functions of Chief Executive Officer and Chairperson of the Board of Directors. This policy was determined upon the recommendation of the Remuneration & Talent Committee and with the assistance of a leading compensation expert. 

The compensation structure for the Chairperson of the Board of Directors, who has a non-executive role, is exclusively made up of annual fixed cash compensation. 

The Chairperson of the Board of Directors does not receive any compensation for their duties as a director and does not benefit from annual or multi-year variable compensation, stock options or performance shares. 

In addition, the Chairperson is not eligible for any severance pay or any commitment in the event his/her duties are terminated and cannot be allocated any exceptional compensation. 

The Chairperson of the Board of Directors is not bound to the Company or to any other Group company by an employment contract. 

The annual fixed compensation of the Chairperson of the Board of Directors is intended to compensate for the extensive responsibilities attached to such corporate office as determined by the law, the by-laws and the Internal Board Rules, including the specific missions entrusted by the Board of Directors, such as those that he/she may exercise in concert with the Company’s general management. 

This compensation also accounts for the Chairperson’s background, and in particular his/her skills, abilities and experience in successfully carrying out these duties. 

As indicated above, this compensation is aligned with market practice with respect to the compensation allocated to non-executive board chairpersons in comparable companies. 

In principle, annual fixed compensation can only be revised after relatively long intervals, such as upon the end of the term of office. However, a revision can take place within a shorter period and, as necessary, during the term of office, if specific circumstances, such as a significant change in the scope of responsibilities or the Company’s position, so justify. Any revision that has taken place during the term of office will be made public. 

The Chairperson’s annual fixed compensation is set at €250,000 (or equivalent in a foreign currency(5)) payable in 12 equal monthly instalments. This compensation is in the 25th percentile of a group of 40 comparable companies in the SBF80 index. 

The Chairperson of the Board is subject to social security taxes or their equivalent according to his/her place of residence and in accordance with applicable laws and may benefit from benefits in kind that are customary for all the Group’s managerial employees: mandatory retirement scheme, health insurance and disability insurance, but not unemployment insurance or expatriation and mobility consulting fees.

The Board of Directors may also decide to grant the Chairperson of the Board of Directors benefits in kind that can consist of, for instance, an allowance for the vehicle he/she uses for his/her professional needs or any equivalent form. 

The compensation policy applicable to the Chief Executive Officer was thoroughly reviewed in the context of the Distribution and the Company’s resulting new profile, upon the recommendation of the Remuneration Committee and with the assistance of a leading compensation expert.

The purpose of the policy is to align the Chief Executive Officer’s interests with those of the shareholders post-Distribution. 

The Chief Executive Officer’s annual fixed and variable compensation is defined in US dollars as paid to Mr. Luis Martinez-Amago, the current Chief Executive Officer, in that currency.

The Chief Executive Officer's fixed compensation is made up of a fixed portion and a variable portion (annual) representing approximatively 33% of his aggregate gross compensation. In addition, 72% of total annual compensation consists of variable components (annual variable and long-term incentive plans) subject to performance conditions.

The Chief Executive Officer receives annual fixed compensation that is determined in view of complexity of his responsibilities, his experience in similar positions and in light of market practices for comparable companies.

The Board of Directors reviews the fixed compensation amount after relatively long intervals. In addition, if it is decided to review the fixed compensation amount, the reason for such a revision would be explained transparently to the shareholders.

The Chief Executive Officer’s annual fixed compensation is set at $750,000  which is payable in bi-weekly instalments.

The Chief Executive Officer is entitled to an annual variable compensation with respect to which the Board of Directors (upon recommendation of the Remuneration & Talent Committee) defines every year performance objectives that are diverse, ambitious, specific and pre-defined, allowing for a comprehensive analysis of performance, and that are aligned with shareholders’ interests.

This annual variable compensation will be based on financial and non-financial objectives, the achievement of which will be assessed by the Board of Directors after the end of the financial year.

Regarding financial objectives, the variable compensation is subject to the achievement of minimum targets with respect to the financial objectives the Board sets each year. The selected financial objectives applied are the performance indicators selected by the Group in its financial communications. The same financial objectives (with the same targets) also apply when determining the variable compensation of all Group employees who receive variable compensation and have a Group related financial objective. 

The objectives will therefore include quantitative and qualitative criteria relating to the Group’s financial objectives and to corporate social responsibility and individual objectives. 

Subject to the achievement of the performance objectives, annual variable compensation will amount to:

• •US $0 if the objectives are not achieved;
• •a target amount of  US $900,000 if the objectives are achieved at a rate of 100%  (representing 120% of his fixed compensation);
• •up to 167% of the target amount if his objectives are exceeded (i.e. US $1,500,000 representing 200% of his fixed compensation).

The Board of Directors defined the performance objectives for the Chief Executive Officer’s 2023 variable compensation as follows:

• •financial objectives (accounting for 60% of the amount of the target bonus):
  • •a consolidated adjusted EBITDA objective accounting for 30% of the target bonus:
    • —if the consolidated adjusted EBITDA does not amount to a minimum objective set by the Board of Directors, no compensation will be paid in respect of that objective,
    • —if the consolidated adjusted EBITDA amounts to a target objective set by the Board of Directors, 100% of the target bonus will be paid in respect of that objective,
    • —if the consolidated adjusted EBITDA exceeds this target objective, the compensation paid in respect of that objective could be up to 150% of the target bonus;
  • •a consolidated Operating Cash Flow objective accounting for 30% of the amount of the target bonus:
    • —if the consolidated Operating Cash Flow does not amount to a minimum objective set by the Board of Directors, no compensation will be paid in respect of that objective,
    • —if the consolidated Operating Cash Flow amounts to a target objective set by the Board of Directors, 100% of the target bonus will be paid in respect of that objective,
    • —if the consolidated Operating Cash Flow exceeds this target objective, the compensation paid in respect of that objective could be up to 150% of the target bonus;
• •extra-financial objectives (the fulfilment of each of the two extra-financial objectives accounting together for 40% of the amount of the target bonus will be assessed by the Board of Directors and, in case of overachievement, an amount of up to 150% of the target bonus will be paid in respect of these objectives):
  • •20% of the target bonus will depend upon a strategic objective consisting in driving and conducting the M&A operations (acquisitions and divestments) approved by the Board of directors for the period 2023-2026.
  • •20% of the target bonus will depend upon a CSR objective consisting in:
  • -5%, CSR assessment by third party (5% achieved if EcoVadis rating is Platinum, 3% partielly achieved if EcoVadis is Gold, 0% not achieved if EcoVadis rating is below Gold),
  • -5%, Compliance with Gift and Entertainment policy and App implemented for all targeted audience (ExCom, MCom, sales teams, procurement and supply chain teams) without significant break to the policy reported in 2023; get a "post spin-off" Corruption Risks Heat map to be approved by the CEO & ExCom in H2 2023 and presented to the Board; get a Third-Party policy defined and implemented to evaluate the integrity of customers, suppliers and intermediaries by end 2023,
  • -5%, Equality and DEI with a dedicated program set-up to identify 10 to 15 key talent female employees in Vantiva, to assess and to develop their skillset, to assign career path and to get them ready for future promotion; to maintain overall equal (+/-5%) number of training hours per employee between women and men with full year measurement; to define a Vantiva DEI 360° (gender, age, nationaly, disability...) approach for hiring and promotion with a formal 3 year plan (2024-2026) including detailed actions (eg R&D refresh, specific campus hiring...) and targets in line with Business objectives (headcount forecast, footprint, diversification...),
  • -5%, Circular Economy and Climate Change by reducing Scope 1+2 CO² emissions from 56,800 tons in 2022 to below 50,000 in SCS (~6,800 tons) and remaining stable in CH (2,700 tons in 2022) and reaching SCS recycling rate at 75% (versus 72% in 2022 and 62% in 2021). 
  •  

The financial objectives for the quantitative portion of the annual variable compensation are based on the Company’s forecast and public objectives set by the Board. They are usually announced to the market in February or March when publishing the past year annual results. The criteria are therefore transparent and measurable.

The extra-financial objectives for the qualitative portion of the annual variable compensation are assessed by the Board of Directors based on the recommendation of the Remuneration & Talent Committee, which forms its assessment using information provided by management. Precise contents and methods of assessment for each extra-financial objective may not be fully disclosed in advance for confidentiality purpose. However such information shall be given ex post once these objectives have been assessed by the Board.

Payment to the Chief Executive Officer of his variable compensation will be subject to approval of his compensation package by the shareholders at the Annual General Meeting, in accordance with Article L. 22-10-34 II of the French Commercial Code.

As with other Group executives, the Chief Executive Officer should benefit from the long-term incentive plan that is intended to involve employees in the Group’s development and performance in the context of the Group’s Strategic Plan. 

Such a plan makes it possible to ensure that the compensation offered by the Group remains competitive in dynamic and competitive international markets, and in sectors in which the ability to attract talent is a key factor to success.

• Performance shares

This long-term incentive plan will be based on the award of performance shares, this being subject however to a new authorization to be given by the next Shareholders General Meeting to the Board of Directors to proceed to the additional grant of performance shares. 

Due to the fall in the share price following the TCS profit warning, the envelope granted by the Shareholders General Meeting held on September 6, 2022 (14th resolution) was not sufficient to serve at the expected levels the Chief Executive Officer nor the other beneficiaries eligible to the 2022 Long-Term Incentive Plan.

Subject to this additional authorization, the vesting of the performance shares to be granted will be subject to demanding internal and/or external vesting conditions to be pre-set by the Board of Directors in advance and made public. 

It is noted that:

• •the Board of Directors will verify whether the performance conditions defined at the time of the award are met;
• •these performance conditions will be assessed over a minimum period of three years;
• •the vesting shall be subject to the Chief Executive Officer’s continued employment in the Group (the Chief Executive Officer may not leave the Group before the vesting period expires, except in the case of an early legal exit and other customary exceptions approved by the Board).

In addition to these principles:

• •the IFRS valuation of the long-term instruments that may be awarded under a long-term incentive plan cannot represent a disproportionate percentage of the Chief Executive Officer’s overall compensation (not more than 200% of fixed compensation and the target annual variable compensation);
• •the maximum annual grant is determined taking into account: (i) market practice and the positioning of the Chairman and Chief Executive Officer's compensation in relation to his peers; (ii) the Group's performance; and (iii) the performance evaluation structure on which the final vesting of the shares granted under the long-term equity plans depends;
• •the award to the Chief Executive Officer may not represent an excessive share of the overall Plan (up to 35% of the total award);
• •the Chief Executive Officer must formally undertake to not use hedging instruments during  the holding period. The sale of the shares that have been definitively acquired by the Chief Executive Officer is prohibited during black-out periods, in accordance with applicable legal and regulatory provisions and Group's procedures;
• •in accordance with applicable law and Group's rules, the Chief Executive Officer must hold a significant and increasing number of shares and must hold in registered form up until his duties end, 20% of the shares he will have acquired at the end of the vesting period provided for by such plans.

• Cash plan (phantom shares)

In the event that the Shareholders General Meeting does not authorize the Board of Directors to make additional grants of performance shares that would allow to bring the long-term remuneration of the Chief Executive Officer at the expected level, the Chief Executive Officer may then be entitled, instead of/or in addition to the grant of performance shares, to an equivalent long-term incentive cash plan and receive, up to the expected level, phantom shares. 

Other than being virtual shares without any potential dilution, such phantom shares will be subject to the same vesting period and performance conditions as those applicable to the performance shares. 

The Chief Executive Officer benefits from benefits in kind that are customary within the Group (mandatory retirement plan from which all Group personnel benefits, health and disability insurance, directors’ and officers’ insurance) and other benefits in accordance the Group’s policies that apply to executive managers (cadres dirigeants) with respect to expatriation and mobility. 

The Company will also reimburse:

• •certain fees in connection with legal advice,
• •travel and lodging expenses tied to the need for the Chief Executive Officer to spend a significant part of his time at the registered office (Paris, France), up to €100,000 per year.

The Chief Executive Officer will not be paid compensation in respect of his directorship.

The Chief Executive Officer is not eligible for exceptional compensation.

The Chief Executive Officer will not benefit from any supplementary pension plan.

In principle, when an employee becomes an executive corporate officer (dirigeant mandataire social), the employment contract between him/her and the company or another Group company is terminated. However, in duly justified circumstances, the Chief Executive Officer’s employment contract may simply be suspended.

Regarding Mr. Luis Martinez-Amago, his employment contract with Technicolor Connected Home USA LLC was suspended when appointed as Chief Executive Officer for the duration of his term of office. The Board of Directors had considered that maintaining this employment contract was justified in this case in light of his age and seniority in the Group (of close to 8 years at the date of the appointment as Chief Executive Officer). The termination of Mr. Luis Martinez-Amago’s employment agreement would have had the effect of depriving him of the rights attached to the performance of the employment contract that were progressively earned over the course of his professional career within the Company at a time when it was experiencing significant structural change in connection with the Distribution. However, the Chief Executive Officer did accept a change to the protection arrangements he would benefit from if he leaves office such that the indemnity he could claim is subject to the performance conditions as described below.

If the Chief Executive leaves office, irrespective of the form in which his duties of Chief Executive Officer cease, other than resignation or if the Chief Executive Officer asserts his right to retire, he will have the right to severance pay under his employment contract in the conditions described below: 

• •Departure before December 31, 2022 (as a reminder only as no more applicable): the amount of the severance payment will be US$1,500,000 without any performance conditions attached; 
• •Departure between January 1, 2023 and December 31, 2023: the severance payment amount will be US$1,000,000 without any performance conditions attached (i.e., 133% of his annual fixed compensation) and US$500,000 subject to performance conditions (i.e., 66% of his annual fixed compensation); 
• •Departure between January 1, 2024 and December 31, 2024: the severance payment amount will be US$500,000 without any performance conditions attached (i.e., 66% of his annual fixed compensation) and US$1,000,000 subject to performance conditions (i.e., 133% of his annual fixed compensation); 
• •Departure after January 1, 2025: US$1,500,000 subject to performance conditions (i.e., 200% of his annual fixed compensation). 

With respect to financial objectives, the performance conditions described above will refer to, in respect of the 2023 financial year, the performance conditions governing the annual variable compensation of Mr. Luis Martinez-Amago set by the Board for the same fiscal year. In respect of the 2024 and subsequent financial years, the performance conditions will be subject to the fact of having benefited from at least 80% of his annual variable gross compensation in the preceding year (with respect to the 2024 financial year) or 80% of such compensation on average over the two preceding financial years (with respect to subsequent financial years).

If the Chief Executive Officer leaves office, the fixed portion of his compensation will be calculated on a prorated basis; the annual variable portion will also be calculated on a prorated basis and based on the achievement of objectives set in the compensation policy.

In addition, if the Chief Executive Officer leaves the Group before the expiration of a vesting period, he will lose his rights to the awarded but unpaid long-term compensation. 

As an exception, in the event of his death, disability, retirement or the termination of his duties at the Company’s initiative on grounds other than misconduct and other customary exceptions approved by the Board of Directors, the Chief Executive Officer will retain his rights to a portion of the shares granted. In such cases, subject to the achievement of performance conditions, the number of shares to be delivered will be prorated to the number of days elapsed between the plan date and the event date in relation to the total duration of the plan, unless the Board of Directors decides otherwise at its discretion, and, to the extent necessary, subject to the approval of the Shareholders’ Meeting.

In accordance with Article L. 22-10-34 II of the French Commercial Code, the Company will submit to the shareholders’ vote the following compensation items paid during or granted to Ms. Anne Bouverot as Chairperson of the Board of Directors for the last fiscal year (resolution to be approved by the shareholders at the Annual General Meeting to be held to approve the financial statements for the fiscal year ending December 31, 2022).

The table below summarizes the components of compensation paid or awarded to Ms. Anne Bouverot, Chairperson of Technicolor’s Board of Directors until September 27, 2022 in respect of fiscal year 2022.

Ms. Anne Bouverot’s compensation as Chairperson of Technicolor’s Board of Directors until the Distribution was composed in 2022 of a fixed compensation and Directors’ compensation.

For 2022 Ms. Anne Bouverot was not awarded and did not benefit from the following: annual or multi-annual variable compensation, exceptional compensation, stock options, performance shares or other long-term instrument, welcome bonus, severance pay, non-compete indemnity, or supplemental retirement plan.

Treated as an employee for social security purposes under French Law, she enjoyed certain benefits in kind which are usual for all Group managers and employees (mandatory pension scheme, health insurance and disability coverage), excluding unemployment insurance.

The details of the individual compensation for fiscal year 2022 of Ms. Anne Bouverot, Chairperson of Technicolor’s Board of Directors until September 27, are presented below:

In accordance with Article L. 22-10-34 II of the French Commercial Code, the Company will submit to the shareholders’ vote the following compensation items paid during or granted to Mr. Richard Moat as Chairperson of the Board of Directors for the last fiscal year (resolution to be approved by the shareholders at the Annual General Meeting to be held to approve the financial statements for the fiscal year ending December 31, 2022).

The table below summarizes the components of compensation paid or awarded to Mr. Richard Moat, Chairperson of Vantiva’s Board of Directors since September 27, 2022 in respect of fiscal year 2022.

Mr. Richard Moat’s compensation as Chairperson of Vantiva’s Board of Directors since September 27, 2022 was exclusively made up of annual fixed cash compensation.

As of the date of his appointment as Chairperson of the Board of Directors, Mr. Richard Moat ceased to be eligible to any other compensation component such as annual or multi-annual variable compensation, exceptional compensation, stock options, performance shares or other long-term instrument, welcome bonus, severance pay, non-compete indemnity, or supplemental retirement plan.

The details of the individual compensation for fiscal year 2022 of Mr. Richard Moat, Chairperson of Vantiva’s Board of Directors since September 27, are presented below.

This information does not include any individual compensation paid in 2022 or granted in respect with such fiscal year 2022 to Mr. Richard Moat as Technicolor’s Chief Executive Officer until September 27, 2022 (for such information, please refer to section 4.1.2.3 hereafter).

In accordance with Article L. 22-10-34 II of the French Commercial Code, the Company will submit to the shareholders’ vote the following compensation items paid during or granted to Mr. Richard Moat as Chief Executive Officer for the last fiscal year (resolution to be approved by the shareholders at the Annual General Meeting to be held to approve the financial statements for the fiscal year ending December 31, 2022).

For 2022, Mr. Richard Moat did not benefit from multi-annual variable compensation, other exceptional compensation, stock options, welcome bonus, or supplemental retirement plan or Directors’ compensation.

Employer contributions paid by the Group’s companies in respect of Mr. Richard Moat’s compensation amounted to €187,167 in 2022.

Tables 8 and 9 of the Annex 4 to the AFEP-MEDEF Corporate Governance Code are included in sub-section 4.2.4: “Stock Option Plans and Performance or Restricted Share plans” of this Universal Registration Document.

In accordance with Article L. 22-10-34 II of the French Commercial Code, the Company will submit to the shareholders’ vote the following compensation items paid during or granted to Mr. Luis Martinez-Amago as Chief Executive Officer for the last fiscal year (resolution to be approved by the shareholders at the Annual General Meeting to be held to approve the financial statements for the fiscal year ending December 31, 2022).

For 2022, Mr. Luis Martinez-Amago was not awarded, nor did he benefit from multi-annual variable compensation, exceptional compensation, stock options, welcome bonus, or supplemental retirement plan or Directors’ compensation.

Employer contributions paid by the Group’s companies in respect of Mr. Luis Martinez-Amago’s compensation as Chief Executive Officer amounted to $14,518 in 2022.

Tables 8 and 9 of the Annex 4 to the AFEP-MEDEF Corporate Governance Code are included in sub-section 4.2.4: “Stock Option Plans and Performance or Restricted Share plans” of this Universal Registration Document.(6)

The Remuneration & Talent Committee recommends to the Board of Directors the total amount of Directors’ compensation to be submitted for shareholders’ approval at the Annual General Meeting, and their allocation among the Directors. The maximum annual amount of Directors’ compensation that can be paid to the Directors was set at €850,000 by the Annual General Meeting held on April 29, 2016.

The rules governing the allotment of the Directors’ compensation payable for 2022 are defined in the Compensation policy for the Directors approved by the shareholders at the Combined General Meeting held on September 6, 2022 held in the context of the Spin-Off (see the report on corporate governance included in the 2021 Universal Registration Document and its Addendum available on Vantiva website as part of the documentation of the said Shareholders General Meeting).

Mr. Gauthier Reymondier and Angelo, Gordon & Co., L.P. represented by Mr. Julien Farre, did not receive any compensation as Board Observers.

This Chapter aims at presenting the set of Corporate Social Responsibility initiatives of the Group. It includes the Declaration on Extra-Financial Performance (DPEF) pursuing Article L. 225-102-1 of the French Commercial Code and the Vigilance Plan, pursuing Article L. 225-102-4 of the French Commercial Code.

Methodology Note

 (about Q3 spin-off of Technicolor Creative Studios and extra-financial disclosures)

GRI [2-4 Restatements of information]

Vantiva legal entities and activities were part of the former Technicolor Group until September 27, 2022, when the Technicolor Creative Studios legal entities and activities were spun-off of the Vantiva Group. The respective extra-financial performances of these activities were reported under the Technicolor Group during the past years.

As part of the separation process of the Technicolor Group between Vantiva and Technicolor Creative Studios, and during a transition and temporary period that should end during 2023, a few employees working for Technicolor Creative Studios activities have a working contract with a legal entity of the Vantiva group and vice versa.

According to the French Commercial Code, the scope of the report on the disclosure of extra-financial performance must be done according to the legal entities of the Vantiva Group. Tables and figures will be primarily presented according to this legal requirement, based on the legal entities that are part of the Vantiva group, along the full 2022 year.

In order to provide a consistent view about the scope of activities, comparison with 2021 and 2020 years will be primarily provided based on the scope of legal entities of Vantiva. It also includes employees working exclusively for Technicolor Creative Studios but who are part of Vantiva  legal entities.     

The same approach will be applied for health and safety data, and environmental data, as very few sites that are part of Vantiva legal entities work for Technicolor Creative Studios.

With the purpose of allowing comparison with past years, estimates for 2021 and 2020 of health, safety and environmental data will be provided but based on the related activity scope based on the split of past disclosure between the different businesses of Technicolor Group, if the split by legal entity is not possible or relevant.

GRI Sustainability Reporting Standards 
(GRI Standards) and disclosures

Since 2014, Vantiva has been following the GRI Standards, a worldwide reporting framework on sustainability, to structure its economic, environmental and social reporting.

For the 2022 reporting period,  Vantiva has prepared its Sustainability report in accordance with the GRI Standards, thereby demonstrating that its non-financial information and disclosures are exhaustive. The Sustainability report includes a GRI Content Index with a statement of use for reporting in accordance with the GRI Standards. Vantiva Sustainability reports are available on the Vantiva website in the CSR section: https://www.vantiva.com/corporate-social-responsibility

GRI Disclosure labels are included in both the Universal Registration Document and in the Sustainability report. Disclosure labels (for example GRI [2-7 Employees], GRI [404-2]) help readers locate the information that they are looking for as indicated in the GRI Content Index. They contribute to give more control over the transparency, comparability, quality and accountability of the Group’s sustainability data.

GRI [2-14 Role of the highest governance body in sustainability reporting]

Within the Group, the Corporate Social Responsibility Department supervises the CSR (Corporate Social Responsibility) processes in cooperation with the business divisions. CSR is backed by the People and Talent network and the Environment Health and Safety network, each network having responsible local members located in the main sites. CSR reports to the Chief Officer - People and Talent, CSR and Corporate Legal, who is a member of the Executive Committee of the Group, and who defines Human Resources and CSR strategic priorities in-line with Vantiva’s Strategic Plan and drives initiatives across the Group’s activities.

Vantiva’s activities, as well as the associated business models, are presented in sections 1.1: “Overview and historical background”, 1.2: “Organization and business overview”, and 1.3: “Strategy”.

GRI [3-3 Management of material topics: Employment] [3-3 Management of material topics: Training and Education]

Except for Vantiva global support functions, most profiles of Vantiva’s employees are business division specific:

• •Connected Home: mainly engineering skills, with R&D hardware and software engineers, quality engineers, technical customer support, sourcing and manufacturing engineers, sales engineers, and a limited percentage of production workers. Turnover is limited and recruitment is mainly in Asia and Americas, allowing a relative level of diversity complemented by the diversity of site locations and the internal mobility of employees;
• •Supply Chain Solutions: line operators, warehouse and material handling workers, content security specialists, facilities and equipment maintenance technicians, health and safety specialists, supervisors and managers. Activity is seasonal and regularly requires large staffing variations using temporary recruitment (employees and agency workers), in addition to overtime, to offset peak production requirements. Recruitment is local.

Therefore, the management and the development of talent requires a flexible organization to match with these different requirements. Since 2020, when Vantiva launched the re-engineering of its operating model with the implementation of the People & Talent & CSR organization, the Head of People & Talent, CSR, and legal, a Member of Vantiva’s Executive Committee, defines Human Resources and CSR strategic priorities in line with Vantiva’s Strategic Plan, implements and adapts the People & Talent and CSR model, identifies organizational needs and related resources, and pilots People & Talent and CSR initiatives across all of the Group’s activities. The organization has four dimensions:

• •Global Centers of Excellence (CoE) who design the strategy in their respective fields. They ensure consistency and delivery of key Group HR projects and provide specialized advice and expertise across the whole organization in the following areas:
  • •Global Rewards, Wellness and Payroll focusing on compensation & benefits, rewards, incentive programs, individual contribution to team performance management, pension schemes, medical care and other benefits, payroll and wellness framework,
  • •Digitalization, Performance and Transformation, including information systems and processes, HR performance KPIs, leading and managing the re-engineering projects of systems and data management, and focusing on implementing user-friendly, agile, coherent and sustainable tools,
  • •Global Talent Development focusing on people and teams development to:
    • —1. enhance both technical and soft skills leveraging on learning platforms like O`Reilly or Cornerstone, and on internal and external trainers,
    • —2. provide all compliance required training, recorded in the HR database,
    • —3. enhance management skills set at all levels from line managers to senior managers,
  • •Global Diversity, Equity and Inclusion (DEI) focusing on inclusion and equity programs and initiatives to attract and retain our diverse workforce,
  • •Corporate Social Responsibility (CSR) & Compliance focusing on all areas pertaining to Sustainable Responsibility: Human Rights, Health and Safety, Environmental care, Ethics, and Social Responsibility as well as Compliance;
• •Talent & Business Partners who define the operational talent requirements and objectives in strong partnership with their respective business divisions. Talent & Business Partners work closely with each business leader to analyze and to plan the evolution of Vantiva’s workforce skills and competencies, and to ensure they are in line with their business strategy. They have a key role in the domains of organizational design, define career paths and specific development strategies aligned with business priorities. On the basis of the Resource & Development Plans drawn up each year by the divisions, the Talent and Business Partners define and lead, hand-in-hand with the management of their organization, an HR strategy for their scope which is based on 4 pillars: Talent Acquisition and Development, People and Teams Performance, Recognition, and Retention;

• •People Partners who deliver regionally and locally the Human Resources services to the businesses such as:
  • •talent identification and development,
  • •employee relations,
  • •Performance Management,
  • •Global Rewards,
  • •employment compliance and labor relations,
  • •local DEI or Wellness initiatives.
• They ensure a consistent HR approach across sites and functions within each geographical region, and guarantee that Vantiva remains compliant with local employment laws and practices. People Partners also contribute to the implementation of Corporate People & Talent programs and facilitate coherent local communications. Within each country, People Partners can be shared between businesses and transversal functions or dedicated to a single business when the site’s business is specific;
• •Global People Services focuses on delivering data management, transactional and on-boarding services as a global tiered operating and service delivery model for all countries. It is located in India.

Within each division, managers and HR identify the types of profiles and skills needed to ensure the success of the business’s current and future projects and initiatives. When internal profiles or skills identified are not internally available, the People & Talent team externally recruits the best talents for our businesses, projects and culture.

In the case of individual recruitments (replacements, job creations, creation of teams), a vacancy request is published by the manager with the help of the local HR, triggering recruitment of the required position(s).

To optimize its recruitment capabilities, Vantiva set up internal recruitment teams in locations where recruitment activities are more complex than others because of highly competitive markets, demanding role specifications or language requirements like India or mainland China. In other countries, Vantiva partnered with a well-known international outsourcing Company to cover all jobs except senior executives. Special initiatives were relaunched post-pandemic such as referrals program or recruiting fairs involving both business and People & Talent representatives. Investment was made in 2022 in a new hiring platform to enhance the candidate’s experience, to add job on-boarding capabilities and improve hiring process monitoring through live KPIs.

Lastly, the Group has been locally developing for many years wherever it operates and seeks to maintain an attractive Employer branding that allows candidates to better recognize Vantiva as an employer of choice due to its culture and values.

GRI [2-20 Process to determine remuneration] [401-2] [403-6] [404-3]

Since 2010, Vantiva has been evaluating the individual performance of all employees.

Committed to offer the best support possible in alignment with the constant evolution of businesses (project mode, constant technological changes, continuous improvement, etc.) and the needs of employees (purpose, transparency, feedback in real time, etc.), in March 2018 the Group launched a project to overhaul the system of performance evaluation and employee development. This tool called “TEAM” is based on 4 fundamental principles:

• •contribution replaces the notion of performance: the contribution is defined in this tool as the global appreciation of the concrete contribution of an individual to the results and successes of the collective;
• •observed behaviors (the “how”) are taken into account in the evaluation of the contribution as well as the results obtained (the “what”);
• •“continuous” conversations aim at ensuring frequent exchanges between employees and their managers: setting or modifying objectives or missions, feedback loops on obtained results and observed behaviors; and finally,
• •for those who wish to do so, integration into the contribution assessment of the justified and formalized opinions of relevant stakeholders who collaborated with the person evaluated (multi source feedback).

42.4% of all employees are now using the TEAM tool, as well as 97% of the employees having a variable compensation.

In a competitive environment, the compensation and benefits policies, including the total remuneration policy, are a key pillar of retention of acquired talent.

The remuneration policy is tailored to acknowledge and fairly recognize an employee’s contribution to the short-term and long-term success of the Group.

Vantiva uses a classification structure based upon Willis Towers Watson methodology, with grades and bands that ultimately emphasize and reinforce the strong link between contribution and remuneration. Vantiva is steadily reviewing its job definitions and levels in a way that reflects the evolutions of the Group. Such classification allows the Group to ensure the internal equity of remuneration packages. Moreover, Vantiva participates to relevant salary surveys to assess the competitiveness of remuneration in the proper marketplaces. This provides Vantiva with sustainable, objective and equitable means of remunerating employees while closely controlling its wage bill.

The remuneration policy is structured around flexible and competitive fixed and variable compensation elements driven by market best practices and the Group’s objectives for long-term value creation appropriate to circumstances and goals:

• •competitiveness: appropriate market benchmarks of total compensation against comparable companies allow Vantiva to offer competitive compensation packages to employees in accordance with competitive pressures in the marketplace. This ensures that Vantiva continues to attract, motivate and retain high potentials and key contributors for which Vantiva competes in an international marketplace, while controlling cost structures;
• •equitable approach/internal fairness: Vantiva believes that it remunerates its employees on a fair basis in each of its geographical locations in a way that aligns with both local market standards and proposed corporate programs. The remuneration policy is set according to the Group’s “broad-banding policy” which allows consistent assessment of responsibility, contribution and levels of expertise on an international business basis across all businesses and functions. In addition, the remuneration policy of top executives is managed by Corporate Human Resources to facilitate consistency of various remuneration components and ease international and cross-business mobility;
• •business and skills focus: the remuneration of professionals, engineers and managers is a sound, market-driven policy and is ultimately administered to stimulate business performance. A substantial part of the total remuneration package is composed of variable elements which drive a performance culture and support the Group strategy. These variable elements are meant to stimulate, recognize and reward not only individual contribution, especially innovation and risk-taking, but also and in particular, solid and consistent Group and division performances.

In accordance with the principles and rules established by the Group, any group or division entity is entitled to recognize the potential and encourage the development of its employees by using the different compensation elements in force within the Group.

The evolution of remuneration is measured at constant currency rate exchange (end of year) and at constant population of employees (all employees present both in the reporting year and the past year), and on the evolution of the base salary payroll mass (without variable elements and social contributions paid by the employer).

As part of this total remuneration policy, Vantiva regularly expands its benefits policy with the double objective of fairness and equity between employees of the different countries and divisions and of attractiveness.

However in 2022 after the improvements provided during the years of pandemic, the separation project launched in February 2022 prevented additional committments for both future separated companies in several countries. Therefore, improvements were only made in the USA:

The severity of impact and consequences of the pandemic in India were of particular concern and several more specific initiatives were implemented in 2021 and maintained throughout 2022 to support our employees and their families:

• •Corona Kavach health insurance policy for employees tested Covid positive, until end of April 2022;
• •agreement with a renowned Indian Chain of Hospitals to provide support for infected employees and their families;
• •exclusive vaccination drive as part of the above agreement;
• •breakfast, lunch and dinners organized for employees;
• •transportation of IT assets required for work to employees remote locations and reimbursement of broadband bills for working remotely until mid 2022;
• •10 days of Covid leaves for recovery over and above the sick leaves until mid 2022; and
• •transport facility arranged.

Beyond the processes and initiatives described above, Vantiva strives to detect any significant trend that may hamper the retention of our talent as this objective is key.

In the past years, Vantiva conducted yearly employee satisfaction and engagement surveys on selected businesses and sites. Due to the Covid-19 pandemic and the switch for a large part of our employees to work from home on the one hand, and the Black Live Matters movement surge on the other hand, these surveys have been redirected in 2022 to match with the expectations arising from these events and situations with two worldwide surveys:

• •check employees’ morale and mindset for those employees who were working from home for long periods, due to the likely effects of the different lockdowns and restrictions;
• •survey the diversity or our employees and understand their perception and expectatins about the way diversity is managed by Vantiva. As diversity was understood in a very broad sense, this survey could not be conducted in a few countries where national legislations prevent the collection of such information (data privacy and personal information).

Since early September 2021, with the return to the workplace in most locations, all employees were invited to answer to an on-line global engagement survey, covering all topics: Strategic alignment, Career (Growth and Development), Compensation, Communications, Job Enablement, Performance Management, Belonging and Wellbeing, DEI and Managing change.

Based on its results, business specific action plans are prepared in order to meet expressed employees’ expectations.

In addition to this global approach, several specific sites surveys were launched to address particular topics: Quality of life at work in Rennes, France, return to work and listening sessions in several Supply Chain Solutions sites in the USA, and climate surveys in Brazil.

Apart from surveys, throughout the employee lifecycle, there are several effective processes to ensure continual feedback. This is through qualitative On-boarding and Exit Surveys as vital touchpoints on the employee journey, as well as engaging continually throughout the year with the employee committees (Balance and Culture Champions – more information below) who are the employees with their ears on the ground in the business.

GRI [404-1] [404-2] [404-3]

In order to guarantee a constant match between the expectations of our customers and the skills of our employees, the Group has set up a training program and pragmatic development approach that is aligned as much as possible to the business challenges.

Training priorities are set, based on the evolution of existing jobs and technologies, on the identification of new capabilities to develop and on the individual needs of employees in terms of job performance and/or of professional evolution. The creation of specific learning tracks per job has been encouraged in each division, resulting in an optimization of training resources and in an increased number of training opportunities. In order to ensure the same quality level as well as alignment and consistency, development programs regarding Leadership, Management and Technical or Functional skills are coordinated at the Corporate level.

In addition, the Talent Development Center of Excellence advises operational managers and Talent & Business Partners on all aspects of training and development, particularly on leadership and management aspects. Talent & Business Partners coordinate the construction and monitoring of Development Plans at division or function level. Training sessions are organized at the local level by the People Partners who are responsible for ensuring that training initiatives are optimized across divisions and that they comply with local regulations. The Covid-19 crisis shifted learning and development initiatives to virtual spaces and shifted focus to foundational soft skills development and improving personal well-being. That focus remained throughout 2022.

Training in 2022 happened more often in quicker iterations. The focus on soft-skills and well-being resulted in sessions being more focused on how to keep behavior and stress management top of mind throughout 2021 and 2022. There was a focus on both remote working and returning to office, helping employees adapt to the ambiguity of the modern workplace and still be able to work together effectively became paramount. There was a heavy reliance on rolling out e-learnings via the Learning Management System, MyDevelopment, giving all employees access to a robust soft skills learning library and compliance training. This platform allowed for easier access to voluntary learning, assigned learning, and progress monitoring.

Overall, training initiatives offered in 2022 encompassed 134,195 hours of training for both employees and external persons working under Group supervision, of which 126,248 hours were delivered to 4,735 Vantiva employees. This represents 26.7 hours of training per employee trained on an annualized basis. The training hour gender gap per trained employee is monitored to ensure training is delivered on an equal basis to women and men, as part of our strategy to prevent a structural gender pay gap.

Training focused on the following categories:

• •technical and functional training with 106,093 hours for 2,339 employees. A significant effort was done to offer longer technical training to women for upskilling and evolution, as they receive in average 54.4 hours of training compared to 37 hours for men;
• •environment Health and Safety with 15,763 hours of which 7,187 hours for employees and 7,946 hours for agency workers and supervised people (see section 5.2.5 for more details);
• •prevention of discrimination and harassment with 2,174 hours for 1,913 employees (see section 5.3.2 for more details);
• •security of IT use with 1,543 hours for 3,103 employees;
• •leadership and management with 4,250 hours for 1,529 employees;
• •anti-bribery with 945 hours for 1,253 employees.

Besides technical training, initiatives were focused on the development of a curriculum training track for managers.

Training actions were focused on:

• •creating cross-trained resources;
• •developing upskilling opportunities to offer a career path;
• •mental health training;
• •re-training of operational and support departments to implement process efficiencies.

A yearly Leadership Talent Review process is conducted in all divisions. The process involves managers at all levels of the organization as well as the members of the Executive Committee and of the Management Committee. All these stakeholders participate in the identification of employees with the right level of potential and performance to feed the pool of future managers at the division or Group level. The members of this talent pool are eligible to benefit from dedicated leadership development trainings, activities and events during the year.

Several programs are managed at the Group level: 

• •the Leadership Talent Pool and the Leadership Development program:
• Each business has unique learning and development needs, and all need foundational management behavior development. The Talent and Development Center of Excellence is designed to be an internal full-service consultancy to support and offer both Group and custom solutions for these diverse businesses.
• The Talent & Development Center works with businesses to provide foundational e-learning and virtual instructor-led curriculum in such areas as DEI, well-being, remote work, presentation skills, change management, and foundational behavior expectations for managers. The Center tailors content and delivery modalities to fit the business culture.
• The mission is to shift our culture and improve effectiveness through cultivating awareness, common language, interpersonal skills, and connection in our talent across the globe while creating a “habit of learning” across the organization.
• The 2022 development initiatives were virtually delivered, for shorter periods of time. This allowed for more participation and increased exposure across the globe with a focus on well-being, DEI and foundational people manager behaviors. This “Blended learnings” approach, combining e-learning and virtual instructor-led sessions continued in 2022. Talent & Development (T & D) Center sponsored 3,724 individual training hours focused on creating a best-in-class baseline for employee soft skills. Talent & Business Partners kept the T & D Center informed of changes as they happened and T & D adapted, managed, and facilitated programs to support the changes.
• With an increased focus on soft skills development of managers, a foundational curriculum was launched in Connected Home, Empower, aimed at developing manager self-awareness, definition/appreciation of management style difference, and skill building on delegation and motivation. Empower had an additional focus on transformational leadership and will continue in 2023.

In 2019, a new feedback tool combined with a talent evaluation system was introduced to support the notion of talent development and transparent feedback. The Continuous Feedback App is accessible and has changed the way employees think about and track feedback. It empowers individuals to own their development and learning, and to take control of their career trajectory. This tool also works to promote a culture of recognition, between peers and between manager and employee.

Management Training : in 2022, Vantiva launched a management training program in each of its businesses (Connected Home and Supply Chain Solutions).

In Connected Home, the program is called Empower and was open to 200 managers. The program covered many topics such as Leadership, Feedback, managing change, managing diversity and emotional intelligence. This content was delivered using blended learning, mixing instructor led training and e-learning. The program was made of 8 modules of 1 hour each and approximately 2 hours of e-learning. Given the success of this program, Vantiva has decided to continue delivering it in 2023 to all new managers.

SCS rolled out a Leadership cohort training in 2022 to more than 90 managers of the Memphis facility. The program was made of 3 sessions of 4 hours each covering leadership topics such as effective decision making, team engagement, entrepreneurial thinking, and managerial courage. 

GRI [401-2]

The total annual bonuses distributed to employees in connection with these Incentive Plans over the three most recent years amount to the following:

• •amounts distributed in 2020 for year 2019: €1,290,096;
• •amounts distributed in 2021 for year 2020: €1,460,555; and
• •amounts distributed in 2022 for year 2021: €1,361,901

In addition, several of our locations offer their employees profit-sharing plans based on results and/or achievement of objectives.

GRI [401-2]

As of December 31, 2022, the number of shares held by the Group’s employees in the Group Saving Plan (Plan d’Épargne Entreprise), by employees and former employees through Technicolor’s Mutual Funds (Fonds Communs de Placement d’Entreprise) was 23,940 Vantiva shares. This does not take into account the Company shares held directly in registered form by employees or former employees.

GRI [2-7 Employees] [2-8 Workers who are not employees] [401-1] [405-1]

On December 31, 2022, the Group employed 5,322 employees (58.5% male and 41.5% female), compared to 6,023 employees on December 31, 2021, a decrease of 11.6%.

The highly competitive and rapidly changing sector in which the Group provides its products, technology and services requires continuing adjustment to the workforce. In 2020, the Covid-19 pandemic generated a drastic reduction of projects for the Supply Chain Solutions Division, while the recovery in 2021 generated an acceleration of the projects and a significant rebound.

The table below shows Vantiva’s total workforce within its legal entities as of December 31, 2022, 2021 and 2020, as well as the distribution of personnel across geographical regions.

Total workforce figures above account for executives, non-executives and workers. Agency workers, trainees and apprentices are excluded. The strong increase of employees in Mexico and of fixed-term contracts results from the Mexican regulation change in 2021 restricting the use of agency workers who now must be hired.

As a reference, the following table provides past years (2021 and 2020) figures based on the scope before the spin-off of Technicolor Creative Studios activities and legal entities.

The following table indicates the number of Group employees by segment as of December 31, 2022.

At the end of December 2022, the Group employed 2,211 women representing 41.5% of Vantiva headcount, and 3,111 men (representing 58.5% of Vantiva headcount). The breakdown per age is as follows:

During 2022, among Vantiva legal entities, 2,583 employees have been hired of which 453 were retained as permanent employees. 496 employees were made redundant.

Employees and workforce figures are extracted from the Vantiva worldwide HR repository system currently implemented in Vantiva.

GRI [2-23 Policy commitments] [2-24 Embedding policy commitments] [2-28 Membership associations] [3-3 Management of material topics: Procurement practices] [3-3 Management of material topics: Supplier environmental assessment] [3-3 Management of material topics: Occupational health and safety] [3-3 Management of material topics: Freedom of association and collective bargaining] [3-3 Management of material topics: Child labor] [3-3 Management of material topics: Forced or compulsory labor] [3-3 Management of material topics: Supplier social assessment]

Vantiva closely follows the international principles laid out in the International Labor Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work in its approach to Ethics and Social Responsibility, a standard reinforced in the Group’s Ethics policy and in its membership with the United Nations (UN) Global Compact. In this way, the Group pledges to ensure freedom of association and the effective recognition of the right to collective bargaining, elimination of all forms of forced or compulsory labor, effective abolition of child labor and elimination of discrimination in respect of employment and occupation. These principles carry through into the supply chain, and supplier compliance with the Group's policies and principles relating to ethics and human rights is monitored through a Supplier Responsibility program or as part of the compliance activities aligned with Vantiva’s membership in the Responsible Business Alliance.

Vantiva has been a Member of the UN Global Compact since 2003. The Global Compact is a United Nations initiative which challenges Member companies to align their operations and strategies around 10 universally accepted principles in the areas of human rights, labor standards, environmental practices and anti-corruption and to develop best practices in these fields. Vantiva seeks to comply with the highest ethical standards, to take into account the legitimate and ethical interests of all its stakeholders as well as the United Nations founding principles and each year Vantiva submits a Communication on Progress as part of its support of, and engagement with the Global Compact. The Communication on Progress is available as part of the Sustainability report on Vantiva’s website at the following location under the Corporate Social Responsibility section:

www.vantiva.com/corporate-social-responsibility

Since 2017, Vantiva Connected Home has been a member of the Responsible Business Alliance after having implemented its Code of Conduct in 2016.

GRI [2-6 Activities, value chain and other business relationships] [308-1] [308-2] [403-7] [406-1] [407-1] [408-1] [409-1] [414-1] [414-2]

Through meetings, contracts, and other methods of formal communication, Vantiva shares its expectations that suppliers and their subcontractors provide safe and healthy working conditions for their employees, abide by Human Rights laws and standards, and strives for continual improvement in their environmental management systems, processes and products.

Vantiva requires its suppliers, partners and sub-contractors to actively support its CSR Principles. Suppliers are required to comply with the legal requirements and standards of their service or industry as applicable under the national law of the countries in which they operate. Vantiva suppliers and sub-contractors also ensure the compliance of their components and products with specific legal requirements applicable in the countries where their products are being sold.

Beyond raw material and component purchasing, the main areas where Vantiva subcontracts production and services are the manufacturing of set-top boxes and gateways of the Connected Home business, and part of the logistics of Supply Chain Solutions in Europe. In addition, to manage seasonal peak workloads within Supply Chain Solutions, Vantiva uses contracted labor services to provide additional workforce on packaging and distribution sites.

To ensure that suppliers respect established principles, and as part of Vantiva’s Supplier Responsibility program, since 2003, Vantiva sourcing management:

• •determines when CSR audits, always performed by Vantiva selected auditors, are required;
• •requires all suppliers to sign the General Rules of Conduct Compliance Certificate;
• •periodically reviews all suppliers according to the Vantiva Suppliers Responsibility program requirements.

The Vantiva Supplier Responsibility program:

• •ensures that Vantiva suppliers respect its policies and program requirements;
• •promotes economic and social welfare with support for non-discriminatory employment practices. Vantiva actively seeks suppliers with similar interests and ethics commitments.

Suppliers are expected to adhere to these basic principles:

• •tolerate no discrimination and encourage diversity;
• •promote best working conditions;
• •use no child labor or forced labor or involuntary labor;
• •protect worker health and safety;
• •respect the environment;
• •support worker development;
• •respect fair market competition;
• •strive to be a good corporate citizen wherever Vantiva operates;
• •prevent and avoid all forms of bribery, corruption, or other unfair and unlawful action;
• •respect consumer and personal privacy;
• •avoid potential conflicts of interests.