Consolidated Financial Statements as of December 31, 2018

We hereby present to you the annual financial report for the fiscal year ended on December 31, 2018, prepared in accordance with the provisions of Articles L. 451-1-2 III of the French Monetary and Financial Code and 222- 4 et seq. of the General Regulations of the French Financial Markets Regulator (AMF).

This report shall be shared in accordance with the provisions of Article 221-3 of the General Regulations of the AMF. In particular, it shall be available on the website of our company, www.mediawan.com.

Contents

1. Consolidated Income Statement ...... 4

2. Consolidated Statement of Comprehensive Income...... 5

3. Consolidated Financial Position ...... 6

4. Table of Consolidated Cash Flow ...... 7

5. Consolidated Variation of Equity...... 8

6. Mediawan Group ...... 9 6.1. Activities of the Group ...... 9 6.2. Significant Events of the Period ...... 9 6.3. Scope of consolidation ...... 12

7. Accounting rules and methods ...... 13 7.1. Approval of the financial statements ...... 13 7.2. Basis for preparation and presentation of the consolidated financial statements...... 13 7.3. Application of new standards and interpretations ...... 14 7.4. Initial application of the IFRS 15 standard ...... 15 7.5. Initial application of the IFRS 9 standard ...... 17 7.6. Expected impacts of application of the IFRS 16 standard ...... 17 7.7. Summary of the significant accounting principles applied by Mediawan ...... 19

8. Notes on the consolidated income statement ...... 30 8.1. Business segment information ...... 30 8.2. Revenues...... 32 8.3. Other operating income ...... 32 8.4. Purchases and other external expenses ...... 32 8.5. Personnel costs ...... 32 8.6. Other operating expenses ...... 33 8.7. Details of net amortization, depreciation, and provisions related to business, amortization excluding that for audiovisual distribution rights, and impairment of assets related to mergers and acquisitions ...... 33 8.8. Other operating income and expenses ...... 34 8.9. Financial income ...... 35 8.10. Taxes ...... 35 8.11. Effects of income and expenses recorded among other items of comprehensive income ...... 36 8.12. Earnings per share ...... 36 8.13. Reconciliation of operating income with EBITDA ...... 37

9. Notes on the status of the consolidated financial position ...... 37 9.1. Intangible fixed assets ...... 37 9.2. Goodwill ...... 38 9.3. Tangible fixed assets ...... 40 9.4. Financial assets ...... 41 9.5. Customer receivables ...... 42 9.6. Other sums owed ...... 42 9.7. Deferred taxes ...... 42 9.8. Equity ...... 43

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9.9. Current and non-current provisions ...... 46 9.10. Net financial debt ...... 48 9.11. Supplier payables and other current liabilities ...... 50 9.12. Other financial liabilities ...... 51

10. Notes on the cash flow statement ...... 51

11. Other information ...... 52 11.1. Average workforce broken down by category ...... 52 11.2. Remuneration of corporate officers ...... 53 11.3. Transactions with the main shareholders or with companies that share Mediawan leaders ...... 56 11.4. Off-balance sheet commitments made ...... 56 11.5. Off-balance sheet commitments received...... 58 11.6. Risks ...... 58 11.7. Financial instruments by category and classification level ...... 61 11.8. Post-closing events ...... 61 11.9. Fees of the Statutory Auditors ...... 62

12. Report of the Statutory Auditors on the consolidated financial statements ...... 63

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1. Consolidated Income Statement

In € millions Notes 2018 2017

Revenues 8.2 258,6 115,7

Other products 8.3 125,5 22,2

Purchases and external expenses 8.4 (96,2) (34,6) Personnel expenses 8.5 (90,1) (33,9) Other expenses 8.6 (38,3) (13,4) Depreciation and provisions, net 8.7 (110,4) (29,8) Other depreciation (excl. audiovisual rights) 8.7 (5,2) (2,8) Other operating income and expenses 8.8 (10,2) (4,7) Amortization of assets recognized through bus. combinations 8.7 (30,1) (21,7) EBIT 3,6 (3,1)

Cost of net financial debt (8,4) (3,8) Other financial income and expenses 5,3 0,0 Net financial income (expense) 8.9 (3,1) (3,7)

Pre-tax income / (loss) 0,5 (6,8)

Current and deferred tax (expense) / benefit 8.10 5,5 0,2

Profit (loss) after tax 5,9 (6,6)

Income from equity affiliates (0,0) - Income from activities held for sale or discontinued - -

Net income / (loss) 5,9 (6,6)

Net income / (loss), Group share 5,0 (6,8) Minority interests (0,9) (0,2)

Basic earnings (loss) per share attributable to owners (in €) 8.12 0,172 (0,233) Diluted earnings (loss) per share (in €) 8.12 0,163 (0,232)

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2. Consolidated Statement of Comprehensive Income

In € millions Note 2018 2017

Net income / (loss) 1 5,9 (6,6) Other items that will not be reclassified to profit or loss 8.11 0,4 (0,1) Other items that may be reclassified to profit or loss - - Foreign exchange gains and losses (0,0) - Comprehensive income (expense) for the period 6,3 (6,7)

Group share 5,4 (6,9) Minority interests (0,9) (0,2)

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3. Consolidated Financial Position

In € millions 31-dec-18 31-dec-17

Intangible assets 361,3 209,4 Goodwill 164,7 96,4 Property, plant and equipment 18,6 18,5 Other non-current financial assets 1,0 2,1 Deferred tax assets 9,6 2,4 Non-current assets 555,2 328,8 Inventories and work-in-progress 0,8 2,0 Trade receivables 94,7 46,9 Other receivables 54,0 14,9 Current tax receivables 8,7 1,1 Cash and cash equivalents 45,9 82,5 Current assets 204,2 147,4 Total assets 759,4 476,2 Share capital 0,3 0,3 Share premium 247,7 216,2 Treasury shares (0,6) (0,1) Other reserves (25,1) 0,1 Retained earnings (deficit) (2,4) (7,4) Equity attributable to owners of the Company 220,0 209,1 Equity attributable to non-controlling interests 1,6 0,6 Equity 221,6 209,7 Long-term borrowings and other non-current fin. liab. 148,3 95,1 Other financial liabilities 36,1 - Employee benefit obligations 3,4 3,1 Long-term provisions 7,8 7,9 Deferred tax liabilities 41,5 42,2 Non-current liabilities 237,0 148,4 Short-term borrowings and other current fin. liab. 60,2 15,9 Short-term provisions 0,4 0,4 Trade and other operating payables 129,8 76,4 Other payables and accrued expenses 108,4 23,2 Current tax liabilities 2,0 2,2 Current liabilities 300,7 118,1 Total Equity and liabilities 759,4 476,2

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4. Table of Consolidated Cash Flow

In € millions Notes 2018 2017

Profit (loss) for the period 5,9 (6,6) Elimination of depreciation, amortization and provisions 145,5 53,5 Revaluation of equity investments (3,5) - Elimination of depreciation, amortization and provisions 1,9 0,3 Charges from share based payment 1,9 0,1 Cash flows from (used in) operations after finance costs, net, and income tax 151,8 47,3 Elimination of income tax expense (benefit) 8.10 (5,5) (0,2) Elimination of finance costs, net 8.9 8,4 3,8 Cash flows from (used in) operations before finance costs, net, and income tax 154,7 50,9 Impact of change in inventories 0,5 0,2 Impact of change in receivables 7,9 1,8 Impact of change in payables (19,5) (2,6) Income tax paid (14,8) (12,4) Net cash generated from (used in) operating activities 128,8 37,8 Impact of changes in scope of consolidation 6.2 (84,7) (241,8) Acq. of tangible and intangible assets 9.1, 9.3, 9.11 (134,3) (42,9) Change in outstanding loans and advances (0,1) 0,2 Proceeds from sale of property, plant and equipment and intangible assets 0,3 0,0 Disposal of financial assets 1,0 - Net cash generated from (used in) investing activities (217,8) (284,4) Capital increase (reduction) 9.8 18,6 (28,5) Net proceeds from sale (net payments for purchases) of treasury shares 5 (0,5) (0,1) Proceeds from new borrowings 9.10 195,4 125,9 Repayment of borrowings 9.10 (164,9) (15,7) Net interest paid (6,2) (3,3) Production credits 9.10 1,4 Net cash generated from (used in) financing activities 43,8 78,4 Impact of foreign currency exchange rate variations 0,0 - Net increase (decrease) in cash and cash equivalents (45,2) (168,2)

Net cash and cash equivalents at beginning of period 9.10 82,4 250,7 Net cash and cash equivalents at period-end 9.10 37,2 82,4

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5. Consolidated Variation of Equity

Equity attribut. to Non- Share Share Treasury Other In € millions Notes owners of control. Total equity capital premium shares reserves the interests Company Balance at January 1, 2017 0,3 244,6 - (0,7) 244,3 - 244,3 Comprehensive income (expense) for the period - - - (6,9) (6,9) 0,2 (6,7) Capital increase / (reduction) (0,0) (28,5) - - (28,5) - (28,5) Change in treasury shares - - (0,1) - (0,1) - (0,1) Share-based payment - - - 0,1 0,1 - 0,1 Other variations - (0,0) - 0,2 0,2 0,4 0,6 Balance at December 31, 2017 0,3 216,2 (0,1) (7,3) 209,1 0,6 209,7

Balance at January 1, 2018 0,3 216,2 (0,1) (7,3) 209,1 0,6 209,7 IFRS 15 impact - - - 1,6 1,6 - 1,6 Restated balance at January 1, 2018 0,3 216,2 (0,1) (5,6) 210,8 0,6 211,4 Comprehensive income (expense) for the period 2 - - - 5,4 5,4 0,9 6,3 Capital increase / (reduction) 9.8 0,0 31,6 - - 31,6 - 31,6 Change in treasury shares - - (0,5) - (0,5) - (0,5) Share-based payment - - - 1,9 1,9 0,0 1,9 Put options on minority interests 9.12 (20,6) (20,6) (13,4) (34,1) Other variations - - - (8,5) (8,5) 13,6 5,1 Balance at December 31, 2018 0,3 247,7 (0,6) (27,5) 220,0 1,6 221,6

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6. Mediawan Group

6.1. Activities of the Group Mediawan was formed by Pierre-Antoine Capton, Xavier Niel, and Matthieu Pigasse. The company then raised €250 M through its initial public offering on the regulated Euronext market in Paris. Since March 2017, Mediawan has made eight strategic acquisitions, becoming a new independent player in the premium audiovisual content market, with a leading position in Europe. The Group operates in four market segments: production of original fiction and documentary content, usage of animation brands, distribution of audiovisual content, and publishing of digital services and channels.

6.2. Significant Events of the Period

 External Growth Operations The acquisitions presented below were managed in compliance with the revised IFRS 3 – Business Combinations standard in the consolidated financial statements of the Group. In regards to valuation methods and assumptions, the Group relied on a combination of the various typical valuation methods for this type of transaction, including, in particular, the future cash flow method. The various valuation parameters (WACC, TRI, etc.) are overall identical to those used for the goodwill depreciation test (see note 7.7). Acquisition of EuropaCorp’s television business: On January 15, 2018, Mediawan acquired EuropaCorp’s television business (excluding US series) via the company Storia Télévision, created for this purpose and owned 80% by Mediawan and 20% by Thomas Anargyros, the historic founder of the acquired business. Acquisition of a majority stake in Makever Group: On March 15, 2018, Mediawan, via its subsidiary MDWan Fiction, acquired a majority stake in Makever. On May 3, 2018, in accordance with the agreements made, MDWan Fiction acquired from a beneficiary of free shares of Makever a portion of said shares that had become tradable. As of December 31, 2018, MDWan Fiction owned 77.0% of Makever; then, following a post- closing event on January 5, 2019, described in note 11.8 of this report, that stake is now 78.9%. Acquisition of a majority stake in ON Entertainment: On June 7, 2018, Mediawan acquired shares and invested in a reserved share capital increase, increasing direct and indirect ownership by the Group to 51.35% of equity and 50.19% of voting rights of ON Entertainment.

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On December 26, 2018, Mediawan signed an in-kind contribution agreement with certain ON Entertainment shareholders, allowing the Group to strengthen its position in ON Entertainment, increasing the Group’s holdings to 62.33% of equity and 61.44% of voting rights. Acquisition of a majority stake in Mon Voisin Productions: On October 2, 2018, Mediawan, via its subsidiary Groupe AB, acquired shares of Mon Voisin Productions so that Groupe AB owns 60.0% of the company’s equity. Acquisition of a majority stake in Mai Juin Productions: On October 12, 2018, Mediawan, via its subsidiary MDWan Fiction, acquired shares and invested in a reserved share capital increase of Mai Juin Productions, bringing its holdings to 50.01% of equity. Impact on revenues of the Group: The revenues and cumulative total net income of the entities acquired and included in the financial statements of the Group since the dates of acquisition amount to €81.8 million and €2.4 million, respectively. The cumulative revenues from acquired entities that would have been included in the financial statements of the Group if the acquisitions made in 2018 had taken place at the start of the fiscal year amount to €102.2 million.

 Financing operations: . Fixed-term loan: Mediawan and its subsidiary MDWan Fiction, for the acquisitions announced at the end of 2017 and in January 2018, obtained on March 19, 2018, a fixed-term loan for €45 million for a duration of 18 months. This fixed-term loan was paid back in full as part of the transaction mentioned below and all of the obligations related to this bridge loan agreement were lifted at the same time on December 19, 2018. . Refinancing: On December 19, 2018, Mediawan signed with a pool of nine French and international banks a new loan in the total amount of €230.0 million. This bank loan, to be repaid over 5.5 years, is made up of (i) a line of credit for €150.0 million to refinance existing loans, including the fixed-term loan entered into on March 19, 2018, and (ii) additional credit facilities amounting to €80.0 million (not drawn on as of December 31, 2018) to finance future external growth operations.

 Change in governance . The Mediawan General Assembly of Shareholders, gathered on June 5, 2018, approved: - the appointment of Anne Le Lorier as a member of the Supervisory Board, - the co-opting of Giacaranda Caracciolo as a member of the Supervisory Board on September 25, 2017.

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. In addition, the Supervisory Board of Mediawan appointed: - Guillaume Izabel, Chief Financial Officer of Mediawan since August 2017, as a member of the Management Board to replace Guillaume Prot, who resigned; and - Stanislas Subra, Investment Manager for Listed and Non-listed High-Risk Assets at MACSF (Mutuelle d’Assurance du Corps de Santé Français), as an observer on the Supervisory Board as of March 20, 2018. . Finally, in order to avoid potential conflicts of interest in his new position, Andrea Scrosati resigned from the Mediawan Supervisory Board on September 10, 2018.

 Change in equity . On May 30, 2018, following the exercise of 137,500 redeemable stock warrants (“BSAR,” from the French), Mediawan issued 68,750 new shares, raising the share capital from €€284,326.80 to €285,014.30, made up of 28,501,430 ordinary shares, each with a nominal value of €0.01. . On June 29, 2018, following the exercise of 1,648,566 BSARs, Mediawan issued 824,283 new shares, raising the share capital from €285,014.30 to €293,257.13, made up of 29,325,713 ordinary shares, each with a nominal value of €0.01. . On September 26, 2018, following the exercise of 1,416,044 BSARs, Mediawan issued 708,022 new shares, raising the share capital from €293,257.13 to €300,337.35, made up of 30,033,735 ordinary shares, each with a nominal value of €0.01. . On December 26, 2018, Mediawan issued 1,020,200 new shares, raising the share capital to €310,539.35, made up of 31,053,935 ordinary shares, each with a nominal value of €0.01, following: - an in-kind contribution agreement resulting in the issuance of 1,000,000 new shares, made with certain shareholders of ON Entertainment (the “Contributors”), under the terms of which the Contributors committed to provide 501,512 shares of ON Entertainment, appraised at €12,939,000. The value used for Mediawan shares was €388,606,000, based on a non-diluted value of €12.94 per existing share; this led to a trade of about 1.99 Mediawan shares for 1 share of ON Entertainment. The difference between the issuance price of shares in exchange for the Contribution (€12,939,000) and the nominal amount of said shares (€10,000) constitutes an acquisition premium in the amount of €12,929,000, listed among the liabilities of Mediawan as an “acquisition premium,” - the exercise of 40,400 BSARs, resulting in the issuance of 20,200 new shares.

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6.3. Scope of consolidation The consolidated financial statements include the following companies:

Total Number of Consolidation Company Country number of % of control % of interest shares held method shares Mediawan (SA) France - - - - Société mère Top Co 1 (SAS) France 1 000 1 000 100,0% 100,0% IG Top Co 2 (SNC) France 3 144 601 3 144 601 100,0% 100,0% IG Groupe AB (SAS) France 61 640 230 61 640 230 100,0% 100,0% IG CC&C (SAS) France 4 500 3 600 80,0% 80,0% IG Edition du Lagon (SAS) France 100 80 80,0% 80,0% IG AB Productions (SASU) France 278 832 278 832 100,0% 100,0% IG AB Droits Audiovisuels (SAS) France 174 605 174 605 100,0% 100,0% IG AB Télévision (SAS) France 1 882 911 1 882 911 100,0% 100,0% IG EGO Productions (SASU) France 1 063 1 063 100,0% 100,0% IG Auteurs Associés (SAS) France 1 474 1 474 100,0% 100,0% IG AB Thématiques (SAS) France 1 579 901 1 579 901 100,0% 100,0% IG AB LP (kfa AB La Plaine) (SASU) France 2 000 2 000 100,0% 100,0% IG AB Entertainment SA (SA) Lux. 1 600 1 600 100,0% 100,0% IG RTL9 SA (SA) Lux. 1 000 1 000 100,0% 100,0% IG RTL9 SA & Cie SECS (SECS) Lux. 30 690 30 690 100,0% 100,0% IG RTL Shopping SA & Cie (SECS) Lux. 1 250 1 250 100,0% 100,0% IG Mon Voisin Productions (SAS) France 6 000 3 600 60,0% 60,0% IG Mon Voisin Editions (SAS) France 150 90 60,0% 60,0% IG Storia Television (SAS) France 2 217 935 1 774 348 80,0% 80,0% IG MDWan Fiction (SAS) France 4 040 000 4 040 000 100,0% 100,0% IG Mai Juin Production (SAS) France 3 375 1 688 50,0% 50,0% IG Makever (SAS) France 60 260 46 392 77,0% 77,0% IG Alauda Films (SAS) France 10 000 5 389 53,9% 53,9% IG Frenchkiss pictures (SAS) France 5 000 3 849 77,0% 77,0% IG JPG Films (SAS) France 1 429 330 23,1% 23,1% MEQ Les Films De Télémaque (SAS) France 45 000 34 644 77,0% 77,0% IG Making Prod (SAS) France 10 000 7 699 77,0% 77,0% IG Vema Production (SAS) France 2 500 1 925 77,0% 77,0% IG Scarlett Production (SAS) France 500 385 77,0% 77,0% IG Mademoiselle Films (SAS) France 10 000 7 699 77,0% 77,0% IG ON Entertainment (SAS) France 4 326 412 2 696 445 61,4% 62,3% IG Method Animation (SAS) France 1 765 1 100 61,4% 62,3% IG Onyx Films (SAS) France 1 307 815 61,4% 62,3% IG Onyx Lux (SARL) Lux. 126 79 61,4% 62,3% IG Little Princess (SARL) France 45 000 28 046 61,4% 62,3% IG Upside Down Films (Sas) France 1 000 623 61,4% 62,3% IG ON Animation Studio Montreal (SADC) Canada 1 000 623 61,4% 62,3% IG 2.9 Film Holding (PLC)* UK 1 000 312 30,7% 31,2% IG 2.9 Film Distribution (PLC)* UK 1 0,3 30,7% 31,2% IG Chapter2 (SARL) France 45 000 28 046 61,4% 62,3% IG Chapter II America (LLP) US 1 000 623 61,4% 62,3% IG ON SARL (SARL) France 1 307 815 61,4% 62,3% IG ON US (LLP) US 1 000 623 61,4% 62,3% IG Methonyx (SARL) France 100 62 61,4% 62,3% IG ON Brand & Licensing (SARL) France 10 000 6 233 61,4% 62,3% IG Norman Studios (SAS) France 1 000 623 61,4% 62,3% IG LPP TV (SAS) France 37 000 11 530 30,7% 31,2% IG LPPM (SAS) France 200 62 30,7% 31,2% IG LP Animation (SARL) France 1 000 623 61,4% 62,3% IG

Lux: Luxembourg; UK: United Kingdom; USA: United States FC: Full consolidation; EM: Equity-method consolidation [*]: ON Entertainment owns a 66.66% stake in 2.9 Film Holding (PLC) and 2.9 Film Distribution (PLC)

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7. Accounting rules and methods

7.1. Approval of the financial statements The consolidated financial statements of Mediawan for the year 2018, as well as the related notes, were approved by the Management Board on April 9, 2019, and were examined by the Supervisory Board on April 19, 2019. They will be submitted for approval from the shareholders at the General Assembly on June 4, 2019.

7.2. Basis for preparation and presentation of the consolidated financial statements

 Declaration of conformity In application of European Regulation No. 1606/2002 of July 19, 2002, on the application of international accounting standards, the consolidated financial statements for fiscal year 2018 were prepared according to the IFRS, as adopted by the European Union. The financial statements for fiscal year 2018 are presented with a comparison to fiscal year 2017, for which the financial statements were also prepared according to the IAS/IFRS. However, given that fiscal year 2017 included the acquisition of Groupe AB, the Mediawan consolidated financial statements as of December 31, 2017, include the contribution of Groupe AB starting from April 1, 2017, which makes comparison between fiscal years difficult. Starting January 1, 2018, following an examination of the presentation of the financial statements, Mediawan chose to present operating expenses on the consolidated income statement of the Group by nature and no longer by purpose. This presentation provides more reliable and relevant information for users of the financial statements and will be maintained to ensure comparability between reporting periods. The comparable information as of December 31, 2017, was also recategorized.

 Bases of valuation used for preparing the consolidated financial statements The consolidated financial statements were prepared using the historical cost method, except for certain categories of financial assets and liabilities, which are valued at fair value as per the principles set forth by the IFRS. The categories in question are mentioned in the following notes.

 Usage of estimates and judgments In preparing the consolidated financial statements, the Group management had to make estimates and formulate assumptions that may have an impact both on the amounts of assets and liabilities as of the date the accounts were closed and on the amounts of revenues and expenses. The estimates and underlying assumptions are made based on past experience and other factors that are considered reasonable given the circumstances. Thus, they serve as a basis for the judgment rendered in determining the book values of assets and liabilities that cannot be obtained directly from other sources. The definitive amounts appearing in future Mediawan consolidated financial statements may be different from the values estimated herein. These estimates and assumptions are to be regularly reexamined.

Annual Financial Report – Mediawan – December 31, 2018 – 13

Estimates are used in particular for the valuation of goodwill, the valuation of intangible assets (audiovisual distribution rights, broadcasting rights, and others), the recognition of deferred tax assets, the estimation of provisions, and the estimation of employee commitments and benefits. Specific information about these estimates is provided in the various notes hereinafter.

7.3. Application of new standards and interpretations

 New standards, amendments, and interpretations adopted by the European Union and applicable as of January 1, 2018. The Group applied to its financial statements the standards and amendments newly applicable as of January 1, 2018. . IFRS 15 – Revenue from Contracts with Customers: the Group chose partial retroactive application of this standard. The effects and modalities of transition for application of IFRS 15 are presented in Note 7.4. . IFRS 9 – Financial Instruments: The Group chose simplified retroactive application. The IFRS 9 standard has been applied starting January 1, 2018, without reprocessing of prior reporting periods. The effects and modalities of transition for application of IFRS 9 are presented in Note 7.5. . IFRIC 22 – Foreign Currency Transactions and Advance Consideration, with no effect on the Group. The other required standards for application in the European Union as of January 1, 2018, have no impact on the financial statements of the Group.

 Standards, amendments, and interpretations adopted by the European Union, but not mandatorily applicable as of January 1, 2018. The Group has not opted for early application of the following standards and interpretations whose application was not mandatory as of January 1, 2018: . IFRS 16 – Leases, published in November 2017, establishes the model for accounting for leases and will replace IAS 17 – Leases and the interpretations IFRIC 4, SIC 15, and SIC 27, with mandatory application starting January 1, 2019. The effects and modalities of transition for application of IFRS 16 are presented in Note 7.6. . Amendment to IFRS 9 – Financial Instruments, related to early repayment clauses calling for negative compensation, for mandatory application starting January 1, 2019; . Interpretation IFRIC 23 – Uncertainty over Income Tax Treatments, for mandatory application starting January 1, 2019.

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 Standards, amendments, and interpretations not yet adopted by the European Union. Standards and amendments not yet adopted by the European Union are: . The amendments resulting from the IFRS 2015-2017 annual improvement procedure regarding IAS 12, IAS 23, IFRS 3, and IFRS 11, for mandatory application starting January 1, 2019, according to the ASB; . The various amendments to IAS 19 and IAS 28, for mandatory application starting January 1, 2019, according to the ASB; . The amendments to IAS 1 and IAS 8 – Modification of the definition of the term “significant,” for mandatory application starting January 1, 2020, according to the ASB; . The amendments to IFRS 3 – Definition of a company, for mandatory application starting January 1, 2020, according to the ASB; . Modification of the references for the conceptual framework in the standards, for mandatory application starting January 1, 2020, according to the ASB; . IFRS 17 – Insurance Contracts, for mandatory application starting January 1, 2021.

7.4. Initial application of the IFRS 15 standard

 Preliminary comments The IFRS 15 standard is required to be applied as of January 1, 2018, and replaces the IAS 11 – Construction Contracts and IAS 18 – Revenue standards. The Group chose the partial retroactive method, according to which the comparable information is not reprocessed and the cumulative effect of initial application is presented as an adjustment to equity at the start of the fiscal year in which it is first applied. As explained in Note 7.5 in the section “Consolidated financial statements as of December 31, 2017” of the 2017 annual financial report, the analysis of differences of principles for the financial statements of the Group related to application of the IFRS 15 standard was finalized in 2018 and did not result in the identification of significant impacts.

 Presentation of the revenues, operating income, and EBITDA of the Group as of December 31, 2018, comparing them to the figures that would have resulted from applying the standards and interpretations previously applicable as of December 31, 2017

2018 2018 In € millions Variation * IFRS 15 IAS 18 Revenues 258,6 248,8 (9,8) EBIT 3,6 3,8 0,2 EBITDA 49,1 49,4 0,2

*]: The calculation of the impact of applying the IFRS15 standard on the revenue, operating income, and EBITDA excludes entities that were not consolidated as of December31, 2017

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 Rationale for methodology changes The recategorization performed in application of IFRS 15 is explained below: Change in timing of recognition of revenues: IFRS 15 requires identifying “performance obligations” in the contract that correspond to account units for the recognition of revenue. Pursuant to this, the Group performed an analysis on identification of performance obligations for series “in installments” (i.e. presenting a story that stretches over a full season of episodes): . Series (historical and documentary, animated, other) are made up of episodes that are relatively distinct from one another. Each episode has its own usefulness for the customer (which can, for example, distribute/broadcast the episodes independently from one another); . According to the analysis performed, under IFRS 15, each episode thus has a distinct performance obligation. Revenues are to be recorded per “ready-to-air” for each episode, which marks acceptance by the broadcaster of the delivered material. Furthermore, amortization of production costs must be calculated simultaneously for each episode based on budgeted costs. This is different from the practices under IAS 18, which had recognition of revenues mid- season or per ready-to-air/opening of rights for the latest episodes, for new acquisitions in 2018 only. However, the impact is not significant for the Group (the method for recognizing revenues per episode already having been applied for the scope of Groupe AB as of December 31, 2017). Recognition of co-production contributions from broadcasters: Co-production contracts with broadcasters establish that the contribution from the broadcaster for the funding of a film is made, on the one hand, through the acquisition of broadcasting rights (broadcast portion) and, on the other hand, through co-production investments (co-production portion). Until the end of December 2017, co-production investments by broadcasters were accounted for as a deduction from production costs. According to our analyses, under IFRS 15, revenues must include the amount for both the broadcast portion and the co- production portion. Indeed: . The legal rights that the broadcaster receives provide, above all, protection. The broadcaster does not have a right of control over the work; . The risks and benefits of the work to which the broadcaster is exposed do not enable the broadcaster to be considered a “partner” under IFRS 11;

Annual Financial Report – Mediawan – December 31, 2018 – 16

. The co-production portion gives the broadcaster the right to receive a share of revenues from secondary sales, registered among operating expenses. These sales are uncertain and the amount of revenue sharing cannot be reliably determined at the start of a contract; As the co-production portion will no longer come as a deduction from the value of the intangible fixed asset, the application of IFRS 15 also impacts the gross value of fixed assets and related depreciation and amortization.

7.5. Initial application of the IFRS 9 standard The IFRS 9 standard, applied by the Group in its entirety, is subject to simplified retroactive application, effective January 1, 2018. Fiscal year 2017 was not reprocessed, as permitted by IFRS 9. IFRS 9 introduces a depreciation model for financial assets that is based on expected losses, while the IAS 39 standard was based on a mode of realized losses (accounting for depreciation only after a credit event occurs: late payment, significant downgrading of a credit rating, etc.). The application of the IFRS 9 model results in moving forward the frequency of accounting for depreciation on financial assets valued on the balance sheet at their depreciated costs. For non-current financial assets, depreciation was assessed individually, taking into account the profile of counterparty risk and existing guarantees. For trade receivables, the Group used the simplified method, which involves provisioning expected losses over the residual maturity of the receivables. The amount of depreciation was assessed in a differentiated manner according to the activities and profiles of customers: . Depreciation on an individual basis taking into account (i) the counterparty risk profile; (ii) historical probability of default; (iii) probability of default according to credit rating agencies; (iv) any credit insurance; and (v) the amount of estimated losses, in the case of receivables for which a credit event was identified. . Depreciation on a collective basis using a depreciation schedule based on a statistical approach according to historical losses on unrecoverable receivables. There were no impacts from the initial application of the depreciation portion of IFRS 9 as of January 1, 2018. As such, the equity of the Group as of January 1, 2018 was not reprocessed. Furthermore, the Group does not have any foreign exchange derivatives.

7.6. Expected impacts of application of the IFRS 16 standard On January 13, 2016, the ASB published IFRS 16 – Leases. IFRS 16 will replace IAS 17, as well as the associated IFRIC and SIC interpretations. For lessees, it will eliminate the distinction previously made between “simple leases” and “financing leases.” Lessees will have to record all leases with durations longer than a year in a manner analogous to the modalities currently

Annual Financial Report – Mediawan – December 31, 2018 – 17

established for financing leases by IAS 17 and thus record an asset and a liability for the rights and obligations created by a lease. The new standard, adopted by the European Union on October 31, 2017, is applicable as of January 1, 2019.

 Nature of assets concerned: Purchases and sales of access rights and usage rights for intellectual property licenses are excluded from the scope of IFRS 16. Furthermore, the analysis performed by the Group on contracts for the usage of satellite capacity (transponders) did not show these contracts to meet the definition of asset according to IFRS 16. Consequently, the main point of concern for Mediawan is the recognition of real estate leases under which Mediawan is the lessee.

 Transition method and selected options: The Group chose to apply the simplified retroactive method as of January 1, 2019, and will thus recognize the cumulative effect of initial application of the new standard in equity as of that date, without reprocessing of comparable information from previous periods. The Group decided to use simplification measures set forth by the standard and to not take into account leases with durations of less than 12 months, nor those for assets of low value. Finally, the Group chose to identically use leases considered to be financing leases under IAS 17.

 Estimation of debt from leases as of January 1, 2019: Correspondingly, the Group established a special tool for collecting contract data and performing simulations to appraise expected debt from leases as of the transition date. The amount of liabilities depends on the assumptions used regarding the duration of commitments and discount rates: . The contract duration used for calculation of liabilities is the original negotiated contract duration (performance duration), without taking into account early cancellation or extension options, except in particular cases; . The discount rates used correspond to the marginal rates of debt, in accordance with the standard. In particular, they are determined according to the duration of the contract. The inventory of contracts that fall within the scope of the standard and the collection of data needed to calculate liabilities as of the transition date are being completed. The final valuation of the amount of debt from leases will be completed by the time the 2019 semi- annual financial statements are published. In any case, the amount of liabilities related to application of IFRS 16 should be viewed in relation to the amount of off-balance sheet commitments related to simple leases presented in note 11.4 (-€9.3 million as of the end of December 2018). However, the Group notes that differences between this amount and debt from leases according to IFRS 16 may be due to the following factors:

Annual Financial Report – Mediawan – December 31, 2018 – 18

. debt from leases does not include leases already signed as of December 31, 2018, but whose start date is after the transition date, contrary to off-balance sheet commitments; . debt from leases does not include leases with an original duration less than or equal to one year as per the exemptions in paragraph 5(a) of IFRS 16, contrary to off- balance sheet commitments; . debt from leases does not include leases for which the underlying asset is considered to be of low value as per the exemptions in paragraph 5(b) of IFRS 16, contrary to off- balance sheet commitments; . the estimation of the duration for certain leases according to IFRS 16 may differ from that of off-balance sheet commitments: these are leases for which the Group has reasonable certainty of exercising an option for renewal or early cancellation, if applicable; . finally, the effect of discounting on the debt from leases does not apply to off-balance sheet commitments.

7.7. Summary of the significant accounting principles applied by Mediawan

 Consolidation methods The companies in the scope of consolidation are consolidated using the full consolidation or equity method. The Group exercises direct or indirect control over all of its subsidiaries. Control exists when the Group (i) holds power over an entity, (ii) is exposed to or has right to variable returns due to its ties to the entity, and (iii) has the ability to exert its power over the entity so as to influence the amount of returns that it receives. In practice, the companies in which the Group directly or indirectly holds the majority of voting rights are generally considered to be controlled by the Group. All of the companies in the Group closed their annual accounts on December 31, 2018. The accounts of the consolidated companies are reprocessed so that they comply with the accounting principles described hereinafter. The list of subsidiaries is presented in note 6.3.

 Intragroup operations

Reciprocal operations and transactions for assets and liabilities, revenue and expenses, between consolidated companies are eliminated in the consolidated statements.

 Conversion of accounts and transactions expressed in foreign currencies Receivables and debts in foreign currencies are valued based on the exchange rates in effect on the date of closing (December 31, 2018). Exchange rate differences for settled transactions in foreign currency are recorded on the income statement for the reporting period. Any unrealized gains or losses on forward currency purchases are treated in the same way.

Annual Financial Report – Mediawan – December 31, 2018 – 19

The financial statements of non-French companies whose operating currency is different from the currency used for presenting the Group’s consolidated financial statements are converted using the exchange rate as of the closing date for balance sheet items and using the average exchange rate for the period for items on the income statement. The resulting currency translation adjustments are recorded as currency translation adjustments under the consolidated reserves.

 Recognition of revenues Delivery to broadcasters of new programs Revenues are recorded as income when (i) the broadcaster has accepted the material (“ready-to-broadcast”) and (ii) the right is available for broadcasting. The broadcaster is considered to have accepted the material either: . When the broadcaster has sent formal written notice of acceptance; . Upon distribution or according to the specific contractual conditions; . Or upon payment of invoices. Since co-production contracts with broadcasters do not include performance obligations (i.e. sale of a license), Group revenues include, as of January 1, 2018: . the amount of the broadcast portion of revenues; and . co-production contributions from broadcasters, which were previously recorded for as deductions from production costs. In regards to series (historical and documentary, animated, other) made up of episodes that are distinct from one another, revenues are recorded by the ready-to-broadcast for each episode. Guaranteed minimums are recorded at the time of receipt of the ready-to-broadcast for the work and if the broadcast right is available. Revenues from secondary sales of programs and licensing and merchandising revenues Revenues received from the usage of audiovisual works are recognized in full when the broadcaster has accepted the material and the broadcast right is available. The portion to be paid to the co-producers and co-owners is provisioned as an expense, while the Group records its share as revenue. In regards to programs distributed on behalf of third parties, the Group only records its distribution commission as revenues. For programs under distribution agreements (distributed by third parties), the Group records net revenues from distribution commissions as sales are completed. If information is not regularly received from the distributor, revenues are recorded when payment is received for sales on its share.

Annual Financial Report – Mediawan – December 31, 2018 – 20

Licensing fees Revenues from licensing fees paid by cable, ADSL, and satellite companies are recorded either on the basis of subscriber declarations received each month from the companies or on the basis of lump-sum licensing fees set forth in contracts. Advertising Revenues from the sale of advertising time on channels are recorded based on the declarations provided by the advertising sales firm, with the commissions of the firm recorded as expenses. This advertising revenue is recorded in the income for the period in which the advertising spots were broadcast. Income from exchange transactions is recorded if the goods or services that are the subjects of said transactions are of a different nature and if the income of the exchange transactions can be measured reliably. Income from exchange transactions is valued at the fair value of the goods or services received. Other Sales of DVDs and derivative products are recorded as income upon delivery. Revenues from services are recorded as income when the services are rendered.

 EBITDA EBITDA is the key performance indicator tracked by Mediawan from a purely analytical point of view. It corresponds to operating income before: . allocations to impairment other than those for audiovisual distribution rights; . the effects on accounts of allocations to amortization of the share of goodwill attributed to tangible and intangible assets following fiscal years in which purchase prices were allocated; . “other income” and “other expenses” as defined in Note 8.8 of this report. It should be noted that (i) EBITDA, as defined by Mediawan, includes impairment of audiovisual distribution rights and that (ii) other companies may define and calculate EBITDA differently for analytical purposes. As such, this indicator may not be suitable for direct comparison to that of other companies. Reconciliation between operating income, as presented in the Group income statement, and EBITDA is presented in note 8.13.

 Customer receivables and depreciation Provisions are calculated according to the probability of payment of the receivables in question.

 Goodwill The Group applies the purchase method to register mergers and acquisitions.

Annual Financial Report – Mediawan – December 31, 2018 – 21

The purchase price, also called in French the “transferred counterpart,” for the acquisition of a subsidiary is the sum of the fair values of the assets transferred and of the liabilities taken on by the buyer as of the date of the acquisition, as well as the fair values of the equity securities issued by the buyer. The purchase price includes any earnouts, which are valued and recorded at their fair value as of the date of acquisition. Direct costs related to the acquisition are recorded as expenses for the period in which they were incurred. Upon each merger or acquisition, the Group can choose to account for the portion of unearned interest: . Either at its fair value as of the date of acquisition, resulting in recording of goodwill for the unearned portion (full goodwill method); . Or based on its share of the net identifiable assets of the earned portion of interest at fair value, which results in only recording the goodwill attributable to the shareholders of the parent company (partial goodwill method, the preferred method for the Group). Any surplus of the purchase price compared to the fair value of the assets and liabilities is recorded as goodwill. Any negative difference between the purchase price and the fair value of the assets and liabilities is recorded on the income statement for the fiscal year of the acquisition. The initial valuation of the purchase price and fair values of the assets acquired and liabilities assumed is finalized within no more than 12 months following the date of the acquisition. Any adjustment is recorded as a retroactive change to goodwill if it is related to existing events as of the date of the acquisition. Beyond this 12-month period, any adjustment is recorded directly on the income statement. Earnouts are initially recorded at their fair value. Changes in value after the 12-month period following the acquisition are systematically recorded on the income statement. Goodwill is not amortized; rather, it is annually subjected to a depreciation test on the date of closing, or more frequently if there is an indication of loss of value.

 Production and catalog of audiovisual distribution rights, amortization, and provisions Audiovisual products are immobilized at their production costs, excluding financing and sales fees. The French audiovisual tax credit and subsidies granted by the French National Center of Cinematography are deducted from the gross immobilized value. The catalog of audiovisual distribution rights, resulting from the acquisition of distribution rights produced by third parties, is immobilized at the start date of the distribution rights using their purchase prices, with any dubbing costs added. Advances and guaranteed minimum revenues are also immobilized.

Annual Financial Report – Mediawan – December 31, 2018 – 22

Amortization is determined by category of program based on sales achieved versus earned and forecast revenues, re-valued at the closing of each accounting period. These categories of programs are determined according to the strategy of the Group for acquiring and producing programs. They reflect trends in the market for sales of intellectual property rights. Generally, a category of programs corresponds to either: . A group of programs purchased together and/or from the same producer, . Or a group of programs belonging to the same genre (determined by the origin of the program, the type of program, etc.). These groups of programs, often acquired or produced over time, result from a business decision to form a sufficient volume for optimal sales, . Or a program or series identified as a “flagship” at the time of its acquisition or production and intended to be sold on its own. Distribution rights acquired and intended for distribution on the channels of the Group are immobilized and amortized upon distribution for a maximum duration equal to the duration of the rights acquired.

 Tangible fixed assets and software Tangible fixed assets and software are recorded at their historical purchase price, acquisition costs included, and are depreciated according to the asset’s expected duration of usage, which is:

Type of fixed assets Period Mode Buildings and fixtures & fittings 10 to 25 years Straight line Technical production equipment 4 to 10 years Straight line Software 1 year Straight line Other equipment 5 years Straight line

Maintenance and upkeep costs are recorded in the fiscal year in which they are incurred. When circumstances or events indicate that a tangible fixed asset may have lost value, an examination of the recoverable amount of the fixed asset, or of the asset class to which it belongs, is conducted. A loss of value is recorded when the recoverable amount is less than the net book value. The recoverable amount corresponds to either the fair value minus sales costs or the value in use, whichever is higher: . The value in use is assessed by updating expected future cash flow from the tangible fixed asset or from the asset class to which it belongs, under normal intended usage conditions; . The fair value minus sales costs corresponds to the sale price, net of costs, which could be received from a transaction conducted under normal market conditions.

Annual Financial Report – Mediawan – December 31, 2018 – 23

 Financing lease Assets acquired under finance leasing are immobilized when the leases effectively transfer nearly all of the inherent risks and benefits of ownership of the assets to the lessee. The criteria for assessing such leases are set forth in IAS 17 – Leases and are based on, notably: . The relationship between the duration of the lease of the assets and their lifespan; . The total of future minimum payments, reported at the fair value of the financed asset; . The existence of a transfer of ownership at the end of the lease; . The existence of a lease option; . The specific nature of the leased asset. Financing leases are identified in this way. If they are significant, they are reprocessed so that: . Among assets on the balance sheet, the original values of the assets in question appear, along with any theoretical depreciation, the original value being lower than the present value of minimum payments for the lease and lower than the fair value at the start of the lease; . Among liabilities, the corresponding financial debts appear; . Among financial costs and depreciation, the minimum payments for the lease appear, with financial costs spread across the covered period so that a constant, per-period interest rate is obtained for the remaining amount due for each fiscal year. Leases that do not have the characteristics of a financing lease are recorded as operating leases and the rent payments are recorded on the income statement using a straight-line basis for the duration of the leases.

 Inventory Inventory mainly includes audiovisual distribution rights for unscripted programs and, secondly, a physical inventory of DVDs intended for sale (video business of the Distribution division).

 Royalties Royalties to be paid on operating income are accounted for in the fiscal year in which the revenues are received. Advances on royalties paid to artists are allocated to receivables if the Group assesses that they are recoverable based on royalties paid in the past and on the popularity of the artist in question. These advances are allocated as royalties received by the artist.

Annual Financial Report – Mediawan – December 31, 2018 – 24

 Subsidies Government subsidies are recorded at their fair value when there is a reasonable assurance that they will be received and that the company will adhere to the conditions for granting the subsidies. These government subsidies are mainly those granted by the French National Center of Cinematography (“CNC,” from the French). Subsidies are deducted from the cost of the programs for which they are granted and are deducted from operating expenses once the broadcaster has accepted the material and the rights are ready for broadcast.

 Financial assets and liabilities Financial assets In accordance with IFRS 9, the Group distinguishes between several types of financial assets whose classification depends on the model of management and contractual characteristics for the asset at the time of acquisition. These criteria determine how these instruments are handled for accounting. . Financial assets registered at amortized cost: These are assets for which the Group expects to collect contractual cash flows and for which the cash flows are made up only of principal and interest. This type of assets includes, in particular, lending and borrowing. . Financial assets registered based on options at the fair value on the comprehensive income statement (non-recyclable): These are financial assets not held for transactional purposes. This category includes non-consolidated shareholdings. These assets are valued at their fair values as of the date of closing and variations in value of these assets are included in the line “unrealized gains and losses on financial assets” on the comprehensive income statement (non-recyclable). For the lines of securities in question, as specified in the standard, only dividends received are registered on the income statement; gains and losses on sales cannot be recorded on the income statement at the time of derecognition of the instrument. Furthermore, no depreciation is registered for these securities. For market-listed securities, the fair value corresponds, in principle, to the market price as of the closing date in question. . Financial assets registered at fair value on the income statement: These are assets held for transactional purposes and intended to be sold. This category may include, in particular, certain tradable securities. Also processed by default in this category are financial assets that do not meet any of the criteria for the two other types described above (accounting at the amortized cost or at fair value on the comprehensive non-recyclable income statement). These assets are valued at fair value and variations in fair value are registered on the income statement.

Annual Financial Report – Mediawan – December 31, 2018 – 25

Financial liabilities

Borrowings and other financial liabilities are initially valued at their fair value minus transaction fees, then at the amortized cost using the effective interest method. Derivatives held by the Group to hedge exposure to foreign exchange risk are initially recorded at their fair value. Subsequent variations in fair value, obtained from the issuing financial institutions, are recorded directly on the income statement, with the Group not applying hedge accounting.

 Cash and cash equivalents

Cash and cash equivalents include cash in bank checking accounts and on hand. Cash and cash equivalents are valued at their fair value on the income statement. They include bank balances, monetary mutual funds in euros, CDs with a short term as of their date of entry on the balance sheet, and other short-term, very liquid, easily convertible assets that are subject to negligible risk of change in value, combined with a maturity of less than three months.

 Treasury stock

Shares of the parent company held by the same or by consolidated entities, no matter their purpose, are deducted from consolidated equity at their cost of purchase by the Group.

 Bonus shares

Bonus shares are granted to a certain number of Group corporate officers and employees on condition of active employment. These shares are valued at the fair value of the benefit granted to the employee on the date of granting.

The fair value of the stock is determined by applying a model according to IFRS 2 – Share- based Payment, whose parameters include, in particular, the stock price as of the day of granting, the non-transferability of the shares post-acquisition, dividends not paid during the period of acquisition of the shares, and market performance conditions.

This benefit, recorded using a straight-line basis under “personnel expenses” over the acquisition period for the rights over equity, is categorized as “Other income and operating expenses” on the Group income statement.

 Provisions A provision is defined as a liability whose due date or amount is uncertain. It is recorded because, firstly, the Group has an obligation (legal or implied) resulting from a past event and, secondly, it is likely that an outflow of resources, without an equal inflow, will be necessary to fulfill the obligation. Additionally, the amount of the obligation is reliably

Annual Financial Report – Mediawan – December 31, 2018 – 26

estimated based on information available to the Group when preparing the consolidated financial statements.

 Retirements and retirement severance pay Retired employees receive retirement income paid by the government. Within the legal framework, employees and the Group pay required payroll taxes to entities responsible for managing retirement commitments. These costs are covered by the Group in the fiscal year in which they are incurred. Besides these payroll tax payments, there are no specific commitments. In accordance with current collective bargaining agreements, the Group must give severance pay to employees when they take retirement, with the amounts based on years of employment at the company, remuneration, and employee classification. The amount of these commitments is calculated using a prospective actuarial method that takes into account life expectancy, age, years of service, the employee turnover rate, remuneration, and the status of employees. These commitments are provisioned on the balance sheet as rights are acquired by employees. Assumptions used: Discount rate 1.3% Salary revaluation rate 1.5% Retirement age assumption 60-67 years old Turnover Average

 Current and deferred taxes Taxes due are the calculated amount of taxes to be paid on taxable profits for the fiscal year, determined using the tax rates adopted or nearly adopted as of the date of closing, as well as any adjustment of the amount of taxes due for previous fiscal years. Deferred tax assets and liabilities are calculated at the tax rates expected to be applied for the period in which the asset will be realized and/or the liability will be paid, based on tax regulations adopted or nearly adopted as of the date of closing. Deferred tax assets related to tax loss carrybacks and temporary differences whose recovery is considered more improbable than probable are not recorded on the consolidated balance sheet.

 Audiovisual tax credits

Audiovisual tax credits are recorded as deductions from operating expenses among operating income from current activities when the broadcaster has accepted the material and the right is available for broadcast.

Annual Financial Report – Mediawan – December 31, 2018 – 27

 Competitiveness and Employment Tax Credit

In place since January 1, 2013, the French Tax Credit for Competitiveness and Employment (CICE, from the French) is recorded as a deduction from personnel expenses as per IAS 20.

The amount used to calculate this tax credit is based on gross remuneration subject to payroll taxes (total payroll) paid by the company, with a limit of 2.5 times the French minimum wage (called the “SMIC”). Its rate is 6% of remuneration that meets the above conditions.

 Earnings per share Basic earnings per share are calculated by dividing the Group share of net income by the weighted average number of shares in circulation over the fiscal year. Diluted earnings per share are calculated by taking the average number of shares in circulation over the fiscal year plus the number of shares that would have resulted from the exercise of all existing convertible securities as of the date of closing. During the General Assembly of Shareholders on April 17, 2016, it was announced that 25.6 million redeemable stock warrants (“BSAR,” from the French) issued at the time of the IPO and traded under the ticker symbol MDWBS became redeemable starting on April 3, 2017. They will expire at the close of trading on the Euronext Paris market on April 1, 2022 (or earlier if there is an early buyback). The redemption price of each warrant is €11.50 and the exchange ratio is set at two warrants per one new Mediawan share.

 Recategorization The presentation of certain items from the financial statements for the previous fiscal year may have been modified, if necessary, in order to make it consistent with the rules adopted for the last period presented (see note 7.2).

 Tracking of the value of goodwill, audiovisual distribution rights, broadcast rights, and other intangible assets The net book values of goodwill, audiovisual distribution rights, broadcast rights, and other intangible assets are subject to review at least once per year and/or when events and circumstances indicate that a reduction in value may have occurred. Goodwill: Starting from the acquisition date, goodwill is allocated to the cash-generating units (CGUs) defined by the Group, which correspond to subsidiaries or groups of subsidiaries belonging to the same business division and generating cash flows that are clearly independent from those generated by other CGUs.

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The conditions under which the Group conducts its business have led to the identification of the following CGUs: . Mediawan Originals; . Mediawan Animation; . Mediawan Rights; . Mediawan Thematics These CGUs, to which goodwill is allocated, are subject to depreciation tests annually and when events or circumstances indicate that a loss of value may occur. A loss of value is recorded when the recoverable amount is less than the net book value. The recoverable amount corresponds to either the fair value minus sales costs or the value in use, whichever is higher: . The fair value minus sales costs corresponds to the sale price, net of costs, which could be received by the Group from a transaction conducted under normal market conditions or to a multiple of revenue considered to be market value; . The value in use is determined, in particular, based on projected cash flow prorated to the cash-generating unit (CGU) to which the tested items are connected. Expected future cash flow projections are established based on budgets and medium-term plans. Said plans are developed with a five-year span and an end value equal to the indefinite capitalization of an annual standardized flow is added to the value of expected future flows. For the four CGUs tested, the discount rate applied to the forecast cash flows was 8.0% and the perpetuity growth rate used was 2.0%. No indication of loss of value was identified as of December 31, 2018. The breakdown of net assets tested per CGU as of December 31, 2018, as well as the amount of depreciation that would result from an increase of 50 basis points on the discount rate or from a decrease of 25% on the average annual growth rate for anticipated EBITDA beyond the budgets and two-year business plans established by the Group, or from a decrease of 50 basis points on the perpetuity growth rate, are detailed below:

Impairment losses in case of : Decrease of 50 Increase of 50 Decrease of 25% basis points Net assets scoped basis points In € millions applied to the applied to the as of 31/12/2018 applied to the EBITDA* CAGR perpetual growth discount rate rate Mediawan Originals 128,1 - - - Mediawan Animation 83,3 - - - Mediawan Rights 56,2 - - - MedianwanThematics 64,5 - - - [*] : beyond FY19 budget and 2-y BP produced by the Group

Annual Financial Report – Mediawan – December 31, 2018 – 29

Audiovisual distribution rights, broadcast rights, and others: At the closing of each fiscal year or when an internal or external indication of loss of value is identified, future net cash flows are estimated. Future net cash flows take into account future revenue related to each category of televised programs as of the date of valuation, sales costs, payments of royalties, and taxes. If the current value of net income is not sufficient to cover the net book value, depreciation is recorded to bring the net book value to match the current value of estimated future net income. In regards to broadcast rights, depreciation is recorded according to the number of airings remaining and their likelihoods of airing. Customer relations: Following the exercise of identifying and appraising the main intangible assets, as well as the other assets and liabilities of Groupe AB, an intangible asset called “Customer Relations” was recorded: . It corresponds to the relations that Groupe AB maintains (i) with cable and satellite network operators who broadcast the Group’s channels and (ii) with end customers under the BIS (television by satellite) business. . This asset was valued based on expected future cash flows from distribution and from the Group’s television channels. . This asset is amortized on a straight-line basis over 16 years and, as of the end of December 2018, the remaining amount was €36.4 million.

8. Notes on the consolidated income statement

8.1. Business segment information

 Main operational decision-maker Mediawan would like to remind all that the body serving as the main operational decision- maker is the Management Board.

 Identification of operational sectors Starting January 1, 2018, the operational activities of Mediawan Group are performed within the four following branches of business: . Mediawan Originals for original content production activities for fictional and documentary content. Revenues from this business mainly correspond to the delivery to broadcasters of new programs, as well as income from secondary sales of programs produced by the Group (net of distribution commissions). . Mediawan Animation for production and usage activities for animated content. Revenues from this business mainly correspond to the delivery to broadcasters of new programs, as well as income from secondary sales of programs produced by the

Annual Financial Report – Mediawan – December 31, 2018 – 30

Group and income from licensing and merchandising (net of distribution commissions). . Mediawan Rights for distribution activities for audiovisual programs. Revenues are mainly made up of sales of rights acquired by the Group and distribution commissions charged at the time of sale of rights produced by the production companies or by third parties. . Mediawan Thematics includes the publishing of channels and associated digital services. Revenues are mainly made up of licensing fees from TV service providers and advertising income.

In € millions Originals Animation Rights Thematics Other 2018

Revenues 88,4 26,8 35,9 107,1 0,4 258,6 In accordance with the IFRS 8 standard, and given the change of the operating sectors, the tables below present: Revenues for the 12-month period ended on December 31, 2017:

In € millions Originals Animation Rights Thematics Other 2017

Revenues 11,8 - 22,5 81,2 0,1 115,7 For comparison, the 2017 revenues from the “Production & Distribution” business sector, as presented in the annual financial report, were €34.3 million and were made up of the Mediawan Originals sector for €11.8 million and Mediawan Rights sector for €22.5 million. The revenues from the Mediawan Thematics sector correspond to those from the “Channels and Digital” sector as presented in the 2017 annual financial report. Pro-forma revenues audited for the 12-month period ended on December 31, 2017:

In € millions Originals Animation Rights Thematics Other 2017 Revenues 28,0 - 27,6 108,2 0,1 163,8

 Information on important customers Three customers can be considered “important” under the definition in IFRS 8, meaning that Mediawan earns at least 10% of its revenues from them.

Annual Financial Report – Mediawan – December 31, 2018 – 31

8.2. Revenues

In € millions 2018 2017

France 204,2 91,0 Belgium 12,8 0,2 Switzerland 7,0 0,1 Rest of Europe 14,3 15,9 North America 12,9 6,2 Asia-East 5,1 2,2 Rest of the world 2,2 0,0 Revenues 258,6 115,7

8.3. Other operating income

In € millions 2018 2017

Capitalized costs 121,9 21,2 Ancillary revenues 3,6 1,0 Other products 125,5 22,2 Other operating income mainly includes production costs for programs capitalized as production fixed assets.

8.4. Purchases and other external expenses

In € millions 2018 2017

Purchases (44,0) (14,3) Subcontracting (5,0) (0,5) Rents (16,1) (8,1) Fees (13,6) (5,7) Transport (8,3) (2,2) Other external expenses (9,2) (3,8) External expenses (52,2) (20,3)

Puchases & external expenses (96,2) (34,6)

8.5. Personnel costs The category “Other personnel costs” includes the French “CICE” tax credit for competitiveness and employment. However, the category excludes the non-cash impact of (i) the change in expenses incurred under plans for giving employees shares free of charge and (ii) the residual portion (considered to be related to post-acquisition services) of earnouts and of the fair value of commitments to acquire shares from minority shareholders. These items are accounted for as “Other operating income and expenses” and are detailed in 8.8.

Annual Financial Report – Mediawan – December 31, 2018 – 32

In € millions 2018 2017

Remuneration (61,9) (22,9) Social costs (28,2) (11,0) Other personnel expenses 0,0 - Personnel expenses (90,1) (33,9)

8.6. Other operating expenses

In € millions 2018 2017

Taxes (5,2) (2,1) Royalties (19,7) (8,6) Profit sharing (0,5) (0,6) Others (12,9) (2,1) Other expenses (38,3) (13,4)

8.7. Details of net amortization, depreciation, and provisions related to business, amortization excluding that for audiovisual distribution rights, and impairment of assets related to mergers and acquisitions Net depreciation, amortization, and provisions

In € millions 2018 2017 Depreciation related to audiovisual rights (111,2) (28,2) Accruals of provisions (3,0) (2,2) Depreciation & accruals of provisions (114,2) (30,4) Reversals of depreciation 1,7 - Reversals of provisions 2,1 0,6 Reversals of depreciation and provisions 3,8 0,6

Depreciation and provisions, net (110,4) (29,8) Net depreciation, amortization, and provisions amounted to €(110.4) million in 2018. As a reminder, the entirety of this category, which includes amortization of audiovisual distribution rights, is included in EBITDA, a key performance indicator tracked by Mediawan. Allocations to impairment (excluding audiovisual distribution rights)

In € millions 2018 2017 Intangible assets (1,8) (0,4) Tangible assets (3,5) (2,4) Other D&A (excluding rights) (5,2) (2,8)

Annual Financial Report – Mediawan – December 31, 2018 – 33

Impairment of assets related to mergers and acquisitions

In € millions 2018 2017 Library (27,6) (15,6) Broadcasting rights - - Other intangible assets (3,1) (5,8) Intangible assets (30,8) (21,3) Tangible assets (0,4) (0,3) Reversals of contingent liabilities 1,1 -

Amortization of assets recognized through business combinations (30,1) (21,7) Writebacks on any liabilities are related to a legal dispute resolved during the period.

8.8. Other operating income and expenses

In € millions 2018 2017

Fees stemming from M&A acquisitions (3,0) (9,3) Compensation fees (1,2) - Non recurring commercial indemnity - 5,3 Severance payment (1,4) - Share-based payment (1,9) (0,1) Puts options / Earn-outs (2,6) (0,6) Other operating income and expense, net (10,2) (4,7) Mediawan chose to present certain operating income and expenses in a section entitled “Other operating income and expenses” with the goal of setting a level of operating performance that can be used for a forecasting approach to recurring performance through the key performance indicator of the company, EBITDA. The category includes income or expenses that are (i) limited in number, unusual, and of particularly significant amounts, or (ii) related to accounting effects, without an impact on the cash flow of the Group, of items comparable to remuneration under the IFRS standards. In particular, other operating income and expenses include: . Fees related to external growth operations conducted or being conducted by the Group; . Transactional compensation recorded in 2018 amounting to €(1.2) million; . A contract termination penalty for €5.3 million in 2017, recorded in the allocation of purchase price and amortized on the line “Impairment of assets related to mergers and acquisitions”; . Non-recurring employee severance pay, recorded following the departures of three managers of the Group;

Annual Financial Report – Mediawan – December 31, 2018 – 34

. The accounting effects, without an impact on the cash flow of the Group, of (i) the change in expenses incurred under plans for giving employees shares free of charge and (ii) the residual portion (considered to be related to post-acquisition services) of earnouts and of the fair value of commitments to acquire shares from minority shareholders.

8.9. Financial income

In € millions 2018 2017

Interest expense (5,0) (2,9) Debt issuance costs (3,6) (0,8) Income from cash equivalents 0,2 0,0 Cost of net financial debt (8,4) (3,7) Depreciation of financial assets, net 0,5 0,2 Foreign exchange gains (losses) 0,7 (0,1) Other financial income and expenses 4,1 (0,1) Other financial income and expenses 5,3 0,0

Net financial result (3,1) (3,7) Active financial expenses are made up of loan origination fees. The expense for the period includes the accelerated repayment, worth €(2.4) million, of the origination fees on the loan for €130.0 million paid off in 2018. The negative effect on the income statement of the fair value of the interest rate swap amounted to €(0.2) million and was recorded among other financial income and expenses. Other financial income and expenses mainly include the revaluation to fair value of the portion of ON Entertainment shares previously held by the Group, in the amount of €4.5 million.

8.10. Taxes

 Breakdown of expenses or income from taxes

In € millions 2018 2017

Deferred taxes 13,2 9,4 Current taxes (7,7) (9,2) Other Tax Credit 0,0 0,0 Corporate income tax 5,5 0,2

Annual Financial Report – Mediawan – December 31, 2018 – 35

 Effective tax rate

In € millions 2018 2017

Profit (loss) before tax 0,5 (6,8) Standard income tax rate 34,43% 34,43% Income tax expense calculated using the standard rate (0,2) 2,4 Impact of change in tax rates 2,1 (0,5) Impact of differences in tax rates of foreign companies 1,0 0,6 Tax credits 3,7 2,5 Unrecognized tax loss carryforwards (1,2) (4,2) Other (0,0) (0,5)

Effective income tax (charge) / benefit 5,5 0,2

8.11. Effects of income and expenses recorded among other items of comprehensive income Expenses not recorded among income are made up of items related to the valuation of obligations for employee benefits: they include actuarial gains and losses recorded for defined benefit plans amounting to €(0.4) million.

8.12. Earnings per share

In € millions 2018 2017

Number of shares used to calculate basic earnings (loss) per share: Number of shares outstanding at the period-end [A] 31 053 935 28 432 680 Weighted average number of shares outstanding during the period [C] 29 075 076 29 384 659 Number of shares used to calculate non diluted / diluted earnings (loss) per share: Profit (loss)for the period attributable to owners of the Company [B] 5,0 (6,8) Weighted average number of ordinary shares (on a diluted basis): Weighted average number of shares outstanding during the period [C] 29 075 076 29 384 659 Number of free shares 371 794 24 235 Number of "free shares" stemming from the exercice of warrants 1 368 492 - Number of share equivalents [D] 30 815 361 29 408 894 Earnings (loss) per share (in €) [B] / [C] 0,172 (0,233) Diluted earnings (loss) per share (in €) [B] / [D] 0,163 (0,232) “Earnings per share (in €)” are calculated by dividing the Group share of net income by the weighted average number of shares in circulation over the reporting period, minus Group- owned shares. “Diluted earnings per share (in €)” are calculated by taking into account the number of shares that would have resulted from the exercise of all existing convertible securities as of the date of closing.

Annual Financial Report – Mediawan – December 31, 2018 – 36

This number of share equivalents includes, in particular: . The weighted average number over the reporting period of shares granted free of charge to Group leaders and employees (which was 371,794 shares in 2018); . The weighted average number of shares from the conversion of stock warrants in circulation, assuming that the income in the reporting period for these warrants was allocated as share buybacks at the average stock price for the period in question (maximum dilution of 12,149,418 shares, reduced to 1,368,492 shares when taking into account the redemption price of €11.50 per share issued). In 2017, given the difference between the Mediawan share price as of December 31, 2017, and the stock warrant redemption price, the impact of potential dilution related to stock warrants was not taken into account to determine the number of share equivalents.

8.13. Reconciliation of operating income with EBITDA

In € millions 2018 2017

EBIT * 3,6 (3,1) Amortization of assets recognized through bus. Combinations * 30,1 21,7 Other operating income and expenses * 10,2 4,7 Other depreciation (excl. audiovisual rights) * 5,2 2,8 EBITDA 49,1 26,1 [*]: As presented in consolidated income statement

9. Notes on the status of the consolidated financial position

9.1. Intangible fixed assets

Amortiz./ Changes impairme In € millions 31-dec-17 IFRS15 Acquis. Disposals in scope PPA Reclass. Forex 31-dec-18 nt charge of conso.

Library 144,1 18,0 7,8 (1,6) - 55,0 32,5 79,6 - 335,5 Broadcasting rights 40,6 20,1 (14,0) - - - (0,3) - 46,4 Production-in-progress 16,7 85,7 (1,5) - 76,1 13,7 (79,2) (0,3) 111,2 Other 52,3 1,2 (0,0) - 1,1 - 0,0 (0,1) 54,6 Total gross value 253,7 18,0 114,8 (17,1) - 132,3 46,2 0,1 (0,3) 547,6 Library (26,4) (15,5) - 1,4 (112,2) - - (0,1) - (152,7) Broadcasting rights (11,7) - 14,0 (21,8) - - 0,1 - (19,4) Production-in-progress (0,0) - - (3,2) - - - - (3,2) Other (6,2) - 0,0 (4,8) - - - 0,1 (11,0) Amortiz. and impairment (44,3) (15,5) - 15,4 (142,0) - - (0,0) 0,1 (186,3) Carrying amount 209,4 2,5 114,8 (1,6) (142,0) 132,3 46,2 0,1 (0,2) 361,3 The “IFRS 15” column presents the effect as of January 1, 2018, of the change in method for recording co-production contributions from broadcasters. As explained in note 7.4, starting in 2018, co-production contributions from broadcasters are no longer recorded as a deduction from production costs; instead, they are recorded as revenue.

Annual Financial Report – Mediawan – December 31, 2018 – 37

Acquisitions of intangible fixed assets reflect: . Group investments in the production of new original programming; . Group investments related to the purchase of audiovisual distribution rights, acquired to add to its existing catalog; . Group investments related to the purchase of broadcasting rights, acquired from third parties for a set duration, intended for broadcasting on the Group’s channels; Variations of scope corresponding to the incorporation of catalogs of audiovisual distribution rights and works in progress from entities acquired during the period. The “PPA” column corresponds to the allocation of the purchase price for EuropaCorp’s television business (excluding US series), Makever, and ON Entertainment, acquired by Mediawan in 2018. The detailed list of assets identified and valued at their fair value is presented in note 9.2. Recategorizations mainly concern production costs for programs in progress as of December 31, 2017, and delivered as of December 31, 2018. For comparison, the variation of intangible fixed assets in 2017 is presented below:

Amortiz./ Changes impairme In € millions 31-dec-16 IFRS15 Acquis. Disposals in scope PPA Reclass. Forex 31-dec-17 nt charge of conso.

Library - - 25,3 (11,8) - 33,3 83,1 14,3 - 144,1 Broadcasting rights - - 20,5 (5,6) - 25,5 - - - 40,6 Production-in-progress - - 15,3 (0,3) - 12,6 3,4 (14,3) - 16,7 Other 0,1 - 0,7 - - 1,9 49,6 - - 52,3 Total gross value 0,1 - 61,8 (17,8) - 73,4 136,1 0,0 - 253,7 Library - - - 0,1 (26,5) - - - - (26,4) Broadcasting rights - - - 5,6 (17,2) - - - - (11,7) Production-in-progress - - - - (0,0) - - - - (0,0) Other (0,0) - - - (6,2) - - - - (6,2) Amortiz. and impairment (0,0) - - 5,7 (50,0) - - - - (44,3) Carrying amount 0,0 - 61,8 (12,1) (50,0) 73,4 136,1 0,0 - 209,4

9.2. Goodwill  Variation of goodwill

Newly conso Impairment In € millions 31-dec-17 Deconso. PPA 31-dec-18 companies charge

Goodwill 96,4 90,1 - (21,8) - 164,7 Goodwill impairment ------

Carrying amount 96,4 90,1 - (21,8) - 164,7

Annual Financial Report – Mediawan – December 31, 2018 – 38

 Allocation of goodwill In the course of its business, the Group made five acquisitions during fiscal year 2018, with (i) EuropaCorp’s television business (excluding US series), (ii) Makever, (iii) ON Entertainment, (iv) Mon Voisin Productions, and (v) Mai Juin Productions. These acquisitions had the following impact on the cash of the Group:

In € millions 31-dec-18

Cash outflow of 2018 acquisitions (85,9) Cash acquired at the acquisition date 1,4 Net cash outflow (84,4) The goodwill resulting from these five acquisitions breaks down in the following manner:

In € millions 31-dec-18

Price of the shares (1) 91,9 Adjusted net assets (2) 1,8 Preliminary goodwill (1) - (2) 90,1 Recognition of definitive goodwill: The Group hired an independent expert to help it identify and appraise the main intangible assets, as well as the other assets and liabilities of EuropaCorp’s television business (excluding US series), Makever, and ON Entertainment. Valuation was determined based on fair value, defined as “the price that would be received for the sale of an asset or paid for the transfer of a liability in a transaction ordered between market actors as of the valuation date.” Mediawan relied on a combination of the various usual appraisal methods for this type of transaction, including, in particular, (i) the future cash flow method, (ii) the super profit method, and (iii) the net realizable value. The allocation of the purchase price is presented as follows:

In € millions 31-dec-18

Preliminary goodwill 88,7 Library (17,0) Production in-progress with contracts (6,7) Production in-progress without contracts (7,0) Portfolio of format (15,5) Minority interests 11,0 Deferred taxes 13,3 Fair value adjustments (21,8)

Goodwill 66,9

Annual Financial Report – Mediawan – December 31, 2018 – 39

Allocation of the purchase price led to the following adjustments: . A revaluation of the catalog of audiovisual distribution rights, which includes previously produced programs, for €17.0 million; . A revaluation of programs in production amounting to €13.7 million; . Identification of a portfolio of formats for €15.5 million, defined as: all future audiovisual content for which the Group has production rights, including trademarks, concepts, key characters, and story rights for which future flows are expected as of the transaction date. The residual goodwill of €66.9 million includes (i) the skills of employees, (ii) organizational expertise demonstrated by effective internal processes, (iii) sales expertise that enables more effective selling of programs and audiovisual distribution rights to customers, (iv) the ability to maintain and develop existing assets, and (v) the ability to generate new opportunities by adding new customers. Recognition of preliminary goodwill: Preliminary goodwill tied to the acquisitions of Mon Voisin Productions and Mai Juin Productions amounts to €1.4 million. The definitive allocation of the purchase prices will be made in fiscal year 2019.

9.3. Tangible fixed assets

Depre./ Changes in impair. Reversals In € millions 31-dec-17 Aquis. Disposals scope of Reclass. Other 31-dec-18 charge on prov. conso.

Land and buildings 12,8 0,1 - - - - 0,0 0,0 12,9 Machinery and equipment 7,0 0,7 (0,0) - - 1,7 0,5 0,5 10,5 Other PPE 1,2 0,8 (0,1) - - 2,8 (0,1) (0,1) 4,5 PPE under construction 0,1 0,4 - - - 0,0 (0,5) (0,5) (0,4) Total gross value 21,2 1,9 (0,1) - - 4,5 - 0,0 27,5 Depre./impairm. of buildings et lands (0,7) - - (0,9) - - - - (1,6) Depre./impair. of machinery and equipment (1,5) - 0,0 (2,2) - (1,0) - - (4,7) Depre./impair. of other PPE (0,5) - 0,0 (0,8) 0,0 (1,3) - - (2,6) Accumulated depreciation and impairment (2,7) - 0,1 (3,9) 0,0 (2,3) - - (8,9) Carrying amount 18,5 1,9 (0,0) (3,9) 0,0 2,1 - 0,0 18,6

Annual Financial Report – Mediawan – December 31, 2018 – 40

Depre./ Changes in impair. Reversals In € millions 31-dec-16 Aquis. Disposals scope of Reclass. Other 31-dec-17 charge on prov. conso.

Land and buildings - 0,2 - - - 4,9 7,7 - 12,8 Machinery and equipment - 0,2 (0,0) - - 6,9 - - 7,0 Other PPE - 0,3 (0,0) - - 0,9 - - 1,2 PPE under construction - 0,0 (0,0) - - 0,1 - - 0,1 Total gross value - 0,7 (0,0) - - 12,8 7,7 - 21,2 Depre./impairm. of buildings et lands - - - (0,7) - - - - (0,7) Depre./impair. of machinery and equipment - - 0,0 (1,5) - - - - (1,5) Depre./impair. of other PPE - - 0,0 (0,5) - - - - (0,5) Accumulated depreciation and impairment - - 0,0 (2,7) - - - - (2,7) Carrying amount - 0,7 (0,0) (2,7) - 12,8 7,7 - 18,5

9.4. Financial assets

Changes in In € millions 31-dec-17 Aquis. Disposals Reversals Result scope of Reclass. Other 31-dec-18 conso. Investments in non-conso. companies 1,9 - (1,5) - - 0,4 1,5 (2,2) 0,1 Créances rattachées à des part. - 0,0 ------0,0 Loans, deposits and other receivables 0,3 0,6 (0,5) - - 0,6 - 0,0 1,0 Financial assets 2,2 0,6 (2,0) - - 1,0 1,5 (2,2) 1,1 Equity affiliates - - - - (0,0) (0,0) - - (0,1) Imp. of invest. in non-conso. companies (0,0) - - 0,0 - (0,0) (0,0) 0,0 (0,1) Total impairment (0,0) - - 0,0 (0,0) (0,0) (0,0) 0,0 (0,1) Carrying amount 2,1 0,6 (2,0) 0,0 (0,0) 0,9 1,5 (2,2) 1,0

Changes in In € millions 31-dec-16 Aquis. Disposals Reversals Result scope of Reclass. Other 31-dec-17 conso. Investments in non-conso. companies - - - - - 1,6 0,3 - 1,9 Créances rattachées à des part. ------Loans, deposits and other receivables - 0,2 (0,4) - - 0,5 - - 0,3 Financial assets - 0,2 (0,4) - - 2,1 0,3 - 2,2 Equity affiliates ------Imp. of invest. in non-conso. companies - (0,0) 0,3 - - - (0,3) - (0,0) Total impairment - (0,0) 0,3 - - - (0,3) - (0,0) Carrying amount - 0,1 (0,1) - - 2,1 - - 2,1 Non-consolidated equity securities as of December 31, 2017, mainly corresponded to the stake owned in ON Entertainment, which no longer appears among financial assets as of December 31, 2018, following the acquisition of a majority stake and the consolidation of this company in the Mediawan consolidated financial statements.

Annual Financial Report – Mediawan – December 31, 2018 – 41

9.5. Customer receivables

In € millions 31-dec-18 31-dec-17

Trade receivables 97,9 49,5 Allowances (3,2) (2,5)

Total trade receivables 94,7 46,9

9.6. Other sums owed

In € millions 31-dec-18 31-dec-17

Advances and prepayment 0,5 0,1 Receivables from suppliers 5,8 3,5 Social receivables 0,7 0,3 Fiscal receivables 10,2 3,1 Audiovisual tax credit 18,1 3,6 CNC subsidies 6,6 2,5 Other receivables 10,0 0,5 Prepaid expenses 2,0 1,2

Other current assets 54,0 14,9

9.7. Deferred taxes

 Variation table:

Movements Changes in In € millions 31-dec-17 during the scope of PPA Reclass. Other 31-dec-18 period conso. Deferred tax assets 2,4 7,8 9,4 - (10,1) 0,2 9,6 Deferred tax liabilities (42,2) 5,4 0,5 (13,3) 9,3 (1,2) (41,5) Net deferred tax asset (liability) (39,8) 13,2 9,9 (13,3) (0,8) (1,1) (31,9) In 2018, net variation of deferred taxes comprised a net increase of €12.2 million tied to the impairment of assets related to mergers and acquisitions and a net increase of €1.0 million tied to business.

Movements Changes in In € millions 31-dec-16 during the scope of PPA Reclass. Other 31-dec-17 period conso. Deferred tax assets - 1,2 - 1,2 - - 2,4 Deferred tax liabilities - 8,2 (5,8) (44,6) - - (42,2) Net deferred tax asset (liability) - 9,4 (5,8) (43,4) - - (39,8)

Annual Financial Report – Mediawan – December 31, 2018 – 42

 Calculation of deferred taxes: Deferred taxes for the integrated entities are determined based on the tax rates (and tax regulations) that were adopted or nearly adopted as of the closing date and that are expected to be applied when the deferred tax asset in question is received or the deferred tax liability is paid.

Calculation Deferred In € millions basis taxes Contingent liabilities 2,3 0,8 CNC 159,0 54,7 Cancellation of subsidies (0,3) (0,1) Adjustements & restatements 1,6 0,4 Capitalisation of tax losses carried forward 38,0 10,6 Non-deductible provisions 3,2 0,8 Compensation (167,5) (57,7) Total deferred tax assets 36,2 9,6 Revenues (15,0) (5,2) Customer relationship (39,8) (10,6) Remeasurement of the rights catalog (93,7) (26,2) Remeasurement of buildings (6,9) (2,0) Intra-group gains and losses/ Depreciation and amortization (146,0) (50,3) Distribution revenues (10,9) (3,8) Other (including temporary differences) (3,4) (1,1) Compensation 167,5 57,7 Total deferred tax liabilities (148,2) (41,5)

Total (112,0) (31,9)

9.8. Equity

 Composition of and change in share capital

The equity of Mediawan is made up of 31,053,935 shares of common stock admitted for trading on the Euronext Paris regulated market.

As of December 31, 2018, the equity of Mediawan is broken down as follows:

31-dec-18 31-dec-17 Var.

Number of Number of Number of Shareholders % % shares shares shares Founders 6 280 815 20,2% 6 280 815 22,1% - Free float* 24 773 120 79,8% 22 151 865 77,9% 2 621 255 Total 31 053 935 100,0% 28 432 680 100,0% 2 621 255 [*] incl. treasury stock under the liquidity agreement

Annual Financial Report – Mediawan – December 31, 2018 – 43

The variation of 2,621,255 shares is related to: . The exercise of 3,242,510 stock warrants during the period, resulting in the issuance of 1,621,255 shares. As a reminder, 25.6 million stock warrants were issued at the time of the IPO and have been traded under the ticker symbol MDWBS. They became redeemable starting April 3, 2017, and will expire upon the closing of the Euronext Paris market on April 1, 2022 (or earlier in the event of an early buyback). The redemption price of each warrant is €11.50 and the exchange ratio is set at two warrants per one Mediawan share. . On December 26, 2018, Mediawan finalized an in-kind contribution agreement resulting in the issuance of 1,000,000 new shares, made with certain shareholders of ON Entertainment (the “Contributors”), under the terms of which the Contributors committed to provide 501,512 shares of ON Entertainment, appraised at €12,939,000. The difference between the issuance price of shares in exchange for the Contribution (€12,939,000) and the nominal amount of said shares (€10,000) constitutes an acquisition premium in the amount of €12,929,000, listed among the liabilities of Mediawan as an “acquisition premium.”

 Dividends The amount of profits distributed was: . Dividends for fiscal year 2017 paid in 2018: None . Interim dividends paid in 2018: None For a total paid in 2018 of: None

 Shares granted for free The General Assembly of Shareholders held on June 5, 2018: . Renewed the authorization given to the Management Board, for a period of 38 months, to grant 899,096 shares free of charge to certain Wannabe employees. The shares will be granted through the issuance of new shares via capitalization of reserves, profits, and/or bonuses of the Company. . Granted authorization to the Management Board, for a period of 38 months, to grant shares free of charge, on one or more occasions, to employees or leaders of companies in the Group, to be issued within the limit of 4% of the share capital of the company, including 2% reserved for members of the Management Board. The shares will be granted through the issuance of new shares via capitalization of reserves, profits, and/or bonuses of the Company.

Annual Financial Report – Mediawan – December 31, 2018 – 44

The main characteristics of the plans for granting shares free of charge are the following: Number of End of the End of the # of Performance Start shares acquisition retention beneficiaries conditions date allocated period period Plan #1 - Tranche 1 1  48 469 29/09/2017 30/09/2019 30/09/2020 Plan #1 - Tranche 2 1  48 469 29/09/2017 30/09/2021 30/09/2022 Plan #2 2  91 508 07/06/2018 06/06/2020 06/06/2021 Plan #3 4  21 660 01/07/2018 20/06/2020 06/06/2021 At the latest Plan #4 - Tranche 1 2  224 774 30/07/2018 - 30/06/2020 At the latest Plan #4 - Tranche 2 2  224 774 30/07/2018 - 30/06/2021 60% of the fixed Plan #5 2  35 364 31/07/2018 30/07/2021 remuneration + variable of the exit year Plan #6 2  9 000 31/07/2018 30/07/2021 - Plan #7 1  1 820 11/09/2018 10/09/2021 - The provisional number of shares granted has changed as described below over the course of the fiscal year:

Number of shares provisionally allocated as of 01.01.2018 96 938 Number of shares provisionally allocated over the period 608 900 Number of share allocations vested - Number of share allocations expired -

Number of shares provisionally allocated as of 31.12.2018 705 838

The change in the portion of fair value for shares granted is presented below:

In € millions 2018 2017

Expense of the period related to share-based payment (1,9) (0,1)

Annual Financial Report – Mediawan – December 31, 2018 – 45

9.9. Current and non-current provisions

Reversals Change in In € millions 31-dec-17 Additions Other 31-dec-18 (unused) scope Prov. for claims and litigation – short-term 0,4 0,1 (0,1) - - 0,3 Other prov. for contingencies – long-term 4,1 1,7 (0,6) - - 5,2 Other prov. for contingencies – short-term ------Total provisions for contingencies 4,5 1,8 (0,7) - - 5,5 Prov. for post-employment benefit obligations – long-term3,1 0,3 (0,0) 0,5 (0,6) 3,4 Other provisions for charges – short-term - 0,1 (0,1) 0,1 - 0,1 Other provisions for charges – long-term 3,9 0,3 (1,6) - - 2,6 Provisions for taxes – short-term 0,0 - - - - 0,0 Total provisions for charges 7,0 0,7 (1,8) 0,7 (0,6) 6,1 Total provisions 11,4 2,5 (2,4) 0,7 (0,6) 11,6

 Provisions for legal actions, other provisions for risks, and other provisions for expenses

As of the end of December 2018, the total amount of these provisions was €8.2 million, covering legal actions or risks related to commercial operations. As such, the provisions are for legal actions, disputes, and claims from third parties, including expenses related to corporate or tax disputes.

When settlement of a dispute takes place beyond the operating cycle, these provisions are considered non-current.

The provisions are valued at the amount of resources likely to be paid out for the proceedings or disputes in progress whose cause existed as of the date of closing.

 Provisions for retirements Commitments are determined with an actuarial calculation that uses the projected unit credit cost method. This method requires the usage of long-term actuarial assumptions on demographic data (employee turnover, mortality) and financial data (salary increases, discount rate). These parameters are reviewed each year. The effect of changes to actuarial assumptions on the amount of the commitment is registered under actuarial gains and losses. These actuarial gains and losses are taken into account in other items of non- recyclable comprehensive income. The assumptions used by the Group are the following:

Actuarial assumptions 31-dec-18 31-dec-17 Discount rate 1,6% 1,3%

Expected rate of increase in salaries 1,5% 1,5%

Annual Financial Report – Mediawan – December 31, 2018 – 46

In 2018, the change in the provision for pensions and retirements breaks down as follows:

In € millions 31-dec-18 31-dec-17

Opening position (3,1) - Change in scope (0,5) (2,8) Current service cost (0,3) (0,2) Interest costs (0,0) (0,0) Actuarial gains and losses 0,6 (0,1)

Closing position (3,4) (3,1) As of the end of December 2018, the impact of actuarial gains recorded among other items of comprehensive income amounted to €0.6 million:

In € millions 31-dec-18 31-dec-17 Impact of experience adjustments 0,3 (0,1) Impact of changes in assumptions 0,3 (0,0) Actuarial gains and losses 0,6 (0,1)

The expense recorded on the income statement was €(0.3) million, of which €(0.3) million was for services rendered in 2018 recorded in current operating income for Mediawan, in application of IAS 1.

In € millions 31-dec-18 31-dec-17 Current service cost (0,3) (0,2) Personnel costs (0,3) (0,2) Interest costs (0,0) (0,0) Financial result (0,0) (0,0) (Charges) / Products (0,3) (0,3)

Annual Financial Report – Mediawan – December 31, 2018 – 47

9.10. Net financial debt

 Status of net financial debt For the Group, net financial debt includes all financial debts, minus cash and cash equivalents. Production credits are used to finance the production of audiovisual programs and to develop new projects. They will be reimbursed by customer receivables already registered or forthcoming, given as collateral for signed contracts.

In € millions 31-dec-18 31-dec-17

Cash 45,3 77,4 Cash equivalents 0,6 5,1 Bank overdrafts (8,7) (0,1) Cash & cash equivalents net 37,2 82,4 Borrowing from credit institutions (153,0) (110,5) Accrued interest on borrowings (0,1) (0,5) Other bank and similar borrowings (4,6) (0,0) Obligations under finance leases (0,4) - Financial debt (158,1) (111,0) Net financial debt (120,9) (28,5) Production credits (41,7) - Net financial debt (incl. production credits) (162,6) (28,5)

Annual Financial Report – Mediawan – December 31, 2018 – 48

 Change in financial debts

Changes in Non cash In € millions 31-dec-17 Additions Repaym. scope of Reclass. Other 31-dec-18 variation conso. Bank overdrafts (0,1) (3,9) (4,7) - 0,0 (8,7) Borrowing from credit institutions (113,8) (195,8) 159,8 (7,2) - 0,0 (156,9) Debt issuance costs 3,4 4,4 - - - (3,6) - 4,2 Derivative instruments (0,1) - (0,2) (0,3) Accrued interest on borrowings (0,5) (0,1) 0,5 (0,0) - - (0,1) Other bank and similar borrowings (0,0) (3,8) 4,9 (6,3) 0,5 - (4,6) Obligations under finance leases - 0,2 (0,6) (0,4) Financial debt (111,0) (199,2) 165,4 (18,8) 0,5 (3,8) 0,0 (166,8) Production credits - (1,4) - (40,3) - - (41,7) Financial debt incl. production credits (111,0) (200,6) 165,4 (59,1) 0,5 (3,8) 0,0 (208,5)

In € millions 2018

Increase in financial debt - consolidated cash flow (195,4) Bank overdrafts 1 (3,9) Derivative instruments 2 0,2 Accrued interest on borrowings 3 (0,1) Production credits 4 (1,4) Increase in financial debt including production credits (200,6)

In € millions 2018

Decrease in financial debt - consolidated cash flow 164,9 Accrued interest on borrowings 3 0,5 Decrease in financial debt including production credits 165,4 Notes: [1]: Change in cash found in the consolidated cash flow table is presented net of the change in bank overdrafts. [2]: Change in the fair value of derivatives is presented in non-monetary change in the table of change in financial debts. [3]: Change in accrued interest on borrowings is presented on the line “Net interest paid” of the consolidated cash flow table. [4]: Change in production credits is presented on the line “Production credits.”

Annual Financial Report – Mediawan – December 31, 2018 – 49

For comparison, change in financial debts in 2017, including production credits, is presented below:

Changes Non cash In € millions 31-dec-16 Additions Repaym. in scope Reclass. Other 31-dec-17 variation of conso. Bank overdrafts - - 2,6 (2,6) - - - (0,1) Borrowing from credit institutions - (130,0) 16,3 - - - - (113,8) Debt issuance costs - 4,2 - - - (0,8) - 3,4 Derivative instruments - - - - - (0,1) - (0,1) Accrued interest on borrowings - (1,6) 1,1 - - - - (0,5) Other bank and similar borrowings - - 0,3 (0,3) - - - (0,0) Obligations under finance leases ------Financial debt - (127,3) 20,2 (3,0) - (1,0) - (111,0) Production credits ------Financial debt incl. production credits - (127,3) 20,2 (3,0) - (1,0) - (111,0)

 Payment schedule for financial debts

5 ans In € millions 31-dec-18 < 1 an 2 ans 3 ans 4 ans et plus Borrowing from credit institutions - long-term (146,1) - (8,1) (17,5) (15,5) (105,0) Borrowing from credit institutions - short-term (7,0) (7,0) - - - - Other short-term borrowings and fin. Liab. (4,6) (2,5) (0,7) (1,1) - (0,3) Production credits (41,7) (41,7) - - - - Intérêts courus sur emprunts (0,1) (0,1) - - - - Découverts bancaires (8,7) (8,7) - - - - Dettes liées aux contrats de location financement (0,4) (0,2) (0,2) - - -

Emprunts et dettes financières (208,5) (60,2) (8,9) (18,7) (15,5) (105,2)

9.11. Supplier payables and other current liabilities

In € millions 31-dec-18 31-dec-17

Trade payables 45,9 6,7 Payables related to purchases of audiovisual rights 9,5 13,2 Accrued invoices 26,7 12,9 Accrued invoices (audiovisual rights) 12,1 21,3 Royalties 35,6 22,4

Total trade and other operating payables 129,8 76,4 The variation of payables for purchases of audiovisual distribution rights and non-received invoices for audiovisual distribution rights, corrected for the effects of entry into the scope, was €(17.5) million and was recategorized in the consolidated cash flow table under acquisitions of tangible and intangible fixed assets.

Annual Financial Report – Mediawan – December 31, 2018 – 50

In € millions 31-dec-18 31-dec-17

Credit notes, discounts and rebates 1,8 1,9 Accrued payroll charges – short-term 20,5 9,0 Accrued taxes (excl. income tax and CVAE) – short-term 10,9 0,9 Other short-term payables 0,0 1,7 Deferred Tax credit 7,2 1,8 Deferred subsidies 20,7 2,9 Deferred income 47,3 5,0

Total other payables and accrued expenses 108,4 23,2 Prepaid income is mainly tied to advances from broadcasters.

9.12. Other financial liabilities Other financial liabilities include obligations incurred by Mediawan through commitments to buy shares from minority shareholders (“put options” for minority stakes). As of December 31, 2018, the current value of the redemption price for these buyback commitments was assessed at €(43.1) million. In accordance with IFRS 3: . Mediawan recorded liabilities in the amount of €(34.1) million. The counterpart to these liabilities is presented (i) minus minority stakes, in the amount of the book value of the shares that are subject to put options for minority stakes, and (ii) for the remainder, minus the Group-owned share of equity. . The residual portion of the current value of the redemption price for these commitments, €(9.1) million, was categorized as compensation for post-acquisition services and has been spread across the duration of commitments on the income statement of the Group, in the category “other operating income and expenses,” as a counterpart to other financial liabilities. In 2018, the portion of the residual share of the current value of the redemption price for these commitments, accounted for in the operating income of the Group, amounted to €1.6 million.

10. Notes on the cash flow statement

As December 31, 2018, net cash from bank lending was €37.2 million, versus €82.4 million as of December 31, 2017, a decrease of €(45.2) million.

 Net cash flow related to business activities In 2018, net cash flow related to business activities came to a net inflow of €128.8 million and resulted from:

. Net cash flow before costs of net financial debt and taxes, for a positive amount of €154.7 million;

Annual Financial Report – Mediawan – December 31, 2018 – 51

. An increase in working capital requirements (net of change in payables for acquisitions of audiovisual distribution rights – see note 9.11) generating a negative impact of €(5.9) million on net cash flow; . And payments made for taxes totaling €(20.0) million.

 Net cash flow related to investment operations The components of cash flow related to investment operations, with the negative amount of €(217.8) million, mainly reflect: . The incorporation of net assets from acquisitions made during the period (Storia Télévision, Makever, ON Entertainment, Mon Voisin Productions, Mai Juin Productions) in the amount of €(84.7) million; . The acquisitions of tangible and intangible fixed assets representing a cash outflow of €(134.3) million (net of change in payables for acquisitions of audiovisual distribution rights – see note 9.11) mainly related to investments in the production of programs and to the acquisition of audiovisual distribution rights.

 Net cash flow related to financing operations The positive net cash flow corresponding to financing operations amounted to €43.8 million and mainly concerned: . A share capital increase of €18.6 million following the exercise of stock warrants presented in note 9.8 of this report; . A net cash inflow from reimbursements and from loan origination fees related to a bank loan for €30.5 million.

11. Other information

11.1. Average workforce broken down by category

Average headcount 2018 2017

Executives 270 189 Employees 168 139 Permanents 437 328 Non permanents 537 187 Total 974 515

Annual Financial Report – Mediawan – December 31, 2018 – 52

11.2. Remuneration of corporate officers

 Remuneration of the members of the Supervisory Board The Chairman of the Supervisory Board received no fixed annual remuneration and no variable remuneration in fiscal year 2018. Like the other members of the Supervisory Board, he received no attendance fee and no other benefit in fiscal year 2017. The ordinary General Assembly of Shareholders on June 5, 2018, decided to increase the allocation for attendance fees paid to Supervisory Board members to a total budget of €340,000, with the stipulation that the division of the total amount among the board members should take into account the involvement of each member and, in particular, their participation in special committees. The total amount allocated was determined by referring to market standards for comparable companies. As a reminder, the payment of these attendance fees is suspended until the Company adheres to the provisions of French Law 2011-103 of January 27, 2011, on the balanced representation of women and men on boards of directors and supervisory boards, and on equality at work. According to this law, the proportion of male and female Supervisory Board members cannot be less than 40% for either gender at companies whose shares are admitted for trading on a regulated market. In fiscal year 2018, the Company continued its efforts to come into compliance with the provisions of this law. Indeed, Mrs. Giacaranda Caracciolo was co-opted by the General Assembly of June 5, 2018, as a member of the Supervisory Board and Mrs. Anne Le Lorier was appointed by the same Assembly as a member of the Supervisory Board. As such, given the resignation of a male member of the Supervisory Board, as of December 31, 2018, the representation of women on the Supervisory Board was 37.5%. In order to achieve the required representation of women and men on the Supervisory Board, the Group is seeking out new women who could be appointed as Supervisory Board members.

 Remuneration of members of the Management Board

Fixed compensation:

On April 10, 2018, the Supervisory Board approved, then the General Assembly of Shareholders of June 5, 2018, approved the fixed compensation for Management Board members for their offices (excluding any work contracts) for fiscal year 2018: . Pierre-Antoine Capton: €450,000 annual . Guillaume Prot (until April 10, 2018): €20,000 . Guillaume Izabel (starting April 11, 2018): €43,333, or €60,000 annual. He also receives fixed compensation under his work contract as Group Chief Financial Officer, in the annual amount of €200,000.

Annual Financial Report – Mediawan – December 31, 2018 – 53

These amounts were set by taking into account the level and difficulty of responsibilities, experience in the position, and practices learned at companies or groups of companies of comparable size. In any case, fixed compensation is only to be revised at regular intervals by the Appointments and Compensation Committee.

Variable compensation

For fiscal year 2018, Pierre-Antoine Capton and Guillaume Izabel received variable compensation, paid on an annual basis, equal to a maximum of 200% of annual fixed compensation for Pierre-Antoine Capton and 100% for Guillaume Izabel, based on the following factors: . 40% of variable compensation paid according to pro-forma revenues for the scope of consolidation corresponding to the announcements made to the market . 40% of variable compensation paid according to the level of EBITDA . 20% of variable compensation paid according to the level of cash flow

These criteria were approved by the Supervisory Board on April 10, 2018, then by the General Assembly of Shareholders on June 5, 2018.

The Supervisory Board, after examining performance for fiscal year 2018 and the above criteria, approved the following amounts of variable compensation for the Management Board members for their corporate offices, payable after approval by the next General Assembly of Shareholders, to be held on June 4, 2019: . Pierre-Antoine Capton: €497,700 . Guillaume Izabel: €58,800; note that payment of his variable compensation for his work contract as Chief Financial Officer of the Company, in the annual amount of €200,000, has already been made.

Long-term compensation plan

For fiscal year 2018, the Management Board members received the benefit of a long-term compensation plan, with shares of the Company granted to them free of charge, equal to a maximum of 100% of their annual fixed compensation. This granting of shares was authorized by the General Assembly of Shareholders on June 5, 2018, along with the following criteria for earning them: . 50% of shares to be earned in relation to annual growth of earnings per share . 50% of shares to be earned in relation to total shareholder return as compared with the STOXX® Europe Media index

Annual Financial Report – Mediawan – December 31, 2018 – 54

Definitive earning of shares will not take effect until three years after they are granted. Furthermore, Management Board members are also obligated to keep 60% of the performance shares definitively earned under the long-term compensation plan for the entire duration of their offices. This holding obligation ceases to apply once members permanently hold an aggregate number of shares (as and when shares are acquired and options exercised) equivalent to one year’s benchmark monetary compensation (fixed compensation + target annual variable compensation). The benchmark monetary compensation used is that of the year during which the member of the Management Board intends to transfer the performance shares. Finally, the Management Board members have made a formal commitment, through the expiration of their terms, to not use any risk hedging mechanism for the shares granted under long-term profit sharing plans.

The chosen and approved performance criteria and amounts for 2018 variable compensation have been used for a comprehensive analysis of performance, aligned with the medium-term strategy of the Company and the interests of shareholders.

The number of shares granted to Management Board members in year N is the result of the quotient of the amount of fixed compensation of each Management Board member in year N divided by the average Company stock price between the date of publication of the N-1 financial statements for the Company and the 30 days thereafter.

As such, on July 31, 2018, after approval by the Supervisory Board, the Management Board members were granted the following numbers of performance shares: . Pierre-Antoine Capton: 32,256 shares . Guillaume Izabel: 3,106 shares

Exceptional compensation

The Supervisory Board has adopted the principle according to which members of the Management Board, for their corporate offices, may receive exceptional compensation under circumstances that must be disclosed and justified in detail. Payment of such compensation can only be made subject to shareholder approval, in accordance with Article L. 225-37-2 of the French Commercial Code.

As such, for the fiscal year ended on December 31, 2018, the Supervisory Board, upon recommendations from the Appointments and Compensation Committee, unanimously decided to pay exceptional compensation to the members of the Management Board for fiscal year 2018, corresponding to (i) €350,000 for Pierre-Antoine Capton, Chairman of the Management Board, and (ii) €95,000 for Guillaume Izabel, Management Board member, with the stipulation that this exceptional compensation will not be paid until it is approved by the shareholders at the next General Assembly of Shareholders, to be held on June 4, 2019.

Benefits of any nature received by the members of the Management Board

Annual Financial Report – Mediawan – December 31, 2018 – 55

. Severance pay and non-compete compensation: None. . Prohibition against having a concurrent work contract and corporate office: Mr. Guillaume Izabel, member of the Management Board since April 11, 2018, also has a work contract in his position as Chief Financial Officer of the Company since August 1, 2017. . Other items: - Members of the Management Board receive the usual in-kind benefits that corporate officers of companies or groups of companies of comparable size receive, for a reasonable cumulative amount. - The members of the Management Board of the Company also receive liability insurance coverage for all costs, fees, expenses, losses, or liabilities incurred in their positions at the Company.

11.3. Transactions with the main shareholders or with companies that share Mediawan leaders Application of IAS 24 - Related Party Disclosures requires that groups of companies report on operations conducted with related parties. Troisième Œil Group was identified as a related party (having a shared leader):

Related-party transactions and balances between Amount Type Groupe AB and the Troisième Œil Group (€ thousands)

Gross operating receivables at December 31, 2018 - Operating products

Operating payables at Decembre 31, 2018 (0,1) Operating charges - Operating income 0,0 Trade of auiovisual programmes Operating expenses (0,0) Royalties Purchase of audiovisual rights (0,1) Purchase of audiovisual rights

11.4. Off-balance sheet commitments made

 Bank loans and production loans:

Refinancing transaction on December 19, 2018

On December 19, 2018, Mediawan signed with a pool of nine French and international banks a loan agreement in the total amount of €230.0 million. This bank loan, repayable over 5.5 years, is made up of (i) two lines of credit for a total amount of €150.0 million to refinance existing loans, including the fixed-term loan for €45.0 million taken out by Mediawan and its subsidiary MDWan Fiction on March 19, 2018, as well as the loan dated March 31, 2017, taken on by Wannabe in the amount of €270.0 million, and (ii) three additional credit facilities in the total amount of €80.0 million (not drawn on as of December 31, 2018) to finance future external growth operations.

Annual Financial Report – Mediawan – December 31, 2018 – 56

In order to provide a guarantee for this loan (and interest on it), Mediawan gave the banks collateral when it initially drew on its credit for €150.0 million on December 19, 2018: . A collateral agreement for a share account made between Mediawan as the pledgor and Société Générale as the security agent for its shares held in Groupe AB (formerly Wannabe), dated December 19, 2018 . A collateral agreement for a share account between Mediawan as the pledgor and Société Générale as the security agent for its shares held in MDWan Fiction, dated December 19, 2018

These forms of collateral were offered as a guarantee for the payment obligations (present, future, real, or contingent) for all sums due on principal (up to €230.0 million), late-payment interest or other sums (including commissions, fees, expenses, or compensation of any nature whatsoever) due or that may be due (including following an accelerated payment) from Mediawan under the loan agreement (including in case of expiration of the term and, notably, sums due for cancellation, resolution, or annulment of the loan agreement).

In addition, maintenance of the bank line of credit for €150.0 million is subject to maintaining a financial ratio calculated annually based on consolidated data, for the duration of the loan. As of the end of December 2018, this ratio has been maintained.

Production loans

The subsidiaries of the Group carrying out the production business grant, for production loans, collateral in the form of future revenues associated with the usage of audiovisual works produced.

 Commitments to buy minority stakes and pay earnouts

Obligations incurred by Mediawan through commitments to buy shares from minority shareholders (“put options” for minority stakes) are recorded under “other financial liabilities.”

However, the portion of the current value of commitments to buy back minority stakes categorized as compensation for post-acquisition services, as well as earnouts, constitute a commitment given by the Group that amounts to €(9.8) million.

 Other commitments

Annual Financial Report – Mediawan – December 31, 2018 – 57

Other commitments given off-balance sheet for the Group, presented in the table below, include contracts signed for current business line activities, such as commitments related to the acquisition of content, operating leases and sub-leases, and commercial commitments such as long-term service contracts. Most of these commitments are reciprocal commitments:

Commitments given (in € thousands) Total < 1 year 1 - 5 years > 5 years

Operating leases 9,3 2,9 4,9 1,6 Transponder lease agreements 6,8 2,9 3,9 - Non-cancelable commitments to purchase programs 28,5 25,6 2,9 - Other commitments 19,6 0,5 19,1 - Total 64,2 31,9 30,7 1,6 11.5. Off-balance sheet commitments received

Mirroring the purchase promises given by Mediawan for certain minority stakes, the Group received sale promises from the same stakes (“call options” on minority stakes).

As part of external growth transactions, Mediawan also signed guarantee agreements with the sellers of the acquired entities, with the purpose of indemnifying the Group in the event of a decrease in assets or increase in liabilities after the sale, due to one or more causes existing before said sale. As a guarantee of execution by the sellers of their obligations under the agreement and of on-time payment of any sum due from them under the agreement, the sellers committed to give Mediawan collateral in the form of immediately liquid assets or to give bank guarantees in the amount of their commitments.

Other commitments received off-balance sheet for the Group include: . Subsidies received and not allocated to productions, as well as commercial commitments for sales of audiovisual distribution rights:

Commitments received (in € thousands) Total < 1 year 1 - 5 years > 5 years

Grants received and not allocated to a production 11,7 6,1 5,6 - Commercial commitments – sales of rights 6,1 6,1 - - Total 17,7 12,2 5,6 - . As well as rights to draw on credit not yet exercised (see note 11.4).

11.6. Risks

 Interest rate risk

Annual Financial Report – Mediawan – December 31, 2018 – 58

Variable In € millions Total Fixed-rate Unexposed rate Financial assets 1,5 - 0,3 1,3 Financial liabilities (244,5) (10,7) (228,0) (5,8) Net position (243,0) (10,7) (227,8) (4,6)

In € millions Total < 1 year 1 - 5 years > 5 years

Fixed rate financial assets - - - - Variable rate financial assets 0,3 0,3 - - Financial assets not exposed 1,3 0,6 0,3 0,3 Financial assets 1,5 0,9 0,3 0,3 Fixed rate financial liabilities (10,7) (6,9) (3,8) - Variable rate financial liabilities (228,0) (19,5) (25,6) (182,9) Financial liabilities not exposed (5,8) (3,4) (2,5) - Financial liabilities (244,5) (29,8) (31,8) (182,9) As of the end of December 2018, the bank loan for the Group was the only financial liability with a variable interest rate; thus, the Group is exposed to interest rate risk. In order to hedge its exposure to this risk, the Group purchased a derivative financial instrument used to convert the bank loan taken out at a variable rate to a fixed rate. As of December 31, 2018, the fair value of this interest rate swap was €(0.3) million (liability derivative).

 Foreign exchange risk Due to the international nature of its business, Mediawan is exposed to foreign exchange risk on commercial transactions recorded on the balance sheet, as well as FX risk on forecast transactions. Mediawan makes an effort to provide a natural hedge between cash inflows and outflows in currencies other than the euro. Mediawan considers on a case-by-case basis the need and opportunity to put in place a foreign exchange hedge for this risk (forward purchases or sales, options). The Group also has a bank account denominated in USD in order to complete transactions denominated in this currency.

Annual Financial Report – Mediawan – December 31, 2018 – 59

The net FX position of the Group as of December 31, 2018, is presented as follows:

In € millions USD/EUR CAD/EUR CHF/EUR GBP/EUR EUR/EUR Total Assets 9,0 4,6 2,7 33,3 709,8 759,4 Liabilities (2,1) (4,2) (0,0) (33,3) (719,7) (759,4) Off Balance Sheet (received) - - - - 17,7 17,7 Off Balance Sheet (given) (4,2) - - - (60,0) (64,2) Net position before hedging 2,7 0,4 2,7 (0,0) (52,2) (46,4) Hedging ------Net position 2,708 0,4 2,7 (0,0) (52,2) (46,4)

Sensitivity (0,3) (0,0) (0,3) 0,0 - (0,6) The net exposure in foreign currencies, expressed in euros at the closing exchange rate of the fiscal year, was €5.8 million. The sensitivity of the overall net foreign exchange position to 10% appreciation of the euro against all of the other relevant currencies would be worth €(0.6) million. Additionally, a 10% appreciation of the value of the US dollar would have a positive impact on the income statement of around €0.7 million.  Liquidity risk The policy of Mediawan is to pre-finance all of its new productions with specialized financial institutions, which ensures the monthly cash flow needed to cover production costs, as well as general expenses allocated to production. Mediawan receives bank credit from Coficiné for projects in development, in-progress productions, and finished productions. These lines of credit are backed by incurred or contracted receivables and are paid down when the corresponding customer receivables are registered. Credit pay-outs are regulated and issued in increments according to conditions generally tied to stages of production. Receivables are paid according to a payment schedule determined between the Group and its customers, with the schedule forming an integral part of the contract. Given the quality of customer receivables given as collateral, the credit risk borne by Mediawan is minimal. This form of financing, specific to the business sector in which the Group operates, is not subject to debt ratios. Given that the credit risk is considered low, Mediawan has not found it appropriate to date to obtain credit insurance.

 Stock risk Mediawan and its subsidiaries are not engaged in speculative stock market operations. As of December 31, 2018, Mediawan owned 51,041 treasury shares (under the liquidity agreement), valued at the closing share price on December 31, 2018.

Annual Financial Report – Mediawan – December 31, 2018 – 60

11.7. Financial instruments by category and classification level As per IFRS 7 - Financial Instruments – Disclosures, assets and liabilities recorded at fair value are classified according to the following three levels of fair value: . Level 1: prices quoted on an active market. When prices quoted on an active market are available, they are used preferentially to determine the market value; . Level 2: internal model with observable parameters based on internal valuation techniques. These techniques use typical calculation methods incorporating data that can be observed on markets (forward price, rate curve, etc.). The calculation for most derivative financial instruments traded on markets is performed based on commonly used models for valuing these financial instruments; . Level 3: internal model with non-observable parameters.

Liabilities Fair Asset NBV Fair Loan & carried at Hierarchic In € millions Value available Derivatives Dec18 Value receivab. amortized level per result for sale costs

Current financial assets 0,2 0,2 - - 0,2 - - - Non current financial assets 0,8 0,8 - - 0,8 - - n.a. Cash & cash equivalent 45,9 45,9 - 45,9 - - - n.a. Financial assets 46,9 46,9 - 45,9 1,0 - - - Current financial liabilities (60,2) (60,5) 0,3 - - (60,5) - n.a. Non current financial liabilities (184,4) (184,4) - - - (149,9) (34,5) n.a. Financial liabilities (244,5) (244,8) 0,3 - - (210,4) (34,5) -

11.8. Post-closing events

 Increased stake in Makever On January 5, 2019, in accordance with the agreements made at the time of the acquisition of the majority stake in Makever, Mediawan acquired from recipients of free shares of Makever those same shares made available, thus increasing the share of equity held by MDWan Fiction to 78.9% of share capital.  Acquisition of a majority stake in Palomar On January 15, 2019, Mediawan announced that it had signed a final agreement for the acquisition of a majority stake in the share capital of Palomar, the largest independent producer of TV series, films, and documentaries in Italy. Mediawan finalized the acquisition of a 72% majority stake in Palomar, carried out through MDWan Fiction, after: . the acquisition of shares and investment in a reserved share capital increase on February 27, 2019; . an in-kind contribution agreement with Palomar shareholders, reinforcing Mediawan’s position, on March 28, 2019.

Annual Financial Report – Mediawan – December 31, 2018 – 61

In addition, this transaction was financed by drawing on a line of credit on February 27, 2019, established during the refinancing transaction carried out on December 19, 2018, in the amount of €30.0 million. In 2018, Palomar earned revenues of €20.1 million for a net profit of €2.2 million.

 Legal simplification operation Made possible by the refinancing transaction on December 19, 2018, on March 30, 2019, Mediawan proceeded with: . the transfer by Topco 1 to Mediawan of its share of Topco 2 (as such, Topco 1 and Topco 2 are now wholly owned by Mediawan); . at the same time, the take-over merger of Topco 1 and Topco 2 by Mediawan, taking effect retroactively going back to January 1, 2019, but actually effective as of May 15, 2019, given legal waiting periods.

11.9. Fees of the Statutory Auditors For fiscal year 2018, the fees paid to the Statutory Auditors are as follows:

Mazars Grant Thornton Amounts In % Amounts In % In € millions 2018 2017 2018 2017 2018 2017 2018 2017

Mediawan (Issuer) (0,1) (0,2) 24,8% 68,5% (0,1) (0,2) 29,3% 67,9% Fully-consolidated (0,3) (0,1) 75,2% 21,9% (0,2) (0,1) 67,0% 25,0% subsidiaries Certification and half-year limited review of the (0,4) (0,2) 100,0% 90,4% (0,3) (0,2) 96,3% 92,9% individual and consolidated financial statements Mediawan (Issuer) - (0,0) 0,0% 8,6% (0,0) (0,0) 3,7% 6,1% Fully-consolidated - (0,0) 0,0% 1,0% - (0,0) 0,0% 1,0% subsidiaries Services other than certification of financial - (0,0) 0,0% 9,6% (0,0) (0,0) 3,7% 7,1% statements Statutory Auditors’ (0,4) (0,2) 100,0% 100,0% (0,3) (0,2) 100,0% 100,0% remuneration In 2018, the services, other than certification of financial statements, provided over the fiscal year mainly regarded verifying social and environmental information published in the Mediawan management report.

Annual Financial Report – Mediawan – December 31, 2018 – 62

12. Report of the Statutory Auditors on the consolidated financial statements

To the General Assembly of Shareholders of the company Mediawan,

 Opinion In carrying out the mission given to us under your articles of association, we completed the audit of the consolidated financial statements of the company Mediawan for the fiscal year ended on December 31, 2018, as they are attached to this report.

We hereby certify that the consolidated financial statements are, from the standpoint of the IFRS as adopted by the European Union, in good order and honest, and give a faithful representation of the result of operations in the past fiscal year, as well as of the situation of finances and assets, as of the end of the fiscal year, of the group made up by the people and entities included in the scope of consolidation.

The opinion expressed above is consistent with the contents of our report to the Audit Committee.

 Basis of the opinion

Audit references

We performed our audit according to the professional standards that apply in France. We find that the items that we collected are sufficient and appropriate for basing our opinion.

Our responsibilities under these standards are indicated in the section “Responsibilities of the statutory auditors as regards the audit of the consolidated financial statements” of this report.

Independence

We carried out our audit while adhering to the rules for independence that apply to us over the period from January 1, 2018, to the issuance date of our report and, in particular, we did not provide any services prohibited by Article 5, paragraph 1 of the EU regulation No. 537/2014 or by the ethics code of the statutory auditor profession.

 Observation Without calling into question the opinion expressed above, we would like to draw your attention to notes 7.4 and 7.5 in the appendices to the consolidated financial statements, which list changes to accounting methods resulting from application of IFRS 15 “Revenue from Contracts with Customers” and IFRS 9 “Financial Instruments.”

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 Justification of findings – Key points of the audit In application of the provisions of Articles L. 823-9 and R. 823-7 of the French Commercial Code related to justifying our findings, we would like to bring to your attention the key points of the audit related to risks of significant anomalies, which, in our professional opinion, were the most important for the audit of the consolidated financial statements for the fiscal year, as well as the responses that we provided for these risks.

The findings fit into the context of the audit of the consolidated financial statements, taken as a whole, and the context of the formation of our opinion expressed above. We do not express any opinion on items in these consolidated financial statements taken in isolation.

Valuation of audiovisual distribution rights and broadcasting rights (Notes 7.7 “Summary of the significant accounting principles applied by Mediawan” and 9.1 “Intangible fixed assets”)

Identified risk

Productions and the catalog of audiovisual distribution and broadcasting rights represent a net book value of €318 million as of December 31, 2018 (i.e. 42% of total assets).

They are defined as follows: . Audiovisual distribution rights: Productions & Catalog Audiovisual products are immobilized at their production costs, excluding financing and sales fees. The French audiovisual tax credit and subsidies granted by the French National Center of Cinematography are deducted from the gross immobilized value. The catalog of audiovisual distribution rights, resulting from the acquisition of distribution rights produced by third parties, is immobilized at the start date of the distribution rights using their purchase prices, with any dubbing costs added. Advances and guaranteed minimum revenues are also immobilized. Amortization is determined by category of program based on sales achieved versus earned and forecast revenues, re-valued at the closing of each accounting period. These categories of programs are determined according to the strategy of the Group for acquiring and producing programs. They reflect trends in the market for sales of intellectual property rights.

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. Broadcasting rights Rights acquired and intended for broadcasting on the channels of the Group are immobilized and amortized upon broadcasting for a maximum duration equal to the duration of the rights acquired. These audiovisual distribution rights and broadcasting rights are annually subjected to a depreciation test on the date of closing, or more frequently if there is an indication of loss of value. Depreciation is then recorded if the recoverable value of these rights is less than their net book value. The recoverable value of these rights is determined on the basis of net cash flows, which take into account the future income from each category of televised program as of the valuation date, sales expenses, royalties paid to intellectual property owners, and taxes. If the current value of the net income is not sufficient to cover the net book value of these rights, depreciation is recorded to bring the net book value down to match the current value of estimated future net income. In regards to broadcast rights, depreciation is recorded according to the number of airings remaining and their likelihoods of airing. We therefore considered that audiovisual distribution and broadcast rights were a key point in our audit, given the significance of judgments and assumptions determined by Management when calculating future income from each of the categories of televised programs.

Our response

We have taken into account the processes related to valuation of audiovisual distribution rights and broadcasting rights. Our other work consisted of, in particular: . examining the principles and methods for valuation of the audiovisual distribution and broadcast rights using applicable accounting standards; . assessing the lifetime assumed and the method of amortization selected; . corroborating the reasonableness of the principal data and assumptions upon which the estimates are based, particularly future net income; . as regards the rights recognized at the time the purchase prices for entities acquired during the period were allocated, assessing the consistency of the selected amounts and periods for amortization as compared to the conclusions of the outside experts used at the time of the acquisitions;

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. verifying the consistency of these estimates with those used when the purchase price was allocated; . ensuring proper accounting of amortization and recorded losses of value. Furthermore, we assessed the appropriateness of the information provided in notes 7.7 and 9.1 in the appendices to the consolidated financial statements.

Valuation of the recoverable value of goodwill (Notes 7.7 “Summary of the significant accounting principles applied by Mediawan” and 9.2 “Goodwill”)

Identified risk

Since March 2017, Mediawan has made eight strategic acquisitions. These acquisitions resulted in recording of goodwill after allocation of the purchase prices for the assets acquired and liabilities assumed. As of December 31, 2018, the net value of goodwill recorded on the balance sheet was €165 million, on a balance sheet total of €759 million. The Group performs annual depreciation tests on these assets. The modalities for these tests are described in note 7.7 in the appendices to the consolidated financial statements. The depreciation tests performed by management on goodwill for each of the Cash Generating Units (CGUs) defined by the Group include a significant portion from judgments and assumptions, regarding, in particular:

. future cash flow, . discount rates (WACC) and long-term growth rates used to project these flows. As such, change in these assumptions may change the recoverable value of the goodwill.

We believe that the valuation of goodwill is a key point for auditing because of its importance in the consolidated financial statements and because the determination of its recoverable value, based on projections of discounted future cash flow, relies on assumptions, estimates, assessments, or judgments from management.

Our response

We have examined the modalities for implementation of tests for loss of value performed by the Group. We primarily focused on CGUs where immobilized intangible assets represent a significant share of net assets.

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We assessed the reasonableness of the main estimates: . by verifying the consistency of forecast cash flows with the budget presented to the Audit Committee, . by verifying the reasonableness of the assumptions for key activities (particularly growth forecasts) and the growth rate used to extrapolate cash flows beyond the projection period, . by assessing, with assistance from our valuation specialists, the discount rate used in relation to market standards, . by examining the sensitivity analyses presented in the appendices to the consolidated financial statements. We also verified the appropriateness of the information provided in the appendices to the consolidated financial statements.

Allocation of purchase prices of ON Entertainment, Makever, and the television business of EuropaCorp (Notes 6.2 “Significant Events of the Period” and 9.2 “Goodwill”)

Identified risk

In the course of business, during fiscal year 2018, Mediawan Group made several acquisitions for a total amount of €91.9 million, including for ON Entertainment Group, Makever Group, and the television business of EuropaCorp.

These transactions resulted in the recording of residual goodwill in the total amount of €67 million after allocation of the purchase prices to acquired assets and liabilities. Allocation of the purchase prices was done for each of the three transactions within the 12 months following the date on which Mediawan assumed control. Mediawan hired an independent expert to help it identify and value the main intangible assets, as well as the other assets and liabilities. Allocation of the purchase prices for the different companies acquired is considered a key point in our audit given the importance of these acquisitions and because management had to use a certain level of judgment to identify the assets acquired and liabilities assumed and to value them at their fair value.

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Our response

Our work consisted of, in particular: • obtaining and reading documentation on the various transactions, such as purchase contracts and associated agreements, interacting with management to understand the characteristics of these acquisitions and verifying conformity with applicable accounting provisions based on the revised IFRS 3; • using the independent expert’s reports and support from our own experts, assessing the scope of the independent expert’s work and the appropriateness of the assumptions and means used to value the acquired assets and assumed liabilities from the standpoint of the criteria established by the relevant accounting standards; • verifying that the appropriate accounting records were incorporated into the consolidated financial statements; • verifying the correctness of calculations.

Finally, we verified the appropriateness of the information provided in the notes appended to the consolidated financial statements.

 Specific checks In accordance with the professional standards applicable in France and as required by laws and regulations, we also carried out the specific verifications of information relating to the Group provided in the Management Board’s management report.

We have no observations to make on the information’s accuracy or consistency with the consolidated financial statements.

 Statement of extra-financial performance We hereby attest that the consolidated statement of extra-financial performance, called for by Article L. 225-102-1 of the French Commercial Code, appears in the Group’s management report. Please note that, in accordance with the provisions of Article L. 823-10 of the same Code, we did not verify the accuracy of the information contained in this statement or its consistency with the consolidated financial statements. The information must be verified in a report by an independent third party.

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 Information resulting from other legal and regulatory obligations Designation of the Statutory Auditors

We were appointed as Mediawan’s Statutory Auditors by the articles of association dated December 10, 2015.

As of December 31, 2018, Grant Thornton and Mazars were in their fourth uninterrupted year of their appointment, three of those years being since the company’s shares were admitted for trading on a regulated market.

 Responsibilities of management and of the persons responsible for corporate governance in regards to the consolidated financial statements It is the responsibility of management to prepare the consolidated financial statements while presenting a faithful representation, in accordance with the IFRS as adopted by the European Union. Management is also responsible for establishing internal controls that it deems necessary for preparing the consolidated financial statements so that they do not contain any significant anomalies, whether due to fraud or error. When preparing the consolidated financial statements, management is responsible for evaluating the ability of the company to continue operations and for presenting in the financial statements, if applicable, the necessary information related to continuation of operations. Management is also responsible for applying the accounting principle of continuity of operations, unless there is a plan to liquidate the company or to cease its activities. It is the responsibility of the Audit Committee to track the process for preparing the financial information and to track the effectiveness of internal control and risk management systems, as well as, if applicable, internal auditing systems, in regards to procedures for preparing and processing accounting and financial information.

The consolidated financial statements were approved by the Management Board.

 Responsibilities of the Statutory Auditors in regards to auditing the consolidated financial statements Purpose of the audit and process We are responsible for preparing a report on the consolidated financial statements. Our objective is to obtain reasonable assurances that the consolidated financial statements, when taken as a whole, do not contain any significant anomalies. Reasonable assurance corresponds to a high degree of assurance, without, however, guaranteeing that an audit carried out in accordance with professional standards will systematically detect all significant anomalies. Anomalies may result from fraud or errors and are considered to be significant

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when one can reasonably expect that they may, taken individually or together, influence the economic decisions that users of the financial statements make on the basis of such financial statements.

As specified in article L. 823-10-1 of the French Commercial Code, our mission of certifying the financial statements does not involve guaranteeing the viability or the quality of the management of your company.

In the context of an audit carried out in accordance with the professional standards applicable in France, the statutory auditor applies their professional judgment throughout the duration of the audit. In addition: . they identify and evaluate the risk that the consolidated financial statements may contain significant anomalies, whether as a result of fraud or error, define and implement audit procedures in light of such risks, and gather the information they deem sufficient and appropriate for the purpose of arriving at their opinion. The risk of failing to detect a significant anomaly resulting from fraud is higher than the risk of failing to detect a significant anomaly resulting from an error, as fraud may involve collusion, falsification, voluntary omissions, false representations, or the circumventing of internal controls; . they take into account internal controls relevant to the audit in order to establish audit procedures appropriate to the circumstances and not with the purpose of expressing an opinion about the effectiveness of the internal controls; . they assess the appropriateness of the accounting methods used and the reasonableness of the accounting estimates made by management, as well as the information regarding the estimates provided in the consolidated financial statements; . they assess the appropriateness of application by management of the accounting principle of continuity of operations and, according to the information collected, whether or not there is significant uncertainty related to events or circumstances that may call into question the ability of the company to continue operations. This assessment is based on the information gathered up until the date of their report, but it is noted that subsequent circumstances or events may call into question the continuity of operations. If the statutory auditor concludes that significant uncertainty exists, then they must draw the attention of readers of the report to the information provided in the consolidated financial statements concerning that uncertainty or, if such information is not provided or is not relevant, they must provide a qualified opinion or refuse to certify the financial statements; . they assess the overall presentation of the consolidated financial statements and evaluate whether the consolidated financial statements reflect the underlying transactions and events in such a manner as to present a faithful representation;

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. regarding financial information relating to persons or entities included within the scope of consolidation, they collect the information they deem sufficient and appropriate for the purpose of expressing an opinion on the consolidated financial statements. They are responsible for managing, supervising, and carrying out the audit of the consolidated financial statements, as well as for the opinion expressed on the statements.

Report to the Audit Committee

We submit to the Audit Committee a report that, in particular, presents the scope of the audit and the work plan that was implemented, as well as the conclusions resulting from our work. We also bring to their attention, if applicable, significant weaknesses of internal controls that we identified in regards to procedures for preparing and processing accounting and financial information.

The information presented in the report to the Audit Committee includes the risks for significant anomalies that we found to be the most important for auditing the consolidated financial statements for the fiscal year; because of this, these risks are considered the key points for the audit, which we therefore described in this report.

We also provide the Audit Committee with the statement established in Article 6 of EU regulation No. 537-2014, confirming our independence according to the applicable rules in France as they have been established, particularly by Articles L. 822-10 to L. 822-14 of the French Commercial Code and in the ethics code for the statutory auditor profession. If necessary, we will discuss with the Audit Committee the risks weighing upon our independence and the safeguards that were applied.

Signed in Neuilly-sur-Seine and Courbevoie, France, on April 30, 2019

The Statutory Auditors

GRANT THORNTON FRENCH MEMBER OF GRANT THORNTON INTERNATIONAL

Laurent Bouby

MAZARS Gilles Rainaut

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