Criteo
Annual Report 2013

Plain-text annual report

Morningstar® Document Research℠ FORM 20-FCriteo S.A. - CRTOFiled: March 06, 2014 (period: December 31, 2013)Annual and transition report of foreign private issuers under sections 13 or 15(d)The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 FORM 20-F (Mark One)¨REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIESEXCHANGE ACT OF 1934OR xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934For the fiscal year ended December 31, 2013OR ¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934For the transition period from to OR ¨SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934Date of event requiring this shell company reportCommission file number 001-36153 Criteo S.A.(Exact name of Registrant as specified in its charterand translation of Registrant’s name into English) France(Jurisdiction of incorporation or organization)32, rue Blanche, 75009 Paris—France(Address of principal executive offices)Jean-Baptiste RudelleChairman and Chief Executive OfficerCriteo S.A.32 rue Blanche75009 Paris, FranceTel: +33 1 40 40 22 90 Fax: +33 1 40 40 22 030(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsSecurities registered or to be registered pursuant to Section 12(b) of the Act. Title of each class Name of each exchange on which registeredAmerican Depositary Shares, each representing one ordinary share,nominal value €0.025 per share The Nasdaq Stock Market LLCOrdinary shares, nominal value €0.025 per share* The Nasdaq Stock Market LLC *Not for trading, but only in connection with the registration of the American Depositary Shares.Securities registered or to be registered pursuant to Section 12(g) of the Act. NoneSecurities for which there is a reporting obligation pursuant to Section 15(d) of the Act. NoneIndicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Annual Report.Ordinary shares, nominal value €0.025 per share: 56,856,070 as of December 31, 2013 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes x NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ¨ Yes x NoIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. x Yes ¨ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ¨ Yes x NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer xIndicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP ¨ International Financial Reporting Standards as issuedby the International Accounting Standards Board x Other ¨If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. ¨ Item 17 ¨ Item 18If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No *Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsTABLE OF CONTENTS PAGE INTRODUCTION PART I Item 1. Identity of Directors, Senior Management and Advisers 4 Item 2. Offer Statistics and Expected Timetable 4 Item 3. Key Information 4 A. Selected Financial Data 4 B. Capitalization and Indebtedness 9 C. Reasons for the Offer and Use of Proceeds 9 D. Risk Factors 9 Item 4. Information on the Company 42 A. History and Development of the Company 42 B. Business Overview 42 C. Organizational Structure 59 D. Property, Plants and Equipment 59 Item 4A. Unresolved Staff Comments 59 Item 5. Operating and Financial Review and Prospects 59 A. Operating Results 61 B. Liquidity and Capital Resources 82 C. Research and Development, Patents and Licenses 86 D. Trend Information 86 E. Off-Balance Sheet Arrangements 89 F. Tabular Disclosure of Contractual Obligations 89 Item 6. Directors, Senior Management and Employees 90 A. Directors and Senior Management 90 B. Compensation 92 C. Board Practices 103 D. Employees 107 E. Share Ownership 107 Item 7. Major Shareholders and Related Party Transactions 107 A. Major Shareholders 107 B. Record Holders 110 C. Related Party Transactions 111 D. Interests of Experts and Counsel 113 Item 8. Financial Information 114 A. Consolidated Statements and Other Financial Information 114 B. Significant Changes 114 Item 9. The Offer and Listing 115 A. Offer and Listing Details 115 B. Plan of Distribution 115 C. Markets 115 D. Selling Shareholders 115 E. Dilution 115 F. Expenses of the Issue 115 iSource: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsTABLE OF CONTENTSCONTINUED PAGE Item 10. Additional Information 115 A. Share Capital 115 B. Memorandum and Articles of Association 116 C. Material Contracts 116 D. Exchange Controls 116 E. Taxation 116 F. Dividends and Paying Agents 123 G. Statement by Experts 123 H. Documents on Display 123 I. Subsidiary Information 124 Item 11. Quantitative and Qualitative Disclosures About Market Risk 124 Item 12. Description of Securities Other than Equity Securities 125 A. Debt Securities 125 B. Warrants and Rights 125 C. Other Securities 125 D. American Depositary Shares 125 PART II Item 13. Defaults, Dividend Arrearages and Delinquencies 127 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 127 Item 15. Controls and Procedures 127 Item 16A. Audit Committee Financial Expert 128 Item 16B. Code of Ethics 128 Item 16C. Principal Accountant Fees and Services 128 Item 16D. Exemptions from the Listing Standards for Audit Committees 128 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 129 Item 16F. Change in Registrant’s Certifying Accountant 129 Item 16G. Corporate Governance 129 PART III Item 17. Financial Statements 130 Item 18. Financial Statements 130 Item 19. Exhibits 130 iiSource: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsINTRODUCTIONUnless otherwise indicated, “Criteo,” “the Company,” “our Company,” “we,” “us” and “our” refer to Criteo S.A. and its consolidated subsidiaries.“Criteo,” the Criteo logo and other trademarks or service marks of Criteo S.A. appearing in this Annual Report on Form 20-F are the property of CriteoS.A. Trade names, trademarks and service marks of other companies appearing in this Annual Report on Form 20-F are the property of their respectiveholders.Our audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued bythe International Accounting Standards Board, or IASB. Our consolidated financial statements are presented in euros. All references in this Annual Report onForm 20-F to “$,” “US$,” “U.S.$,” “U.S. dollars,” “dollars” and “USD” mean U.S. dollars and all references to “€” and “euros,” mean euros, unlessotherwise noted. Throughout this Annual Report on Form 20-F, references to ADSs mean ADSs or ordinary shares represented by ADSs, as the case may be. 1Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsSPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Annual Report on Form 20-F contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management’s beliefs and assumptions and on informationcurrently available to our management. All statements other than present and historical facts and conditions contained in this Annual Report on Form 20-F,including statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, areforward-looking statements. When used in this Annual Report on Form 20-F, the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,”“intend,” “is designed to,” “may,” “might,” “plan,” “potential,” “predict,” “objective,” “should,” or the negative of these and similar expressions identifyforward-looking statements. Forward-looking statements include, but are not limited to, statements about: • our ability to meet the challenges of a growing company in a rapidly developing and changing industry, including our ability to forecastaccurately; • our ability to maintain an adequate rate of revenue growth; • the ability of the Criteo Engine to accurately predict engagement by a user; • our ability to continue to collect and utilize data about user behavior and interaction with advertisers; • our ability to protect users’ information and adequately address privacy concerns; • our ability to acquire an adequate supply of advertising inventory from publishers on terms that are favorable to us; • our ability to predict and adapt to changes in widely adopted industry platforms and other new technologies; • the effects of increased competition in our market; • our ability to effectively scale our technology platform in new industry verticals and to manage our international expansion and the integration ofour acquisitions; • regulatory, legislative or self-regulatory developments regarding internet privacy matters; • our ability to maintain, protect and enhance our brand and intellectual property; • our ability to attract and retain qualified employees and key personnel; and • our ability to integrate the operations of acquired businesses.You should refer to the section of this Annual Report on Form 20-F titled “Item 3.D—Risk Factors” for a discussion of important factors that may causeour actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure youthat the forward-looking statements in this Annual Report on Form 20-F will prove to be accurate. Furthermore, if our forward-looking statements prove to beinaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statementsas a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake noobligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.You should read this Annual Report on Form 20-F and the documents that we reference in this Annual Report on Form 20-F and have filed as exhibits tothis Annual Report on Form 20-F completely and with the understanding that our actual future results may be materially different from what we expect. Wequalify all of our forward-looking statements by these cautionary statements. 2Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThis Annual Report on Form 20-F contains market data and industry forecasts that were obtained from industry publications. These data involve anumber of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified any third-partyinformation. While we believe the market position, market opportunity and market size information included in this Annual Report on Form 20-F is generallyreliable, such information is inherently imprecise. 3Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPART I Item 1.Identity of Directors, Senior Management and AdvisersNot applicable. Item 2.Offer Statistics and Expected TimetableNot applicable. Item 3.Key Information A.Selected Financial DataOur audited consolidated financial statements have been prepared in accordance with IFRS, as issued by the IASB. We derived the selected consolidatedstatements of income data for the years ended December 31, 2011, 2012 and 2013 and selected consolidated statements of financial position data as ofDecember 31, 2012 and 2013 from our audited consolidated financial statements included elsewhere in this Annual Report on Form 20-F. The selectedconsolidated statements of income data for the year ended December 31, 2010 and the selected consolidated financial position data as of December 31, 2010and 2011 have been derived from our audited consolidated financial statements and notes thereto which are not included in this Annual Report on Form 20-F.This data should be read together with, and is qualified in its entirety by reference to, “Item 5. Operating and Financial Review and Prospects” as well as ourconsolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 20-F. Our historical results are not necessarily indicativeof the results to be expected in the future.Consolidated Statement of Income Data: Year Ended December 31, 2010 2011 2012 2013 Euro Euro Euro Euro US$ (in thousands, except share and per share data) Revenue €65,626 €143,562 €271,855 €443,960 $611,732 Cost of revenue: Traffic acquisition costs (35,796) (79,060) (157,707) (264,952) (365,077) Other cost of revenue (2,517) (5,690) (12,662) (21,956) (30,253) Gross profit €27,313 €58,812 €101,486 €157,052 $216,402 Operating expenses: Research and development (2,433) (8,786) (14,285) (32,175) (44,334) Sales and operations (11,723) (30,830) (58,047) (82,816) (114,112) General and administrative (5,741) (9,309) (20,208) (31,387) (43,248) Total operating expenses (19,897) (48,925) (92,540) (146,378) (201,694) Income from operations 7,416 9,887 8,946 10,674 14,708 Financial income (expense) (34) 628 (1,559) (6,868) (9,463) Income before taxes 7,382 10,515 7,387 3,806 5,245 Provision for income taxes (2,668) (4,391) (6,556) (2,413) (3,325) Net income €4,714 €6,124 €831 €1,393 $1,920 Net income available to shareholders of Criteo S.A. €4,714 €6,124 €981 €1,065 $1,467 Net income allocated to shareholders per share: Basic €0.334 €0.140 €0.022 €0.022 $0.030 Diluted €0.329 €0.129 €0.020 €0.019 $0.026 Weighted average shares outstanding used incomputing per share amounts: Basic 14,127,273 43,793,904 45,143,188 48,692,148 48,692,148 Diluted 14,349,075 47,521,964 48,586,666 55,174,764 55,174,764 4(8)(1)(1)(1)(1)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOther Financial and Operating Data: As of December 31, 2010 2011 2012 2013 Euro Euro Euro Euro US$ (€ and $ in thousands) Number of Clients 832 1,638 3,297 5,072 5,072 Revenue ex-TAC €29,830 €64,502 €114,148 €179,008 $246,655 Adjusted Net Income €5,581 €7,519 €4,387 €10,909 $15,032 Adjusted EBITDA €9,009 €13,884 €17,380 €31,313 $43,146 Consolidated Statement of Financial Position Data: As of December 31, 2010 2011 2012 2013 Euro Euro Euro Euro US$ (in thousands) Cash and cash equivalents €15,552 €16,382 €43,262 €234,343 $322,901 Total assets 39,093 63,974 137,130 391,110 538,910 Trade receivables net of allowances 15,055 33,423 60,685 87,643 120,763 Total financial liabilities 775 877 6,253 11,316 15,592 Total liabilities 21,012 38,168 76,689 126,036 173,665 Total equity 18,081 25,806 60,441 265,074 365,245 Cost of revenue and operating expenses include share-based compensation expense, service costs (pension), depreciation and amortization expense, andacquisition-related deferred price consideration as follows: Year Ended December 31, 2010 2011 2012 2013 (in thousands) Share-Based Compensation Expense: Research and development €(29) €(180) €(429) €(2,049) Sales and operations (495) (899) (1,800) (2,801) General and administrative (343) (316) (1,327) (2,026) Total share-based compensation expense €(867) €(1,395) €(3,556) €(6,876) Service Costs (Pension): Research and development €— €— €— €(109) Sales and operations — — — (105) General and administrative (43) (75) (110) (67) Total service costs (pension) €(43) €(75) €(110) €(281) Depreciation and Amortization Expense: Cost of revenue €(609) €(2,010) €(3,648) €(7,846) Research and development (8) (51) (166) (915) Sales and operations (59) (227) (847) (1,792) General and administrative (7) (239) (107) (566) Total depreciation and amortization expense €(683) €(2,527) €(4,768) €(11,119) Acquisition-related deferred price consideration: Research and development €— €— €— €(2,363) Sales and operations — — — — General and administrative — — — — Total acquisition-related deferred price consideration €— €— €— €(2,363) 5(8)(3)(4)(5)(8)(1)(6)(7)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents For the year ended December 31, 2012 and 2013, this includes €(150,000) and €328,000, respectively, of net income (loss) attributable to non-controlling interests in our Japanese subsidiary held by Yahoo! Japan Corporation. We define Revenue ex-TAC as our revenue excluding traffic acquisition costs, or TAC, generated over the applicable measurement period. Revenue ex-TAC is not a measure calculated in accordance with IFRS. We have included Revenue ex-TAC in this Annual Report on Form 20-F because it is a keymeasure used by our management and board of directors. In particular, we believe that the elimination of TAC from revenue can provide a usefulmeasure for period-to-period comparisons of our core business. Accordingly, we believe that Revenue ex-TAC provides useful information to investorsand others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Revenueex-TAC has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results asreported under IFRS. Some of these limitations are: (a) other companies, including companies in our industry which have similar businessarrangements, may address the impact of TAC differently; and (b) other companies may report Revenue ex-TAC or similarly titled measures butcalculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should considerRevenue ex-TAC alongside our other IFRS-based financial performance measures, such as revenue and our other IFRS financial results. The followingtable presents a reconciliation of Revenue ex-TAC to revenue, the most directly comparable IFRS measure, for each of the periods indicated: Year Ended December 31, 2010 2011 2012 2013 (in thousands) Revenue €65,626 €143,562 €271,855 €443,960 Adjustment: Traffic acquisition costs (35,796) (79,060) (157,707) (264,952) Revenue ex-TAC €29,830 €64,502 €114,148 €179,008 We define Adjusted Net Income as our net income adjusted to eliminate the impact of share-based compensation expense, amortization of acquisition-related intangible assets, acquisition-related deferred price consideration and the tax impact of the foregoing adjustments. Adjusted Net Income is not ameasure calculated in accordance with IFRS. We have included Adjusted Net Income in this Annual Report on Form 20-F because it is a key measureused by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisionsregarding the allocation of capital. In particular, we believe that the elimination of share-based compensation expense, amortization of acquisition-relatedintangible assets, acquisition-related deferred price consideration and the tax impact of the foregoing adjustments in calculating Adjusted Net Income canprovide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted Net Income provides usefulinformation to investors and others in understanding and evaluating our results of operations in the same manner as our management and board ofdirectors. Our use of Adjusted Net Income has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysisof our financial results as reported under IFRS. Some of these limitations are: Adjusted Net Income does not reflect the potentially dilutive impact ofequity-based compensation or the impact of certain acquisition related costs 6(2)(3)(4)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents and other companies, including companies in our industry, may calculate Adjusted Net Income or similarly titled measures differently, which reducestheir usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted Net Income alongside our other IFRS-based financial performance measures, such as net profit and our other IFRS financial results. The following table presents a reconciliation of AdjustedNet Income to net income, the most directly comparable IFRS measure, for each of the periods indicated: Year Ended December 31, 2010 2011 2012 2013 (in thousands) Net income €4,714 €6,124 €831 €1,393 Adjustment: Share-based compensation expense 867 1,395 3,556 6,876 Amortization of acquisition-related intangible assets — — — 350 Acquisition-related deferred price consideration — — — 2,363 Tax impact of the above adjustments — — — (73) Adjusted Net Income €5,581 €7,519 €4,387 €10,909 We define Adjusted EBITDA as our consolidated earnings before interest, taxes, depreciation and amortization, adjusted to eliminate the impact of share-based compensation expense, service costs (pension) and acquisition-related deferred price consideration. Adjusted EBITDA is not a measure calculatedin accordance with IFRS. We have included Adjusted EBITDA in this Annual Report on Form 20-F because it is a key measure used by ourmanagement and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding theallocation of capital. In particular, we believe that the elimination of share-based compensation expense service costs (pension) and acquisition-relateddeferred price consideration in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business.Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results ofoperations in the same manner as our management and board of directors. Our use of Adjusted EBITDA has limitations as an analytical tool, and youshould not consider it in isolation or as a substitute for analysis of our financial results as reported under IFRS. Some of these limitations are:(a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, andAdjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;(b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect thepotentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cashavailable to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently,which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted EBITDA alongside ourother IFRS-based 7(5)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents financial performance measures, such as net profit and our other IFRS financial results. The following table presents a reconciliation of AdjustedEBITDA to net income, the most directly comparable IFRS measure, for each of the periods indicated: Year EndedDecember 31, 2010 2011 2012 2013 (in thousands) Net income €4,714 €6,124 €831 €1,393 Adjustments: Financial expense (income) 34 (628) 1,559 6,868 Provision for income taxes 2,668 4,391 6,556 2,413 Share-based compensation expense 867 1,395 3,556 6,876 Service costs (pension) 43 75 110 281 Depreciation and amortization expense 683 2,527 4,768 11,119 Acquisition-related deferred price consideration — — — 2,363 Total net adjustments 4,295 7,760 16,549 29,920 Adjusted EBITDA €9,009 €13,884 €17,380 €31,313 Effective January 1, 2012, actuarial gains and losses are recognized in other comprehensive income. Prior periods have not been modified as the effect ofthe change in accounting policy is immaterial. Includes acquisition-related amortization of intangible assets of €350,000 as of December 31, 2013. Translated solely for convenience into dollars at the noon buying rate of €1.00=US$1.3779 at December 31, 2013.Exchange Rate InformationIn this annual report, for convenience only, we have translated certain euro amounts reflected in our financial statements as of and for the year endedDecember 31, 2013 into U.S. dollars at the rate of €1.00 = $1.3779, the noon buying rate for euros in New York City on December 31, 2013. You should notassume that, on that or on any other date, one could have converted these amounts of euros into U.S. dollars at that or any other exchange rate.The following table sets forth, for each period indicated, the low and high exchange rates for euros expressed in U.S. dollars, the exchange rate at the endof such period and the average of such exchange rates on the last day of each month during such period, based on the noon buying rate in the City of NewYork for the euro. As used in this document, the term “noon buying rate” refers to the rate of exchange for the euro, expressed in U.S. dollars per euro, ascertified by the Federal Reserve Bank of New York for customs purposes. Year Ended December 31, 2009 2010 2011 2012 2013 High 1.5100 1.4536 1.4875 1.3463 1.3816 Low 1.2547 1.1959 1.2926 1.2062 1.2774 Rate at end of period 1.4432 1.3269 1.2973 1.3187 1.3779 Average rate per period 1.3955 1.3216 1.4002 1.2909 1.3303 The following table sets forth, for each of the last six months, the low and high exchange rates for euros expressed in U.S. dollars and the exchange rateat the end of the month based on the noon buying rate as described above. July2013 August2013 September2013 October2013 November2013 December2013 January2014 High 1.3282 1.3426 1.3537 1.3810 1.3606 1.3816 1.3682 Low 1.2774 1.3196 1.3120 1.3490 1.3357 1.3552 1.3500 Rate at end of period 1.3282 1.3196 1.3535 1.3594 1.3606 1.3779 1.3500 8(6)(6)(7)(8)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOn December 31, 2013, the noon buying rate of the Federal Reserve Bank of New York for the euro was €1.00 = $1.3779. Unless otherwise indicated,currency translations in this Annual Report on Form 20-F reflect the December 31, 2013 exchange rate.On February 21, 2014, the noon buying rate of the Federal Reserve Bank of New York for the euro was €1.00 = $1.3722.Information presented on a constant currency basis in this Annual Report on Form 20-F is calculated by translating current year results at prior yearaverage exchange rates. Management reviews and analyzes business results excluding the effect of foreign currency translation because they believe this betterrepresents our underlying business trends. B.Capitalization and IndebtednessNot applicable. C.Reasons for the Offer and Use of ProceedsNot applicable. D.Risk FactorsOur business faces significant risks. You should carefully consider all of the information set forth in this annual report and in our other filingswith the United States Securities and Exchange Commission (“SEC”), including the following risk factors which we face and which are faced by ourindustry. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. This report alsocontains forward-looking statements that involve risks and uncertainties. Our results could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below and elsewhere in this report and our other SEC filings. See“Special Note Regarding Forward-Looking Statements” above.Risks Related to Our Business and IndustryWe are an early-stage company with a limited operating history, which makes it difficult to evaluate our current business and future prospects.We began our operations in November 2005. Our limited operating history may make it difficult to evaluate our current business and our futureprospects. We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly developing andchanging industries, including challenges in forecasting accuracy, determining appropriate investments of our limited resources, market acceptance of ourexisting and future solutions, managing client implementations and developing new solutions. Our current operating model may require changes in order for usto scale our operations efficiently. You should consider our business and prospects in light of the risks and difficulties we face as an early-stage company.We have experienced rapid growth in recent periods, and our recent growth rates may not be indicative of our future growth.Our revenue has increased substantially since our inception, but we may not be able to sustain revenue growth consistent with our recent history, or atall. You should not consider our revenue growth in recent periods as indicative of our future performance. In future periods, our revenue could decline or growmore slowly than we expect. We believe growth of our revenue depends on a number of factors, including our ability to: • attract new clients, including from new industry verticals such as automotive, telecommunications, consumer goods and finance, and retain andexpand our relationships with existing clients; 9Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents • maintain the breadth of our publisher network and attract new publishers, including publishers of web content, mobile applications, video andsocial games, in order to grow the volume and breadth of advertising inventory available to us; • adapt our solution to meet evolving needs of businesses, including to address market trends such as the migration of consumers from web tomobile devices; • maintain and increase our access to data necessary for the performance of the Criteo Engine; • maintain the proper functioning of the Criteo Engine as we continue to collect increasing amounts of data from our growing base of clients; • continuously improve on the algorithms underlying the Criteo Engine; • adapt to a changing regulatory landscape governing privacy matters; • attract advertising dollars committed to a broader set of marketing objectives, such as building brand awareness; • introduce our solution to new geographic markets; • increase awareness of our brand on a global basis; and • attract and retain employees.We cannot assure you that we will be able to successfully accomplish any of these objectives.In addition, we also may incur significant losses in the future for a number of reasons, including other risks described in this Annual Report on Form20-F, and we may encounter unforeseen expense, difficulties, complications, delays and other unknown factors. While we have been profitable in each of thelast three full years, we had losses in certain quarterly periods. If we fail to achieve sufficient revenue growth to offset increased costs, we may be unable tosustain our recent growth in revenue or return to profitability in the future.The failure by the Criteo Engine to accurately predict engagement by a user could result in significant costs to us, in lost revenue and indiminished internet display advertising inventory.Our solution depends on the ability of the Criteo Engine to accurately predict the likelihood that a consumer will engage with any given internet displayadvertisement in order for our clients to achieve desirable returns on their advertising spend. We primarily charge our clients based on a cost per click, orCPC, pricing model, and our clients only pay us when a user engages with (i.e., clicks on) the advertisement. However, we purchase advertising inventoryfrom publishers on a cost per thousand impressions, or CPM, basis. Our results of operations therefore are dependent on the Criteo Engine’s ability to predictuser engagement with respect to a particular advertisement.Our agreements with clients are open ended and often do not include a spending minimum. Similarly, our contracts with publishers generally also do notinclude long-term obligations requiring them to make their inventory available to us. Therefore, we need to continuously deliver satisfactory results for ouradvertiser clients and publishers in order to maintain and increase revenue, which in turn depends in part on the optimal functioning of the Criteo Engine.In addition, as we have increased the number of advertiser clients and publishers that use our solution on a global basis, we have experienced significantgrowth in the amount of data processed by the Criteo Engine and the amount of advertising impressions we deliver. As the amount of data and variablesprocessed by the Criteo Engine increases, the calculations algorithms must compute become increasingly complex and the likelihood of any defects or errorsincreases. 10Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsAs a result, if we were to experience significant errors or defects in the Criteo Engine, our solution could be impaired, which could have various negativeconsequences, including: • a loss of advertiser clients and publishers; • lower click-through rates; • lower profitability per impression; • faulty advertisement purchase decisions for which we may need to bear the cost; • lower return on advertising spend for our clients; • lower price for advertising inventory which we may be able to offer to publishers; and • delivery of advertisements that are less relevant or irrelevant to users.Furthermore, our success depends in part on our ability to continuously innovate and improve on the algorithms underlying the Criteo Engine in order todeliver positive results for our advertiser clients and publishers. The failure to do so could result in delivering poor performance for our advertiser clients and areduced ability to secure advertising inventory from publishers.If failures in the Criteo Engine or our inability to innovate and improve on the algorithms underlying the Criteo Engine results in our advertiser clientsand publishers ceasing to use our solution, we cannot assure you that we will be able to replace, in a timely or effective manner, departing clients with newclients that generate comparable revenue or departing publishers with new publishers that offer similar internet display advertising inventory. As a result, thefailure by the Criteo Engine to accurately predict engagement by a user and continue to do so over time could result in significant costs to us, in lost revenueand in diminished internet display advertising inventory.Our ability to generate revenue depends on our collection of significant amounts of data from various sources.Our ability to optimize the delivery of internet display advertisements for our clients depends on our ability to successfully leverage data, including datathat we collect from our clients as well as data provided by our publisher partners and from third parties as well as our own operating history. Using cookiesand similar tracking technologies, we collect information about the interaction of users with our advertisers’ and publishers’ websites (including, for example,information about the placement of advertisements and users’ shopping or other interactions with our clients’ websites or advertisements). Our ability tosuccessfully leverage such data is dependent upon our continued ability to access and utilize such data. Our ability to access and use such data could berestricted by a number of factors, including consumer choice, restrictions imposed by advertisers and publishers, changes in technology, and newdevelopments in laws, regulations, and industry standards.If consumer resistance to the collection and sharing of the data used to deliver targeted advertising, increased visibility of consent / Do Not Trackmechanisms as a result of industry regulatory and/or legal developments, and/or the development and deployment of new technologies result in a materialimpact on our ability to collect data, this will materially impair the results of our operations.Changes to web browsers and a number of other factors could impair our ability to collect the significant amounts of data we use to optimizedisplay advertisements for our clients.We collect information about the interaction of users with our advertisers’ and publishers’ websites (including, for example, information about theplacement of advertisements and users’ shopping or other interactions with our clients’ websites or advertisements) using cookies and similar trackingtechnologies. Our ability to access and use such data could be restricted by a number of factors, including consumer choice, restrictions imposed byadvertisers and publishers, changes in technology, and new developments in laws, regulations and industry standards. Further, certain web browsers, suchas Safari, currently block or are planning to block some or all third-party cookies by default. 11Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWe have adapted our solution to enable us to continue to access data and deliver internet display advertising by using first party cookies, rather thanthird party cookies. Our solution requires no additional technical integration with our advertiser clients and is fully transparent to users, who receive noticeand the ability to elect to deactivate Criteo services before any cookie is dropped. However we are in the early stages of rolling out of our solution and there canbe no assurance that advertisers will accept our approach, regulators will not challenge the transparency of the solution or web browser developers will nottechnically block the solution. If the roll out of our solution is not successful, we could be prevented from serving advertisements to users that utilize webbrowsers that block third party cookies. If we are blocked from serving advertisements to a significant portion of internet users, our business could suffer andour results of operations could be harmed.In addition, our ability to collect and use data may be restricted or prevented by a number of other factors, including: • the failure of our network or software systems, or the network or software systems of our clients; • variability in user traffic on advertiser websites; • decisions by some of our advertiser clients or publishers to restrict our ability to collect data from them, third parties and users or to refuse toimplement mechanisms we request to ensure compliance with our legal obligations; • decisions by consumers to opt out of tracking or to use technology, such as browser settings, that limits our ability to collect data about users andreduce our ability to deliver relevant advertisements; • our inability to grow our advertiser and publisher base in new industry verticals and geographic markets in order to obtain the critical mass ofdata necessary for the Criteo Engine to perform optimally in such new industry vertical or geography; • interruptions, failures or defects in our data collection, mining, analysis and storage systems; • changes in regulation impacting the collection and use of data; • changes in browser or device functionality and settings, and other new technologies, which make it easier for users to prevent the placement ofcookies or other tracking technology and impact our publishers’ or our advertisers’ ability to collect and use data; and • changes in international laws, rules, regulations, and industry standards or increased enforcement of international laws, rules, regulations, andindustry standards (e.g. laws in the U.S., EU, and Asia Pacific region).Any of the above described limitations on our ability to successfully collect, utilize and leverage data could also materially impair the optimalperformance of the Criteo Engine and severely limit our ability to target users for our advertisements, which would harm our business and adversely impactour future results of operations.Regulatory, legislative or self-regulatory developments regarding internet privacy matters could adversely affect our ability to conduct ourbusiness.Self-regulation and privacy regulationThe regulatory environment for the collection and use of consumer data by advertising networks, advertisers, and publishers is very unsettled inEurope, the United States and internationally.The United States and foreign governments have enacted, considered or are considering legislation or regulations that could significantly restrictindustry participants’ ability to collect, augment, analyze, use and share anonymous data, such as by regulating the level of consumer notice and consentrequired before a company can place cookies or other tracking technologies. A number of existing bills are pending in the U.S. Congress that containprovisions that would regulate how companies can use cookies and other tracking technologies to collect and utilize user information. 12Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOn September 27, 2013, the governor of California signed into law AB 370, an amendment to the California Online Privacy Protection Act of 2003, orCalOPPA. This amendment requires that we disclose in our privacy policy how we respond to web browser “do not track” signals. Our updated privacypolicy discloses that we do not respond to web browser do not track signals but that we do respond to opt out requests made through our proprietary opt-outbutton or through industry opt-out platforms (namely Network Advertising Initiative and Digital Advertising Alliance).Directive 2009/136/EC of the European Parliament and of the Council of November 25, 2009 amended Directive 2002/581-EC of the EuropeanParliament and of the Council, or the E-Privacy Directive, to introduce a requirement for countries in the European Economic Area to enact specific legislationrequiring companies like ours together with advertisers and publishers to present users with an information notice and obtain their consent prior to placingcookies or other tracking technologies. The amendment to the E-Privacy Directive and country-specific laws which follow or have already followed the E-Privacy Directive may reduce the amount of data we can collect or process. As a result of these regulatory changes in Europe and related public attention, someleading browser providers have developed or are further developing browsers which reject third-party cookies as the default setting or at least make it easier forconsumers to reject cookies or other similar tracking technologies. The changes in Europe following the amendment to the E-Privacy Directive have alsoresulted in a significant increase in publicity surrounding use of data for targeted advertising, which has heightened consumer awareness and influencedconsumer sentiment.The amended E-Privacy Directive which requires advertisers or companies like ours to obtain informed consent from users for the placement of cookiesor other tracking technologies and the delivery of targeted advertisements, should have been implemented in all thirty countries in the European Economic Area.The requirement to obtain users’ consent has been implemented differently across the European Economic Union member states. Some countries, like the UK,permit companies to imply consent from the user’s proceeding onto the website and continuing his/her navigation after s/he has been clearly informed abouthow cookies are used without disabling them. Other countries currently require through law and/or guidance that the user’s explicit consent must be obtainedprior to the placement of cookies for targeted advertising purposes.The position regarding explicit versus implied consent is still not fully settled within the European Economic Area, or the EU. On October 2, 2013, theArticle 29 Data Protection Working Party, a group with an advisory status composed inter alia of representatives of the EU data protection authorities and ofthe European Commission, issued a new guidance on the obtaining of consent for cookies under the E-Privacy Directive and recommended that consent beexpressed by the user’s positive action or other active behavior, such as clicking on a link, image or other content, based on clear information that cookies willbe set due to this action.If the trend in the EU toward an implied consent mechanism as an acceptable solution does not continue, and requirements for explicit consentmechanisms are maintained, decisions by users not to provide explicit consent could materially affect our business. In addition to explicit versus impliedconsent uncertainties, changes to the timing of when users receive disclosure about placement of our cookies for purposes of targeting advertising (i.e.,providing pop-up or other clear notice prior to placement of the cookie) could materially affect our business.In some countries where legislation and/or regulators’ guidance had previously taken a strict explicit consent position, regulators and some legislatorsrecently have shown more flexibility and willingness to accept an implied consent approach.By way of illustration, on May 20, 2013, the Dutch government released a legislative proposal amending the prior explicit consent requirement, which,if adopted, could lead to the adoption of implied consent rules in The Netherlands. Whether this proposal will be confirmed by the adoption of laws and/orofficial guidance is not certain. 13Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsFurther, in guidance issued in April 2012, the Commission Nationale de l’Informatique et des Libertés, or CNIL, the French data protectionregulator, interpreted French law to require the data controller of any processing that sets cookies, or a third-party designated by the data controller, to informthe user of the purpose of the cookie (e.g., targeted advertising) and to ask if the user accepts the storage of the cookie on his/her computer prior to anyprocessing of user data for targeted advertising purposes, among other requirements. On December 5, 2013, the CNIL clarified its former guidance. As a resultof this decision, on the entry page of the website, users must be shown a notice indicating that the user’s proceeding onto the website and continuing his/hernavigation will be deemed consent to the setting of cookies. This notice, which cannot disappear until the user has not continued his/her navigation, mustindicate the purpose of the services proposed to be provided through the cookies and give access to options to object to such cookies. Consent remains valid fora maximum period of 13 months, after which consent from the users must again be sought. This is an implied consent regime through information andcontrol. Liability for the compliance with this recommendation is shared between advertisers, publishers and networks, including Criteo. We need theassistance of the advertisers and publishers with whom we work to ensure our mutual compliance with these rules, including to provide appropriateinformation and obtain the user’s consent, including explicit consent where required. If advertisers, publishers or networks on whom we rely, fail to obtainappropriate consent, we could potentially be liable under these guidelines and could suffer damages, fines and penalties and reputational harm.A new regulation is being considered by European legislative bodies to replace the 1995 European Union Data Protection Directive, which may includemore stringent operational requirements for business processing data and may introduce significant penalties for non-compliance. The final provisions mayimpose requirements that materially impact our business.Similarly, considering our global presence, we may also be subject to local data protection laws in Canada, the Asia-Pacific region, South America andother regions. There is no legal harmonized approach in many of these regions and little regulatory guidance. Consequently, we could be at risk of non-compliance with applicable local privacy protection laws.In addition to compliance with government regulations, we voluntarily participate in several trade associations and industry self-regulatory groups thatpromulgate best practices or codes of conduct relating to targeted advertising. For example, the Internet Advertising Bureau EU & US, the NetworkAdvertising Initiative and the Digital Advertising Alliance, have developed and implemented guidance for companies to provide notice and choice to usersregarding targeted advertising. There is ongoing debate about whether the current guidance and approaches by such associations and industry groups complieswith EU law. For example, on December 28, 2011, the Article 29 Working Group published an opinion stating that the self-regulatory code was not adequateto comply with Article 5.3 of the amended E-Privacy Directive addressing placement and reading of cookies for targeted advertising. We could be adverselyaffected by changes to these guidelines and codes in ways that are inconsistent with our practices or the practices of our publishers and advertisers or inconflict with the laws and regulations of the EU, United States or other international regulatory authorities.These existing and proposed laws, regulations and industry standards can be costly to comply with and can delay or impede the development of newproducts, result in negative publicity and reputational harm, increase our operating costs, require significant management time and attention, increase our riskof non-compliance and subject us to claims or other remedies, including fines or demands that we modify or cease existing business practices.Privacy risks relating to our clients’ actions or inactionsOn behalf of certain of our clients using some of our services, we collect and store information derived from the activities of website visitors and theirdevices. This enables us to provide such clients with reports on information from and about the visitors to their websites in the manner specifically directed byeach such individual client and to conduct targeted advertising. Federal, state and foreign governments and agencies have 14Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsadopted or are considering adopting laws regarding the passive collection, use, sharing and storage of data collected from or about users’ or their devices. Anyperception of our practices or products as an invasion of privacy, whether or not such practices or products are consistent with current or future regulationsand industry practices, may subject us to public criticism, private class actions, reputational harm or claims by regulators, which could disrupt our businessand expose us to increased liability.Our compliance with privacy laws and regulations and our reputation among the public body of website visitors depend in part on our clients’adherence to privacy laws and regulations and their use of our services in ways consistent with visitors’ expectations. We contractually require our clients tonotify visitors to their websites about our services (i.e., that we place cookies and collect and share certain non-identifying data for purposes of targetingadvertisements), and further require that they link to pages where visitors can opt-out of the collection or targeting. We rely on representations made to us byclients that they will comply with all applicable laws including all relevant privacy and data protection regulations. We make reasonable efforts to enforcecontractual notice requirements but do not fully audit our clients’ compliance with our recommended disclosures or their adherence to privacy laws andregulations, nor do we contractually require them to seek explicit consent to the placement of cookies which may be required in certain countries. If our clientsfail to adhere to our contracts in this regard, or a court or governmental agency determines that we have not adequately, accurately or completely described ourown products, services and data collection, use and sharing practices in our own disclosures to consumers, or if explicit consent was required, then we, andour clients, may be subject to potentially adverse publicity, damages and related possible investigation or other regulatory activity in connection with ourprivacy practices or those of our clients.ComplianceIn May 2012, the CNIL commenced an inquiry into our compliance with the French Data Protection laws. The inquiry is ongoing. The CNIL hasvisited our site, and requested and received various documents and information about our services and platform, most recently in February 2013. The CNIL’sdecision has not yet been issued and we currently do not know when it will be made available. The inquiry has focused on how we operate technically, how weuse data, how long data is stored, and the placement and reading of cookies for advertising purposes (including whether informed consent is collected in amanner which complies with French data protection law). The CNIL may determine that we are not in compliance and may impose a fine and/or require us totake additional steps or amend our current processes and procedures to ensure compliance, or may have other concerns they wish to raise with us. An adversedecision from the CNIL or other regulators may adversely affect Criteo, as noted in the preceding section.If we fail to access a consistent supply of internet display advertising inventory and expand our access to such inventory, our business and resultsof operations could be harmed.All of our revenue is derived from placing internet display advertisements on publisher websites that we do not own. As a result, we do not own orcontrol the advertising inventory upon which our business depends. We currently access advertising inventory through various channels, including throughdirect relationships with publishers, advertising exchange platforms (such as DoubleClick Ad Exchange, Yahoo!’s Right Media, facebook’s Exchange andMicrosoft‘s Ad Exchange) and other platforms that aggregate the supply of advertising inventory, such as Appnexus Inc., Admeld Inc., The Rubicon Project,Inc. and PubMatic, Inc. For example, Google Inc.’s and Appnexus Inc.’s advertising inventory represented 34% or our cost of revenue in 2012 and 28% of ourcost of revenue in 2013. Since our contracts with publishers with whom we have direct relationships generally do not include long-term obligations requiringthem to make their inventory available to us, our ability to continue to purchase inventory from these publishers depends in part on our ability to consistentlypay sufficiently competitive CPMs for their internet display advertising inventory as well as our ability to offer advertisements from high quality companies.Similarly, as more companies compete for advertising impressions on advertising exchange platforms and other platforms that aggregate supply of advertisinginventory, advertising inventory becomes more expensive, which may adversely affect our ability to acquire advertising inventory and resell it on a profitablebasis. Any 15Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsinterference with our ability to maintain access to such inventory could materially reduce the amount of advertising inventory that our solution relies on inorder to deliver advertisements for our clients. In addition, since we rely on a limited number of companies for access to significant portions of advertisinginventory that our business depends on, the loss of access to advertising inventory from one of those companies would negatively impact our ability to deliverinternet display advertisements for our advertiser clients. Any of these consequences could therefore adversely affect our results of operations and financialcondition.In addition, we rely on a limited number of companies that operate advertising exchange platforms and other platforms that aggregate supply ofadvertising inventory for access to a significant amount of advertising inventory that our business depends on. Many widely used aggregators of advertisinginventory are owned by companies that may compete with us for clients. Competitive pressure may incentivize these companies to limit our access toadvertising inventory available through their platforms. If this were to occur, our ability to place advertisements would be significantly impaired and ourresults of operations would be adversely affected.In order to grow our publisher base, we will need to expand the breadth and quality of businesses that utilize our solution. In addition, in order to growour advertiser base, we must expand our access to new sources of internet display advertising inventory and maintain a consistent supply of this inventory.While we have historically relied both on accessing advertising inventory through direct relationships with publishers and through advertising exchangeplatforms and other platforms that aggregate supply of advertising inventory, we may increasingly rely on direct relationships with publishers in order tomaintain the necessary access to, and establish a greater amount of preferred access to, advertising inventory. In order to enter into or maintain such directrelationships, we may need to agree to terms that are unfavorable to us, including, for example, contractual minimums for advertising inventory and/or longterm commitment. In addition, as we attempt to improve our solution to enable businesses to place advertisements with publishers other than on the web,including mobile applications, video and social games, we will need to develop and improve our access to publishers in those environments. Our ability toattract new publishers on the web, mobile applications, video and social games will depend on various factors, some of which are beyond our control.Therefore, we cannot assure you that we will successfully grow our direct relationships with new publishers or maintain and expand our access to advertisinginventory through other channels. In addition, even if we do grow our direct relationships, we cannot assure you that those direct relationships with publisherswill be on favorable terms to us.Therefore, if we are unable to acquire sufficient advertising inventory through direct publisher relationships or intermediaries, our business and resultsof operations could be harmed.We have incurred net losses in the certain quarterly periods as we invested in our business, and we expect our operating expenses to increasesignificantly in the foreseeable future. Accordingly, we may have difficulty sustaining profitability.We have incurred losses in the three month periods ended June 30, 2012, December 31, 2012 and June 30, 2013 and we may incur losses in the future.While we were profitable in each of 2012 and 2013, we do not know if we will be able to maintain profitability on a continued basis. Although our revenue hasincreased substantially in recent periods, we may not be able to maintain this rate of revenue growth. We anticipate that our operating expenses will continue toincrease as we scale our business, invest in significantly expanding our headcount and expand our operations. In particular, we plan to continue to focus onmaximizing our revenue after traffic acquisition costs on an absolute basis, or the revenue we derive after deducting the costs we incur to purchase advertisinginventory, which we call revenue ex-TAC, as we believe this focus fortifies a number of our competitive strengths, including access to advertising inventory,breadth and depth of data and continuous improvement of the Criteo Engine’s performance. As part of this focus, we are continuing to invest in buildingrelationships with direct publishers, increasing access to leading advertising exchanges and enhancing the liquidity of our advertising inventory supply, whichincludes purchasing advertising inventory that may result in lower margin on an individual impression basis and may be less effective in generating clicks.We also expect our general and administrative expenses to increase in absolute dollars as a result of being a public company. Our 16Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsability to sustain profitability is based on numerous factors, many of which are beyond our control. We may not be able to generate sufficient revenue tosustain profitability.Our focus on maximizing our revenue after traffic acquisition costs may result in a further decrease in our gross margin.We are focused on maximizing our revenue after traffic acquisition costs on an absolute basis, or the revenue we derive after deducting the costs we incurto purchase advertising inventory, which we call revenue ex-TAC, as we believe this focus fortifies a number of our competitive strengths, including access toadvertising inventory, breadth and depth of data and continuous improvement of the Criteo Engine’s performance. As part of this focus, we are continuing toinvest in building relationships with direct publishers, increasing access to leading advertising exchanges and enhancing the liquidity of our advertisinginventory supply, which includes purchasing advertising inventory that may have lower margin on an individual impression basis and may be less effectivein generating clicks. In addition, we are experiencing, and expect to continue to experience, increased competition for advertising inventory purchased on aprogrammatic basis. Our traffic acquisition costs as a percentage of revenue have increased primarily as a result of the purchasing of lower margin advertisinginventory on an individual impression basis and, to a lesser extent, increased competition. Overall, this adversely impacts our revenue ex-TAC as a percentageof revenue and our gross margin. We expect our traffic acquisition costs to continue to increase as a percentage of revenue for the foreseeable future as wecontinue our focus on liquidity and long-term value sustainability over our gross margins. Even with this focus, we cannot be certain that such investmentswill be successful and result in increased liquidity or long-term value for our shareholders.Large and established internet and technology companies may be able to significantly impair our ability to operate.Large and established internet and technology companies such as Adobe Systems Incorporated, Amazon.com, Inc., AOL, Inc., Apple Inc., eBay Inc.,facebook, Inc., Google Inc. and Yahoo! Inc. may have the power to significantly change the very nature of the internet display advertising marketplace, andthese changes could materially disadvantage us. For example, Amazon, Apple, Facebook, Google and Microsoft have substantial resources and have asignificant share of widely adopted industry platforms such as web browsers, mobile operating systems and advertising exchanges and networks. Therefore,these companies could leverage their position to make changes to their web browsers, mobile operating systems, platforms, exchanges, networks or otherproducts or services that could be significantly harmful to our business and results of operations. For example, Apple first warned iOS developers in August2011 that it would limit their access to unique device identifiers, or UDIDs, and subsequently instructed developers to make use of other identifiers, such as anew Identifier for Advertising, or IDFA, which was introduced by Apple in Fall 2012. In May 2013, the Apple App Store stopped accepting iOS apps andupdates attempting to mine UDID data. While we do not utilize the UDID to serve personalized advertisements in iOS applications, we do make use of theIDFA. If Apple were to similarly restrict use of the IDFA our ability to serve personalized advertisements in Apple applications would be impaired. We wouldhave access to other technologies like digital fingerprinting, which consolidates all information about the capabilities of a user’s browser and system into adigital fingerprint. However, digital fingerprinting may not perform as well for us or our advertisers as it is less reliable for user identification than the IDFAor, when needed, such alternative technologies may not be available at all. Our business may not grow in this application market if such limitations arestrictly enforced.The market in which we participate is intensely competitive and fragmented, and we may not be able to compete successfully with our current orfuture competitors.The market for internet display advertising solutions is highly competitive and rapidly changing. With the introduction of new technologies and theinflux of new entrants to the market, we expect competition to persist and intensify in the future, which could harm our ability to increase sales and maintainour profitability. 17Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWe compete primarily in the market for internet display advertising. This market is rapidly evolving, highly competitive, complex and fragmented. Weface significant competition in this market which we expect will intensify in the future. We currently compete for advertising spend with large, well-establishedcompanies, such as Amazon.com, Inc., eBay Inc., Google Inc., Conversant, Inc. and Yahoo! as well as smaller, privately-held companies. We believe theprincipal competitive factors in our industry include: • ability to deliver return on advertising spend at scale; • global reach; • client trust; • breadth and depth of publisher relationships; • comprehensiveness of products and solutions; and • ease of use.In addition to competing with various companies for advertising spend, we also compete with some of them for internet display advertising inventoryand some of these companies also operate their own advertising networks or exchanges. Further, some of these companies that we compete with either foradvertising spend and/or advertising inventory may also be our clients or affiliated with our clients. Competitive pressure may incentivize such companies tocease to be our clients or cease to provide us with access to their advertising inventory. If this were to occur, our ability to place advertisements would besignificantly impaired and our results of operations would be adversely affected.New technologies and methods of buying advertising present a dynamic competitive challenge, as market participants offer multiple new products andservices, such as analytics, automated media buying and exchanges, aimed at capturing advertising spend. In addition to existing competitors andintermediaries, we may also face competition from new companies entering the market, which may include large established companies, such as Amazon,Inc., Apple Inc. and Adobe Systems Incorporated, which recently acquired Omniture, Inc. and Efficient Frontier, Inc., AOL Inc., which acquired Platform-A,Inc. (advertising.com), and eBay Inc., which recently acquired Fetchback, Inc. and GSI Commerce Inc., all of which currently offer, or may in the futureoffer, solutions that result in additional competition for advertising spend or advertising inventory.We may also face competition from companies we do not yet know about. If existing or new companies develop, market or resell competitive high-valuemarketing products or services, acquire one of our existing competitors or form a strategic alliance with one of our competitors, our ability to competeeffectively could be significantly compromised and our results of operations could be harmed.Our current and potential competitors may have significantly more financial, technical, marketing and other resources than we have, be able to devotegreater resources to the development, promotion, sale and support of their products and services, have more extensive advertiser bases and broader publisherrelationships than we have, and may have longer operating histories and greater name recognition than we have. As a result, these competitors may be betterable to respond quickly to new technologies, develop deeper advertiser relationships or offer services at lower prices. Any of these developments would make itmore difficult for us to sell our solution and could result in increased pricing pressure, reduced gross margins, increased sales and marketing expense and/orthe loss of market share.If we fail to innovate, adapt and respond effectively to rapidly changing technology, our solution may become less competitive or obsolete.Our future success will depend on our ability to continuously enhance and improve our solution to meet advertiser needs, add functionality to ouradvertiser and publisher platforms and address technological advancements. If we are unable to enhance our solution to meet market demand in a timelymanner, we may not be able to maintain our existing clients or attract new clients. For example, as e-commerce and consumption of 18Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentscontent continues to migrate from the web to mobile and tablet devices and advertisements more frequently include video or incorporate animation, soundand/or interactivity, which we refer to as rich media content, businesses are increasingly demanding that internet display advertising solutions extend to allthree screens and support video and rich media content. In addition, as consumers spend more time watching video and playing social network games online,as opposed to browsing static webpages, businesses may increasingly shift their advertising budgets to video and game publishers or, if consumers fail toengage with advertisements displayed on smaller screens, reduce their internet display advertising budgets. In order to maintain and continue to grow ourrevenue, we will need to continue to adapt and improve our solution to offer video and rich media content advertisements and to enable advertisers to placeadvertisements with publishers other than through a desktop, including on smart phones and tablets and on applications created for these devices, anddevelop ways to encourage engagement on these devices. In the first quarter of 2013, we launched a mobile solution in Japan. This mobile solution involvesdelivery of display advertising to the web browsers of mobile devices, which we refer to as in-browser, but not within mobile applications, which we refer toas in-app. To date, substantially all of our mobile revenue is from in-browser advertisements and we are in the process of launching our mobile in-appsolution. We may not be successful in rolling out our mobile in-app solution. In addition, while we have recently enhanced our in-browser solution to serveadvertisements on iOS devices, we may not be successful in scaling and expanding our iOS solution globally or at all. In July 2013 we acquired Ad-XLimited, or Ad-X, a complementary mobile analytics and attribution technology company, that allows businesses to track and optimize mobile displayadvertising campaigns delivered to smartphones and tablets through mobile advertising networks and other marketing solutions, but we may not be successfulin utilizing this technology to grow our mobile business. If we are unable to successfully develop or acquire new solutions to continuously meet advertiserneeds or are unable to adapt our organization to market these new solutions, our solution may become less competitive or obsolete.If we are unsuccessful at marketing our solution to businesses for use across a broader spectrum of advertising objectives, we may not be able toachieve our growth and business objectives.We have designed our solution to address important changes in the display advertising industry, including, for example, a focus on automation, real-time bidding and enabling businesses to only pay for advertising that has performed, most often measured as a click on an internet display advertisement. Todate, we have principally focused our efforts on marketing our solution to businesses delivering advertisements to users that may already be engaged withthem. However, an important component of our growth strategy involves marketing our solution to businesses for use across a broader spectrum of advertisingobjectives, such as in capturing the attention of new users to drive engagement with businesses, or preference shift, and building brand awareness. However,our ability to adapt our solution to meet these advertiser objectives is dependent upon our ability to access new data and identify appropriate measurableobjectives (other than a click or a sale) that can be used to focus our prediction algorithms. As such, we would need to make significant investments inproduct development to meet these broader advertiser objectives.Further, we may need to make significant additional investments in sales and marketing to educate the market on the benefits of our solution. However,we have limited experience marketing our solution to businesses as an answer to broader advertising purposes. Therefore, if we are unable to successfullymarket our solution for broader advertisement campaign objectives and businesses do not adopt our solution to pursue such objectives, we may not be able toachieve our growth and business objectives.We may not be able to integrate and roll out recently acquired technologies and products in one or more of our geographic markets, which mayadversely affect our ability to achieve our growth and business objectives.On February 20, 2014, we announced we acquired Tedemis S.A., or Tedemis, a provider of real-time personalized email marketing solutions. To date,the Tedemis solution has only been offered to advertiser clients in France and we will need to build an inventory of e-mail addresses in each country we aim toexpand into as part of any product roll out. We cannot assure you that we will be successful in acquiring the necessary e-mail addresses or that, if we doacquire them, that our internet display advertising clients will be willing to use e-mail 19Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsmarketing for their products. We are in the early stages of planning the integration and roll-out of our new email marketing product and there can be noassurance that we will be successful in integrating and rolling out this new product globally or at all.In addition, in July 2013 we acquired Ad-X, a complementary mobile analytics and attribution technology company that allows businesses to track andoptimize mobile display advertising campaigns delivered to smartphones and tablets through mobile advertising networks and other marketing solutions, butwe may not be successful in utilizing this technology to grow our mobile business. If we are unable to successfully integrate and roll out the solutions weacquire to our advertiser clients in some or all of our markets, our solution may become less competitive which may adversely affect our ability to achieve ourgrowth and business objectives.Future acquisitions, strategic investments, partnerships or alliances could be difficult to integrate, divert the attention of key managementpersonnel, disrupt our business, dilute shareholder value and adversely affect our results of operations and financial condition.We recently acquired Tedemis S.A., or Tedemis, and Ad-X and may seek to acquire additional businesses, products or technologies. However, we havelimited experience in acquiring and integrating businesses, products and technologies. If we identify an appropriate acquisition candidate, we may not besuccessful in negotiating the terms and/or financing of the acquisition, and our due diligence may fail to identify all of the problems, liabilities or othershortcomings or challenges of an acquired business, product or technology, including issues related to intellectual property, product quality or architecture,regulatory compliance practices, revenue recognition or other accounting practices or employee or client issues.Any acquisition or investment may require us to use significant amounts of cash, issue potentially dilutive equity securities or incur debt. In addition,acquisitions, including our recent acquisitions of Tedemis and Ad-X, involve numerous risks, any of which could harm our business, including: • difficulties in integrating the operations, technologies, services and personnel of acquired businesses, especially if those businesses operate outsideof our core competency; • cultural challenges associated with integrating employees from the acquired company into our organization; • reputation and perception risks associated with the acquired product or technology by the general public; • ineffectiveness or incompatibility of acquired technologies or services; • potential loss of key employees of acquired businesses; • inability to maintain the key business relationships and the reputations of acquired businesses; • diversion of management’s attention from other business concerns; • litigation for activities of the acquired company, including claims from terminated employees, clients, former shareholders or other third parties; • failure to identify all of the problems, liabilities or other shortcomings or challenges of an acquired company, technology, or solution, includingissues related to intellectual property, solution quality or architecture, regulatory compliance practices, revenue recognition or other accountingpractices or employee or client issues; • in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic,currency, political and regulatory risks associated with specific countries; • costs necessary to establish and maintain effective internal controls for acquired businesses; • failure to successfully further develop the acquired technology in order to recoup our investment; and • increased fixed costs. 20Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIf we are unable to successfully integrate Tedemis and Ad-X, or any future business, product or technology we acquire, our business and results ofoperations may suffer.As we expand the market for our solution, we may become more dependent on advertising agencies as intermediaries and this may adversely affectour ability to attract and retain business.As we market our solution for broader advertising purposes, we may increasingly need to depend on advertising agencies to work with us in assistingbusinesses in planning and purchasing for broader advertising objectives, such as preference shift and brand awareness. However, we have limited experiencein working with advertising agencies as intermediaries, as we have traditionally had direct relationships with our advertiser clients. Historically, directrelationships with our clients accounted for 86.5%, 87.4%, 85.8% and 77.7% of our revenue in 2010, 2011, 2012, and 2013, respectively. If we have anunsuccessful engagement with an advertising agency on a particular advertising campaign, we risk losing the ability to do work not only for the advertiser forwhom the campaign was run, but also for other brands represented by that agency. Further, if our business evolves so that we are increasingly workingthrough advertising agency intermediaries, we would have less of a direct relationship with our clients than if our clients dealt with us directly. This may driveour clients to attribute the value we provide to the advertising agency rather than to us, further limiting our ability to develop long term relationships directlywith our clients. Our clients may move from one advertising agency to another, and, accordingly, even if we have a positive relationship with an advertisingagency, we may lose the underlying business when an advertiser switches to a new agency. The presence of advertising agencies as intermediaries between usand our clients thus creates a challenge to building our own brand awareness and affinity with our clients who are the ultimate sources of our revenue. Further,we may become more dependent on advertising agencies as intermediaries and this may adversely affect our ability to attract and retain business.Our future success will depend in part on our ability to expand into new industry verticals.As we market our solution to a wider group of potential clients outside of our three key industry verticals of retail, travel and classifieds, includingbusinesses in the automotive, telecommunications, consumer goods and finance industries, we will need to adapt our solution and effectively market oursolution to businesses in those industry verticals. We have limited experience in selling to businesses outside of the retail, travel and classified industries. Oursuccess in expanding our solution to businesses in new industry verticals will depend on various factors, including our ability to: • design products and solutions that are attractive to businesses in such industries; • hire personnel with relevant industry vertical experience to lead sales and product teams; and • accumulate sufficient data sets relevant for those industry verticals to ensure that the Criteo Engine has sufficient quantity and quality ofinformation to deliver efficient and effective internet display advertising within the relevant industry.If we are unable to successfully adapt our solution to appeal to businesses in industries other than retail, travel and classifieds, and then effectivelymarket such solutions to businesses in such industries, we may not be able to achieve our growth or business objectives. Further, as we expand our client baseand solution into new industry verticals, we may be unable to maintain our current client retention rates.If we are unable to protect our proprietary information or other intellectual property, our business could be adversely affected.We rely largely on trade secret law to protect our proprietary information and technology. We generally seek to protect our proprietary information byconfidentiality, non-disclosure and assignment of invention agreements with our employees, contractors and parties with which we do business. However, wemay not be successful in executing these agreements with every party who has access to our confidential information or contributes to the development of ourintellectual property. Those agreements that we do execute may be 21Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsbreached, and we may not have adequate remedies for any such breach. Breaches of the security of our website, databases or other resources could expose usto a risk of loss of proprietary information. We cannot be certain that the steps we have taken will prevent unauthorized use or reverse engineering of ourtechnology or information. Moreover, our trade secrets may be disclosed to or otherwise become known or be independently developed by competitors and inthese situations we may have no or limited rights to stop their use of our information. To the extent that our employees, contractors, or other third parties withwhom we do business use intellectual property owned by others in their work for us, disputes may arise as to the rights to such intellectual property. If, forany of the above reasons, our intellectual property is disclosed or misappropriated, it would harm our ability to protect our rights and may have an adverseeffect on our business.Although we also rely on copyright laws to protect the works of authorships, including software, created by us, we do not register the copyrights in anyof our copyrightable works. United States copyrights must be registered before the copyright owner may bring an infringement suit in the United States.Furthermore, if a U.S. copyright is not registered within three months of publication of the underlying work, the copyright owner is precluded from seekingstatutory damages or attorneys fees in any United States enforcement action, and is limited to seeking actual damages and lost profits. Accordingly, if one ofour unregistered U.S. copyrights is infringed by a third-party, we will need to register the copyright before we can file an infringement suit in the UnitedStates, and our remedies in any such infringement suit may be limited.We hold one patent issued by the U.S. Patent and Trademark Office and one patent issued by the French Patent Office, and have filed four non-provisional patent applications in the United States and one Patent Cooperation Treaty application. We are also pursuing the registration of our domain names,trademarks and service marks in the United States and in certain locations outside the United States. Effective trademark, domain name and patent protectionare expensive to develop and maintain, both in terms of initial and ongoing registration requirements and the costs of defending our rights. Any of our patents,trademarks or other intellectual property rights may not provide sufficient protection for our business as currently conducted or may be challenged by othersor invalidated through administrative process or litigation. In addition, in the event that our trademarks are successfully challenged, we could be forced torebrand our solution, which could result in loss of brand recognition, and could require us to devote resources to advertising and marketing our new brand.Further, we cannot assure you that competitors will not infringe our trademarks, or that we will have adequate resources to enforce our trademarks. While wehave two patents, our existing patents and any patents issued in the future may not provide us with competitive advantages, may be successfully challenged,invalidated or circumvented by third parties, may give rise to ownership claims or to claims for the payment of additional remuneration of fair price by thepersons having participated in the creation of the inventions and may not be of sufficient scope or strength to provide us with any meaningful protection.Further, as we continue to expand our business geographically, it may become desirable for us to protect our intellectual property in an increasing number ofjurisdictions, a process that is expensive and may not be successful or which we may not pursue in every location. We may, over time, increase ourinvestment in protecting our intellectual property through additional patent filings that could be expensive and time-consuming. Once we file a patentapplication in one country, we have a limited period of time to file it in all other countries in which we want to have patent protection over a certain invention. Ifwe fail to file in those countries we will be precluded from having patent protection for that invention in those other countries. Without patent protection, otherswill be free to practice that invention in those other countries. Even if we obtain patent protection, we cannot assure you that competitors will not infringe ourpatents, or that we will have adequate resources to enforce our patents.Additionally, in the United States, the central provisions of the Leahy-Smith America Invents Act, or AIA, became effective recently. Among otherthings, this law switched U.S. patent rights from the former “first-to-invent” system to a “first inventor-to-file” system. This may result in inventors andcompanies having to file patent applications more frequently to preserve rights in their inventions. This may favor larger competitors that have the resources tofile more patent applications. 22Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsFurther, the laws of certain countries do not protect proprietary rights to the same extent as the laws of the United States and, therefore, in certainjurisdictions, we may be unable to protect our proprietary technology adequately against unauthorized third-party copying, infringement or use, which couldadversely affect our competitive position.To protect or enforce our intellectual property rights, we may initiate litigation against third parties. Litigation may be necessary to protect our intellectualproperty, or determine the enforceability, scope and validity of the proprietary rights of others. Any lawsuits that we initiate could be expensive, takesignificant time and divert management’s attention from other business concerns. Additionally, we may provoke third parties to assert claims against us.These claims could invalidate or narrow the scope of our own intellectual property. We may not prevail in any lawsuits that we initiate and the damages orother remedies awarded, if any, may not be commercially valuable. Accordingly, despite our efforts, we may be unable to prevent third parties from infringingupon or misappropriating our intellectual property. The occurrence of any of these events may adversely affect our business, financial condition and results ofoperations.Our business may suffer if it is alleged or determined that our technology or another aspect of our business infringes the intellectual propertyrights of others.The online and mobile advertising industries are characterized by the existence of large numbers of patents, copyrights, trademarks, trade secrets andother intellectual property and proprietary rights. Companies in these industries are often required to defend against litigation claims that are based onallegations of infringement or other violations of intellectual property rights. Our technologies may not be able to withstand any third-party claims or rightsagainst their use.Our success depends, in part, upon non-infringement of intellectual property rights owned by others and being able to resolve claims of intellectualproperty infringement or misappropriation without major financial expenditures or adverse consequences. From time to time, we may be the subject of claimsthat our solution and underlying technology infringe or violate the intellectual property rights of others, particularly as we expand the complexity and scope ofour business. Furthermore, as a result of disclosure of information in filings required of a public company, our business and financial condition will becomemore visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties.Regardless of whether claims that we are infringing patents or other intellectual property rights have any merit, these claims are time-consuming andcostly to evaluate and defend and the outcome of any litigation is inherently uncertain. Some of our competitors have substantially greater resources than we doand are able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. Claims that we areinfringing patents or other intellectual property rights could: • subject us to significant liabilities for monetary damages, which may be tripled in certain instances; • prohibit us from developing, commercializing or continuing to provide some or all of our solution unless we obtain licenses from, and payroyalties to, the holders of the patents or other intellectual property rights, which may not be available on commercially favorable terms, or at all; • subject us to indemnification obligations or obligations to refund fees to, and adversely affect our relationships with, our current or future clients,advertising agencies, media networks and exchanges or publishers; • cause delays or stoppages in providing our solution; • cause clients, potential clients, advertising agencies, media networks and exchanges or publishers to avoid working with us; • divert the attention and resources of management and technical personnel; 23Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents • harm our reputation; and • require technology or branding changes to our solution that would cause us to incur substantial cost and that we may be unable to executeeffectively or at all.In addition, we may be exposed to claims that the content contained in advertising campaigns violates the intellectual property or other rights of thirdparties. Such claims could be made directly against us or against the advertising agencies, media networks and exchanges and publishers from whom wepurchase advertising inventory. Generally, under our agreements with advertising agencies, media networks and exchanges and publishers, we are required toindemnify the advertising agencies, media networks and exchanges and publishers against any such claim with respect to an advertisement we served. Wegenerally require our clients to indemnify us for any damages from any such claims. There can be no assurance, however, that our clients will have the abilityto satisfy their indemnification obligations to us, and pursuing any claims for indemnification may be costly or unsuccessful. As a result, we may be requiredto satisfy our indemnification obligations to advertising agencies, media networks and exchanges and publishers or claims against us with our assets. Thisresult could harm our reputation, business, financial condition and results of operations.Our business involves the use, transmission and storage of confidential information, and the failure to properly safeguard such informationcould result in significant reputational harm and monetary damages.Our business involves the storage and transmission of confidential consumer information, including certain purchaser data, and security breachescould expose us to a risk of loss or unauthorized disclosure of this information, litigation and possible liability, as well as damage our relationships with ourclients. If our security measures are breached as a result of third-party action, employee error, malfeasance or otherwise and, as a result, someone obtainsunauthorized access to our data or the data of our clients or publishers, our reputation could be damaged, our business may suffer and we could incursignificant liability.Techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target.As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived security breach occurs,the market perception of our security measures could be harmed and we could lose sales and clients. Any significant violations of data privacy or othersecurity breaches could result in the loss of business, litigation and regulatory investigations and penalties that could damage our reputation and adverselyimpact our results of operations and financial condition. Moreover, if a high profile security breach occurs with respect to another provider of performancedisplay advertising solutions, our clients and potential clients may lose trust in the security of providers of performance display advertising solutionsgenerally, which could adversely impact our ability to retain existing clients or attract new ones.Additionally, third parties may attempt to fraudulently induce employees or consumers into disclosing sensitive information such as user names,passwords or other information in order to gain access to our data, our advertiser clients’ or publishers’ data, which could result in significant legal andfinancial exposure and a loss of confidence in the security of our solution and ultimately harm our future business prospects. A party who is able tocompromise the security of our facilities could misappropriate our proprietary information or the proprietary information of our advertiser clients and/or ourpublishers, or cause interruptions or malfunctions in our operations or those of our advertiser clients and/or publishers. We may be required to expendsignificant capital and financial resources to protect against such threats or to alleviate problems caused by breaches in security. Finally, in addition, computerviruses may harm our systems causing us to lose data, and the transmission of computer viruses could expose us to litigation.Our errors and omissions insurance may be inadequate or may not be available in the future on acceptable terms, or at all. In addition, our policy maynot cover any claim against us for loss of data or other indirect or consequential damages and defending a suit, regardless of its merit, could be costly anddivert management’s attention. 24Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOur business depends on our ability to maintain the quality of content of our advertiser clients and publishers.We must be able to ensure that our clients’ advertisements are not placed in publisher content that is unlawful or inappropriate. If we fail to ensure thatour clients’ advertisements are not placed in unlawful or inappropriate content, our reputation and business may suffer. In addition, if we place advertisementsin content that is not permitted under the terms of the applicable agreements with a client, we may be unable to charge the client for clicks generated on thosesites, the client may terminate their campaign or the client may require us to indemnify them for any resulting third party claims. Further, our publishers relyupon us not to place advertisements on their websites that are unlawful or inappropriate. If we are unable to ensure that the quality of our advertiser andpublisher content does not decline as the number of advertiser clients and publishers we work with continues to grow, then our reputation and business maysuffer and we may not be able to secure additional or retain our direct publisher relationships.Our sales efforts with both potential advertiser clients and publishers require significant time and expense and our success will depend oneffectively expanding our sales and marketing operations and activities to grow our base of advertiser clients and publishers.Attempting to increase our base of advertiser clients and publishers and achieving broader market acceptance of our solution is a key component of ourgrowth strategy. Attracting advertiser clients and publishers, however, requires substantial time and expense, and we may not be successful in establishingthese new relationships or in maintaining or advancing our existing relationships. For example, it may be difficult to identify, engage and market to potentialclients that are unfamiliar with our solution, especially as they relate to their general advertising campaigns, or currently delegate advertising decisions toadvertising agencies. Furthermore, many of our existing and potential clients require input from multiple internal constituencies. As a result, we must identifythose involved in the purchasing decision and devote a sufficient amount of time to presenting our solution to those individuals, including providingdemonstrations and comparisons against other available solutions, which can be a costly and time-consuming process.Our ability to grow our advertiser and publisher base will depend to a significant extent on our ability to expand our sales and marketing and publishersupport operations and activities. We expect to be increasingly dependent on our direct sales force and publisher support teams to attract new advertiser clientsand publishers and we intend to continue to expand these teams internationally. In addition, as we target new industry verticals, we will need to attractsophisticated sales and publisher support personnel that are familiar with the relevant industry and geographic market. We believe that there is significantcompetition for direct sales personnel with the sales skills and technical knowledge that we require. Therefore, our ability to achieve significant growth inrevenue in the future will depend, in large part, on our success in recruiting, training and retaining sufficient numbers of sales and publisher supportpersonnel with relevant industry knowledge. New hires require significant training before they achieve full productivity. Newly hired advertiser sales andpublisher development personnel may not become productive as quickly as we would like, or at all, thus representing increased operating costs and lostopportunities which in turn would adversely affect our business, financial condition and results of operations.Therefore, if we are not successful in recruiting and training our advertiser sales and publisher development personnel and streamlining our sales andbusiness development processes with advertiser clients and publishers to cost-effectively grow our advertiser and publisher base, our ability to grow ourbusiness and our results of operation could be adversely affected.If our implementation cycles are long, we may allocate resources to an advertiser without any guarantee of near-term revenue generation.Implementing our solution with clients generally requires clients to integrate software code on their website to enable us to gather and import dataregarding consumer behavior on their website into our systems and inform the algorithms underlying the Criteo Engine. This implementation process can becomplex and time-consuming 25Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsfor an advertiser and can result in delays in the deployment and use of our solution after an advertiser has signed up to utilize it. Depending upon the time andresources that an advertiser is willing to devote to the integration of our solution with their website and the nature and complexity of an advertiser’s networkand systems, the actual testing and implementation of our solution may occur some period of time after an advertiser has signed up to use our solution. As aresult, the possibly lengthy implementation cycle may result in difficulty in predicting our future results of operations.Failures in our systems and infrastructure supporting our solution could significantly disrupt our operations and cause us to lose clients.In addition to the optimal performance of the Criteo Engine, our business relies on the continued and uninterrupted performance of our software andhardware infrastructures. We currently place over one billion advertisements per day and each of those advertisements can be placed in under 150milliseconds. Sustained or repeated system failures of our software and hardware infrastructures, which interrupt our ability to deliver advertisements quicklyand accurately, our ability to serve and track advertisements and our ability to process consumers’ responses to those advertisements, could significantlyreduce the attractiveness of our solution to advertiser clients and publishers, reduce our revenue and impair our reputation.In addition, while we seek to maintain excess capacity to facilitate the rapid provision of new client deployments and the expansion of existing clientdeployments, we may need to increase bandwidth, storage, power or other elements of our system architecture and our infrastructure as our client basecontinues to grow, and our existing systems may not be able to scale up in a manner satisfactory to our existing or prospective clients. Our failure tocontinuously upgrade our infrastructure to meet the demands of a growing base of global advertiser clients and publishers could adversely affect thefunctioning and performance of our solution and could in turn affect our results of operations.Finally, our systems are vulnerable to damage from a variety of sources, some of which are outside of our control, including telecommunicationsfailures, power outages, malicious human acts and natural disasters. Any steps we take to increase the reliability and redundancy of our systems supportingour solution may be expensive and may not be successful in preventing system failures.If we fail to manage our growth effectively, we may be unable to execute our business plan or maintain high levels of advertiser and publishersatisfaction.We have experienced, and may continue to experience, rapid growth and organizational change, which have created, and may continue to create,challenges to the quality of our service to our advertiser clients and publishers, and which have placed, and may continue to place, significant demands onour management and our operational and financial resources.For example, the number of clients from which we collect revenue has increased from under 350 located in eight countries as of January 1, 2010 to over5,000, located in over 46 countries, as of December 31, 2013. While our client count has increased over time, this metric can also fluctuate from quarter toquarter due to the seasonal trends in advertising spend of our clients and timing and amount of revenue contribution from new clients. Therefore, there is notnecessarily a direct correlation between a change in clients in a particular period and an increase or decrease in our revenue. Part of the challenge that we expectto face in the course of our continued expansion is to maintain a high level of service and advertiser and publisher satisfaction. To the extent our advertiser andpublisher base grows, we will need to expand our account management and other personnel, in order to continue to provide personalized account managementand services. We will therefore require significant expenses and capital expenditures and the allocation of valuable management resources to maintain thequality of our client service that has been central to our growth so far, especially as we continue to seek to attract larger advertiser clients and publishers. If wefail to manage our anticipated growth in a manner that preserves our attention to our clients, our brand and reputation may suffer which would in turn impairour ability to attract and retain advertiser clients and publishers. 26Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWe expect to continue to expand our international operations into other countries in the future. As such, our organizational structure is becoming morecomplex as we expand our managerial, operational, research and development, marketing and sales, administrative, financial and other functions in order tosupport our expanding business. Furthermore, our rapid international expansion and the expanding geographical diversity of our workforce has placed, and isexpected to continue to place, a significant strain on the corporate culture of rapid innovation and teamwork that has been central to our growth so far. If we areunable to successfully manage growth in employee headcount and function and our geographical expansion, our results of operations could suffer.If we fail to enhance our brand cost-effectively, our ability to expand our client base will be impaired and our financial condition may suffer.We believe that developing and maintaining awareness of the Criteo brand in a cost-effective manner is critical to achieving widespread acceptance of ourexisting solution and future solutions, such as mobile solutions and solutions directed toward capturing broader advertising budgets, and is an importantelement in attracting new advertiser clients and publishers. Furthermore, we believe that the importance of brand recognition will increase as competition in ourmarket increases. Successful promotion of our brand will depend largely on the effectiveness of our marketing efforts and on our ability to deliver valuablesolutions for our advertiser clients and publishers. In the past, our efforts to build our brand have involved significant expenses. Brand promotion activitiesmay not yield increased revenue, and even if they do, any increased revenue may not offset the expenses we incurred in building our brand. If we fail tosuccessfully promote and maintain our brand, or incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail toattract enough new advertiser clients or publishers or retain our existing advertiser clients or publishers and our business could suffer.We experience quarterly fluctuations in our results of operations due to a number of factors which make our future results difficult to predict andcould cause our operating results to fall below expectations or our guidance.Our quarterly results of operations fluctuate due to a variety of factors, many of which are outside of our control. As a result, comparing our results ofoperations on a period-to-period basis may not be meaningful. You should not rely on our past results as indicative of our future performance. If our revenue orresults of operations fall below the expectations of investors or securities analysts, or below any guidance we may provide to the market, the price of the ADSscould decline substantially.We plan to continue to substantially increase our investment in research and development, product development and sales and marketing, as we seek tocontinue to expand into new devices (e.g. mobile applications), geographically and to new industry verticals to capitalize on what we see as a growing globalopportunity for our solution. We also expect that our general and administrative expense will increase both to support our growing operations and due to theincreased costs of operating as a public company. For the foregoing reasons or other reasons we may not anticipate, historical patterns should not be consideredindicative of our future quarterly results of operations.Other factors that may affect our quarterly results of operations include the following: • the nature of our clients’ products or services; • demand for our solution and the size, scope and timing of advertising campaigns; • the lack of long term agreements with our advertiser clients and publishers; • advertiser and publisher renewal rates; • market acceptance of our solution and future products and services in current industry verticals and in new industry verticals; • market acceptance of our solution and future products and services in new geographic markets; 27Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents • the timing of large expenditures related to expansion into new geographic markets and/or new industry verticals; • the timing of adding support for new devices, platforms and operating systems; • the amount of inventory purchased through direct relationships with publishers versus internet advertising exchanges or networks; • our clients’ budgeting cycles; • our ability to timely collect amounts owed to us by our clients; • changes in the competitive dynamics of our industry, including consolidation among competitors; • the response of consumers to our clients’ advertisements and to online marketing in general; • our ability to control costs, including our operating expenses; • network outages, errors in our solution or security breaches and any associated expense and collateral effects; • foreign currency exchange rate fluctuations, as some of our foreign sales and costs are denominated in their local currencies; • failure to successfully manage any acquisitions; and • general economic and political conditions in our domestic and international markets.As a result, we have a limited ability to forecast the amount of future revenue and expense, and our results of operations may from time to time fallbelow our estimates or the expectations of public market analysts and investors.Seasonal fluctuations in advertising activity could adversely affect our cash flows.Our cash flows from operations could vary from quarter to quarter due to the seasonal nature of our clients’ spending. For example, in particular in theonline retail industry, many businesses devote the largest portion of their budgets to the fourth quarter of the calendar year, to coincide with increased holidayspending by consumers. Conversely, our e-commerce retail and travel clients typically conduct fewer advertising campaigns in the second quarter than they doin other quarters. To date, these seasonal effects have been masked by our rapid revenue growth. However, if and to the extent that seasonal fluctuationsbecome more pronounced, our operating cash flows could fluctuate materially from period to period as a result.In periods of economic uncertainty, businesses may delay or reduce their spending on advertising, which could materially harm our business.General worldwide economic conditions have experienced significant instability in recent years, especially in the European Union where we generated83.4%, 63.5% and 53.5% of our revenue in 2011, 2012 and 2013, respectively. These conditions make it difficult for our clients and us to accurately forecastand plan future business activities, and could cause our clients to reduce or delay their advertising spend with us. Historically, economic downturns haveresulted in overall reductions in advertising spending. We cannot predict the timing, strength or duration of any economic slowdown or recovery. In downturnsour revenue can be adversely affected as businesses may curtail spending on advertising in general and on a solution such as ours. Any macroeconomicdeterioration in the future, especially further deterioration in the European Union, could impair our revenue and results of operations. In addition, even if theoverall economy improves, we cannot assure you that the market for internet display advertising solutions and the market for performance internet displayadvertising will experience growth or that we will experience growth. Furthermore, we generally sell through insertion orders with our 28Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsclients. These insertion orders generally do not include long-term obligations and are cancelable upon short notice and without penalty. Any reduction inadvertising spending could limit our ability to grow our business and negatively affect our results of operations.We derive a significant portion of our revenue from e-commerce businesses, especially in the retail, travel and classified industries, and downturnin these industries or any changes in regulations affecting these industries could harm our business.A significant portion of our revenue is derived from e-commerce businesses in the retail, travel and classifieds industries. For example, in 2011, 2012and 2013, 68.2%, 66.0% and 62.4%, respectively, of our revenue was derived from advertisements placed for retail e-commerce businesses. In addition, weexpect to grow our advertiser base in additional industries, such as automotive, telecommunications, consumer goods and finance. Any downturn in any ofthese industries, or other industries we may target in the future, may cause our clients to reduce their spending with us, delay or cancel their advertisingcampaigns with us.Furthermore, our business could be negatively impacted by the application of existing laws and regulations or the enactment of new laws by federal,state and foreign governmental or regulatory agencies which would impose taxes on goods and services provided over the internet. To the extent that such taxesdiscourage the use of the internet as a means of commercial marketing or reduce the amount of products and services offered through e-commerce websites,online advertising spending may decline and the use or attractiveness of our solution by our clients or potential clients may be adversely affected.Interruptions or delays in services provided by third-party providers that we rely upon could impair the performance of our solution and harmour business.We currently lease space from third-party data center hosting facilities for our servers located in California, France, Japan, New York and TheNetherlands. All of our data gathering and analytics are conducted on, and the advertisements we deliver are processed through, our servers located in thesefacilities. We also rely on bandwidth providers and internet service providers to deliver advertisements. Any damage to, or failure of, the systems or facilitiesof our third-party providers could adversely impact our ability to deliver our solution to clients. If, for any reason, our arrangement with one or more datacenters is terminated, we could experience additional expense in arranging for new facilities and support.The occurrence of a natural disaster, an act of terrorism, vandalism or sabotage, a decision to close any data center or the facilities of any other third-party provider without adequate notice, or other unanticipated problems at these facilities could result in lengthy interruptions in the availability of oursolution. While we have disaster recovery arrangements in place, our testing in actual disasters or similar events is limited. If any such event were to occur,our business, results of operations and financial condition could be adversely affected.Our international operations and expansion expose us to several risks.During 2011, 2012 and 2013, revenue generated outside of France was 70.9%, 81.9% and 86.5% of our revenue, respectively, based on the location ofwhere the respective advertising campaign was delivered. Our primary research and development operations are located in France and the United States. Inaddition, we currently have international offices outside of France and the United States, which focus primarily on selling and implementing our solution inthose regions. In the future, we may expand to other international locations. Our current international operations and future initiatives will involve a variety ofrisks, including: • localization of our solution, including translation into foreign languages and adaptation for local practices; • unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions; 29Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents • different labor regulations, especially in the European Union, where labor laws are generally more advantageous to employees as compared to theUnited States, including deemed hourly wage and overtime regulations in these locations; • exposure to many onerous and potentially inconsistent data protections laws; • more stringent regulations relating to data security and the unauthorized use of, or access to, commercial and personal information, particularly inthe European Union; • changes in a specific country’s or region’s political or economic conditions; • challenges inherent to efficiently managing an increased number of employees over large geographic distances, including the need to implementappropriate systems, policies, benefits and compliance programs; • risks resulting from changes in currency exchange rates and the implementation of exchange controls, including restrictions promulgated by theOffice of Foreign Assets Control of the U.S. Department of the Treasury, and other similar trade protection regulations and measures in the UnitedStates or in other jurisdictions; • reduced ability to timely collect amounts owed to us by our clients in countries where our recourse may be more limited; • limitations on our ability to reinvest earnings from operations derived from one country to fund the capital needs of our operations in othercountries; • limited or unfavorable intellectual property protection; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act and similar lawsand regulations in other jurisdictions; and • restrictions on repatriation of earnings.We have limited experience in marketing, selling and supporting our solution outside of France, Germany, the United Kingdom, the United States andJapan. Our limited experience in operating our business internationally increases the risk that any potential future expansion efforts that we may undertake willnot be successful. If we invest substantial time and resources to expand our international operations and are unable to do so successfully and in a timelymanner, our business and results of operations will suffer.Additionally, operating in international markets also requires significant management attention and financial resources. We cannot be certain that theinvestment and additional resources required in establishing operations in other countries will produce desired levels of revenue or profitability.We are a multinational organization faced with increasingly complex tax issues in many jurisdictions, and we could be obligated to pay additionaltaxes in various jurisdictions as a result of new taxes and new laws, including sales taxes, which may negatively affect our business.As a multinational organization, operating in multiple jurisdictions such as France, the United States, the United Kingdom, Germany and Japan, wemay be subject to taxation in several jurisdictions around the world with increasingly complex tax laws, the application of which can be uncertain. Theamount of taxes we pay in these jurisdictions could increase substantially as a result of changes in the applicable tax principles, including increased tax rates,new tax laws or revised interpretations of existing tax laws and precedents, which could have a material adverse effect on our liquidity and results ofoperations.In addition, as internet commerce and globalization continue to evolve, increasing regulation by federal, state or foreign governments becomes morelikely. Our business could be negatively impacted by the application of existing laws and regulations or the enactment of new laws applicable to digitaladvertising. The cost to comply with such laws or regulations could be significant, and we may be unable to pass along those costs to our clients in the formof increased fees, which may negatively affect our business. 30Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsFinally, the authorities in these jurisdictions could review our tax returns and impose additional taxes, interest and penalties, and the authorities couldclaim that various withholding requirements apply to us or our subsidiaries or assert that benefits of tax treaties are not available to us or our subsidiaries, anyof which could have a material impact on us and the results of our operations.We are exposed to foreign currency exchange rate fluctuations.We incur portions of our expenses and derive revenues in currencies other than the euro. As a result, we are exposed to foreign currency exchange risk asour results of operations and cash flows are subject to fluctuations in foreign currency exchange rates. Foreign exchange risk exposure also arises from intra-company transactions and financing with subsidiaries that have a functional currency different than the euro. Therefore, for example, an increase in the valueof the euro against the U.S. dollar could be expected to have a negative impact on our revenue and earnings growth as U.S. dollar revenue and earnings, if any,would be translated into euros at a reduced value. Before December 2013, we did not engage in hedging transactions to protect Criteo’s sales, expenses andother balance sheet items from the impact of uncertainty in future exchange rates between particular foreign currencies and the euro. While we have recentlybegun engaging in hedging transactions to minimize the impact of uncertainty in future exchange rates on intra-company transactions and financing, we maynot hedge all of our foreign currency exchange rate risk. In addition, hedging transactions carry their own risks, including the possibility of a default by thecounterparty to the hedge transaction. There can be no assurance that we will be successful in managing our foreign currency exchange rate risk. We cannotpredict the impact of foreign currency fluctuations, and foreign currency fluctuations in the future may adversely affect our financial condition, results ofoperations and cash flows.Our revenue would decline if we fail to gather sufficient data in a particular geographical market and effectively coordinate the demand for andsupply of advertising inventory.The performance of the Criteo Engine in a particular geographical market depends on having sufficient advertiser clients and publishers in that marketutilizing our solution and our ability to coordinate the demand for and supply of advertising inventory in that market. Since we cannot consistently predict thedemand for advertising inventory by our clients and the advertising inventory being made available to us, including on a priority basis, the demand for andsupply of advertising inventory in that market may not be sufficient or sufficiently coordinated for the Criteo Engine to function optimally. As such, as wetarget new geographic markets, we will need to adequately coordinate the timing for local advertiser clients and publishers to use our solution. A failure toeffectively manage demand for and the supply of advertising inventory processed through the Criteo Engine could impair its ability to accurately predict userengagement in that market, which could result in: • a reduction in the amount of inventory our publishers make available to us in the future; • a loss of existing advertiser clients or publishers; • an adverse effect on our ability to attract new publishers willing to give us preferred access; • harm to our reputation; • increased cost; and • lost revenue.If we do not retain our senior management team and key employees, or attract additional sales and technology talent, we may not be able tosustain our growth or achieve our business objectives.Our future success is substantially dependent on the continued service of our senior management team. Our management team is currently spread acrossmultiple physical locations and geographies, which can strain the organization and make coordinated management more challenging. Our future success alsodepends on our ability to continue to attract, retain and motivate highly skilled employees, particularly employees with technical 31Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsskills that enable us to deliver effective advertising solutions, and sales and advertiser and publisher support representatives with experience in digitaladvertising. Competition for these employees in our industry is intense. As a result, we may be unable to attract or retain these management, technical, salesand advertiser and publisher support personnel who are critical to our success, resulting in harm to our key advertiser and publisher relationships, loss ofkey information, expertise or proprietary knowledge and unanticipated recruitment and training costs. The loss of the services of our senior management orother key employees could make it more difficult to successfully operate our business and pursue our business goals.Our inability to use software licensed from third parties, or our use of open source software under license terms that interfere with ourproprietary rights, could disrupt our business.Our technology platform incorporates software licensed from third parties, including some software, known as open source software, which we usewithout charge. Although we monitor our use of open source software, the terms of many open source licenses to which we are subject have not been interpretedby U.S. or foreign courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on ourability to provide our solution to our clients. In the future, we could be required to seek licenses from third parties in order to continue offering our solution,which licenses may not be available on terms that are acceptable to us, or at all. Alternatively, we may need to re-engineer our solution or discontinue use ofportions of the functionality provided by our solution. In addition, the terms of open source software licenses may require us to provide software that wedevelop using such software to others on unfavorable license terms such as by precluding us from charging license fees or by requiring us to disclose oursource code. Our inability to use third-party software could result in disruptions to our business, or delays in the development of future offerings orenhancements of our existing platform, which could impair our business.Our failure to maintain certain tax benefits applicable to French technology companies may adversely affect our results of operations.As a French technology company, we have benefited from certain tax advantages, including, for example, the French research tax credit (crédit d’impôtrecherche), or CIR. The CIR is a French tax credit aimed at stimulating research and development. The CIR can be offset against French corporate income taxdue and the portion in excess (if any) may be refunded at the end of a three fiscal-year period. The CIR is calculated based on our claimed amount of eligibleresearch and development expenditures in France and represented €1.5 million, €2.4 million and €1.9 million in 2011, 2012 and 2013, respectively. TheFrench tax authority with the assistance of the Research and Technology Ministry may audit each research and development program in respect of which aCIR benefit has been claimed and assess whether such program qualifies in their view for the CIR benefit. If the French tax authority determines that ourresearch and development programs do not meet the requirements for the CIR benefit, we could be liable for additional corporate tax, and penalties and interestrelated thereto, which could have a significant impact on our results of operations and future cash flows.For example, in 2011, we underwent a tax inspection by the French tax authorities covering fiscal years 2008 and 2009, which resulted in areassessment of €0.5 million for the two years. Further, we had another inspection related to fiscal years 2010 and 2011 with the French tax authorities, whichresulted in a non-significant reassessment of less than €50,000 for the two years. The French tax authorities may challenge our eligibility to, or our calculationof certain tax reductions and/or deductions in respect of our research and development activities and, should the French tax authorities be successful, we maybe liable to additional corporate income tax, and penalties and interest related thereto, which could have a significant impact on our results of operations andfuture cash flows. Furthermore, if the French Parliament decides to eliminate, or reduce the scope or the rate of, the CIR benefit, either of which it could decideto do at any time, our results of operations could be adversely affected. 32Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsTransfer pricing rules may adversely affect our corporate income tax expense.Many of the jurisdictions in which we conduct business have detailed transfer pricing rules which require that all transactions with non-resident relatedparties be priced using arm’s length pricing principles. Contemporaneous documentation must exist to support this pricing. The tax authorities in thesejurisdictions could challenge the arm’s lengthiness of our related party transfer pricing policies and as a consequence the tax treatment of correspondingexpenses and income. International transfer pricing is an area of taxation that depends heavily on the underlying facts and circumstances and generallyinvolves a significant degree of judgment. If any of these tax authorities were successful in challenging our transfer pricing policies, we may be liable foradditional corporate income tax, and penalties and interest related thereto, which may have a significant impact on our results of operations and future cashflows.Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reportedresults of operations.Financial accounting standards may change or their interpretation may change. A change in accounting standards or practices can have a significanteffect on our reported results and may even affect our reporting of transactions completed before the change becomes effective. Changes to existing rules or there-examining of current practices may adversely affect our reported financial results.In addition, as a “foreign private issuer” our financial statements are prepared and presented in accordance with the International Financial ReportingStandards, or IFRS, as issued by the International Accounting Standards Board, or IASB. If we lose our status as a “foreign private issuer,” we will need tobegin reporting as a U.S. domestic issuer, which entails preparing and presenting our financial statements in accordance with U.S. generally acceptedaccounting principles, or U.S. GAAP. This migration from IFRS to U.S. GAAP would require us to present our financial information in U.S. dollars insteadof euros as well, which would involve a significant change in the way our financial information is prepared and presented. Additionally, this migration fromIFRS to U.S. GAAP may involve revisions to our accounting for and presentation of historical transactions which may adversely affect our reported financialresults or the way we conduct our business.Risks Related to Ownership of Our Shares and the ADSs and the Trading of the ADSsThe market price for the ADSs may be volatile or may decline regardless of our operating performance.The trading price of the ADSs has fluctuated, and is likely to continue to fluctuate, substantially. The trading price of the ADSs depends on a numberof factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operatingperformance.Since the ADSs were sold at our initial public offering in November 2013 at a price of $31.00 per share, the price per ADS has ranged as low as $28.27and as high as $59.26 through March 5, 2014. The market price of the ADSs may fluctuate significantly in response to numerous factors, many of whichare beyond our control, including: • actual or anticipated fluctuations in our revenue and other results of operations; • the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of us and our securities, changes in financial estimates by any securities analysts whofollow our company, or our failure to meet these estimates or the expectations of investors; • announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures or capitalcommitments; • changes in operating performance and stock market valuations of online marketing or other technology companies, or those in our industry inparticular; 33Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents • lawsuits threatened or filed against us; and • other events or factors, including those resulting from war, incidents of terrorism or responses to these events.In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices ofequity securities of many technology companies. Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to theoperating performance of those companies. In the past, shareholders have instituted securities class action litigation following periods of market volatility. If wewere to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our businessand adversely affect our business.Share ownership remains concentrated in the hands of our principal shareholders and management, who continue to be able to exercise a director indirect controlling influence on us.Our executive officers, directors, current five percent or greater shareholders and affiliated entities together currently beneficially own approximately73.0% of our ordinary shares outstanding. As a result, these shareholders, acting together, have significant influence over all matters that require approval byour shareholders, including the election of directors and approval of significant corporate transactions. Corporate action might be taken even if othershareholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that othershareholders may view as beneficial.If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the price of theADSs and trading volume could decline.The trading market for the ADSs depends in part on the research and reports that securities or industry analysts publish about us or our business. If noor few securities or industry analysts cover our company, the trading price for the ADSs would be negatively impacted. If one or more of the analysts whocovers us downgrades the ADSs or publishes incorrect or unfavorable research about our business, the price of the ADSs would likely decline. If one or moreof these analysts ceases coverage of our company or fails to publish reports on us regularly, or downgrades the ADSs, demand for the ADSs could decrease,which could cause the price of the ADSs or trading volume to decline.We do not currently intend to pay dividends on our securities and, consequently, your ability to achieve a return on your investment will depend onappreciation in the price of the ADSs. In addition, French law may limit the amount of dividends we are able to distribute.We have never declared or paid any cash dividends on our ordinary shares and do not currently intend to do so for the foreseeable future. We currentlyintend to invest our future earnings, if any, to fund our growth. Therefore, you are not likely to receive any dividends on your ADSs for the foreseeable futureand the success of an investment in ADSs will depend upon any future appreciation in its value. Consequently, investors may need to sell all or part of theirholdings of ADSs after price appreciation, which may never occur, as the only way to realize any future gains on their investment. There is no guarantee thatthe ADSs will appreciate in value or even maintain the price at which our shareholders have purchased the ADSs. Investors seeking cash dividends should notpurchase the ADSs.Further, under French law, the determination of whether we have been sufficiently profitable to pay dividends is made on the basis of our statutoryfinancial statements prepared and presented in accordance with accounting principles generally accepted in France, or French GAAP. In addition, payment ofdividends may subject us to additional taxes under French law. Therefore, we may be more restricted in our ability to declare dividends than companies notbased in France. 34Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIn addition, exchange rate fluctuations may affect the amount of euros that we are able to distribute, and the amount in U.S. dollars that ourshareholders receive upon the payment of cash dividends or other distributions we declare and pay in euros, if any. These factors could harm the value of theADSs, and, in turn, the U.S. dollar proceeds that holders receive from the sale of the ADSs.We may need additional capital in the future to meet our financial obligations and to pursue our business objectives. Additional capital may not beavailable on favorable terms, or at all, which could compromise our ability to meet our financial obligations and grow our business.While we anticipate that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operations for at least the next12 months, we may need to raise additional capital to fund operations in the future or to finance acquisitions. If adequate funds are not available on acceptableterms, we may be unable to fund the expansion of our marketing and sales and research and development efforts, increase working capital, take advantage ofacquisition or other opportunities, or adequately respond to competitive pressures which could seriously harm our business and results of operations. If weincur debt, the debt holders would have rights senior to shareholders to make claims on our assets, and the terms of any debt could restrict our operations,including our ability to pay dividends on our ordinary shares. In addition, pursuant to the terms of our credit facilities, we may be restricted in the use of suchfacilities to capital expenditures and information technology-related expenses. If adequate additional funds are not available, we may be required to delay,reduce the scope of, or eliminate material parts of our business strategy, including potential additional acquisitions or development of new technologies.Furthermore, if we issue additional equity securities, shareholders will experience dilution, and the new equity securities could have rights senior to thoseof our ordinary shares. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control,we cannot predict or estimate the amount, timing or nature of our future offerings. As a result, our shareholders bear the risk of our future securities offeringsreducing the market price of the ADSs and diluting their interest.Future sales of shares of the ADSs by existing shareholders could depress the market price of the ADSs.If our existing shareholders sell, or indicate an intent to sell, substantial amounts of the ADSs in the public market the trading price of the ADSs coulddecline significantly. In addition, the sale of these securities could impair our ability to raise capital through the sale of additional securities.As of January 31, 2014, we had 56,908,066 outstanding ordinary shares. Substantially all of those shares, other than the 9,294,967 shares in theform of ADSs issued in our initial public offering, are subject to restrictions as a result of lock-up agreements. However, subject to applicable securities lawrestrictions, substantially all of these shares will become eligible for sale in the public market beginning April 27, 2014 when the applicable lock-ups expire.Approximately 73.0% of our outstanding ordinary shares are held by directors, executive officers and other affiliates and will continue to be subject to resalevolume limitations under Rule 144 under the Securities Act after the expiration of the lock-up agreements.In addition, the ordinary shares subject to outstanding options and warrants issued under our equity incentive plans, of which options and warrants topurchase an aggregate of 4,673,935 ordinary shares were exercisable as of January 31, 2014, will become available for sale immediately upon the exercise ofsuch options or warrants and the expiration or waiver of any applicable lock-up agreements, subject to compliance with Rule 144 under the Securities Act inthe case of our affiliates. Moreover, holders of an aggregate of approximately 65% of our outstanding ordinary shares as of January 31, 2014 have rights,subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements thatwe may file for ourselves or other shareholders.In addition, we, J.P. Morgan Securities LLC and Deutsche Bank Securities Inc. may permit our officers, directors, employees and current shareholdersto sell shares prior to the expiration of the lock-up agreements, 35Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentswhich would result in more ADSs being available for sale in the public market at earlier dates. Sales of ADSs by existing shareholders in the public market,the availability of these shares for sale, our issuance of securities or the perception that any of these events might occur could materially and adversely affectthe market price of the ADSs.Our by-laws and French corporate law contain provisions that may delay or discourage a takeover attempt.Provisions contained in our by-laws and the corporate laws of France, the country in which we are incorporated, could make it more difficult for a third-party to acquire us, even if doing so might be beneficial to our shareholders. In addition, provisions of our by-laws impose various procedural and otherrequirements, which could make it more difficult for shareholders to effect certain corporate actions. These provisions include the following: • our ordinary shares are in registered form only and we must be notified of any transfer of our shares in order for such transfer to be validlyregistered; • under French law, a non-resident of France may have to file an administrative notice with French authorities in connection with a direct or indirectinvestment in us, as defined by administrative rulings; • the provisions of French law allowing the owner of 95% of the share capital or voting rights of a public company to force out the minorityshareholders following a tender offer made to all shareholders are only applicable to companies listed on a stock exchange of the European Unionand will therefore not be applicable to us; • a merger (i.e., in a French law context, a stock for stock exchange following which our company would be dissolved into the acquiring entity andour shareholders would become shareholders of the acquiring entity) of our company into a company incorporated in the European Union wouldrequire the approval of our board of directors as well as a two-thirds majority of the votes held by the shareholders present, represented by proxyor voting by mail at the relevant meeting; • a merger of our company into a company incorporated outside of the European Union would require 100% of our shareholders to approve it; • under French law, a cash merger is treated as a share purchase and would require the consent of each participating shareholder; • our shareholders have granted and may grant in the future our board of directors broad authorizations to increase our share capital or to issueadditional ordinary shares or other securities (for example, warrants) to our shareholders, the public or qualified investors, including as a possibledefense following the launching of a tender offer for our shares; • our shareholders have preferential subscription rights on a pro rata basis on the issuance by us of any additional securities for cash or a set-offof cash debts, which rights may only be waived by the extraordinary general meeting (by a two-thirds majority vote) of our shareholders or on anindividual basis by each shareholder; • our board of directors has the right to appoint directors to fill a vacancy created by the resignation or death of a director, subject to the approval bythe shareholders of such appointment at the next shareholders’ meeting, which prevents shareholders from having the sole right to fill vacancies onour board of directors; • our board of directors can only be convened by our chairman or our managing director, if any, or, when no board meeting has been held for morethan two consecutive months, by directors representing at least one third of the total number of directors; • our board of directors meetings can only be regularly held if at least half of the directors attend either physically or by way of videoconference orteleconference enabling the directors’ identification and ensuring their effective participation in the board’s decisions; 36Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents • approval of at least a majority of the votes held by shareholders present, represented by a proxy, or voting by mail at the relevant ordinaryshareholders’ general meeting is required to remove directors with or without cause; • advance notice is required for nominations to the board of directors or for proposing matters to be acted upon at a shareholders’ meeting, exceptthat a vote to remove and replace a director can be proposed at any shareholders’ meeting without notice; and • pursuant to French law, the sections of the by-laws relating to the number of directors and election and removal of a director from office may onlybe modified by a resolution adopted by 66 2/3% of the votes of our shareholders present, represented by a proxy or voting by mail at the meeting.You may not be able to exercise your right to vote the ordinary shares underlying your ADSs.Holders of ADSs may exercise voting rights with respect to the ordinary shares represented by the ADSs only in accordance with the provisions of thedeposit agreement. The deposit agreement provides that, upon receipt of notice of any meeting of holders of our ordinary shares, the depositary will fix a recorddate for the determination of ADS holders who shall be entitled to give instructions for the exercise of voting rights. Upon timely receipt of notice from us, if weso request, the depositary shall distribute to the holders as of the record date (1) the notice of the meeting or solicitation of consent or proxy sent by us and (2) astatement as to the manner in which instructions may be given by the holders.You may instruct the depositary of your ADSs to vote the ordinary shares underlying your ADSs. Otherwise, you will not be able to exercise your rightto vote, unless you withdraw the ordinary shares underlying the ADSs you hold. However, you may not know about the meeting far enough in advance towithdraw those ordinary shares. If we ask for your instructions, the depositary, upon timely notice from us, will notify you of the upcoming vote and arrangeto deliver our voting materials to you. We cannot guarantee you that you will receive the voting materials in time to ensure that you can instruct the depositaryto vote your ordinary shares or to withdraw your ordinary shares so that you can vote them yourself. If the depositary does not receive timely votinginstructions from you, it may give a proxy to a person designated by us to vote the ordinary shares underlying your ADSs. In addition, the depositary and itsagents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not beable to exercise your right to vote, and there may be nothing you can do if the ordinary shares underlying your ADSs are not voted as you requested.Your right as a holder of ADSs to participate in any future preferential subscription rights or to elect to receive dividends in shares may be limited,which may cause dilution to your holdings.According to French Law, if we issue additional securities for cash, current shareholders will have preferential subscription rights for these securities ona pro rata basis unless they waive those rights at an extraordinary meeting of our shareholders (by a two-thirds majority vote) or individually by eachshareholder. However, the ADS holders in the United States will not be entitled to exercise or sell such rights unless we register the rights and the securities towhich the rights relate under the Securities Act or an exemption from the registration requirements is available. In addition, the deposit agreement provides thatthe depositary will not make rights available to you unless the distribution to ADS holders of both the rights and any related securities are either registeredunder the Securities Act or exempted from registration under the Securities Act. Further, if we offer holders of our ordinary shares the option to receivedividends in either cash or shares, under the deposit agreement the depositary may require satisfactory assurances from us that extending the offer to holdersof ADSs does not require registration of any securities under the Securities Act before making the option available to holders of ADSs. We are under noobligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declaredeffective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, ADS holders may be unable toparticipate in our rights offerings or to elect to receive dividends in shares and may experience dilution in their holdings. In addition, if the depositary 37Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsis unable to sell rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in whichcase you will receive no value for these rights.You may be subject to limitations on the transfer of your ADSs and the withdrawal of the underlying ordinary shares.Your ADSs, which may be evidenced by ADRs, are transferable on the books of the depositary. However, the depositary may close its books at anytime or from time to time when it deems expedient in connection with the performance of its duties. The depositary may refuse to deliver, transfer or registertransfers of your ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary think it is advisable to do sobecause of any requirement of law, government or governmental body, or under any provision of the deposit agreement, or for any other reason subject to yourright to cancel your ADSs and withdraw the underlying ordinary shares. Temporary delays in the cancellation of your ADSs and withdrawal of the underlyingordinary shares may arise because the depositary has closed its transfer books or we have closed our transfer books, the transfer of ordinary shares isblocked to permit voting at a shareholders’ meeting or we are paying a dividend on our ordinary shares. In addition, you may not be able to cancel your ADSsand withdraw the underlying ordinary shares when you owe money for fees, taxes and similar charges and when it is necessary to prohibit withdrawals inorder to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of ordinary shares or other deposited securities.If we fail to establish or maintain an effective system of internal controls, we may be unable to accurately report our financial results or preventfraud, and investor confidence and the market price of the ADSs may, therefore, be adversely impacted.As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internalcontrol. In addition, beginning with our annual report for the year ending December 31, 2014, we will be required to submit a report by management to theAudit committee and external auditors on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.We are in the process of designing, implementing, and testing the internal control over financial reporting required to comply with this obligation. This processis time-consuming, costly, and complicated. In addition, our independent registered public accounting firm will be required to attest to the effectiveness of ourinternal controls over financial reporting beginning with our annual report following the date on which we are no longer an “emerging growth company,” whichmay be up to five fiscal years following the date of our initial public offering. If we identify material weaknesses in our internal controls over financialreporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or assert that our internal controls overfinancial reporting are effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internalcontrols over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market priceof the ADSs may be adversely impacted, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, orother regulatory authorities, which could require additional financial and management resources.The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retainexecutive management and qualified board members.We are subject to the reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank WallStreet Reform and Consumer Protection Act, the listing requirements of the Nasdaq Stock Market and other applicable securities rules and regulations.Compliance with these rules and regulations has increased and will continue to increase our legal and financial compliance costs, make some activities moredifficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company”and/or a foreign private issuer. The Exchange Act requires that, as a public company, we file annual, quarterly and current reports with respect to our 38Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsbusiness, financial condition and result of operations. However, while we expect to continue to submit quarterly interim consolidated financial data to the SECunder cover of the SEC’s Form 6-K, as a foreign private issuer, we are not required to file quarterly and current reports with respect to our business andresults of operations. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective disclosure controls and procedures andinternal control over financial reporting. In order to establish and maintain and, if required, improve our disclosure controls and procedures and internalcontrol over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attentionmay be diverted from other business concerns, which could adversely affect our business and results of operations. Although we have already hired additionalemployees to comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our costand expense.In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for publiccompanies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards aresubject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as newguidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costsnecessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations andstandards, and this investment may result in increased general and administrative expense and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatoryor governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our businessmay be adversely affected.As a public company that is subject to these rules and regulations, we may find that it is more expensive for us to obtain director and officer liabilityinsurance and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it moredifficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, andqualified executive officers.As a result of disclosure of information in this Annual Report on Form 20-F and in other filings required of a public company, our business andfinancial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. Ifsuch claims are successful, our business and results of operations could be adversely affected, and even if the claims do not result in litigation or are resolvedin our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect ourbusiness and results of operations.We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growthcompanies will make the ADSs less attractive to investors.We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reportingrequirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to: (1) not being required tocomply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; (2) only two years of auditedfinancial statements in addition to any required interim financial statements and correspondingly reduced disclosure in management’s discussion and analysisof financial condition and results of operations; and (3) to the extent that we no longer qualify as a foreign private issuer, (a) reduced disclosure obligationsregarding executive compensation in our periodic reports and proxy statements; and (b) exemptions from the requirements of holding a non-binding advisoryvote on executive compensation, including golden parachute compensation. We may take advantage of these provisions for up to five years or such earlier timethat we are no longer an “emerging growth company.” We would cease to be an “emerging growth company” upon the earliest to occur of: (1) the last day of thefiscal year in which we have more than $1.0 billion in annual revenue; (2) the date we qualify as a “large accelerated filer,” with at least $700 million of equitysecurities; 39Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents(3) the issuance, in any three-year period, by our company of more than $1.0 billion in non-convertible debt securities held by non-affiliates; and (4) the lastday of the fiscal year ending after the fifth anniversary of our initial public offering. We may choose to take advantage of some but not all of these reducedreporting burdens. As a result, the information that we provide our security holders may be different than you might get from other public companies in whichyou hold equity interests. We cannot predict if investors will find the ADSs less attractive because we may rely on these exemptions. If some investors find theADSs less attractive as a result, there may be a less active trading market for the ADSs and the price of the ADSs may be more volatile.As a foreign private issuer, we are exempt from a number of rules under the U.S. securities laws and are permitted to file less information with theSEC than a U.S. company; our ordinary shares are not listed, and we do not intend to list our shares, on any market in France, our homecountry. This may limit the information available to holders of the ordinary shares.We are a “foreign private issuer,” as defined in the SEC’s rules and regulations and, consequently, we are not subject to all of the disclosurerequirements applicable to public companies organized within the United States. For example, we are exempt from certain rules under the U.S. SecuritiesExchange Act of 1934, as amended, or the Exchange Act, that regulate disclosure obligations and procedural requirements related to the solicitation of proxies,consents or authorizations applicable to a security registered under the Exchange Act, including the U.S. proxy rules under Section 14 of the Exchange Act. Inaddition, our officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and relatedrules with respect to their purchases and sales of our securities. Moreover, while we expect to submit quarterly interim consolidated financial data to the SECunder cover of the SEC’s Form 6-K, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly asU.S. public companies and will not be required to file quarterly reports on Form 10-Q or current reports on Form 8-K under the Exchange Act. Furthermore,our ordinary shares are not listed and we do not currently intend to list our ordinary shares on any market in France, our home country. As a result, we are notsubject to the reporting and other requirements of listed companies in France. For instance, we are not required to publish quarterly or semi annual financialstatements. Accordingly, there will be less publicly available information concerning our company than there would be if we were a U.S. public company.As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differsignificantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they wouldenjoy if we complied fully with corporate governance listing standards.As a foreign private issuer listed on Nasdaq, we are subject to corporate governance listing standards. However, rules permit a foreign private issuer likeus to follow the corporate governance practices of its home country. Certain corporate governance practices in France, which is our home country, may differsignificantly from corporate governance listing standards. For example, neither the corporate laws of France nor our by-laws require a majority of our directorsto be independent and we could include non-independent directors as members of our compensation committee and nomination and corporate governancecommittee, and our independent directors would not necessarily hold regularly scheduled meetings at which only independent directors are present. Currently,we intend to comply with the corporate governance listing standards of Nasdaq to the extent possible under French law. However, if we choose to change suchpractice to follow home country practice in the future, our shareholders may be afforded less protection than they otherwise would have under corporategovernance listing standards applicable to U.S. domestic issuers.We may lose our foreign private issuer status in the future, which could result in significant additional cost and expense.While we currently qualify as a foreign private issuer, the determination of foreign private issuer status is made annually on the last business day of anissuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2014. 40Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIn the future, we would lose our foreign private issuer status if we to fail to meet the requirements necessary to maintain our foreign private issuer statusas of the relevant determination date. For example, if more than 50% of our securities are held by U.S. residents and more than 50% of our executive officers ormembers of our board of directors are residents or citizens of the United States, we could lose our foreign private issuer status. As of January 31, 2014,approximately 19.1% of our outstanding ordinary shares were held by U.S. residents (assuming that all of our ordinary shares represented by ADSs are heldby residents of the United States).The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly more than costs we incur as aforeign private issuer. If we are not a foreign private issuer, we will be required to file periodic reports and registration statements on U.S. domestic issuerforms with the SEC, which are more detailed and extensive in certain respects than the forms available to a foreign private issuer. We would be required undercurrent SEC rules to prepare our financial statements in accordance with U.S. GAAP, rather than IFRS, and modify certain of our policies to comply withcorporate governance practices associated with U.S. domestic issuers. Such conversion of our financial statements to U.S. GAAP will involve significant timeand cost. In addition, we may lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that areavailable to foreign private issuers such as the ones described above and exemptions from procedural requirements related to the solicitation of proxies.U.S. investors may have difficulty enforcing civil liabilities against our company and directors and senior management.Three of our directors and certain members of senior management, those of certain of our subsidiaries are non-residents of the United States, and all or asubstantial portion of our assets and the assets of such persons are located outside the United States. As a result, it may not be possible to serve process onsuch persons or us in the United States or to enforce judgments obtained in U.S. courts against them or us based on civil liability provisions of the securitieslaws of the United States. Additionally, it may be difficult to assert U.S. securities law claims in actions originally instituted outside of the United States.Foreign courts may refuse to hear a U.S. securities law claim because foreign courts may not be the most appropriate forums in which to bring such a claim.Even if a foreign court agrees to hear a claim, it may determine that the law of the jurisdiction in which the foreign court resides, and not U.S. law, isapplicable to the claim. Further, if U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process, and certain matters of procedure would still be governed by the law of the jurisdiction in which the foreign court resides. Inparticular, there is some doubt as to whether French courts would recognize and enforce certain civil liabilities under U.S. securities laws in original actions orjudgments of U.S. courts based upon these civil liability provisions. In addition, awards of punitive damages in actions brought in the United States orelsewhere may be unenforceable in France. An award for monetary damages under the U.S. securities laws would be considered punitive if it does not seek tocompensate the claimant for loss or damage suffered but is intended to punish the defendant. The enforceability of any judgment in France will depend on theparticular facts of the case as well as the laws and treaties in effect at the time. The United States and France do not currently have a treaty providing forrecognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters.The rights of shareholders in companies subject to French corporate law differ in material respects from the rights of shareholders ofcorporations incorporated in the United States.We are a French company with limited liability. Our corporate affairs are governed by our by-laws and by the laws governing companies incorporated inFrance. The rights of shareholders and the responsibilities of members of our board of directors are in many ways different from the rights and obligations ofshareholders in companies governed by the laws of U.S. jurisdictions. For example, in the performance of its duties, our board of directors is required byFrench law to consider the interests of our company, its shareholders, its employees and other stakeholders, rather than solely our shareholders and/orcreditors. It is possible that some of these parties will have interests that are different from, or in addition to, your interests as a shareholder. See the sections ofthis Annual Report on Form 20-F titled “Item 10. B—Memorandum and Articles of Association” and “Item 16.G—Corporate Governance.” 41Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsItem 4.Information on the Company A.History and Development of the Company.We were incorporated as a société par actions simplifiée, or S.A.S., under the laws of the French Republic on November 3, 2005, for a period of 99years and subsequently converted to a société anonyome, or S.A. We are registered at the Paris Commerce and Companies Register under the number 484 786249. Our principal executive offices are located at 32 Rue Blanche 75009 Paris, France, and our telephone number is +33 1 40 40 22 90. Our agent for serviceof process in the United States is National Registered Agents, Inc. We also maintain a web site at www.criteo.com. The reference to our website is an inactivetextual reference only and the information contained in, or that can be accessed through, our web site is not a part of this Annual Report on Form 20-F.We began selling our solution in France in 2007 and expanded our business into other countries in Western Europe. In 2009, we expanded our businessinto North America. As part of our geographic expansion goals, we initially entered the Asia-Pacific region in late 2010. As a result of our significantinternational operations, our revenue from outside of our home country France, accounted for 86.5% of our revenue for year ended December 31, 2013.In August 2012, we entered into a strategic relationship with Yahoo! Japan, a leading provider of advertising inventory in Japan, which provides us withprivileged access to their performance-based display inventory. In connection with this strategic relationship, Yahoo! Japan invested in our subsidiary,Criteo K.K. After that investment, we retain 66% ownership and Yahoo! Japan holds 34% ownership. The term of this strategic relationship is two years andrenews automatically for one-year terms if neither party provides advance written notice of termination within a specified period of time. The strategicrelationship may be terminated by either party for material breach and other customary events. Yahoo! Japan also has the right to require us to buy back itsinterest, and we have the right to require them to sell their interest, in Criteo K.K. under specified circumstances, such as a termination of the commercialrelationship.As part of our strategy to build upon our market and technology leadership, on July 11, 2013, we acquired all of the shares of Ad-X Limited, or Ad-X,a mobile analytics and attribution technology company and on February 20, 2014, we acquired all of the equity of Tedemis S.A., a leading provider of real-time personalized email marketing solutions to help advertisers turn web visitors into customers.Our actual capital expenditures for the years ended December 31, 2011, 2012 and 2013 amounted to €6.4 million, €13.6 million and €22.0 millionrespectively. These investments in property and equipment primarily consisted of the acquisition of data center and servers equipment. We expect our capitalexpenditures to increase in absolute terms in the near term as we continue to grow our operations. We anticipate our capital expenditure in 2014 to be financedfrom the cash flows from operating activities and proceeds of our initial public offering. We will continue investing in data centers and servers equipment inAsia region to support the launch of our activities in China and Singapore, but we will also pursue our investment in U.S and EMEA to sustain our growth inthese regions. B.Business Overview.OverviewWe are a global technology company specializing in digital performance advertising. We leverage large volumes of granular data to efficiently andeffectively engage and convert customers on behalf of our advertiser clients. We use our proprietary predictive software algorithms coupled with deep insightsinto expressed consumer intent and purchasing habits to price and deliver highly relevant and personalized digital performance advertisements on all devices inreal time.We partner with our clients to track activity on their websites and optimize our advertising placement decisions based on that activity and other data.Demonstrating the depth and scale of our data, we observed over $270 billion 42Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsin sales transactions on our clients’ websites in the year ended December 31, 2013 whether or not a consumer saw or clicked on a Criteo advertisement. Basedon this data and our other data assets, we delivered targeted advertisements that generated approximately 1.9 billion clicks over the same period. Based onthese clicks, our clients generated over $9.7 billion in post-click sales. A post-click sale is defined as a purchase made by a user from one of our client’swebsites during the 30 day period following a click by that user on an advertisement we delivered for that client. We believe post-click sales is a keyperformance indicator that our clients use to measure the effectiveness of our solution in driving sales and the return on their advertising spend with us. As ofDecember 31, 2013, we had over 5,000 clients and in each of the last three years our client retention rate was approximately 90%.Our solution is comprised of the Criteo Engine, our data assets, access to display advertising inventory, and our advertiser and publisher platforms.The Criteo Engine has been developed over the past eight years and consists of multiple machine learning algorithms—in particular, prediction andrecommendation algorithms—and the proprietary global hardware and software infrastructure that enables our solution to operate in real time and at significantscale. The accuracy of the prediction and recommendation algorithms improves with every advertisement we deliver, as they incorporate new data, whilecontinuing to learn from previous data.Every day we are presented with billions of opportunities to connect individuals that are browsing the internet, whom we refer to as consumers or users,with relevant messaging from our clients. For each of these opportunities, our algorithms will have analyzed massive volumes of data to observe and predictuser intent and deliver specific messaging and products that are likely to engage that particular user and result in a sale for our client. To deliver anadvertisement with the right product to the right user, the Criteo Engine dynamically creates a customized advertisement for that user and ultimately determinesthe right price to pay for the internet impression where an advertisement can be served, which we refer to as an advertising impression. The Criteo Engine thenbuys the advertising impression and seamlessly delivers the advertisement. This entire process can be executed in under 150 milliseconds and can result in thedelivery of up to 25,000 advertisements per second, which represents the scale and capacity of our solution.Access to high quality data assets fuels the accuracy of our algorithms. These data assets include our clients’ sensitive and proprietary data, such astransaction activity on their websites; publisher-specific data, such as the performance of advertisements we previously delivered on a particular publisher’swebsite; third-party data, such as customer demographic and behavioral data derived from third-party cookies; as well as internally developed data thatincludes vast and proprietary knowledge we have extracted from having delivered and measured responses to over 500 billion advertising impressions. Weobtain large volumes of expressed consumer purchase intent, browsing behavior and transaction data through integration with substantially all of our clients,which enables us to track users’ interactions with our clients’ websites at an individual product level. This deep access to highly granular information fromour clients demonstrates the trust that our clients place in us. For example, for most of our clients, we typically have real-time access to the products orservices a customer has viewed, researched or bought from them and we continuously receive updated information on approximately 700 million individualproducts or services, including pricing, images and descriptions. Our proprietary knowledge in extracting value from this data is the result of over eight yearsof extensive algorithmic-driven analysis, the ongoing refinement of this analysis and delivery of targeted advertisements. The combination of these data setsgives us powerful and actionable insights into consumer purchasing habits that we use to create the most relevant advertisements to drive engagement andultimately sales for our clients.We benefit from broad access to display advertising inventory through our direct relationships with over 6,600 publisher partners, as well as a leadingpresence on real-time-bidding display advertising exchanges. Many of our direct publisher partners have granted us preferred access to portions of theirinventory as a result of our ability to effectively monetize that inventory. This preferred access means we are able to select and buy inventory on an impressionby impression basis in real time that a publisher might otherwise only sell subject to minimum volume commitments. In addition, this preferred access meansthat we are able to buy inventory in some instances before a publisher makes that inventory available to others. Across both our direct publisher 43Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsrelationships and inventory purchasing done on advertising exchanges, we leverage the Criteo Engine’s ability to quickly and accurately value availableadvertising inventory as it becomes available to us, and utilize that information to bid for inventory on a programmatic, automated basis. Our ability toefficiently access and value inventory has enabled us to build a highly liquid marketplace for internet display advertising inventory, which in turn allows usto quickly find potential customers for our clients, before a potential customer’s purchase intent has diminished and to deliver effective advertisements to theseusers at the right price. We encourage publishers to provide us with access to their display advertising inventory by offering a technology platform throughwhich they can tap into advertising budgets and manage their inventory.We also offer our clients an integrated technology platform that enables comprehensive digital performance advertising campaign management, includinga unified and easy-to-use dashboard and a suite of software and services that automates most campaign processes. As a result, we reduce unnecessarycomplexity and cost associated with manual processes and multiple vendors, delivering efficiencies even as campaigns grow in size and complexity.The accuracy and efficiency of the Criteo Engine enables us to charge our clients only when users engage with an advertisement we deliver, usually byclicking on it. In contrast, traditional display solutions typically charge clients when an advertisement is displayed, whether or not the advertisement is seen orclicked on by a user. We believe our pay-for-performance pricing model provides a clear link between the cost of an advertising campaign and its effectivenessin driving sales and is valued by our clients. Our revenue retention rate was 159%, 155% and 135% for the years ended December 31, 2011, 2012 and 2013,respectively. We define our revenue retention rate with respect to a given twelve-month period as (i) revenue recognized during such period from clients thatcontributed to revenue recognized in the prior twelve-month period divided by (ii) total revenue recognized in such prior twelve-month period.As clients have embraced our solution, we have achieved significant growth since our inception and established a global footprint, including asignificant presence in Europe, the United States, and Asia, where we have a strategic relationship with Yahoo! Japan, which gives us privileged access to itsadvertising inventory for delivering personalized display advertisements. Our clients include 3 Suisses, BonPrix, CDiscount, Expedia, Gmarket,Gumtree.com, Hankyu Kotsusha, Hokende, Hotels.com, L’Oréal Paris, La Redoute, Lenovo, Lotte, Macy’s, NetShoes, Nissen, Orange, Rakuten, Recruit,Sarenza, Staples, Tiger Direct and Zalando.Our financial results include: • revenue increased from €143.6 million in 2011 to €271.9 million in 2012 and €444.0 million in 2013; • revenue excluding traffic acquisition costs, which we refer to as revenue ex-TAC, which is a non-IFRS financial measure, increased from€64.5 million in 2011 to €114.1 million in 2012 and €179.0 million in 2013; • net income was €6.1 million in 2011, €0.8 million in 2012 and €1.4 million in 2013; and • Adjusted EBITDA, which is a non-IFRS financial measure, increased from €13.9 million in 2011 to €17.4 million in 2012 and €31.3 million in2013.Please see footnotes 3 and 5 to the Other Financial and Operating Data table in “Item 3.A – Selected Financial Data” of this Annual Report on Form 20-Ffor a reconciliation of revenue ex-TAC to revenue and Adjusted EBITDA to net income (loss), the most directly comparable financial measures calculated andpresented in accordance with IFRS.Recent AcquisitionsOn February 20, 2014, we announced we acquired Tedemis S.A., or Tedemis, a leading provider of real-time personalized email marketing solutionsthat help advertisers turn web visitors into customers. We believe the addition of Tedemis will enhance our multi-channel performance marketing solution thatis client centric 44Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsbased on a cost per-click, or CPC, model and enable us to extend our digital performance advertising solution to new communications channels. Please refer toNote 27 to our Consolidated Financial statements for further details.As part of our strategy to build upon our market and technology leadership, on July 11, 2013, we acquired all of the shares of Ad-X Limited, or Ad-X,a mobile analytics and attribution technology company. Ad-X provides a solution for businesses to track and optimize mobile display advertising campaignsdelivered to smartphones and tablets through mobile advertising networks and other marketing solutions. We believe the acquisition of Ad-X will enable us toleverage Ad-X’s complementary technology, personnel and client relationships to accelerate our mobile strategy. As of the time we acquired Ad-X, Ad-X hadover 120 clients including eBay, Expedia and Priceline.com. We believe the addition of Ad-X technologies will enhance our solution offerings by expanding ourmobile capabilities.Industry BackgroundThe ability to market to and acquire customers is a critical driver of success for businesses, often representing a very significant portion of their costbase. Business to consumer e-commerce was approximately a $1.0 trillion industry globally in 2012, growing at 16.7% per year from 2012 to 2017,according to International Data Corporation, or IDC. Penetration of smartphones and tablets has also driven rapid growth of mobile commerce, whichrepresented $64.5 billion globally in 2012, and is expected to grow at a 35.5% compound annual growth rate, or CAGR. between 2012 and 2017 according toIDC. The internet and mobile devices are becoming increasingly important mediums for businesses to generate customer engagement and leads that ultimatelyresult in sales, both online and offline. However, these mediums are also complex and fragmented, making it difficult and costly to engage and convertcustomers. Illustrating the difficulty of converting customers, 88% of online shoppers surveyed in 2013 by comScore indicated they had from time to timeplaced items in a shopping cart and left a site without making a purchase. It is therefore important for businesses to develop and execute online and mobilemarketing campaigns efficiently and effectively harnessing consumer intent, big data, technology, measurability, and the ability to target, at scale. Accordingto ZenithOptimedia, marketers spent $102.8 billion on internet advertising in 2013, with this spend expected to grow at a CAGR of 15.0% through 2016.There are two primary channels for customer engagement and conversion online – search and display. Search advertising, which places text-basedadvertisements alongside user query results, represents 47.1% of internet advertising spend and is expected to grow at a 13.7% CAGR from 2013 to 2016,according to ZenithOptimedia. Historically, search has been effective at capturing consumer intent and quickly delivering highly targeted advertisements basedon query keywords, showing clearly measurable results through simple, pay-for-results pricing, and creating an automated and efficient marketplace foradvertising inventory. These factors have made search an ideal “performance” medium enabling businesses to efficiently engage with potential customers andconvert them into buyers. The consolidated nature of the search advertising marketplace has played a key role in enabling these benefits. In most geographiesglobally, there exists a single leading search advertising provider, who has advantages in creating a single, efficient marketplace for advertising inventory, andin aggregating data on user intent that can improve performance of advertising campaigns.Internet display advertising involves placing images, video or advertisements that incorporate animation, sound and/or interactivity, which we refer to asrich media content, alongside website and application content. It accounts for 40.7% of the total internet advertising market. According to ZenithOptimedia, theglobal display advertising market totaled approximately $41.8 billion in 2013 and is projected to grow at a 18.7% CAGR from 2013 to 2016. The displaymarket is highly fragmented as compared to search and is growing at a rate faster than search, due in part to the rapid rise of social and mobile internet usage,as well as the continued proliferation of content across the internet. Through internet display advertising, businesses can deliver impactful advertisementsintegrating imagery, sound, motion and interactivity with the user. These attributes have led display advertising to be well suited to broad marketingobjectives, including generating awareness and favorability for brands as opposed to the intent-driven performance objectives of search. Currently, internetdisplay advertising faces a 45Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsnumber of important challenges as an efficient and effective intent-driven medium for customer engagement and conversion, including:Difficult to Deliver Targeted, Relevant Ads. Businesses strive for targeted, relevant advertisements to minimize wasted spend and maximize theirchances of generating engagement, and ultimately a sale. Relevant advertisements are ones that target a specific audience with a message that matches thataudience’s purchase intent or interest and that are delivered at the right moment. Achieving relevance, however, is particularly difficult because users arescattered across a multitude of online destinations and devices, and consumer purchase intent and interest can be hard to determine or change rapidly. Againstthis backdrop, traditional internet display advertising solutions have incorporated very limited audience targeting capabilities, and even more limitedpersonalization. In addition, these solutions have generally not been effective in utilizing consumer intent as a signal for the delivery of advertisements. As aresult, targeting and messaging have mainly been done at the contextual level, enabling the placement of generic advertisements alongside certain types ofcontent (e.g., non-personalized automotive advertisements on sites related to cars), without incorporating purchase intent or interests. These traditionalcampaigns often lack relevance, and result in poor engagement.Difficult to Deliver Performance at Scale. While internet display advertising solutions may be able to meet or exceed engagement and conversionobjectives for small budgets and limited pilots, many such solutions are unable to sustain that performance for larger campaigns or longer trials. This limitedability to scale performance is due in part to the highly fragmented nature of the internet display landscape, proliferation of data, and lack of robusttechnology. Therefore, the challenges described above are amplified for larger and more complex campaigns.Inefficient Campaign Execution. Deployment of internet display advertising campaigns can be inefficient and costly. Traditional solutions are often acombination of many point solutions, requiring businesses to connect and manage multiple intermediaries and complex elements of the advertising campaignexecution process, including media planning, data analysis, targeting, creative assembly, media buying, optimization, advertisement serving and reporting. Inaddition, meaningful portions of campaign planning, execution and management remain a highly manual exercise.Pricing Disconnected from Performance. Internet display advertising inventory has historically been sold on a cost per impression, or CPM, basis,meaning that a business is charged each time an advertisement is displayed, whether or not a user interacted with, viewed, or made a purchase based on, theadvertisement. This makes it difficult for businesses to determine the true cost of an advertising campaign and evaluate the relationship of that cost to theeffectiveness of the campaign in driving engagement and sales. There are a few different pricing models generally available in the internet advertising market,including the traditional CPM priced model, as well as cost per click, or CPC, priced model, where an advertiser is charged when a user clicks on theadvertisement, cost per action priced model, where an advertiser is charged when a user takes a specific action which may be completing a form or making apurchase, and hybrid pricing models, which reflects a combination of one or more of these models. While the search segment of the internet advertising marketis generally priced on a CPC model, we believe the internet display advertisement segment of the internet advertising market is generally priced on a CPMbasis.We believe internet display advertising is now at a critical inflection point where the potential for it to be both a brand building medium and a moreeffective engagement and conversion medium is finally being realized. This market transformation is being driven by powerful technology trends including:Big Data. According to IDC, from 2005 to 2020, the digital universe is estimated to grow by a factor of 300, from 130 exabytes to 40,000 exabytes, or 40trillion gigabytes. From now until 2020, the digital universe is expected to double every two years. The large and diverse data sets that make up this digitalinformation are often referred to as big data and are generally categorized into business application data, human-generated content and machine data. Newcomputational approaches and the falling costs of computing power now enable 46Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentstechnology companies to process and draw insights from this data using machine learning approaches. These insights can be used to optimize displayadvertising campaigns in ways that were not previously possible.Real Time, Automated Buying. Technologies for more automated and efficient buying and selling of display advertising are gaining traction with bothadvertisers and publishers. Real-time, automated buying platforms and bidding exchanges provide advertisers with dynamic, targeted and efficient ways toaccess the right inventory, and help publishers to maximize the value of their advertising inventory. These technologies have been gaining significant tractionand growth is accelerating. For example, real-time bidding-based advertising spend in the United States is expected to grow from $2.0 billion in 2012 to $14.4billion in 2017 according to IDC, representing a CAGR of 48.4%.Benefits of Our SolutionWe believe our solution is transforming the way that our clients use digital performance advertising to drive sales, by making digital performanceadvertising, and in particular internet display advertising, a more efficient and effective medium for engaging and converting their potential customers. Keybenefits of our solution include:Highly Relevant, Targeted Ads. We are able to deliver an advertisement with the right product, to the right user, at the right price and at the right timeon all devices, which we define as desktops, laptops, smartphones and tablets. Based on observed or predicted user intent, we use the Criteo Engine to create atargeted and personalized internet display advertisement that addresses a user’s expressed intent while that intent likely remains strong. We also use the CriteoEngine to predict a user’s other likely interests and deliver a targeted and personalized internet display advertisement that matches those potential interests.This relevance is facilitated by data and access to inventory. We have direct relationships with our advertiser clients and publishers, through which we haveextensive and valuable data assets. In addition, we have access to the leading real-time bidding, or RTB, exchanges and advertisement networks, as well asdirect relationships with over 6,600 publishers, many of whom have granted us preferred access to portions of their inventory. This breadth and preferredaccess enable us to quickly find the right users on behalf of our clients before a user’s interest or purchase intent has changed, and to deliver our personalizedadvertisements. By dynamically matching what we believe to be a user’s intent or interest with a personalized advertisement, we are able to deliver morerelevant and engaging advertisements to users, which are therefore more likely to lead to sales.Compelling Performance at Scale. As a result of the Criteo Engine and our broad access to inventory through our direct relationships with over 6,600publisher partners and integration with the leading advertising exchanges and networks, we are able to deliver compelling and consistent performance for ourclients even as the size and complexity of their advertising campaigns grow. Therefore, we believe that we have an industry-leading capability to deliver digitalperformance advertising within a given client’s campaign parameters and in doing so can more effectively help our clients reach their customers and drivesales.Performance Driven Business Model. We get paid only when a user engages with our advertisements, usually by clicking on them. This model iswell proven in search advertising, and our clients value pay-for-performance pricing for providing a clear link between the cost of an advertising campaignand its effectiveness in driving sales for clients. In addition, as our algorithms, data, and technologies become ever more sophisticated over time, weincreasingly are optimizing our solution not just to maximize clicks at a target cost per click, but to maximize post-click purchases at a target cost of sales.This has led most of our clients to set their budgets with us whereby their total spend with us is effectively constrained only by our ability to find enoughrelevant opportunities for them that achieve their specific return objectives. For example, during the fourth quarter of 2013, over 70% of our revenue ex-TACwas derived from clients whose budgets were either uncapped or so large that the budget constraint did not restrict purchases of advertisements by us.Commitment to Privacy. We are committed to and are proactive about consumer privacy. In 2009, we became one of the first companies to broadlyinclude a link in the advertisements we deliver, which gives access 47Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsto clear, detailed, and user-friendly information about personalized advertisements and the data practices associated with advertisements they receive. Inaddition, we provide consumers with an easy-to-use and easy-to-access mechanism to opt-out of receiving targeted advertisements we deliver or being trackedby us either for all campaigns or for a specific client. We believe that this consumer-centric approach to privacy empowers consumers to make better-informeddecisions about our use of their data. We also actively encourage our advertiser clients and publishers to provide information to consumers about our collectionand use of data relating to advertisements we deliver and track.Highly Efficient Campaigns at Scale. Our solution provides clients and their advertising agencies with a unified dashboard for media planning,campaign management and reporting. In addition, our platform automates most of the processes associated with executing a media campaign, such as creativeassembly, real-time buying of inventory and campaign optimization, and billing. Using our platform, our clients are able to buy display advertising inventoryin large volumes with real-time control over the prices they pay and the users they target. As a result, we reduce unnecessary complexity and cost associatedwith manual processes and multiple providers involved in display advertising campaign management. Further, we are able to continue to deliver theseefficiencies even as advertising campaigns scale and become more complex.Our Competitive StrengthsWe believe we have established a strong leadership position in the global digital performance advertising market, built upon a number of differentiatingstrengths that enable our clients to engage and convert customers in a cost-effective way regardless of campaign budget or complexity. We believe that thefollowing competitive strengths will enable us to capture increasingly greater digital performance advertising budgets.Powerful and Scalable Technology. Our solution is the result of over eight years of focused research and development and investment. It is supportedby a flexible and scalable infrastructure, built in-house with six data centers on three continents. Our team of over 318 product and engineering professionals isdedicated to developing and enhancing our platform. This platform operates at significant scale and is powered by machine learning algorithms whoseaccuracy and performance improve with each new piece of information about a user and the billions of advertising impressions we analyze daily.Deep Data-Driven Understanding of Consumer Intent and Behavior. For our machine-learning algorithms to function optimally, breadth andquality of data are critical. We have access to two types of differentiating high quality data: (1) valuable consumer purchase behavior data, including productsthat a consumer has recently looked at or purchased; and (2) our own operating data and insights, which we have accumulated through our experience indelivering over 500 billion internet display advertisements. Substantially all our clients grant us access to detailed consumer purchase behavior data throughintegration with their websites. We only use the data from each of our clients for the benefit of that specific client’s advertising campaigns and do not sell orotherwise share this data with other clients or third parties. The power of our solution compels our clients to share this valuable data with us, which theywould otherwise not typically share. Our own operating data includes insights from user responses to each individual advertisement that we serve, which weuse to continually improve our performance. The scale and breadth of our data is constantly growing as users interact with our clients and as we deliver moreadvertising impressions. For example, in 2013, we analyzed approximately 5.7 trillion ad impressions and delivered approximately 590 billionadvertisements.Deep Liquidity of Demand and Supply. Over the course of multiple years, we have built an extensive network of relationships with our advertiserclients and publishers, creating a highly liquid marketplace for internet display advertising inventory. We channel demand for advertising inventory from over5,000 clients on our advertiser platform, representing a broad range of businesses. On the supply side, we have direct relationships with over 6,600 publisherpartners and are also integrated with the leading advertising exchanges and networks. A dedicated team of 91 professionals is focused on building andmaintaining our direct relationships with publishers, many of whom have granted us preferred access to portions of their internet display 48Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsadvertising inventory. This deep and liquid marketplace has enabled us to increase our reach and access to a quality supply of advertising inventory, drivingour ability to quickly match an advertisement to a user before purchase intent has diminished, wherever that user may be online.High-Quality Client Base. As of December 31, 2013, we had more than 5,000 clients that used our solution in order to acquire, convert and retain theircustomers. These include some of the largest and most sophisticated e-commerce companies in the world, including 3 Suisses, BonPrix, CDiscount, Expedia,Gmarket, Gumtree.com, Hankyu Kotsusha, Hokende, Hotels.com, L’Oréal Paris, La Redoute, Lenovo, Lotte, Macy’s, NetShoes, Nissen, Orange, Rakuten,Recruit, Sarenza, Staples, Tiger Direct and Zalando. These well-established relationships enable us to secure desirable publishers by delivering high-qualityadvertising content.Extensive Global Presence. We operate globally in 46 countries. In 2013, 54.7% of our revenue was derived from clients who conducted advertisingcampaigns with us in more than one national market. We have achieved this global presence by successfully replicating and scaling our business model inmultiple different geographic markets. We efficiently conduct campaigns across multiple geographies by leveraging our global network of relationships. Largebusinesses are increasingly seeking comprehensive internet advertising solutions that are effective across geographic markets and we believe we are wellpositioned to serve them in nearly every market in which they seek to drive sales.Data-Driven Virtuous Circle. Our solution provides significant benefits to advertisers, publishers and users, which we believe creates a virtuouscircle. As we attract more advertising budgets and publisher inventory and deliver advertisements, our data assets grow, enabling us to deliver even moreprecisely targeted and personalized advertisements and generate more sales for our clients. As our ability to generate sales improves, we believe more businesseswill use our solution and increase their advertising spend with us. This, in turn, will enable us to increase advertising revenue for our publishers, furtherbuilding our publisher network and enhancing our access to their advertising inventory. We expect this virtuous circle will continue to fuel our growth.Our Growth OpportunitiesOur goal is to be the leading platform through which companies across industries and geographies use digital performance advertising to drive customerengagement and conversion. The core elements of our growth strategy include:Growing Our Mobile Business. With the dramatic increase in smartphone and tablet usage, we see mobile advertising as an opportunity tosignificantly expand our inventory and reach as well as address the growing user audience and content consumption on mobile devices. We intend to leverageour existing technology and are also investing significant research and development resources to develop and expand our mobile solution. In the first quarter of2013, we launched a mobile in-browser solution in Japan and we are in the process of launching our mobile in-app solution. We intend to continue to enhanceand rollout our mobile solutions across our client base. In July 2013, we acquired Ad-X, a complementary mobile technology, that allows businesses to track,monitor and report on mobile display advertising campaign performance on mobile devices. For the month of December 2013, mobile represented 10% of ourrevenue ex-TAC globally, including 18% of revenue ex-TAC in Japan. This compares with 2.5% of our revenue ex-TAC globally for the month of September2013.Continuing to Innovate and Invest in Technology and Data. We intend to continue to make substantial investments in research and development tofurther increase the efficiency and effectiveness of our solution. In addition to improving our algorithms and underlying technology platform, we also intend tocontinue to develop ways of extracting greater value from the data we collect for the benefit of our clients. We believe these investments will enhance our valueproposition for both existing and prospective clients and publisher partners.Expanding Our Presence in Core Markets and Penetrating New Markets. We operate globally in 46 countries. We believe significant opportunitiesremain for us to grow our business in geographic markets where 49Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentswe already operate, such as Europe, the United States and Japan, including through the roll out of complementary products such as the personalized e-mailmarketing solution we acquired with our acquisition of Tedemis in February 2014. We also plan to leverage and grow our existing sales teams as we enter andexpand operations in new geographic markets, such as the Asia-Pacific region and Eastern Europe. We have a strong track record of entering new marketssuccessfully and rapidly achieving commercial traction.Capturing Broader Advertising Budgets. To date, a majority of our revenue has been derived from delivering advertisements to users who haveexpressed intent in one of our clients’ products or services, with the objective of driving a sale based on that intent. We are beginning to leverage the CriteoEngine, data assets and proprietary knowledge to help businesses achieve longer term business objectives, such as customer acquisition, retention andpreference shift, in order to drive sustained sales growth over time. We intend to continue to market our solution to businesses for use across this spectrum ofbusiness objectives and access a larger portion of the $41.8 billion global internet display advertising market.Expanding Selectively into Other Verticals. Historically, we have pursued a growth strategy focused mainly on three verticals: retail, travel andclassifieds. We believe our solution is also appropriate for a broad spectrum of businesses in other industries, including automotive, telecommunications,consumer goods and finance. We intend to pursue each new vertical with the same focused approach that has yielded success for existing verticals, includingby deploying sales professionals with relevant industry experience to pursue opportunities in those industries.Our SolutionOur technology solution delivers digital performance advertising. We enable our clients to efficiently and effectively engage and convert customers. Oursolution is comprised of the Criteo Engine, data assets, our advertiser and publisher platforms and access to display advertising inventory.How It WorksWhen we sign a new client, we require the client to place software code on their website to enable us to gather and import data regarding consumerbehavior on that website, such as which products or services each visitor to the website has viewed. Using our prediction algorithms and the data collected, webuild models to help us predict the potential likelihood a user will engage with the advertisements we display, typically by clicking. Using ourrecommendation algorithms, we also build models to identify other products or services of our clients that our algorithms indicate the user could be interestedin.Each day, we are presented with billions of opportunities to deliver an advertisement to users when advertising impressions become available to us. Foreach impression that becomes available to us, we have real-time software and hardware systems that apply our models to recommend specific products orservices most likely to result in a purchase by the user and to predict the likelihood of that user engaging with an advertisement containing these products orservices. This calculation is done for each of our clients whose website the user has previously visited, taking into account specific products or servicesviewed. Based on the recommendations and predicted likelihood of engagement, the Criteo Engine is designed to determine the most appropriate advertisementto show to the user, dynamically creates a custom advertisement and determines what price to pay for the advertising impression. If we are able to acquire theadvertising impression for less than this price, we display the advertisement. This entire process can be executed in under 150 milliseconds and can result inthe delivery of up to 25,000 advertisements per second, which represents the scale and capacity of our solution. However, the rate of the process and thenumber of advertisements delivered can vary on a second-by-second and day-to-day basis based on a number of potential factors, such as client demand, timeof day and season. The results of the campaign, such as whether the user clicked on the advertisement or made a purchase, are fed back into the Criteo Engineeach time we display an advertisement in order to improve the accuracy of its predictions and recommendations. 50Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCriteo EngineThe Criteo Engine leverages the vast and high-quality data assets developed through our extensive relationships with thousands of clients, brands andpublishers, as well as our significant operational history to deliver the right advertisement to the right user at the right time.The core of our solution involves solving highly complex problems in a dynamic environment. This involves: • determining a user’s engagement with display advertisements, which is a relatively rare event that requires a large sample size of relevant data toaccurately predict; • obtaining a large sample size of relevant data, which is difficult, in particular where the most relevant data points are also the most sparse—forexample, very recent data on specific product interest; and • building powerful, scalable and flexible systems that operate both accurately and quickly, between the time a user navigates to a page and anadvertisement is delivered. We solve this complex problem on a very large scale through: • analyzing 230 terabytes of data daily (representing 2 petabytes of raw uncompressed data); • serving over 1.6 billion impressions per day; • running hundreds of A/B tests and ad-hoc data mining requests each year; • refreshing the data pushed to the Criteo Engine on an hourly basis; and • refreshing the prediction models used by the Criteo Engine on a daily basis. 51Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe Criteo Engine consists of: • Prediction algorithms. These algorithms predict the probability and nature of a user’s engagement with a given advertisement, for example in theform of clicks, conversions, basket-value, or even specific product categories purchased. This predicted engagement incorporates data from ouradvertiser clients, publishers and third-party sources, including user intent, who the client is, the products offered by the client, as well as dataon the creative content of the advertisement, context in which the advertisement is viewed, demographic, behavioral and other data. We alsoincorporate an increasing number of variables resulting in millions of parameters used in these algorithms. Together with our recommendationalgorithms, the prediction algorithms allow us to determine the most appropriate price to pay for an advertising impression based on predictedengagement, and what a client is willing to pay for that engagement. • Recommendation algorithms. These algorithms dynamically create and tailor advertisements to specific user interest by modifying theadvertisement’s creative content and presentation (including, for example, style of the advertisement, colors displayed, text used and formatting)and determining the specific products and services to include in the advertisement. These products and services may be ones that a user hasalready been exposed to, or that the algorithms predict the user could be interested in. For example, in July 2013, 27% of the products sold toconsumers to whom we displayed our advertisements were products that such consumers saw on our advertisements and had not otherwiseviewed on the applicable client’s website in the 30 days prior to purchase. • Software systems and processes. Our algorithms are supported by robust software infrastructure that allows them and our solution to operateseamlessly at scale. The architecture and processing capabilities of this technology have been designed to match the massive computationaldemands and complexity of the algorithms. This technology enables data synchronization, storage and analysis across a large-scale distributedcomputing infrastructure in multiple geographies, as well as fast data collection and retrieval using multi-layered caching infrastructure. • Bidding engine. Our bidding engine executes campaigns based on certain objectives set by the clients (for example, cost per click limits andnumber of sales). After a bid is placed and won, the Criteo Engine assembles and delivers individualized advertisements and provides campaignreporting, all in real time. • Dynamic creative optimization. Based on the results of our algorithms, the Criteo Engine automatically assembles customized advertisingcontent on an impression-by-impression basis in real time. • Experimentation platform. This offline platform is used to improve the prediction abilities of our models, by measuring the correlation ofspecific parameters with user engagement, usually clicks. A dedicated team is constantly testing new types and sources of data to determinewhether they help to diminish the gap between predicted engagement and actual observed engagement over the course of live campaigns.Data AssetsThe accuracy of our algorithms improves with both the increasing quantity and quality of data we obtain from our clients and publishers, as well asinsights gained through our extensive operational history. Using cookies and similar tracking technologies, we collect information about the interaction of userswith our advertisers’ and publishers’ websites (including, for example, information about the placement of advertisements and users’ shopping or otherinteractions with our clients’ websites or advertisements). The information we collect does not enable us to identify the particular user. We have access to largevolumes of granular data from our clients, which carry consumer intent and are directly relevant to those clients’ campaigns. Our clients grant us access tothis valuable data through direct integration with us, which requires our clients to place Criteo software code throughout their websites. This integration givesus privileged insight into users’ behavioral history at the product level for each client, representing a very high-quality data asset. We use a specific client’sdata only for the benefit of that client. 52Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIn addition to client data, we seek to use as much information as possible about the context or intent of a given user to further refine our predictionaccuracy. We collect this data either directly from our clients or publishers or, to a much lesser extent, through third-party data providers.Advertiser and Publisher PlatformsWe offer our clients an integrated technology platform that enables comprehensive campaign management and execution and includes a unified and easy-to-use dashboard and a suite of software and services that automates key campaign processes. As a result, we reduce unnecessary complexity and costassociated with manual processes and multiple vendors, delivering efficiencies even as campaigns grow in size and complexity.Our comprehensive suite of services and software tools includes: • Unified dashboard to manage campaigns. This dashboard automates a number of campaign execution and management tasks. Key attributesof the dashboard include: • easy-to-use interface; • 24/7 availability; • granular control, with the ability to specify product categories, and bid at the category level; and • transparent and detailed report of key campaign metrics, such as CPCs, impressions served, eCPM (or effective cost per thousand impressions),post-click sales, which represent sales of all products or services from our client’s websites from users that made a purchase during the 30 dayperiod following a click by that user on an advertisement we delivered for that client, and post-view sales which represent sales of all products orservices from our client’s websites from users that made a purchase during the 30 day period following us delivering an advertisement to that user. • Business intelligence. We provide consultative services to our larger clients through a team of advisors that aid them in setting goals for,extracting insights from, and evaluating trends and performance of internet display advertising campaigns.We also offer small- and medium-sized publishers direct access to advertisers by providing a comprehensive inventory management platform which wecall our Publisher Marketplace, or PuMP, which allows us to access the inventory of these publishers, without directly managing that inventory. Through thisplatform, our small- and medium-sized publisher partners have access to: • an easy-to-use interface; • 24/7 availability; • control to specify minimum prices for each publisher’s inventory; and • reporting that allows each publisher to monitor the amount of money they have made selling their inventory to us.Access to InventoryThrough our relationships with the leading RTB internet display exchanges, and more than 6,600 publisher partners, including through PuMP, weprovide extensive access to advertising inventory. In some cases, we have negotiated direct and privileged access with publishers, giving us the opportunity topurchase on an impression by impression basis and in real time: (1) inventory that a publisher might otherwise only sell subject to minimum volumecommitments; and/or (2) particular advertising impressions before such impressions are made available to other potential buyers. For example, in Japan, wehave entered into a strategic relationship with Yahoo! Japan, giving us privileged access to its advertising inventory for delivering personalized displayadvertisements. This marks the first time that Yahoo! Japan, one of Japan’s largest publishers, has allowed a third-party technology to 53Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsmonetize their inventory. Across both our direct publisher relationships and inventory purchasing done on advertising exchanges, we leverage the CriteoEngine’s ability to quickly and accurately value available advertising inventory, and utilize that information to bid for inventory on a programmatic,automated basis. Our ability to efficiently access and value inventory results in deep liquidity, allowing us to deliver effective advertisements at the right pricefor our clients and continue to do so as size and complexity of campaigns increases.We purchase inventory from our direct publishers generally through insertion orders consistent with industry standard terms and conditions for thepurchase of internet advertising inventory. Pursuant to such arrangements, we purchase impressions on a CPM-basis for users that Criteo recognizes on thepublishers’ network. Such arrangements are cancellable upon short notice and without penalty.Through the direct relationships we have with publishers, we take steps to determine that the publisher’s inventory meets the content requirements of ourclients and us to ensure that their display advertisements are not shown in inappropriate content categories, such as adult or political content. With respect toour inventory purchased through RTB exchanges, we utilize third-party software to verify that the inventory where the advertisement placement is shownconforms to our advertising guidelines and the content expectations of our advertisers.InfrastructureOur ability to deliver our solution depends on our highly sophisticated global technology software and hardware infrastructure. Our global infrastructureincludes over 3,000 servers and 160-node Hadoop clusters, providing a storage capacity exceeding six petabytes. Our global infrastructure is divided into threeindependent geographical zones in the Americas, in Europe, Middle East and Africa (or EMEA) and in Asia. In each of the zones, our services are deliveredthrough data centers that support these zones. We generally rely on more than one data center in any given zone that are strategically placed within large zonesto be close to our advertiser clients, publishers and users. This has the benefit of minimizing the impact of network latency within a particular zone, especiallyfor time-constrained services such as RTB. In addition, we replicate data across multiple data centers to maximize availability and performance. We alsogenerally seek to distribute workload across multiple locations in order to avoid overloads in our systems and increase reliability through redundancy.Within each data center, computing power is provided by horizontal build-outs of commodity servers arranged in multiple, highly redundant pools.Some of these pools are dedicated to handling incoming traffic and delivering advertisements, including web servers, caches, and real-time databaseapplications. Other pools are devoted to the data analytics involved in creating these advertisements. In particular, we use clusters using software specificallydesigned for processing large data sets, Hadoop, to run the offline data analysis which results are then fed back to refresh and improve our prediction andrecommendation algorithms.We use multiple layered security controls to protect the Criteo Engine and data assets, including hardware and software based access controls for oursource code and production systems, segregated networks for different components of our production systems and centralized production systemsmanagement. 54Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOur ClientsOur client base consists primarily of companies in the online retail, classifieds and travel segments. These companies range from large, diversified e-commerce companies to many smaller regional companies. As of December 31, 2013, we had more than 5,000 advertiser clients, representing clients who hadan advertising campaign that was live on any given day over a 12 trailing-month period. In 2013, 78% of our advertiser client relationships were held directlywith the advertiser. For a breakdown of our revenue by geographic region, please see note 5 to our Consolidated Financial Statements.The following sets forth a list of representative clients:3 SuissesBonPrixCDiscountExpediaGmarketGumtree.comHankyu KotsushaHokendeHotels.comL’Oréal ParisLa RedouteLenovoLotteMacy’sNetShoesNissenOrangeRakutenRecruitSarenzaStaplesTiger DirectZalandoThe foregoing list is not intended to represent a comprehensive list of our client base. Our largest clients could change from period to period. We believeour business is not substantially dependent on any particular client. In 2011, 2012 and 2013, our largest client represented 5.4%, 5.2% and 5.1% of ourrevenue, respectively, and in 2013 our largest ten clients represented 18.4% of our revenue in the aggregate.We define a client to be a unique party from whom we have received an insertion order and delivered an advertisement during the previous 12 months.We count specific brands or divisions within the same business as distinct clients so long as those entities have separately signed insertion orders with us. Onthe other hand, we count a client who runs campaigns in multiple geographies as a single client, even though multiple insertion orders may be involved. Whenthe insertion order is with an advertising agency, we generally consider the client on whose behalf the advertising campaign is conducted as the “client” forpurposes of this calculation. In the event a client has its advertising spend with us managed by multiple agencies, that client is counted as a single client.We generally charge our clients on a CPC-basis, that is, only when a user clicks on an advertisement. We typically sell digital performanceadvertisements to clients through insertion orders that are cancellable upon short notice and without penalty. For any given advertising campaign, the client hasthe ability to adjust its CPC above a determined floor price in real time during the campaign life by product category and user intent segment in the event theclient wants to increase its spending on the given advertising campaign due to the success of the campaign. 55Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCompetitionWe compete primarily in the market for digital performance advertising. Our market is rapidly evolving, highly competitive, complex and fragmented.We face significant competition in this market, which we expect to intensify in the future. We currently compete with large, well-established companies, suchas Amazon.com, Inc., eBay Inc., Google Inc., Conversant, Inc. and Yahoo! Inc. as well as smaller, privately held companies. We believe the principalcompetitive factors in our industry include: • ability to deliver return on advertising spend at scale; • global reach; • client trust; • breadth and depth of publisher relationships; • comprehensiveness of products and solutions; • client service; and • ease of use.We believe that we are well positioned with respect to all of these factors and expect to continue to grow and capture an increasing share of digitalperformance advertising budgets globally.Sales and Publisher DevelopmentClient Sales and SupportWe sell our solution directly to clients and their advertising agencies through a global sales team which is organized by geography, size of account andindustry vertical. A number of our sales professionals are devoted to clients in specific industries, helping to ensure that our teams possess relevant industryknowledge and expertise. Supporting our sales team is our account strategist team, which helps maintain and grow the accounts of our existing clients. As ofDecember 31, 2013, our sales and account strategists teams included 210 employees. We expect to continue to expand our sales and account strategist teams aswe expand into new industry verticals and geographical markets.Publisher DevelopmentAs of December 31, 2013, we had a team of over 91 dedicated professionals focused on establishing new relationships with publishers and managingour existing publisher relationships. Our premium publisher team focuses its efforts on establishing direct relationships with the largest publishers to obtainpreferred access to high-quality advertising inventory. In addition, we have developed our own publisher marketplace, which we refer to as PuMP, in order toefficiently access and manage advertising inventory from small-to-medium-sized publishers. We have a team of dedicated professionals in local markets inwhich we operate to expand the number of publishers that utilize PuMP. Finally, our global RTB team focuses on our developing and enhancing relationshipswith leading advertising exchanges.Research and DevelopmentWe invest substantial resources in research and development to enhance our solution and technology infrastructure, develop new features, conduct andquality assurance testing and improve our core technology. Our engineering group is primarily located in research and development centers in Paris, Franceand Palo Alto, California. We expect to continue to expand capabilities of our technology in the future and to invest significantly in continued research anddevelopment efforts. We had 192 employees primarily engaged in research and development at December 31, 2013. Research and development expense totaled€8.8 million, €14.3 million and €32.2 million for 2011, 2012 and 2013, respectively. 56Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIntellectual PropertyOur intellectual property rights are a key component of our success. We rely on a combination of patent, trademark, copyright and trade secret laws, aswell as confidentiality procedures and contractual restrictions, to establish, maintain and protect our proprietary rights. We generally require employees,consultants, clients, publishers, suppliers and partners to execute confidentiality agreements with us that restrict the disclosure of our intellectual property. Wealso generally require our employees and consultants to execute invention assignment agreements with us that protect our intellectual property rights.Intellectual property laws, together with our efforts to protect our proprietary rights, provide only limited protection, and any of our intellectual propertyrights may be challenged, invalidated, circumvented, infringed or misappropriated. The laws of certain countries do not protect proprietary rights to the sameextent as the laws of France and the United States and, therefore, in certain jurisdictions, we may be unable to protect our proprietary technology. Further,agreements with our employees and consultants may be breached, and we may not have adequate remedies to redress any breach. Further, to the extent that ouremployees or consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-howand inventions. Finally, our trade secrets may otherwise become known or be independently discovered by competitors and unauthorized parties may attemptto copy aspects of our solution or obtain and use information that we regard as proprietary.As of December 31, 2013, we held one issued French patent, which expires in 2026, and one issued U.S. patent, which expires in 2028, and have filedfour non-provisional patent applications in the United States and one Patent Cooperation Treaty application. We also own and use registered and unregisteredtrademarks on or in connection with our products and services in numerous jurisdictions. In addition, we have also registered numerous internet domainnames.Our industry is characterized by the existence of a large number of patents and frequent claims and related litigation regarding patent and otherintellectual property rights. In particular, leading companies in the technology industry have extensive patent portfolios. From time to time, third parties,including certain of these leading companies, have asserted and may assert patent, copyright, trademark and other intellectual property rights against us, ouradvertiser clients or our publishers. Litigation and associated expenses may be necessary to enforce our proprietary rights.Privacy, Data Protection and Content ControlPrivacy and Data ProtectionPrivacy and data protection laws play a significant role in our business. In the United States, at both the state and federal level, there are laws thatgovern activities such as the collection and use of data by companies like us. Online advertising activities in the United States have primarily been subject toregulation by the Federal Trade Commission, or the FTC, which has regularly relied upon Section 5 of the Federal Trade Commission Act, or Section 5, toenforce against unfair and deceptive trade practices. Section 5 has been the primary regulatory tool used to enforce against alleged violations of consumerprivacy interests. In addition, our solution reaches users throughout the world, including in Europe, Australia, Canada, South America and Asia. As a result,some of our activities may also be subject to the laws of foreign jurisdictions. In particular, European data protection laws can be more restrictive regarding thecollection and use of data than those in U.S. jurisdictions. As we continue to expand into other foreign countries and jurisdictions, we may be subject toadditional laws and regulations that may affect how we conduct business.Additionally, U.S. and foreign governments have enacted, considered or are considering legislation or regulations that could significantly restrictindustry participants’ ability to collect, augment, analyze, use and share anonymous data, such as by regulating the level of consumer notice and consentrequired before a company can employ cookies or other electronic tools to track people online. The European Union, or EU, and some EU member states havealready implemented legislation and regulations requiring websites to obtain specific types 57Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsof notice and consent from individuals before using cookies or other technologies to track individuals and their online behavior and deliver targetedadvertisements. It remains a possibility that additional legislation and regulations may be passed or otherwise issued in the future.We also participate in industry self-regulatory programs, mainly initiated by Internet Advertising Bureau EU & US, Network Advertising Initiative andDigital Advertising Alliance, and under which, in addition to other compliance obligations, we provide consumers with notice about our use of cookies and ourcollection and use of data in connection with the delivery of targeted advertising and allow them to opt out from the use of data we collect for the delivery oftargeted advertising. In an effort to harmonize the industry’s approach to internet-based advertising, these programs also facilitate a user’s ability to disableservices of integrated providers but also educate users on the potential benefits of online advertising, including access to free content and display of morerelevant advertisements to users. The rules and policies of the self-regulatory programs that we participate in are updated from time to time and may imposeadditional restrictions upon us in the future.In 2009, we became one of the first companies to broadly include a link in the advertisements we deliver, which gives access to clear, detailed and user-friendly information describing why a user is seeing an advertisement, as well as prominently describing our service and data management practices. Inaddition, we provide users with an easy-to-use and easy-to-access mechanism to opt out of receiving advertisements we deliver or being tracked by us either forall campaigns or for a specific client or time period. We believe that this user-centric approach in addressing privacy matters empowers users to makeinformed decisions on the use of their data. We also actively encourage our clients to provide greater transparency and information about the collection and useof data.Content ControlTo protect against unlawful content (advertiser and publisher), we include restrictions on content in our terms and conditions. We also manually reviewthe websites of new publisher partners and use third party software to screen impressions we acquire through advertising exchanges.Government RegulationWe are subject to numerous domestic and foreign laws and regulations covering a wide variety of subject matters. New laws and regulations (or newinterpretations of existing laws and regulations) may also impact our business. The costs of compliance with these laws and regulations are high and are likelyto increase in the future and any failure on our part to comply with these laws may subject us to significant liabilities and other penalties.In May 2012, the Commission Nationale de l’Informatique et des Libertés, or CNIL, the French data protection regulator, commenced an inquiry intoour compliance with the French Data Protection laws. The inquiry is ongoing. The CNIL has visited our site, and requested and received various documentsand information about our services and platform, most recently in February 2013. As of the date of this Annual Report on Form 20-F, the CNIL’s decision hasnot been issued (and we currently do not know when it will be made available). The inquiry has focused on how we operate technically, how we use data, howlong data is stored, and the placement and reading of cookies for advertising purposes (including whether informed consent is collected in a manner whichcomplies with French data protection law). The CNIL may determine that we are not in compliance and may impose a fine and/or require us to take additionalsteps or amend our current processes and procedures to ensure compliance, or may have other concerns they wish to raise with us. An adverse decision fromthe CNIL or other regulators may adversely affect us.FacilitiesOur headquarters are located in Paris, France, in an approximately 11,000-square-meters facility, under a lease agreement expiring on June 15, 2021 andour principal executive office in the United States is located in New York City, New York in a 16,814 square-foot facility, under a lease agreement expiring onDecember 30, 2016. We have 58Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsregional offices in London, Munich, Stockholm, Amsterdam, Milan, Sao Paolo, Palo Alto, New York, Boston, Chicago, Tokyo, Seoul, Sydney, Beijing andSingapore. We believe that our current facilities are suitable and adequate to meet our current needs and for the foreseeable future.Legal ProceedingsFrom time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are notpresently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on ourbusiness, results of operations, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defenseand settlement costs, diversion of management resources and other factors. C.Organizational Structure.The following diagram illustrates our corporate structure: D.Property, Plants and Equipment.For a discussion of property, plants and equipment, see “Item 4.B—Business Overview—Facilities.” Item 4A.Unresolved Staff CommentsNot applicable. Item 5.Operating and Financial Review and ProspectsOverviewWe are a global technology company specializing in digital performance advertising. We leverage large volumes of granular data to efficiently andeffectively engage and convert customers on behalf of our advertiser clients. We use our proprietary predictive software algorithms coupled with deep insightsinto expressed consumer intent and purchasing habits to price and deliver highly relevant and personalized digital performance advertisements on all devices inreal time. 59Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWe partner with our clients to track activity on their websites and optimize our advertising placement decisions based on that activity and other data.Demonstrating the depth and scale of our data, we observed over $270 billion in sales transactions on our clients’ websites in the year ended December 31,2013 whether or not a consumer saw or clicked on a Criteo advertisement. Based on this data and our other data assets, we delivered targeted advertisementsthat generated approximately 1.9 billion clicks over the same period. Based on these clicks, our clients generated over $9.7 billion in post-click sales. A post-click sale is defined as a purchase made by a user from one of our client’s websites during the 30 day period following a click by that user on anadvertisement we delivered for that client. We believe post-click sales is a key performance indicator that our clients use to measure the effectiveness of oursolution in driving sales and the return on their advertising spend with us. As of December 31, 2013, we had over 5,000 clients and in each of the last threeyears our client retention rate was approximately 90%.We operate in 46 countries, through a network of 15 international offices located in Europe, the Americas and the Asia-Pacific region. We were organizedin 2005 and began selling our solution in France in 2007 and expanded our business into other countries in Western Europe. In 2009, we expanded ourbusiness into North America. As part of our geographic expansion goals, we initially entered the Asia-Pacific region in late 2010. Additionally, in August 2012,we entered into a strategic relationship with Yahoo! Japan, a leading provider of advertising inventory in Japan, which provides us with privileged access totheir performance-based display inventory. As a result of our significant international operations, our revenue from outside of our home country France,accounted for 86.5% of our revenue for year ended December 31, 2013. Our financial results include: • revenue increased from €143.6 million in 2011 to €271.9 million in 2012 and €444.0 million in 2013; • revenue excluding traffic acquisition costs, which we refer to as revenue ex-TAC, which is a non-IFRS financial measure, increased from€64.5 million in 2011 to €114.1 million in 2012 and €179.0 million in 2013; • net income was €6.1 million in 2011, €0.8 million in 2012 and €1.4 million in 2013; and • adjusted EBITDA, which is a non-IFRS financial measure, increased from €13.9 million in 2011 to €17.4 million in 2012 and €31.3 million in2013.Please see footnotes 3 and 5 to the Other Financial and Operating Data table in “Item 3.A – Selected Financial Data” of this Annual Report on Form 20-Ffor a reconciliation of revenue ex-TAC to revenue and Adjusted EBITDA to net income, the most directly comparable financial measures calculated andpresented in accordance with IFRS.We are focused on maximizing our revenue after traffic acquisition costs, or the revenue after deducting the costs we incur to purchase advertisinginventory, which we call revenue ex-TAC. We believe this focus builds sustainable long-term value for our business and fortifies a number of our competitivestrengths, including a highly liquid marketplace for display advertising. As part of this focus, we seek to maximize our percentage of overall marketing spendin the internet display advertising market over the long-term. In addition, this focus enriches liquidity for both advertisers and publishers resulting in moreeffective advertising for the advertiser, better monetization for the publisher and more relevant advertisements for the user. We believe our results of operationsare reflective of this focus.Recent AcquisitionOn February 20, 2014, we announced we acquired 100% of the equity of Tedemis S.A., a leading provider of real-time personalized email marketingsolutions that help advertisers turn web visitors into customers, for €17.0 million in upfront cash plus €4.0 million payable in cash over a two-year period ifcertain milestones are met. 60Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsHow Criteo Generates RevenueWe sell personalized display advertisements featuring product-level recommendations either directly to clients or to advertising agencies, which wecollectively refer to as our clients, and primarily generate revenue when a user clicks on a banner advertisement. We price our advertising campaigns on a costper click, or CPC, model based on the number of clicks by users per month on each advertising campaign. 99.0% of our revenue in each of 2011, 2012 and2013 was derived from advertising campaigns sold on a CPC basis. We serve a wide range of clients and our revenue is not concentrated within any singleclient or group of clients. In 2011, 2012 and 2013, our largest client represented 5.4%, 5.2% and 5.1% of our revenue, respectively, and in 2013, our largestten clients represented 18.4% of our revenue in the aggregate. A.Operating Results.Basis of PresentationThe key elements of our results of operations include:RevenueWe sell internet display advertisements featuring product-level recommendations either directly to clients or to advertising agencies, which we collectivelyrefer to as our clients, and generate revenue when a user clicks on a banner advertisement. We serve a wide range of clients across multiple industry verticalsand company sizes, and our revenue is not concentrated within any single client or group of clients. In 2011, 2012 and 2013, our largest client represented5.4%, 5.2% and 5.1% of our revenue, respectively, and in 2013 our largest ten clients represented 18.4% of our revenue in the aggregate.We price our advertising campaigns on a CPC model based on the number of clicks generated by users on each advertising campaign. The actualnumber of clicks generated by users is highly dependent on our ability to maximize click through rate, or CTR, by displaying customized individual bannersto individual users and purchasing in real time the most relevant impression for that particular individual user. For any given advertising campaign, the clienthas the ability to adjust its CPC above a determined floor price in real time during the campaign life by product category and by user intent segment. Thisenables clients to adjust the estimated marketing spend attributable to the particular campaign. 99.0% of our revenue in each of 2011, 2012 and 2013 wasderived from advertising campaigns sold on a CPC basis. Our remaining revenue also includes advertising revenue generated on a CPM basis or on a cost peracquisition, or CPA, basis as well as fees for packaged sales of advertising on our clients’ websites.We sell performance-based campaigns to clients generally through insertion orders that are cancellable upon short notice and without penalty. Wegenerally bill our clients on a monthly basis for each campaign run during the prior month. The monthly fee is based on the campaign’s various real-timeCPCs for that month multiplied by the number of clicks generated by users for that month for such CPCs.As we further expand our geographic footprint, develop new clients and grow our business with existing clients, and expand our business into newindustry verticals and new devices, such as mobile and tablets, we expect our revenue to continue to increase.Cost of RevenueOur cost of revenue primarily includes traffic acquisition costs and other cost of revenue.Traffic Acquisition Costs. Traffic acquisition costs consist primarily of purchases of impressions from publishers on a CPM basis. We purchaseimpressions directly from publishers or third-party intermediaries, such as advertising exchanges. We recognize cost of revenue on a publisher by publisherbasis as incurred. Costs owed to publishers but not yet paid are recorded in our consolidated statements of financial position as accounts payable and accruedexpenses. 61Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWe purchase inventory from our direct publishers generally through insertion orders consistent with industry standard terms and conditions for thepurchase of internet advertising inventory. Pursuant to such arrangements, we purchase impressions on a CPM-basis for users that Criteo recognizes on thepublishers’ network. Such arrangements are cancellable upon short notice and without penalty. Under our current agreements with our publishers, we onlycommit to purchase a defined volume of impressions from any given publisher to the extent that a pre-determined CTR is reached. If the publisher fails toreach the targeted volume of impressions, we can either terminate the agreement or reduce our commitment to buy impressions accordingly. We intend toexpand our direct relationships with publishers to secure our access to qualified inventory. We may require our publishers to deliver higher volumes ofimpressions, with our commitment to buy being linked to a specified CTR reached. We may also require our publishers to first call us for the advertisingserving, thereby granting us privileged access to qualified internet display advertising inventory, and we may sign more exclusive deals with publishers.In recent years, real-time automated buying platforms and bidding exchanges have gained significant traction in the internet display advertising market,resulting in a significant increase in the supply of inventory. As part of this expansion, we have integrated our solution with the leading advertising exchangesand developed our own publisher marketplace, which we refer to as PuMP. We believe the combination of our extensive direct publisher relationships andaccess to leading advertising exchanges enhances the breadth and depth of our accessible advertising inventory resulting in deep liquidity for us. We believethat this contributes to increasing the strength our solution with our clients.For a discussion of the trends we expect to experience in traffic acquisition costs, see the section titled “—Highlights and Trends—Revenue ex-TAC” inItem 5.D – Trend Information” below.Other Cost of Revenue. Other cost of revenue includes expenses related to third-party hosting fees, depreciation of data center equipment and datapurchased from third parties that we leverage in our solution. We intend to continue to invest additional resources in the capacity of our hosting servicesinfrastructure, and as we enter new markets, we may make additional investments in the acquisition of relevant third-party data.As we develop new products for a broader spectrum of marketing objectives that expand beyond delivering advertisements to users that may already beengaged with an advertising client, our expenses related to third-party data may increase as a percentage of our revenue and, to the extent such increases do notcorrespond to increases in revenue from such data, may have an impact on our gross profit.Operating ExpensesOperating expenses consist of research and development, sales and operations, and general and administrative expenses. Salaries, bonuses, share-basedcompensation, pension benefits and other personnel related costs are the most significant components of each of these expense categories. We grew from 197employees at January 1, 2011 to 810 employees at December 31, 2013, and we expect to continue to hire a significant number of new employees in order tosupport our anticipated revenue growth. We include share-based compensation expense in connection with the grant of share options in the applicable operatingexpense category based on the respective equity award recipient’s function.Research and Development Expense. Research and development expense consists primarily of personnel costs for our employees working in theengine, platform and infrastructure teams, including salaries, bonuses, share-based compensation and other personnel related costs. Our research anddevelopment function was supplemented in January 2013 to include a dedicated product organization following the appointment of our Chief Product Officer.Also included are non-personnel costs such as subcontracting, consulting and professional fees to third-party development resources, allocated overhead anddepreciation and amortization costs. These expenses are partially offset by the French research tax credit that is conditional upon the level of our investments inresearch and development. For additional discussion of the French research tax credit, see the discussion below titled “—Provision for Income Taxes.” 62Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOur research and development efforts are focused on enhancing the performance of our solution and improving the efficiency of the services we deliver toour clients. All development costs, principally headcount-related costs, are expensed as management determines that technological feasibility is reached shortlybefore the release of products or features developed and as a result, the development costs incurred after the establishment of technological feasibility and beforethe release of those products or features are not material and accordingly are expensed as incurred.The number of employees in research and development functions grew from 44 at January 1, 2011 to 192 at December 31, 2013. We expect research anddevelopment expenses to continue to increase in absolute euros but remain fairly constant as a percentage of our revenue. We believe our continued focus onresearch and development to be critical to maintaining and improving our technology solution, our quality of service and our competitive position.Sales and Operations Expense. Sales and operations expense consists primarily of personnel related costs for our employees working in sales, accountstrategy, business intelligence, technical solutions and creative teams, including salaries, bonuses, share-based compensation, and other personnel-relatedcosts. Additional expenses in this category include travel and entertainment, marketing and promotional events, marketing activities, provisions for doubtfulaccounts, subcontracting fees and allocated overhead.The number of employees in sales and operations functions grew from 126 at January 1, 2011 to 491 at December 31, 2013. In order to continue togrow our business, geographic footprint and brand awareness, we expect to continue investing our resources in sales and operations, in particular byincreasing the number of sales and account strategy teams. As a result, we expect sales and operations expenses to increase in absolute euros as we invest toacquire new clients and retain existing clients and grow revenue from existing clients and hire additional sales personnel, but will decrease as a percentage ofrevenue over time as we scale and increase the productivity of our sales and operations teams.General and Administrative Expense. General and administrative expense consists primarily of personnel costs, including salaries, bonuses, share-based compensation, pension benefits and other personnel-related costs for our administrative, legal, information technology, human resources, and financeemployees. Additional expenses included in this category are non-personnel costs, such as travel related expenses, subcontracting and professional fees, auditfees, tax services and legal fees, as well as insurance and other corporate expenses, along with allocated overhead.The number of employees in general and administrative functions grew from 27 at January 1, 2011 to 127 at December 31, 2013. We expect our generaland administrative expense to increase as we continue to support our growth. We also anticipate that we will incur additional costs for personnel andprofessional services related to operating as a public company. Such costs include increases in our finance and legal personnel, additional external legal andaudit fees and expenses and costs associated with compliance with the Sarbanes-Oxley Act of 2002 and other regulations governing public companies. We alsoexpect to incur increased costs for directors’ and officers’ liability insurance and an investor relations function.Financial Income (Expense)Financial income (expense) primarily consists of exchange differences arising on the settlement or translation into local currency of monetary balancesheet items labeled in euros. Financial income and expense also includes interest received on our cash and cash equivalents and interest incurred onoutstanding borrowings under our debt obligations. Our financial position and results of operations will be affected by economic conditions in countries wherewe plan to operate and by changing foreign currency exchange rates. We are exposed to changes in exchange rates primarily in the United States, the UnitedKingdom, Japan and Brazil. The U.S. dollar, the British Pound, the Japanese Yen and Brazilian Real are our most significant foreign currency exchangerisks. A strengthening of the euro against the U.S. dollar, the British Pound, the Japanese Yen or the 63Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsBrazilian Real may result in a decrease of consolidated revenues and expenses. We will monitor foreign currency exposures and will look to mitigate exposuresthrough normal business operations and hedging strategies.Provision for Income TaxesWe are subject to potential income taxes in France, the United States and numerous other jurisdictions. We recognize tax liabilities based on estimates ofwhether additional taxes will be due. These tax liabilities are recognized when we believe that certain positions may not be fully sustained upon review by taxauthorities, notwithstanding our belief that our tax return positions are supportable.Our effective tax rates differ from the statutory rate applicable to us primarily due to unrecognized deferred tax assets, differences between domestic andforeign jurisdiction tax rates, CIR offsets, which are non-taxable items, potential tax audit provision settlements, non-deductible share-based compensationexpenses, and transfer pricing adjustments. We license access to our technology to our subsidiaries and charge a royalty to these subsidiaries for such access.We benefit from a reduced tax rate on this technology royalty income.In 2011, we underwent a tax inspection by the French tax authorities covering fiscal years 2008 and 2009. At the end of 2011, we received a taxassessment notice for which a provision has been recognized for €0.5 million. Pursuant to another tax inspection in 2013, no significant reassessment wasreceived. The provision has been maintained as of December 31, 2013.Critical Accounting Policies and Significant Judgments and EstimatesOur consolidated financial statements are prepared in accordance with IFRS. The preparation of our consolidated financial statements requires us tomake estimates, assumptions and judgments that affect the reported amounts of revenue, assets, liabilities, costs and expenses. We base our estimates andassumptions on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions onan ongoing basis. Our actual results may differ from these estimates. Our most critical accounting policies are summarized below. See note 3 to ourconsolidated financial statements beginning on page F-1 for a description of our other significant accounting policies.Revenue RecognitionWe sell personalized display advertisements featuring product-level recommendations either directly to clients or to advertising agencies, which wecollectively refer to as our clients, and generate revenue when a user clicks on the banner advertisement. We price our advertising campaigns on a CPC modelbased on the number of clicks generated by users on each advertising campaign.Revenue is recognized when the related services are delivered based on the specific terms of the contract, which are commonly based on specified CPCsand related campaign budgets. We recognize revenue when four basic criteria are met: (1) persuasive evidence exists of an arrangement with the client reflectingthe terms and conditions under which the services will be provided; (2) services have been provided or delivery has occurred; (3) the fee is fixed ordeterminable; and (4) collection is reasonably assured. Collectability is assessed based on a number of factors, including the creditworthiness of a client, thesize and nature of a client’s website and transaction history. Amounts billed or collected in excess of revenue recognized are included as deferred revenue. Anexample of this deferred revenue would be arrangements where clients request or are required by us to pay in advance of delivery.We recognize revenue from the delivery of display advertisements in the period in which the display advertisements are delivered. Specifically, werecognize revenue for display advertising delivery through our solution once the consumer clicks on the personalized banner displayed by us on the client’swebsite for CPC advertising campaigns. For CPC advertising campaigns, sales are valued at the fair value of the amount received. Rebates and discountsgranted to clients, along with free or extended advertising campaigns, are recorded as a deduction from revenue. 64Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWe also generate revenue from the sale of personalized display advertisements on a CPM basis or on a CPA basis as well as fees for packaged sales ofadvertising on our clients’ websites. We recognize revenue on a CPM basis as impressions are delivered, while revenue on a CPA basis is recognized once thefinal user purchases an item on the advertiser’s website. Fees related to packaged sales are recognized monthly on a flat fee basis.In the normal course of business, we act as an intermediary in executing transactions with third parties. The determination of whether revenue should bereported on a gross or net basis is based on an assessment of whether we are acting as the principal or an agent in our transactions. In determining whether weact as the principal or an agent, we follow the accounting guidance for principal-agent considerations. The determination of whether we are acting as a principalor an agent in a transaction involves judgment and is based on an evaluation of the terms of each arrangement. While none of the factors individually areconsidered presumptive or determinative, because we are the primary obligor and are responsible for (1) identifying and contracting with third-party clients,(2) establishing the selling prices of the display advertisements sold, (3) performing all billing and collection activities, including retaining credit risk, and(4) bearing sole responsibility for fulfillment of the advertising, we act as the principal in these arrangements and therefore report revenue earned and costsincurred related to these transactions on a gross basis.Trade Receivables, Net of Allowances for Doubtful AccountsWe carry our accounts receivable at net realizable value. On a periodic basis, our management evaluates our accounts receivable and determines whetherto provide an allowance or if any accounts should be written down and charged to expense as a bad debt. The evaluation is based on a past history ofcollections, current credit conditions, the length of time the trade receivable is past due and a past history of write downs. A trade receivable is considered pastdue if we have not received payments based on agreed-upon terms. A higher default rate than estimated or a deterioration in our major clients’ creditworthinesscould have an adverse impact on our future results. Allowances for doubtful accounts on trade receivables are recorded in “Sales and Operations” in ourconsolidated statements of income. We generally do not require any security or collateral to support our trade receivables. The amount of allowances fordoubtful accounts charged to our consolidated statements of income for the years ended December 31, 2011, 2012 and 2013 was €0.1 million, €0.8 millionand €0.8 million, respectively.Deferred Tax AssetsDeferred taxes are recorded on all temporary differences between the financial reporting and tax bases of assets and liabilities, and on tax losses, usingthe liability method. Differences are defined as temporary when they are expected to reverse within a foreseeable future. We may only recognize deferred taxassets if, based on the projected taxable incomes within the next three years, we determine that it is probable that future taxable profit will be available againstwhich the unused tax losses and tax credits can be utilized. If future taxable profits are considerably different from those forecasted that support recordingdeferred tax assets, we will have to revise downwards or upwards the amount of the deferred tax assets, which would have a significant impact on ourfinancial results. This determination requires many estimates and judgments by our management for which the ultimate tax determination may be uncertain.Amounts recognized in our consolidated financial statements are calculated at the level of each subsidiary within our consolidated financial statements. As atDecember 31, 2011, 2012 and 2013, the amount of deferred tax assets recognized in our consolidated statement of financial position was €1.2 million,€1.0 million and €4.5 million, respectively. Unrecognized deferred tax assets amounted to €7.6 million, €11.9 million and €13.5 million, respectively.GoodwillThe acquisition method is used in accounting for business combinations. The consideration transferred to obtain control of a subsidiary is calculated asthe sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair valueof any asset or liability arising from a contingent consideration arrangement. 65Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIdentifiable assets acquired and liabilities assumed are recognized in a business combination regardless of whether they have been previously recognizedin the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition date fairvalues.Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the fair value fair of considerationtransferred, over the sum of the recognized amount of any non-controlling interest in the acquiree and the acquisition-date fair values of identifiable net assets.Intangible AssetsAcquired intangible assets are accounted for at acquisition cost less cumulative amortization and any impairment loss. Acquired intangible assets areamortized over their estimated useful lives of one to five years on a straight-line method. Intangible assets are reviewed for impairment whenever events orchanges in circumstances such as, but not limited to, significant declines in revenue, earnings or cash flows or material adverse changes in the businessclimate indicate that the carrying amount of an asset may be impaired.Internal-Use SoftwareCosts related to customized internal-use software that have reached the development stage are capitalized. These capitalized costs include costs associatedwith our internal SAP solution, such as our licenses related thereto and the interfaces for, and testing of, this solution. Capitalization of such costs beginswhen the preliminary project stage is complete and stops when the project is substantially complete and is ready for its intended purpose. In making thisdetermination, several analyses for each phase were performed, including analysis of the feasibility, availability of resources, intention to use and futureeconomic benefits. Amortization of these costs begins when capitalization stops and is calculated on a straight-line basis over the assets’ useful lives estimatedat three to five years. Other pre- and post-implementation costs related to our internal SAP solution have been expensed as incurred.Our research and development efforts are focused on enhancing the performance of our solution and improving the efficiency of the services we deliver toour clients. All development costs, principally headcount-related costs, are expensed as management determines that technological feasibility is reached shortlybefore the release of products or feature development and as a result, the development costs incurred after the establishment of technological feasibility andbefore the release of those products or features are not material and accordingly are expensed as incurred.ProvisionsWe recognize provisions in accordance with International Accounting Standard No. 37, Provisions, Contingent Liabilities and Contingent Assets, ifthe following three conditions are met: we have a present obligation (legal or constructive) towards a third-party that arises from an event prior to the closingdate; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and the obligation amount can beestimated reliably. With respect to litigations and claims that may result in a provision to be recognized, we exercise significant judgment in measuring andrecognizing provisions or determining exposure to contingent liabilities that are related to pending litigation or other outstanding claims. These judgment andestimates are subject to change as new information becomes available.Share-Based CompensationWe account for share-based compensation in accordance with the authoritative guidance on share compensation. Under the fair value recognitionprovisions of this guidance, share-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense, net ofestimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. 66Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDetermining the fair value of share-based awards at the grant date requires judgment. We use the Black-Scholes option-pricing model to determine thefair value of share options. The determination of the grant date fair value of options using an option-pricing model is affected by our estimated ordinary sharefair value as well as assumptions regarding a number of other complex and subjective variables. These variables include the fair value of our ordinary shares,the expected term of the options, our expected share price volatility, risk-free interest rates, and expected dividends, which are estimated as follows: • Fair value of our ordinary shares. Prior to the completion of our initial public offering, we estimated the fair value of ordinary shares asdiscussed in “—Ordinary Share Valuations” below. Following our initial public offering, we established a policy of using the closing sales priceper ADS as quoted on Nasdaq on the date of grant for purposes of determining the fair value of ordinary shares with a floor value of 95% of theaverage of the closing sales price per ADS for the 20 trading days preceding the grant. • Expected term. The expected term represents the period that our share-based awards are expected to be outstanding. As we do not have sufficienthistorical experience for determining the expected term of the ordinary share option awards granted, we have based our expected term on thesimplified method, which represents the average period from vesting to the expiration of the award. • Expected volatility. As we did not have a trading history for our ordinary shares prior to our initial public offering, the expected share pricevolatility for our ordinary shares was estimated by taking the average historic price volatility for industry peers based on daily price observationsover a period equivalent to the expected term of the ordinary share option grants. We did not rely on implied volatilities of traded options in ourindustry peers’ shares because the volume of activity was relatively low. We intend to continue to consistently apply this process using the sameor similar public companies until a sufficient amount of historical information regarding the volatility of our own ordinary share price becomesavailable. • Risk-free rate. The risk-free interest rate is based on the yields of France Treasury securities with maturities similar to the expected term of theoptions for each option group. • Dividend yield. We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future.Consequently, we used an expected dividend yield of zero.If any of the assumptions used in the Black-Scholes model changes significantly, share-based compensation for future awards may differ materiallycompared with the awards granted previously.The following table presents the weighted-average assumptions used to estimate the fair value of options granted during the periods presented: Year Ended December 31, 2011 2012 2013 Volatility 52.9% – 57.8% 50.2% – 52.5% 50.0% – 50.1% Risk-free interest rate 2.62% – 3.76% 2.20% – 3.16% 1.80% – 2.40% Expected life (in years) 8 years 8 years 8 years Dividend yield — % — % — % 67Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOrdinary Share ValuationsThe fair value of the ordinary shares underlying our share options was determined by our board of directors, which intended all options granted to beexercisable at a price per share not less than the per share fair value of our ordinary shares underlying those options on the date of grant. The valuations of ourordinary shares were determined in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation ofPrivately-Held-Company Equity Securities Issued as Compensation. The assumptions we used in the valuation model were based on future expectationscombined with management judgment. In the absence of a public trading market, our board of directors with input from management exercised significantjudgment and considered numerous objective and subjective factors to determine the fair value of our ordinary shares as of the date of each option grant,including the following factors: • Contemporaneous third-party valuations performed at periodic intervals by a valuation firm conducted as of September 12, 2012, December 31,2012, March 31, 2013 and July 31, 2013; • the prices, rights, preferences and privileges of our preferred shares relative to the ordinary shares; • the purchases of preferred shares by venture capital firms; • our operating and financial performance and forecast; • current business conditions; • significant new client wins; • our stage of development; • the likelihood of achieving a liquidity event for the ordinary shares underlying these share options, such as an initial public offering or sale of ourcompany, given prevailing market conditions; • any adjustment necessary to recognize a lack of marketability for our ordinary shares; • the market performance of comparable publicly-traded technology companies; and • U.S. and global capital market conditions.Recent Accounting PronouncementsFor a discussion of recent accounting pronouncements applicable to us, see note 2 to our consolidated financial statements beginning on page F-1. 68Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsResults of OperationsWe operate in one segment, internet display advertising services. The following table sets forth our selected consolidated statements of income data: Year Ended December 31, 2011 2012 2013 (in thousands) Consolidated Statements of Income Data: Revenue €143,562 €271,855 €443,960 Cost of revenue Traffic acquisition costs (79,060) (157,707) (264,952) Other cost of revenue (5,690) (12,662) (21,956) Gross profit €58,812 €101,486 €157,052 Operating expenses Research and development (8,786) (14,285) (32,175) Sales and operations (30,830) (58,047) (82,816) General and administrative (9,309) (20,208) (31,387) Total operating expenses (48,925) (92,540) (146,378) Income from operations 9,887 8,946 10,674 Financial income (expense) 628 (1,559) (6,868) Income before taxes 10,515 7,387 3,806 Provision for income taxes (4,391) (6,556) (2,413) Net income €6,124 €831 €1,393 Cost of revenue and operating expenses include share-based compensation expense, service costs (pension), depreciation and amortization expense, andacquisition-related deferred price consideration as follows: Year Ended December 31, 2011 2012 2013 (in thousands) Share-Based Compensation Expense: Research and development €(180) €(429) €(2,049) Sales and operations (899) (1,800) (2,801) General and administrative (316) (1,327) (2,026) Total share-based compensation expense €(1,395) €(3,556) €(6,876) Pension Costs: Research and development €— €— €(109) Sales and operations — — (105) General and administrative (75) (110) (67) Total service costs (pension) €(75) €(110) €(281) Depreciation and Amortization Expense: Cost of revenue €(2,010) €(3,648) €(7,847) Research and development (51) (166) (915) Sales and operations (227) (847) (1,792) General and administrative (239) (107) (566) Total depreciation and amortization expense €(2,527) €(4,768) €(11,119) 69(1)(1)(1)(1)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Year Ended December 31, 2011 2012 2013 (in thousands) Acquisition-related deferred price consideration: Research and development €— €— €(2,363) Sales and operations — — — General and administrative — — — Total acquisition-related deferred price consideration €— €— €(2,363) Effective January 1, 2012, actuarial gains and losses are recognized in other comprehensive income. Prior periods have not been modified as the effect ofthe change in accounting policy is immaterial.Includes acquisition-related amortization of intangible assets of €350,000 as of December 31, 2013.The following table sets forth our selected consolidated statements of income data expressed as a percentage of revenue: Year Ended December 31, 2011 2012 2013 (as a percentage of revenue) Consolidated Statements of Income Data: Revenue 100.0% 100.0% 100.0% Cost of revenue Traffic acquisition costs (55.1) (58.0) (59.7) Other cost of revenue (4.0) (4.7) (4.9) Gross profit 41.0 37.3 35.4 Operating expenses Research and development (6.1) (5.3) (7.2) Sales and operations (21.5) (21.4) (18.7) General and administrative (6.5) (7.4) (7.1) Total operating expenses (34.1) (34.0) (33.0) Income from operations 6.9 3.3 2.4 Financial income (expense) 0.4 (0.6) (1.5) Income before taxes 7.3 2.7 0.9 Provision for income taxes (3.1) (2.4) (0.5) Net income 4.3% 0.3% 0.3% Cost of revenue and operating expenses include share-based compensation expense, service costs (pension), depreciation and amortization expense, andacquisition-related deferred price consideration expressed as a percentage of revenue as follows: Year Ended December 31, 2011 2012 2013 (as a percentage of revenue) Share-Based Compensation Expense: Research and development (0.1)% (0.2)% (0.5)% Sales and operations (0.6) (0.7) (0.6) General and administrative (0.2) (0.5) (0.5) Total share-based compensation expense (1.0)% (1.3)% (1.5)% 70(1)(2)(1)(1)(1)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Year Ended December 31, 2011 2012 2013 (as a percentage of revenue) Service Costs (Pension): Research and development — % — % (0.0)% Sales and operations — — (0.0) General and administrative (0.0) (0.0) (0.0) Service costs (pension) (0.0)% (0.0)% (0.1)% Depreciation and Amortization Expense: Cost of revenue (1.4)% (1.3)% (1.8)% Research and development (0.0) (0.1) (0.2) Sales and operations (0.2) (0.3) (0.4) General and administrative (0.2) (0.0) (0.1) Total depreciation and amortization expense (1.8)% (1.8)% (2.5)% Acquisition-related deferred price consideration: Research and development — % — % (0.5)% Sales and operations — — — General and administrative — — — Total acquisition-related deferred price consideration — % — % (0.5)% Effective January 1, 2012 actuarial gains and losses are recognized in other comprehensive income. Prior periods have not been modified as theeffect of the change in accounting policy is immaterial.Revenue, Traffic Acquisition Costs and Revenue ex-TAC by RegionThe following table sets forth our revenue, traffic acquisition costs and revenue ex-TAC by geographic region, including the Americas (North and SouthAmerica), Europe, Middle East and Africa, or EMEA, and Asia-Pacific: Year Ended December 31, Region 2011 2012 2013 (in thousands) Revenue: Americas €22,013 €67,787 €123,004 EMEA 119,798 172,499 237,800 Asia-Pacific 1,751 31,569 83,155 Total €143,562 €271,855 €443,960 Traffic acquisition costs: Americas €(13,705) €(40,043) €(75,306) EMEA (64,320) (100,706) (140,416) Asia-Pacific (1,035) (16,958) (49,230) Total €(79,060) €(157,707) €(264,952) Revenue ex-TAC: Americas €8,308 €27,744 €47,698 EMEA 55,478 71,793 97,385 Asia-Pacific 716 14,611 33,925 Total €64,502 €114,148 €179,008 We define revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Please see footnotes 3 tothe Other Financial and Operating Data table in “Item 3.A —Selected Financial Data” of this Annual Report on Form 20-F for more information. Theabove table also provides a reconciliation of revenue ex-TAC to revenue, the most directly comparable financial measure calculated and presented inaccordance with IFRS. 71(1)(1) (1)(1)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsYears Ended December 31, 2011, 2012 and 2013Revenue Year Ended December 31, % Change 2011 2012 2013 2011 vs.2012 2012 vs.2013 (in thousands) Revenue €143,562 €271,855 €443,960 89.4% 63.3% 2013 Compared to 2012Revenue for 2013 increased €172.1 million, or 63.3% (or 73.6% on a constant currency basis), compared to 2012. This increase was the result of ourrapid growth across all geographies. Our revenue in the Americas region increased 81.5% to €123.0 million for 2013 compared to 2012, as our solutioncontinued to gain significant traction with large clients in the United States and as small and mid-size clients ramped-up. Our revenue in the EMEA regionincreased 37.9% to €237.8 million for 2013 compared 2012, primarily driven by increased penetration in our Western European core markets, including withmid-market clients. Our revenue in the Asia-Pacific region increased 163.4% to €83.2 million for 2013 compared to 2012, driven primarily by additionalclients and publishers and the strengthening of the relationship with Yahoo! Japan. In 2013, revenue from new clients contributed 44.4% of the global year-over-year revenue growth while revenue from existing clients contributed 55.6% of the global year-over-year revenue growth.Additionally, our €444.0 million of revenue in 2013 was negatively impacted by €28.0 million of currency fluctuations and particularly as a result of thestrengthening of the euro compared to the Japanese Yen, Brazilian Real, U.S. Dollar and the British Pound.2012 Compared to 2011Revenue for 2012 increased €128.3 million, or 89.4% (or 83.9% on a constant currency basis), compared to 2011. This increase was the result of ourrapid growth across all geographies. Our revenue in the Americas region increased 207.9% to €67.8 million for 2012 compared to 2011, as our solution gainedsignificant traction with large clients in the United States. Our revenue in the EMEA region increased 44.0% to €172.5 million for 2012 compared 2011,primarily driven by increased penetration in our Western European core markets, including with mid-market clients. Our revenue in the Asia-Pacific regionincreased by an exponential factor to €31.6 million for 2012 compared to 2011, driven primarily by our recently launched Japanese operations. In 2012,revenue from new clients contributed 53% of the global year-over-year revenue growth while revenue from existing clients contributed 47% of the global year-over-year revenue growth.Additionally, €7.8 million, or 2.9%, of our €271.9 million of revenue in 2012 was mainly due to the strengthening of the U.S. dollar and the Britishpound compared to the euro.Cost of Revenue Year Ended December 31, % Change 2011 2012 2013 2011 vs.2012 2012 vs.2013 (euros in thousands) Traffic acquisition costs €(79,060) €(157,707) €(264,952) 99.5% 68.0% Other cost of revenue (5,690) (12,662) (21,956) 122.5 73.4 % of revenue (59.0)% (62.7)% (64.6)% Gross profit % 41.0% 37.3% 35.4% 72Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents2013 Compared to 2012Cost of revenue for 2013 increased €116.5 million, or 68.4%, compared to 2012. This increase was primarily the result of a €107.2 million, or 68.0%(or 78.8% on a constant currency basis), increase in traffic acquisition costs and a €9.3 million, or 73.4% (or 82.4% on a constant currency basis), increasein other cost of revenue.The increase in traffic acquisition costs related primarily to the 169.0% increase in the number of our purchased impressions to support our revenuegrowth, in particular from real-time time bidding exchanges and to a lesser extent from our publisher marketplace, or PuMP. The increase in other cost ofrevenue related primarily to a €5.3 million increase in hosting costs, a €4.2 million increase in allocated depreciation and amortization expense and a€0.1 million increase in other cost of sales, partially offset by a €0.3 million decrease in data acquisition costs.Our gross profit percentage decreased to 35.4% in 2013 compared to 37.3% for 2012. This decrease resulted primarily from a 2.9 percentage pointincrease in TAC as a percentage of revenue across all regions. Our traffic acquisition costs have increased as a percentage of our revenue, particularly in Asia-Pacific, as a consequence of the priority we have given to maximizing scale and liquidity of our solution over a gross profit based focus. We believe this focusbuilds sustainable long-term value for our business and fortifies a number of our competitive strengths, including access to advertising inventory, breadth anddepth of data and continuous improvement of the Criteo Engine’s performance, allowing us to deliver more relevant advertisements at scale. Other cost ofrevenue also increased by 4.3% as a percentage of revenue.2012 Compared to 2011Cost of revenue for 2012 increased €85.6 million, or 101.0%, compared to 2011. This increase was primarily the result of a €78.6 million, or 99.5%(or 93.6% on a constant currency basis), increase in traffic acquisition costs and a €7.0 million, or 122.5% (or 114.3% on a constant currency basis),increase in other cost of revenue.The increase in traffic acquisition costs related primarily to the 107.2% increase in the number of our purchased impressions to support our revenuegrowth, in particular from real-time time bidding exchanges and to a lesser extent from our publisher marketplace, or PuMP. The increase in other cost ofrevenue related primarily to a €3.5 million increase in hosting costs, a €1.5 million increase in data acquisition costs, a €1.6 million increase in allocateddepreciation and amortization expense and a €0.4 million increase in other cost of sales.Our gross profit percentage decreased to 37.3% in 2012 compared to 41.0% for 2011. This decrease resulted primarily from a 2.9 percentage pointincrease in TAC as a percentage of revenue, primarily due to the increase in TAC as a percentage of revenue in EMEA partially offset by decreases in theAmericas and to a lesser extent in Asia-Pacific. Our traffic acquisition costs have increased, including in EMEA, as a percentage of our revenue as aconsequence of the priority we have given to maximizing scale and liquidity of our solution over a gross margin based focus. We believe this focus buildssustainable long-term value for our business and fortifies a number of our competitive strengths, including access to advertising inventory, breadth and depthof data and continuous improvement of the Criteo Engine’s performance, allowing us to deliver more relevant advertisements at scale. Other cost of revenuealso increased by 0.7% as a percentage of revenue.Research and Development Expense Year Ended December 31, % Change 2011 2012 2013 2011 vs.2012 2012 vs.2013 (in thousands) Research and development €(8,786) €(14,285) €(32,175) 62.6% 125.2% % of revenue (6.1)% (5.3)% (7.2)% 73Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents2013 Compared to 2012Research and development expense for 2013 increased €17.9 million, or 125.2%, compared to 2012. This increase was primarily the result of a€14.8 million increase in salaries, bonuses, share-based compensation, and other personnel costs primarily due to increased headcount in this function,acquisition-related deferred price consideration of €2.3 million, a €1.4 million increase in subcontracting and other headcount-related costs, a €1.0 millionincrease in allocated rent and facilities costs, a €0.7 million increase in allocated depreciation and amortization expense and a €0.5 million increase in eventsand other costs, partially offset by a €0.4 million decrease in provisions for tax reassessments expense and a €0.1 million decrease in consulting andprofessional fees.2012 Compared to 2011Research and development expense for 2012 increased €5.5 million, or 62.6%, compared to 2011. This increase was primarily the result of a€2.7 million increase in salaries, bonuses, share-based compensation, and other personnel costs primarily due to increased headcount in this function, a€1.4 million increase in allocated rent and facilities costs, a €1.0 million increase in subcontracting and other headcount-related costs, a €0.3 million increasein consulting and professional fees, a €0.2 million increase in events and other costs and a €0.1 million increase in allocated depreciation and amortizationexpense, partially offset by a €0.3 million decrease in provisions for tax reassessments expense.Sales and Operations Expense Year Ended December 31, % Change 2011 2012 2013 2011 vs.2012 2012 vs.2013 (euros in thousands) Sales and operations €(30,830) €(58,047) €(82,816) 88.3% 42.7% % of revenue (21.5)% (21.4)% (18.7)% 2013 Compared to 2012Sales and operations expense for 2013 increased €24.8 million, or 42.7%, compared to 2012. This increase was primarily a result of a €11.9 millionincrease in salaries, bonuses, share-based compensation, and other personnel costs primarily due to increased headcount in this function, a €2.6 millionincrease in subcontracting and other headcount-related costs, a €1.3 million increase in events, a €1.0 million increase in consulting and professional fees, a€0.9 million increase in allocated depreciation and amortization expense, a €0.4 million increase in allocated rent and facilities costs and a €6.7 millionincrease in other expenses. The €6.7 million increase in the other expenses is mainly due to a €6.0 million increase in taxes in Brazil, €3.1 million relating tosettlement of large intercompany open balances and €2.9 million as a result of increased business activity in Brazil.2012 Compared to 2011Sales and operations expense for 2012 increased €27.2 million, or 88.3%, compared to 2011. This increase was primarily a result of a €16.3 millionincrease in salaries, bonuses, share-based compensation, and other personnel costs primarily due to increased headcount in this function, a €3.4 millionincrease in subcontracting and other headcount-related costs, and a €2.9 million increase in allocated rent and facilities costs, a €1.2 million increase inmarketing costs, a €0.6 million increase in allocated depreciation and amortization expense, a €0.7 million increase in our allowance for doubtful accounts anda €2.1 million increase in other expenses. 74Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsGeneral and Administrative Expense Year Ended December 31, % Change 2011 2012 2013 2011 vs.2012 2012 vs.2013 (euros in thousands) General and administrative €(9,309) €(20,208) €(31,387) 117.1% 55.3% % of revenue (6.5)% (7.4)% (7.1)% 2013 Compared to 2012General and administrative expense for 2013 increased €11.2 million, or 55.3%, compared to 2012. This increase was primarily a result of a €5.2million increase in salaries, bonuses, share-based compensation, pension benefits and other personnel costs primarily due to increased headcount in thisfunction, a €3.0 million increase in subcontracting and other headcount-related costs, a €1.2 million increase in event costs, a €0.9 million increase inallocated rent and facilities costs, a €0.5 million increase in allocated depreciation and amortization expense and a €0.4 million in other expenses.2012 Compared to 2011General and administrative expense for 2012 increased €10.9 million, or 117.1%, compared to 2011. This increase was primarily a result of a€5.1 million increase in salaries, bonuses, share-based compensation, pension benefits and other personnel costs primarily due to increased headcount in thisfunction, including the hiring of certain executives in 2012, a €2.3 million increase in consulting and professional fees partially related to the preparation tobecome and operate as a public company, a €2.6 million increase in subcontracting and other headcount-related costs and a €0.9 million increase in allocatedrent and facilities costs, partially offset by a €0.1 million decrease in allocated depreciation and amortization expense.Financial Income (Expense) Year Ended December 31, % Change 2011 2012 2013 2011 vs.2012 2012 vs.2013 (euros in thousands) Financial income (expense) €628 €(1,559) €(6,868) (348.2)% 340.5% % of revenue 0.4% (0.6)% (1.5)% 2013 Compared to 2012Financial income (expense) for 2013 increased by €5.3 million, or 340.5%, compared to 2012. The significant foreign exchange loss for the year endedDecember 31, 2013 is primarily due to a strengthening of the euro compared to the Japanese Yen, Brazilian Real and U.S. dollar and arises on the settlement ortranslation by our foreign subsidiaries whose functional currency is not euros for their monetary statement of financial position items into their functionalcurrency. Criteo K.K. (Japan), Criteo Corp. (United States) and Criteo do Brasil’s (Brazil) are the primary contributors especially due to translation of theirpayable balances in euros.2012 Compared to 2011Financial income (expense) for 2012 increased by €2.2 million, or 348.2%, compared to 2011. This increase consists primarily of exchange differencesarising out of the settlement or translation into local currency of monetary balance sheet items labeled in euros. Criteo K.K. (Japan), Criteo Corp. (UnitedStates) and Criteo do Brasil LTDA (Brazil) are the primary contributors especially due to their payable balances in euros. 75Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsProvision for Income Taxes Year Ended December 31, % Change 2011 2012 2013 2011 vs.2012 2012 vs.2013 (euros in thousands) Provision for income taxes €(4,391) €(6,556) €(2,413) 49.3% (63.2)% % of revenue (3.1)% (2.4)% (0.5)% Effective tax rate 41.8% 88.8% 63.4% 2013 Compared to 2012The provision for income taxes for 2013 decreased €4.1 million, or 63.2%, compared to 2012. The annual effective tax rate for 2013 was 63.4%,compared to an annual effective tax rate of 88.8% for 2012. Generally, the annual effective tax rates differ from statutory rates primarily due to the impact ofthe domestic tax deduction applicable to technology royalty income we received from our subsidiaries, differences in tax rates in foreign jurisdictions and non-deductible losses at certain of our foreign subsidiaries and share-based compensation expense.In 2013 our effective tax rate and provision for income taxes decreased compared to 2012 primarily due to the partial recognition of the tax losses of ourU.S subsidiary. Based on the projected taxable profit within the next three years, we determined that it is now probable that future taxable profit will beavailable against which the tax losses and tax credits can be utilized. Therefore, deferred tax assets were recognized for €2.4 million as of December 31, 2013.Furthermore, the initial tax regime elected in Brazil was changed at the beginning of 2013, and the subsidiary’s results are now taxed on realized profits, ratherthan on presumptive profits, which resulted in a decrease of €1.8 million in taxes for 2013. Finally, we had a €0.8 million decrease in taxes as a result of theutilization of previously unrecognized tax losses on our UK subsidiary. These decreases were partially offset by a €1.1 million increase in taxes related to ourshare-based compensation expense, for which no deferred taxes are recognized, and a decrease of €0.9 million in 2013 as compared to 2012 in the taxdeduction resulting from technology royalty income we received from our subsidiaries as well as other factors contributing to an aggregate year-over-year €4.1million decrease in the provision for income taxes. Please see note 10 to our consolidated financial statements for more detailed information on the provision forincome taxes.As of December 31, 2013, we had €13.5 million of unrecognized deferred tax assets arising from tax losses, €10.0 million of which are attributable toour U.S. subsidiary and €1.8 million attributable to our Brazilian subsidiary. We will review the determination not to recognize these deferred tax assets andthe probability of utilization of these net operating losses in the future at year end 2014 in light of the positive and negative elements of certain economic factorsthat may affect our business in the foreseeable future and past events. This analysis will be carried out in each tax jurisdiction where we have significantoperations, and our expectations for growth, especially in the United States, may result in the recognition of additional deferred tax assets. Should wedetermine that recognition of additional deferred tax assets is appropriate, such recognition would likely continue reducing our effective tax rate.2012 Compared to 2011The provision for income taxes for 2012 increased €2.2 million, or 49.3%, compared to 2011. The annual effective tax rate for 2012 was 88.8%,compared to an annual effective tax rate of 41.8% for 2011. Generally, the annual effective tax rates differ from statutory rates primarily due to the impact ofthe domestic tax deduction applicable to technology royalty income we received from our subsidiaries, differences in tax rates in foreign jurisdictions and non-deductible losses at certain of our foreign subsidiaries and share-based compensation expense.In 2012 our effective tax rate and provision for income taxes increased compared to 2011 primarily due to our inability to recognize the tax losses ofcertain of our subsidiaries (particularly in the United States and the United Kingdom) that had a year-over-year tax impact of €2.6 million in 2012 ascompared to 2011. In addition, 76Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsour 2012 provision for income taxes was impacted by a €0.7 million increase as compared to 2011 in taxes related to our share-based compensation expense,for which no related deferred taxes are recognized, and differences in tax regimes in foreign jurisdictions as compared to France, particularly in Brazil, where,due to an election by us to utilize the presumptive profits tax regime, taxes were €1.2 million higher in 2012 as compared to 2011. These increases werepartially offset by our CIR tax credit, a non-taxable income item which was €0.3 million higher in 2012 as compared to 2011, an increase of €1.5 million in2012 as compared to 2011 in the tax deduction resulting from technology royalty income we received from our subsidiaries as well as other factorscontributing to an aggregate year-over-year €0.4 million decrease in the provision for income taxes. Please see note 10 to our consolidated financial statements formore detailed information on the provision for income taxes.As of December 31, 2012, we had €9.2 million of unrecognized deferred tax assets arising from tax losses, €8.3 million of which are attributable to ourU.S. subsidiary.Net Income Year Ended December 31, % Change 2011 2012 2013 2011 vs.2012 2012 vs.2013 (euros in thousands) Net Income € 6,124 € 831 € 1,393 (86.4)% 67.6% % of revenue 4.3% 0.3% 0.3% 2013 Compared to 2012Net income for 2013 increased €0.6 million, or 67.6% (or a decrease of 41.6% on a constant currency basis), compared to 2012. This increase was theresult of the factors discussed above and particularly a €1.7 million increase in income from operations as well as a €4.1 million decrease in provision forincome taxes compared to 2012, partially offset by a €5.3 million increase in financial expense.2012 Compared to 2011Net income for 2012 decreased €5.3 million, or 86.4% (or 66.1% on a constant currency basis), compared to 2011. This decrease was the result of thefactors discussed above and particularly a €0.9 million decrease in income from operations as well as a €2.2 million increase in financial expense and a €2.2million increase in provision for income taxes compared to 2011.Constant Currency ReconciliationInformation in this Annual report on Form 20-F with respect to results presented on a constant currency basis was calculated by translating currentperiod results at prior period average exchange rates. Management reviews and analyzes business results excluding the effect of foreign currency translationbecause they believe this better represents our underlying business trends. Below is a table which reconciles the actual results presented in this section with theresults presented on a constant currency basis: Year ended December 31, % Change 2011 2012 2013 2011 vs.2012 2012 vs.2013 (euros in thousands) Revenue as reported € 143,562 € 271,855 € 443,960 89.4% 63.3% Conversion impact euro/other currencies 1,290 (7,835) 27,985 (5.5) (457.2) Revenue at constant currency 144,852 264,020 471,945 83.9 78.8 Traffic acquisition costs as reported 79,060 157,707 264,952 99.5 68.0 Conversion impact euro/other currencies 800 (4,653) 17,033 5.9 (466.1) Traffic acquisition costs at constant currency 79,860 153,054 281,985 93.6 84.2 77Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Year ended December 31, % Change 2011 2012 2013 2011 vs.2012 2012 vs.2013 (euros in thousands) Revenue ex-TAC as reported 64,502 114,148 179,008 77.0 56.8 Conversion impact euro/other currencies 490 (3,183) 10,952 (5.0) (444.1) Revenue ex-TAC at constant currency 64,992 110,965 189,960 72.0 71.2 Other cost of revenue as reported 5,690 12,662 21,956 122.5 73.4 Conversion impact euro/other currencies 84 (467) 1,139 (8.2) (343.9) Other cost of revenue at constant currency €5,774 €12,195 €23,095 114.3% 89.4% Quarterly Results of OperationsThe following tables set forth our unaudited consolidated statement of income data for the last eight quarters, as well as the percentage of revenue foreach line item shown. We derived this information from our unaudited interim consolidated financial information, which, in the opinion of management,include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the information for the quarters presented. Thequarterly results of operations have been prepared by, and are the responsibility of, our management and have not been audited or reviewed by our independentregistered public accounting firm. You should read these data together with our consolidated financial statements and related notes beginning on page F-1. Three Months Ended March 31,2012 June 30,2012 September 30,2012 December 31,2012 March 31,2013 June 30,2013 September 30,2013 December 31,2013 (in thousands) Consolidated Statements of Income Data: Revenue €56,493 €56,650 €72,142 €86,570 €94,860 €99,400 €113,811 €135,889 Cost of revenue Traffic acquisition costs (31,847) (31,794) (42,826) (51,240) (57,553) (59,369) (66,996) (81,034) Other cost of revenue (2,171) (2,494) (3,150) (4,847) (5,172) (5,708) (4,742) (6,334) Gross profit €22,475 €22,362 €26,166 €30,483 €32,134 €34,324 €42,073 €48,521 Operating expenses Research and development (2,711) (3,670) (3,647) (4,258) (6,252) (6,942) (9,008) (9,973) Sales and operations (11,181) (14,859) (14,456) (17,551) (17,296) (22,787) (20,427) (22,306) General and administrative (2,883) (4,149) (5,906) (7,270) (7,536) (7,659) (6,919) (9,273) Total operating expenses (16,775) (22,678) (24,009) (29,079) (31,084) (37,388) (36,354) (41,552) Income (loss) from operations 5,700 (316) 2,156 1,405 1,051 (3,064) 5,719 6,969 Financial income (expense) 427 (108) (231) (1,647) 246 (2,791) (1,054) (3,269) Income (loss) before taxes 6,127 (424) 1,925 (242) 1,297 (5,855) 4,665 3,700 (Provision for) benefit from income taxes (1,701) (34) (330) (4,491) (590) 236 (1,627) (432) Net income (loss) €4,427 €(460) €1,596 €(4,733) €707 €(5,619) €3,038 €3,268 Other Financial Data: Revenue ex-TAC €24,646 €24,856 €29,316 €35,330 €37,307 €40,031 €46,815 €54,855 Adjusted EBITDA €6,897 €1,667 €4,385 €4,430 €4,556 €685 €11,568 €14,504 Average revenue per employee $519 $567 $601 $597 $625 $723 $780 78(1)(1)(2)(3)(4)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Cost of revenue and operating expenses include share-based compensation expense, service costs (pension), depreciation and amortization expense and acquisition related deferred price consideration as follows: Three Months Ended March 31,2012 June 30,2012 September 30,2012 December 31,2012 March 31,2013 June 30,2013 September30, 2013 December 31,2013 (in thousands) Share-Based Compensation Expense: Research and development €(32) €(103) €(110) €(184) €(281) €(278) €(909) €(581) Sales and operations (94) (608) (449) (649) (599) (227) (683) (1,292) General and administrative (101) (373) (314) (539) (645) (685) (237) (459) Total share-based compensation expense €(227) €(1,084) €(872) €(1,372) €(1,525) €(1,190) €(1,829) €(2,332) Service costs (pension): Research and development €— €— €— €— €— €(67) €(25) €(17) Sales and operations — — — — — (58) (26) (21) General and administrative (59) (31) (16) (4) (91) 45 (16) (5) Total service costs (pension) (a) €(59) €(31) €(16) €(4) €(91) €(45) €(67) €(43) Depreciation and amortization expense: Cost of revenue €(735) €(596) €(1,014) €(1,303) €(1,364) €(1,779) €(2,007) €(2,696) Research and development (22) (59) (33) (52) (152) (77) (168) (518) Sales and operations (137) (177) (274) (259) (252) (501) (516) (523) General and administrative (15) (38) (19) (35) (122) (122) (160) (162) Total depreciation and amortization expense €(909) €(870) €(1,340) €(1,649) €(1,890) €(2,479) €(2,851) €(3,899) Acquisition-related deferred price consideration: Research and development €— €— €— €— €— €— €(1,102) €(1,261) Sales and operations — — — — — — — — General and administrative — — — — — — — — Total acquisition related deferred price consideration €— €— €— €— €— €— €(1,102) €(1,261) We define revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC is not a measure calculated in accordance with IFRS. Please seefootnote 3 to the Other Financial and Operating Data table in “Item 3.A – Selected Financial Data” of this Annual Report on Form 20-F for more information. Below is a reconciliation of revenue ex-TAC torevenue, the most directly comparable financial measure calculated and presented in accordance with IFRS. Three Months Ended March 31,2012 June 30,2012 September 30,2012 December 31,2012 March 31,2013 June 30,2013 September 30,2013 December 31,2013 (in thousands) Reconciliation of Revenue ex-TAC to Revenue: Revenue €56,493 €56,650 €72,142 €86,570 €94,860 €99,400 €113,811 €135,889 Adjustment: Traffic acquisition costs (31,847) (31,794) (42,826) (51,240) (57,553) (59,369) (66,996) (81,034) Revenue ex-TAC €24,646 €24,856 €29,316 €35,330 €37,307 €40,031 €46,815 €54,855 We define Adjusted EBITDA as our consolidated earnings before interest, taxes, depreciation and amortization, adjusted to eliminate the impact of share-based compensation expense, service costs (pension) andacquisition-related deferred price consideration. Adjusted EBITDA is not a measure calculated in accordance with IFRS. Please see footnote 5 to the Other Financial and Operating Data table in “Item 3.A –Selected Financial Data” of this Annual Report on Form 20-F for more information. Below is a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculatedand presented in accordance with IFRS. 79(1)(2)(3)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Three Months Ended March 31,2012 June 30,2012 September 30,2012 December 31,2012 March 31,2013 June 30,2013 September 30,2013 December 31,2013 (in thousands) Reconciliation of Adjusted EBITDA to NetIncome: Net income (loss) €4,427 €(460) €1,596 €(4,733) €706 €(5,619) € 3,038 € 3,268 Adjustments: Financial Income (expense) 427 (108) (231) (1,647) 246 (2,791) (1,054) (3,269) (Provision for) benefit from incometaxes (1,701) (34) (330) (4,491) (590) 236 (1,627) (432) Share-based compensation expense (227) (1,084) (872) (1,372) (1,525) (1,190) (1,829) (2,332) Service costs (pension) (59) (31) (16) (4) (91) (80) (67) (43) Depreciation and amortization expense (909) (870) (1,340) (1,649) (1,890) (2,479) (2,851) (3,899) Acquisition–related deferred priceconsideration — — — — — — (1,102) (1,261) Total net adjustments (2,470) (2,127) (2,789) (9,163) (3,850) (6,304) (8,530) (11,236) Adjusted EBITDA €6,897 €1,667 €4,385 €4,430 €4,556 €685 €11,568 €14,504 Represents revenue on a trailing 12 month basis measured from the applicable period divided by our average number of employees per quarter (which iscalculated based on the total number of employees at the end of the prior month and the current month divided by two). Translated solely forconvenience into dollars at the noon buying rate of €1.00=US$1.3779 at December 31, 2013. 80(4)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Three Months Ended March 31,2012 June 30,2012 September 30,2012 December 31,2012 March 31,2013 June 30,2013 September 30,2013 December 31,2013 (as a percentage of revenue) Statement of Operations Data: Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of revenue Traffic acquisition costs (56.4) (56.1) (59.4) (59.2) (60.7) (59.7) (58.9) (59.6) Other cost of revenue (3.8) (4.4) (4.4) (5.6) (5.5) (5.7) (4.2) (4.7) Gross profit 39.8 39.5 36.3 35.2 33.9 34.5 37.0 35.7 Operating expenses Research and development (4.8) (6.5) (5.1) (4.9) (6.6) (7.0) (7.9) (7.3) Sales and operations (19.8) (26.2) (20.0) (20.3) (18.2) (22.9) (17.9) (16.4) General and administrative (5.1) (7.3) (8.2) (8.4) (7.9) (7.7) (6.1) (6.8) Total operatingexpenses (29.7) (40.0) (33.3) (33.6) (32.8) (37.6) (31.9) (30.6) Income (loss) from operations 10.1 (0.6) 3.0 1.6 1.1 (3.1) 5.0 5.1 Financial income (expense) 0.8 (0.2) (0.3) (1.9) 0.3 (2.8) (0.9) (2.4) Income (loss) before taxes 10.8 (0.7) 2.7 (0.3) 1.4 (5.9) 4.1 2.7 (Provision for) benefit fromincome taxes (3.0) (0.1) (0.5) (5.2) (0.6) 0.2 (1.4) (0.3) Net income (loss) 7.8% 0.8% 2.2% (5.5)% 0.7% (5.7)% 2.7% 2.4% Other Financial Data: Revenue ex-TAC 43.6% 43.9% 40.6% 40.8% 39.3% 40.3% 41.1% 40.4% Adjusted EBITDA 12.2% 2.9% 6.1% 5.1% 4.8% 0.7% 10.2% 10.7% We define revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC is not ameasure calculated in accordance with IFRS. Please see footnote 3 to the Other Financial and Operating Data table in “Item 3.A – Selected Financial Data”of this Annual Report on Form 20-F for more information.We define Adjusted EBITDA as our consolidated earnings before interest, taxes, depreciation and amortization, adjusted to eliminate the impact of share-based compensation expense, service costs (pension) and acquisition-related deferred price consideration. Adjusted EBITDA is not a measure calculatedin accordance with IFRS. Please see footnote 5 to the Other Financial and Operating Data table in “Item 3.A – Selected Financial Data” of this AnnualReport on Form 20-F for more information. 81(1)(2)(1)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsB. Liquidity and Capital Resources.Working CapitalThe following table summarizes our cash, cash equivalents and short-term investments, accounts receivable and working capital for the periodsindicated: As of December 31, 2011 2012 2013 (in thousands) Cash, cash equivalents and short-term investments €16,382 €43,262 €234,343 Trade receivables, net of allowances for doubtful accounts 33,423 60,685 87,643 Working capital 6,766 2,884 (10,004) (1)We define working capital as current assets less current liabilities.Our cash and cash equivalents at December 31, 2013 were held for working capital purposes. The significant increase in cash and cash equivalents isprimarily due to the net proceeds from the initial public offering received in November 2013. We do not enter into investments for trading or speculativepurposes. Our policy is to invest any cash in excess of our immediate requirements in investments designed to preserve the principal balance and provideliquidity. Accordingly, our cash and cash equivalents are invested primarily in demand deposit accounts and money market funds that are currentlyproviding only a minimal return. To mitigate the risk of exposure to exchange rate fluctuations in respect of the proceeds of our initial public offering whichwere received in U.S. dollars, we have determined a hedging strategy that is described in note 4 of our consolidated financial statements.Sources of LiquidityPrior to our initial public offering, we funded our operations principally through private placements of our capital shares, cash flows from operationsand bank borrowings. We also benefited to a much lesser extent from the proceeds of the exercise of share options and warrants and expect to continue to do soin the future, as such securities are exercised by holders.Since our inception, we raised a total of €47.0 million, net of costs and expenses, from the sale of preferred shares through four private placements. InNovember 2013 we received aggregate net proceeds of €197.0 million ($269.0 million) from our initial public offering.We are party to two loan agreements with Caisse D’Epargne et de Prévoyance d’Auvergne et du Limousin, or CEPAL, providing an aggregate of€3.6 million, consisting of a €2.5 million loan to finance certain capital expenditures and a €1.1 million loan to finance our SAP licenses. The €2.5 millionCEPAL loan bears interest at fixed rate of 2.65% per annum. The €1.1 million CEPAL loan bears interest at 2.50% per annum. The combined outstandingprincipal and interest for each CEPAL loan are payable in equal monthly installments based upon the applicable date of such loan. Each CEPAL loan maturesin 2015. At December 31, 2013, €2.2 million was outstanding on the CEPAL loans.We are also party to two loan agreements with Le Crédit Lyonnais, or LCL, one of which was entered into in June 2013, providing an aggregate of €10.5million, consisting of a €2.5 million loan and a €8.0 million loan to finance our capital expenditures. The €2.5 million LCL loan bears interest at fixed rate of2.4% per annum. The €8.0 million LCL loan bears interest at 2.3% per annum. The combined outstanding principal and interest for each LCL loan arepayable in equal monthly installments based upon the applicable date of such loan. The €2.5 million LCL loan matures in 2015 and the €8.0 million LCLloan matures in 2016. As of December 31, 2013, €8.4 million was outstanding on the LCL loans. 82(1)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsAll of these loans are unsecured and contain customary events of default but do not contain any affirmative, financial or negative covenants.We are also party to short-term credit line and overdraft facilities with HSBC plc, LCL and Credit Industriel et Commercial, or CIC. Under thesefacilities, we may draw up to a maximum of €9.4 million collectively. Any loans or overdraft under these short-term facilities bear interest based on the onemonth EURIBOR rate or three month EURIBOR rate. As these facilities are exclusively short term credit and overdrafts facilities, our banks have the ability toterminate such facilities on short notice. All of these short-term facilities are unsecured and contain customary events of default but do not contain anyaffirmative, financial or negative covenants. None of these short-term credit lines were drawn as of December 31, 2013.In February 2014, we entered into two loan agreements with Bpifrance Financement (French Public Investment Bank) to support our development. Thefirst agreement is a fixed rate seven-year term loan for €3.0 million. This amount will be amortized quarterly after a two-year period. The interest rate will bedetermined based on the French State Long Term rate published the month before the drawing (that shall not occur after May 20, 2014). The second agreementis a three-year revolving credit facility for a maximum amount of €3.0 million in the first year, and decreasing by €1.0 million in each subsequent year. Theinterest rate is Euribor 3 months plus a 0.70% margin. A 0.30% commitment fee is due on a quarterly basis depending on the amount used.Operating and Capital Expenditure RequirementsIn 2012 and 2013, our actual capital expenditures were €13.6 million and €22.0 million, respectively, primarily with respect to the acquisition of datacenter and servers equipment. We expect our capital expenditures to increase in absolute terms in the near term as we continue to grow our operations.As part of our strategy to build upon our market and technology leadership, on July 11, 2013, we acquired all of the shares of Ad-X Limited, or Ad-X,a mobile analytics and attribution technology company for €5.5 million (based on the exchange rate of €1.1591 for a £1.00 as of July 11, 2013) in upfrontcash plus €3.7 million (based on the exchange rate of €1.1591 for a £1.00 as of July 11, 2013) payable in cash over a three-year period. €1.1 million (basedon the exchange rate of €1.1591 for a £1.00 as of July 11, 2013) of the upfront cash was placed into escrow for a period of 12 months to secure certainindemnification obligations of the selling shareholders. The upfront portion of the cash purchase price was funded using cash on hand.On February 20, 2014, we announced we acquired 100% of the equity of Tedemis S.A., a leading provider of real-time personalized email marketingsolutions that help advertisers turn web visitors into customers, for €17.0 million in upfront cash plus €4.0 million payable in cash over a two-year period ifcertain milestones are met. The upfront portion of the cash purchase price was funded using cash on hand.We believe our existing cash balances will be sufficient to meet our anticipated cash requirements through at least the next 12 months. During thisperiod, we expect our capital expenditure requirements to be approximately €38.5 million. Furthermore, our existing cash balances will allow us to finance theTedemis deferred price consideration of €4.0 million payable in cash over a two-year period if certain milestones are met.Our future working capital requirements will depend on many factors, including the rate of our revenue growth, the amount and timing of ourinvestments in personnel and capital equipment, and the timing and extent of our introduction of new products and product enhancements. If our cash andcash equivalents balances and cash flows from operating activities are insufficient to satisfy our liquidity requirements, we may need to raise additional fundsthrough equity, equity-linked or debt financings to support our operations, and such financings may not be available to us on acceptable terms, or at all. Wemay also need to raise additional funds in the event we determine in the future to effect one or more acquisitions of businesses, technologies, assets orproducts. If we are unable to raise additional funds when needed, our operations and ability to execute our business strategy could be adversely affected. If weraise additional funds through the incurrence of indebtedness, such 83Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsindebtedness would have rights that are senior to holders of our equity securities and could contain covenants that restrict our operations. Any additionalequity financing will be dilutive to our shareholders.Historical Cash FlowsThe following table sets forth our cash flows for 2011, 2012 and 2013: Year Ended December 31, 2011 2012 2013 (in thousands) Cash flows provided by operating activities €6,967 €11,812 €24,705 Cash used in investing activities (6,525) (19,610) (28,133) Cash provided by financing activities 241 35,903 196,716 Operating ActivitiesCash provided by operating activities is primarily influenced by the increase in the number of clients using our solutions and by the amount of cash weinvest in personnel and infrastructure to support the anticipated growth of our business. Cash provided by operating activities has typically been generatedfrom net profit and by changes in our operating assets and liabilities, particularly in the areas of accounts receivable and accounts payable and accruedexpenses, adjusted for non-cash and non-operating expense items such as depreciation, amortization and share-based compensation, deferred tax assets andincome taxes.In 2013, net cash provided by operating activities was €24.7 million and consisted of a net profit of €1.4 million, €21.5 million in adjustments for non-cash and non-operating items and €13.0 million of cash provided by working capital, partially offset by €11.2 million of income taxes paid during 2013.Adjustments for non-cash and non-operating items primarily consisted of depreciation and amortization expense of €12.2 million, share-based compensationexpense of €6.9 million, €(3.7) million of changes in deferred tax assets and €6.1 million of accrued income taxes. The €9.5 million increase in cash resultingfrom changes in working capital primarily consisted of an increase in operating cash flow due to a €3.4 million increase in accounts payable and a€11.4 million increase in accrued expenses such as payroll and payroll related expenses and VAT payables, driven primarily by an increase in trafficacquisition costs, and an increase in accrued payroll and payroll related expenses resulting from an increase in the number of our employees. This waspartially offset by an increase in accounts receivable of €2.4 million, primarily driven by increased revenue during the year as we continue to expand ouroperations and an increase in the average days outstanding of our accounts receivable. Prepaid expenses, VAT receivables, and other current assets alsoincreased by €3.0 million, primarily the result of an increase in our revenue and an increase in transaction costs to be recognized as a deduction from equity inthe context of our initial public offering and to a lesser extent, an increase in office rental advance payments.In 2012, net cash provided by operating activities was €11.8 million and consisted of a net profit of €0.8 million, €15.9 million in adjustments for non-cash and non-operating items and €3.4 million of cash provided by working capital, partially offset by €8.4 million of income taxes paid during 2012.Adjustments for non-cash and non-operating items primarily consisted of depreciation and amortization expense of €5.8 million, share-based compensationexpense of €3.6 million, €0.2 million of changes in deferred tax assets and €6.3 million of accrued income taxes. The €3.4 million increase in cash resultingfrom changes in working capital primarily consisted of an increase in operating cash flow due to a €30.3 million increase in accounts payable and a€4.8 million increase in accrued expenses such as payroll and payroll related expenses and VAT payables, driven primarily by an increase in trafficacquisition costs, and an increase in accrued payroll and payroll related expenses resulting from an increase in the number of our employees. This waspartially offset by an increase in accounts receivable of €29.0 million, primarily driven by increased revenue during the year as we continue to expand ouroperations and an increase in the average days outstanding of our accounts receivable, an 84Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsincrease in prepaid expenses, VAT receivables, and other current assets of €2.6 million, primarily the result of an increase in our revenue and an increase inadvance payments made for rental expenses in our subsidiaries where new offices have been opened.In 2011, net cash provided by operating activities was €7.0 million and consisted of a net profit of €6.1 million, €9.1 million in adjustments for non-cash and non-operating items, partially offset by €5.5 million of cash used in working capital and €2.8 million of income taxes paid during 2011.Adjustments for non-cash and non-operating items primarily consisted of depreciation and amortization expense of €3.4 million, share-based compensationexpense of €1.4 million and €4.5 million of accrued income taxes partially offset by a €0.2 million reduction in deferred tax assets. The €5.5 million decreasein cash resulting from changes in working capital primarily consisted of increase in accounts receivable of €17.9 million, primarily driven by increasedrevenue during the year as we continue to expand our operations, an increase in prepaid expenses, VAT receivables and other current assets of €1.3 million,primarily the result of the increase in our revenue and an increase in advance payments made for rental expenses in our subsidiaries where new offices havebeen opened. This was partially offset by an increase in operating cash flow due to a €10.4 million increase in accounts payable and a €3.2 million increase inaccrued expenses such as payroll and payroll related expenses and VAT payables, driven primarily by an increase in traffic acquisition costs, and an increasein accrued payroll and payroll related expenses resulting from an increase in the number of our employees.Investing ActivitiesOur investing activities have consisted primarily of purchases of property and equipment.In 2013, net cash used in investing activities was €28.1 million and consisted of €22.0 million for purchases of property and equipment, € 5.4 millionrelated to the Ad-X acquisition, a €0.5 million interest-bearing bank deposit that has been pledged in relation with a guaranty provided by the depositary bankwith regards to the 2008 and 2009 tax reassessment and €0.2 million security deposit related to our new premises in Japan.In 2012, net cash used in investing activities was €19.6 million and consisted of €13.6 million for purchases of property and equipment, a€5.6 million interest-bearing bank deposit that has been pledged for the lease for our principal executive offices and €0.4 million for other security deposits foroffice spaces for certain of our subsidiaries.In 2011, net cash used in investing activities was €6.5 million and consisted of €6.4 million for purchases of property and equipment and €0.1 millionfor security deposits for office spaces for certain of our subsidiaries.Financing ActivitiesPrior to our initial public offering, our financing activities have consisted primarily of the issuance of preferred shares, proceeds from the exercise ofshare options and warrants, and borrowings and repayments under our credit facilities.In 2013, net cash provided by financing activities was €196.7 million and consisted primarily of €192.2 million of net proceeds from our initial publicoffering, €8.0 million from borrowings under a new credit facility, partially offset by repayments of €3.5 million under our credit facilities.In 2012, net cash provided by financing activities was €35.9 million and consisted of €30.1 million from the issuance of our Series D preferred shares,€6.1 million from borrowings under our credit facilities and €0.2 million from other financial liabilities, partially offset by repayments of €0.4 million underour credit facilities.In 2011, net cash provided by financing activities was €0.2 million and consisted of €0.5 million from the exercise of share options, partially offset byrepayments of €0.2 million under our then existing credit facilities. 85Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsC. Research and Development, Patents and Licenses, etc.We invest substantial resources in research and development to enhance our solution and technology infrastructure, develop new features, conduct andquality assurance testing and improve our core technology. Our engineering group is primarily located in research and development centers in Paris, Franceand Palo Alto, California. We expect to continue to expand capabilities of our technology in the future and to invest significantly in continued research anddevelopment efforts. We had 192 employees primarily engaged in research and development at December 31, 2013. Research and development expense totaled€8.8 million, €14.3 million and €32.2 million for 2011, 2012 and 2013, respectively.D. Trend Information.Key MetricsWe review three key metrics to help us monitor the performance of our business and to identify trends affecting our business. These key metrics includenumber of clients, revenue ex-TAC, and adjusted earnings before interest, tax, depreciation and amortization, share-based compensation, service cost(pension) and acquisition-related deferred price consideration, or Adjusted EBITDA. We believe these metrics are useful to understanding the underlying trendsin our business. The following table summarizes our key metrics for 2011, 2012 and 2013. Year ended December 31, 2011 2012 2013 (euros in thousands) Number of clients 1,638 3,297 5,072 Revenue ex-TAC €64,502 €114,148 €179,008 Adjusted EBITDA €13,884 €17,380 €31,313 Number of ClientsWe define a client to be a unique party from whom we have received an insertion order and delivered an advertisement during the previous 12 months.We believe this criteria best identifies clients who are actively using our solution. We count specific brands or divisions within the same business as distinctclients so long as those entities have separately signed insertion orders with us. On the other hand, we count a client who runs campaigns in multiplegeographies as a single client, even though multiple insertion orders may be involved. When the insertion order is with an advertising agency, we generallyconsider the client on whose behalf the advertising campaign is conducted as the “client” for purposes of this calculation. In the event a client has itsadvertising spend with us managed by multiple agencies, that client is counted as a single client.We believe that our ability to increase the number of clients using our solution is an important indicator of our ability to grow revenue over time. Whileour client count has increased over time, this metric can also fluctuate from quarter to quarter due to the seasonal trends in advertising spend of our clients andtiming and amount of revenue contribution from new clients. Therefore, there is not necessarily a direct correlation between a change in clients in a particularperiod and an increase or decrease in our revenue.Revenue ex-TACWe consider revenue ex-TAC as a key measure of our business activity. Our traffic acquisition costs primarily consist of purchases of impressionsfrom publishers on a cost per thousand impressions, or CPM, basis.Our management views our revenue ex-TAC as a key measure to evaluate, plan and make decisions on our business activities and sales performance. Inparticular, we believe that the elimination of TAC from revenue can provide a useful measure for period-to-period comparisons of our core business.Accordingly, we believe that Revenue ex-TAC provides useful information to investors and others in understanding and evaluating our results 86Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsof operations in the same manner as our management and board of directors. Revenue ex-TAC is not a measure calculated in accordance with IFRS. Please seefootnote 3 to the Other Financial and Operating Data table in “Item 3.A – Selected Financial Data” of this Annual Report on Form 20-F for a discussion of thelimitations of revenue ex-TAC and a reconciliation of revenue ex-TAC to revenue, the most comparable IFRS measure, for 2010, 2011, 2012 and 2013.Adjusted EBITDAAdjusted EBITDA represents our consolidated earnings before interest, taxes, depreciation and amortization, adjusted to eliminate the impact of share-based compensation expense, service costs (pension) and acquisition-related deferred price consideration. Adjusted EBITDA is a key measure used bymanagement to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular,we believe that the elimination of share-based compensation expense, service costs (pension) and acquisition-related deferred price consideration in calculatingAdjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDAprovides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management andboard of directors. Adjusted EBITDA is not a measure calculated in accordance with IFRS. Please see footnote 5 to the to the Other Financial and OperatingData table in “Item 3.A – Selected Financial Data” of this Annual Report on Form 20-F for a discussion of the limitations of Adjusted EBITDA and areconciliation of Adjusted EBITDA to net income, the most comparable IFRS measure, for 2010, 2011, 2012 and 2013.Highlights and TrendsRevenueOur revenue for 2013 was €444.0 million, a 63.3% increase over 2012. The increase in revenue over this period was due to new client penetration and theexpansion of our business with existing clients in all of our geographic regions, including, the Americas, Europe, the Middle East and Africa, which we referto as EMEA, and Asia-Pacific. Specifically, this increase in revenue was primarily due to our continued expansion in the Americas and Asia-Pacific regionswhere our revenue increased by 81.5% and 163.4% respectively for 2013 over 2012.We believe the global scale of our operations has been a significant contributor to our historical growth. Additionally, we believe significant opportunitiesexist for us to continue to grow our business in our existing markets and to expand our business into new markets. Specifically, we believe that the Americasand Asia-Pacific regions offer the greatest geographic opportunity for our revenue growth, including both in new and existing markets and both with new andexisting clients. As a result, we expect international expansion to continue to be a strong contributing factor to our revenue growth. However, as we furtherincrease our penetration in new markets, we may not be able to maintain our current growth rates.Revenue ex-TACWe are focused on maximizing our revenue ex-TAC on an absolute basis. We believe this focus builds sustainable long-term value for our business byfortifying a number of our competitive strengths, including access to advertising inventory, breadth and depth of data and continuous improvement of theCriteo Engine’s performance, allowing us to deliver more relevant advertisements at scale. As part of this focus we are continuing to invest in buildingrelationships with direct publishers, and increasing access to leading advertising exchanges, which includes purchasing advertising inventory that may havelower margins on an individual impression basis, but generates incremental revenue ex-TAC. We believe this strategy maximizes the growth of our revenue ex-TAC on an absolute basis and strengthens our market position. We expect our traffic acquisition costs to continue to increase on an absolute basis as wecontinue to grow our revenue and as a percentage of revenue for the foreseeable future as we continue to invest in building liquidity and long-term value for ourshareholders over optimizing near-term gross margins. 87Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOur revenue ex-TAC for 2013 was €179.0 million, a 56.8% increase over 2012 (or 66.4% on a constant currency basis). This increase reflects stronggrowth momentum across all regions as we have expanded our presence in our core markets and have penetrated new markets. In particular, revenue ex-TACincreased by 71.9% in the Americas for 2013 compared to 2012 primarily driven by our rapid expansion in the U.S. market and in Brazil. In the Asia-Pacificregion, revenue ex-TAC increased by 132.2 % for 2013 compared to 2012 principally as a result of the expansion of our business into Japan. In addition,revenue ex-TAC increased by 35.6% in EMEA for 2013 compared to 2012, as we further penetrated our core Western European markets and entered into newgeographies, including in Eastern Europe. Revenue ex-TAC is not a measure calculated in accordance with IFRS.Adjusted EBITDAOur Adjusted EBITDA for 2013 was €31.3 million, an 80.2% increase over 2012. Our increase in Adjusted EBITDA for 2013 compared to 2012 wasprimarily the result of the 56.8% growth in revenue ex-TAC over the period. This increase in Adjusted EBITDA was achieved despite the significant increasein our investments made during 2013, especially in hosting costs, sales and operations expenses and general and administrative expenses, as we continued toexpand geographically and started scaling our corporate infrastructure to support future growth and prepare ourselves for becoming and operating as a publiccompany. In the short-term, we expect to continue to invest in our resources and, as a consequence of these increased investments, we anticipate a moderategrowth in Adjusted EBITDA. Over time, we expect our Adjusted EBITDA to increase as a percentage of our revenue ex-TAC, as we benefit from a larger scaleand operating leverage.Number of ClientsSince our inception, we have significantly grown the number of clients with which we do business. Our base of clients increased to approximately 5,100at December 31, 2013, a 53.8% increase over December 31, 2012. This growth in the number of clients using our solution has been driven by a number offactors, including our global footprint expansion, our continued development of high-end clients in the retail, travel and classifieds industry verticals, ourstrong commercial success with small and medium sized clients and our penetration into new industry verticals. We believe that our ability to increase thenumber of clients using our solution is a leading indicator of our ability to grow revenue over time. We expect to continue to focus our attention and investmenton further growing our client base across all regions and various industry verticals.Client RetentionOur technology solution is designed to enable clients to efficiently and effectively engage and convert consumers through highly targeted and personalizedinternet display advertisements. We measure our client satisfaction through our ability to retain our clients and the revenue they generate quarter after quarter.We define client retention rate as the percentage of live clients during the previous quarter that continued to be live clients during the current quarter. This metricis calculated on a quarterly basis, and for annual periods, we use an average of the quarterly metrics. We define a live client as a client whose advertisingcampaign has or had been generating revenue excluding traffic acquisition costs for us, on any day over the relevant measurement period. In each of 2011,2012 and 2013, our client retention rate was approximately 90%. We define our revenue retention rate with respect to a given twelve-month period as (1) revenuerecognized during such period from clients that contributed to revenue recognized in the prior twelve-month period divided by (2) total revenue recognized insuch prior twelve-month period. Our revenue retention rate was 159%, 155% and 135% for the years ended December 31, 2011, 2012 and 2013, respectively.We believe our ability to retain and grow revenue from our live clients is a useful indicator of the stability of our revenue base and the long-term value of ourclient relationships.SeasonalityOur client base consists primarily of businesses in the online retail, classifieds and travel industries. For example, in particular in the online retailindustry, many businesses devote the largest portion of their budgets to 88Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsthe fourth quarter of the calendar year, to coincide with increased holiday spending by consumers. Conversely, our e-commerce retail and travel clientstypically conduct fewer advertising campaigns in the second quarter than they do in other quarters. As a result, our revenue tends to be seasonal in nature butthe impact of this seasonality has been offset by our significant growth and geographic expansion. If the seasonal fluctuations become more pronounced, ouroperating cash flows could fluctuate materially from period to period.E. Off-Balance Sheet Arrangements.We do not have any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance orspecial purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.We do not engage in off-balance sheet financing arrangements. In addition, we do not engage in trading activities involving non-exchange traded contracts. Wetherefore believe that we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.F. Tabular Disclosure of Contractual Obligations.The following table discloses aggregate information about material contractual obligations and periods in which payments were due as of December 31,2013. Future events could cause actual payments to differ from these estimates. Less than1 year 1 to 3years 3 to 5years More than5 years Total (in thousands) Long-term debt €4,704 €5,911 €— €— €10,615 Finance leases 212 208 — — 420 Operating leases 9,870 19,554 14,537 17,219 61,180 Other financial liabilities 177 — — — 177 Financial derivatives 103 — — — 103 Total €15,066 €25,673 €14,537 €17,219 €72,495 The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms,including interest on long-term debt, fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of theactions under the contracts. The table does not include obligations under agreements that we can cancel without a significant penalty. Long-term debt (for theless than one year portion) includes accrued interest of €29,000. 89Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsItem 6.Directors, Senior Management and EmployeeA. Directors and Senior Management.The following table sets forth information regarding our executive officers and directors, including their ages, as of January 31, 2014: Name Age Position(s) Executive Officers: Jean-Baptiste Rudelle 44 Chairman of the Board, Chief Executive Officer and Co-FounderBenoit Fouilland 49 Chief Financial OfficerGreg Coleman 59 President of Criteo Corp.Jean-Louis Constanza 52 Chief Innovation OfficerEric Eichmann 46 Chief Operating OfficerFranck Le Ouay 36 Chief Scientist Officer and Co-FounderRomain Niccoli 36 Chief Technology Officer and Co-FounderJonathan Wolf 39 Chief Product OfficerNon-Employee Directors: Marie Ekeland 38 DirectorDana Evan 54 DirectorHubert de Pesquidoux 48 DirectorDominique Vidal 49 DirectorJames Warner 60 Director Member of the audit committee. Member of the compensation committee. Member of the nomination and corporate governance committee. Member of the strategy committee. Mr. Rudelle, Ms. Ekeland, Ms. Evan and Mr. de Pesquidoux joined the strategy committee effective March 4, 2014.Jean-Baptiste Rudelle, one of our founders, has served as our Chief Executive Officer and as a member of our board of directors since the creation ofthe company. From 1999 to 2004, he founded and was the Chief Executive Officer of K-Mobile, a mobile content provider, which was acquired by AGInteractive, Inc., the online division of American Greetings Corporation, in June 2004. Mr. Rudelle received a degree in Engineering from Ecole Supérieured’Électricité (Supélec). The board of directors believes that Mr. Rudelle’s knowledge of us as one of our founders and his prior industry experience withtechnology companies allow him to make valuable contributions to the board of directors.Benoit Fouilland has served as our Chief Financial Officer since March 2012. From September 2009 to March 2012, he served as Senior VicePresident and Chief Financial Officer for the Europe, Middle East and Africa (EMEA) region of SAP AG, a multinational software corporation. From April2008 to September 2009, Mr. Fouilland was the Chief Financial Officer of Business Objects S.A., an enterprise software company which was acquired bySAP AG in 2007. From January 2006 to April 2008, Mr. Fouilland was Group Vice President, Finance at Business Objects S.A. Mr. Fouilland received aMasters in Business Administration degree from INSEAD, a Diplôme d’Études Supérieures Spécialisées degree in Financial Audit from Université ParisDauphine and a Business degree from the ESLSCA Graduate School of Business in Paris.Greg Coleman has served as President of Criteo Corp., our wholly owned U.S. subsidiary, since April 2011. From September 2009 to March 2011, heserved as President and Chief Revenue Officer at TheHuffingtonPost.Com, Inc., a U.S. news website and content aggregator. From April 2001 to March 2008,Mr. Coleman served as Executive Vice President of Global Sales at Yahoo! Inc., a multinational internet corporation. Mr. Coleman received a Bachelor ofScience in Business Administration degree from Georgetown University and attended the Masters of Business Administration program at New YorkUniversity. 90(4)(2)(3)(4)(1)(3)(4)(1)(4)(2)(3)(4)(1)(2)(4)(1)(2)(3)(4)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsJean-Louis Constanza has served as Chief Innovation Officer since September 2013. From October 2007 to September 2013, Mr. Constanza served asChief Executive Officer at Orange Vallée, a division of the Orange Group responsible for new product development and commercialization. From July 1998 toJanuary 2006, he served as Chief Executive Officer and Founder of Tele2 in various European countries. Mr. Constanza received a Masters in BusinessAdministration degree from INSEAD, a Masters degree in Marketing and Strategy from University Paris Dauphine, and an Engineer’s degree from l’Ecolenationale supérieure de l’Aéronautique et de l’Espace.Eric Eichmann has served as our Chief Operating Officer since November 2013, and as our Chief Revenue Officer from March 2013 to November2013. From September 2010 to December 2012, Mr. Eichmann was the Chief Operating Officer of LivingSocial, Inc. and President of International atLivingSocial Limited. From September 2006 to August 2010, Mr. Eichmann served as Chief Operating Officer at Rosetta Stone Ltd. Mr. Eichmann received aMasters in Management degree from the Kellogg Graduate School of Management, Northwestern University and a Masters in Computer Engineering degreefrom the Swiss Federal Institute of Technology.Franck Le Ouay, one of our founders, has served as our Chief Scientist Officer since March 2006. From January 2001 to October 2004, he served as asoftware engineer at Microsoft Corporation, a multinational software corporation. Mr. Le Ouay received a Masters in Mathematics degree from Mines ParisTech, France.Romain Niccoli, one of our founders, has served as our Chief Technology Officer since March 2006. From October 2000 to May 2005, he served asLead Software Design Engineer at Microsoft Corporation. Mr. Niccoli received a Masters in Computer Science degree from Mines Paris Tech, France.Jonathan Wolf has served as our Chief Product Officer since October 2012 and as our Chief Buying Officer from May 2009 to October2012. From May 2005 to December 2008, Mr. Wolf served as Director and then Senior Director Corporate Development at Yahoo! Inc. Mr. Wolf received aMasters in Physics degree from Oxford University.Marie Ekeland has served as a member of our board of directors since July 2013. From March 2006 to July 2013 Ms. Ekeland served as therepresentative of Elaia Partners on our board of directors. Since September 2005, Ms. Ekeland has served as a Partner at Elaia Partners, a private equityfirm. Ms. Ekeland received an Engineer’s degree in Mathematics and Computer Science from the University of Paris Dauphine and received a Masters inEconomics degree from Paris School of Economics. The board of directors believes that Ms. Ekeland’s experience in working with entrepreneurial companies,and her particular familiarity with technology companies, allow her to make valuable contributions to the board of directors.Dana Evan has served as a member of our board of directors since March 2013. Since July 2007, Ms. Evan has invested in and served on the boardsof directors of companies in the internet, technology and media sectors. She currently serves on the board of directors of Fusion-io, Inc., a datacenter solutionscompany, and Proofpoint, Inc., a public security-as-a-service provider, as well as for several private companies in the technology sector. From 1996 until July2007, Ms. Evan served as Chief Financial Officer of VeriSign, Inc., a provider of intelligent infrastructure services for the internet and telecommunicationsnetworks. Previously, Ms. Evan worked as a financial consultant in the capacity of Chief Financial Officer, Vice President of Finance or Corporate Controllerover an eight-year period for various public and private companies and partnerships, including VeriSign, Inc., Delphi Bioventures, a venture capital firm,and Identix Incorporated, a multi-biometric technology company. Prior to serving as a financial consultant, Ms. Evan worked in a variety of positions atKPMG LLP. Ms. Evan is a certified public accountant (inactive) and received a Bachelor of Science degree in Commerce with a concentration in Accountingand Finance from Santa Clara University. The board of directors believes that Ms. Evan’s broad expertise in operations, strategy, accounting, financialmanagement and investor relations at both publicly and privately held technology and internet companies allow her to make valuable contributions to the boardof directors. 91Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsHubert de Pesquidoux has served as a member of our board of directors since October 2012. Since October 2012, he has also served as an ExecutivePartner at Siris Capital, a private equity firm in the United States. Mr. de Pesquidoux currently serves as a member of the board of directors of SequansCommunications S.A., a semiconductor technology company, and Radisys Corporation, a wireless infrastructure company. From May 2011 to January2012, Mr. de Pesquidoux served as the chairman of the board of Tekelec. From 1991 until December 2008, Mr. de Pesquidoux held various positions at thetelecommunications company Alcatel-Lucent SA (and its predecessor, Alcatel S.A. and its affiliates), where he most recently served as Chief Financial Officerfrom November 2007 until December 2008 and President of the Enterprise Business Group from November 2006 until December 2008. Prior to those roles, hewas a member of the Alcatel Executive Committee and President and Chief Executive Officer of Alcatel North America. Mr. de Pesquidoux received a Mastersin Law from University of Nancy II, is a Graduate of Institut d’Études Politiques de Paris (Economics and Finance) and has a DESS in International Affairsfrom University of Paris Dauphine. The board of directors believes that Mr. de Pesquidoux’s experience and knowledge in the high-tech Industry, as well ashis broad financial expertise, allow him to make valuable contributions to the board of directors.Dominique Vidal has served as a member of our board of directors since July 2013. From December 2007 to July 2013, Mr. Vidal served as therepresentative of Index Venture Associates IV Limited on our board of directors. Since September 2007, Mr. Vidal has served as a Partner of Index VentureManagement LLP, a venture capital firm, and serves on the board of directors of several companies in the technology sector. Prior to joining Index VentureManagement LLP, Mr. Vidal was the Managing Director of Yahoo! Europe from 2004 to 2007. Mr. Vidal received an Engineering degree from École Supérieured’Électricité (Supélec). The board of directors believes that Mr. Vidal’s investment and operations experience, including in the internet display and advertisingindustries, allow him to make valuable contributions to the board of directors.James Warner has served as a member of our board of directors since February 2013. Since January 2009, he has been a Principal of Third FloorEnterprises, an advisory firm specializing in digital marketing and media. From January 2000 until December 2008, Mr. Warner served in various leadershiproles at aQuantive Inc., including as Executive Vice President at Razorfish Inc. (formerly Avenue A), which was acquired by Microsoft Corporation in August2007. Mr. Warner received a Bachelors of Arts degree in American Studies from Yale University and a Masters in Business Administration from HarvardBusiness School. The board of directors believes that Mr. Warner’s experience in the consumer and digital marketing and media industries allows him to makevaluable contributions to the board of directors.Family RelationshipsThere are no family relationships among any of our executive officers or directors.B. Compensation.Compensation of Executive Officers and DirectorsAggregate CompensationThe aggregate compensation paid and benefits in kind granted by us to our current executive officers and directors, including share-basedcompensation, for the year ended December 31, 2013, was €6.8 million. For the year ended December 31, 2013, €167,000 of the amounts set aside or accruedto provide pension, retirement or similar benefits to our employees was attributable to our executive officers. For additional information regarding compensationpaid to our named executive officers, which include our principal executive officer and the next two most highly compensated executive officers for 2013 whocontinue to serve as our executive officers, see “Item 6.B.— Compensation – 2013 Named Executive Officer Summary Compensation Table.” For additionalinformation regarding equity grants made to our executive officers and directors in 2013, see “Item 7.B – Related Party Transactions – Equity Awards.” 92Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents2013 Director Compensation TableThe following table sets forth information regarding the compensation earned by our directors who are not executive officers for service on our board ofdirectors during the year ended December 31, 2013. Mr. Rudelle, our Chief Executive Officer and Chairman of the board of directors, is a director but does notreceive any additional compensation for his services as a director. Mr. Fouilland, our Chief Financial Officer, was a director during the year endedDecember 31, 2013 but did not receive any additional compensation for his services as a director. See “Item 6.B.— Compensation – 2013 Named ExecutiveOfficer Summary Compensation Table” for information regarding Mr. Rudelle’s and Mr. Fouilland’s compensation as executive officers. Name Fees Earnedor Paid inCash(€) Warrants(€) Total(€) Byron Deeter — — — Marie Ekeland — — — Dana Evan 15,914 152,388 168,302 Benoist Grossmann — — — Hubert de Pesquidoux 27,235 50,796 78,031 Dominique Vidal — — — James Warner 15,914 152,388 168,302 Each of Messrs. Deeter and Grossmann was a director during the year ended December 31, 2013 but resigned effective January 29, 2014. This column reflects the full grant date fair value for warrants granted during the year as measured pursuant to IFRS 2—Share-Based Payment asshare-based compensation in our consolidated financial statements. Unlike the calculations contained in our financial statements, this calculation doesnot give effect to any estimate of forfeitures related to service-based vesting, but assumes that the director will perform the requisite service for the awardto vest in full. The assumptions we used in valuing options are described in note 8 to our consolidated financial statements included in this AnnualReport on Form 20-F. The table below shows the aggregate number of warrants outstanding for each of our non-employee directors as of December 31, 2013: Name Aggregatewarrantsoutstanding(#) Dana Evan 30,600 Hubert de Pesquidoux 30,600 James Warner 54,600 Warrants to purchase 10,200 ordinary shares were fully vested and exercisable on December 31, 2013; warrants to purchase 10,200 ordinary shares willbecome exercisable on March 6, 2014; and warrants to purchase the remaining 10,200 ordinary shares will become exercisable on March 6, 2015. Warrants to purchase 20,400 ordinary shares were fully vested and exercisable on December 31, 2013; warrants to purchase 10,200 ordinary shares willbecome exercisable on October 25, 2014. Warrants to purchase 34,200 ordinary shares were fully vested and exercisable on December 31, 2013; warrants to purchase 10,200 ordinary sharesbecame exercisable on February 7, 2014; and warrants to purchase the remaining 10,200 ordinary shares will become exercisable on February 7, 2015. 93(2)(3)(1)(1)(1)(2)(3)(a)(b)(c)(a)(b)(c)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents2013 Named Executive Officer Summary Compensation TableThe following table sets forth information regarding compensation earned during the years ended December 31, 2012 and 2013 by our principalexecutive officer and the next two most highly compensated executive officers for 2013 who continue to serve as our executive officers. These individuals arereferred to herein as our named executive officers. Name and Principal Position Year Salary(€) Bonus(€) Option/Warrant Awards(€) Non-EquityIncentive PlanCompensation(€) All OtherCompensation(€) Total(€) Jean-Baptiste Rudelle 2013 314,000 — — 502,400 24,211 840,611 Chief Executive Officer and Co-Founder 2012 226,123 — 1,247,861 350,353 98,648 1,922,985 Benoit Fouilland 2013 270,000 411,000 172,800 15,247 869,047 Chief Financial Officer 2012 225,000 — 2,472,808 67,178 3,791 2,768,777 Eric Eichmann 2013 211,993 — 2,413,600 144,945 142,159 2,912,697 Chief Operating Officer 2012 — — — — — — This column reflects the full grant date fair value for options/warrants granted during the year as measured pursuant to IFRS 2—Share-BasedPayment as share-based compensation in our consolidated financial statements. Unlike the calculations contained in our financial statements, thiscalculation does not give effect to any estimate of forfeitures related to service-based vesting, but assumes that the named executive officer will performthe requisite service for the award to vest in full. The assumptions we used in valuing options are described in note 8 to our consolidated financialstatements included in this Annual Report on Form 20-F. Reflects bonus payments pursuant to our 2012 bonus plan or 2013 bonus plan, as applicable, pursuant to which our executive officers are eligible toearn annual performance bonuses based on corporate and individual performance objectives for the applicable year. The target awards were calculated asan amount or a percentage of an executive officer’s base salary and varied by executive officer. The corporate component was gross margin and AdjustedEBITDA and the individual component was measured by individual performance objectives, each set by our compensation committee. The relativeweightings between these objectives varied by executive officer. There was also an ability to receive cash for performance in excess of these objectivescapped at 200% of the target award. Includes private insurance for loss of employment, death and disability coverage, annual leave allowance in France and the United Kingdom andhousing and expatriate allowances. This amount includes £27,191 earned in British Pounds that is reported above in euros based on an exchange rate for £ to € of 1.2326. This amount includes £173,357 earned in British Pounds which is reported above in euros based on an exchange rate for £ to € of 1.2326. This amount includes $104,594 earned in U.S. Dollars but is reported above in euros based on the exchange rate for U.S. $ to € as of December 31,2012. Mr. Fouilland joined the Company in March 2012 and his cash compensation for 2012 reflects a partial year of service. Mr. Eichmann joined the Company in March 2013 and his cash compensation for 2013 reflects a partial year of service. This amount was earned in British Pounds but is reported above in euros based on an exchange rate for £ to € of 1.1777. Includes expected 2013 bonuses which have not yet been paid. 94(1)(2)(10)(3)(4)(5)(6)(7)(8)(9)(9)(9)(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOutstanding Equity Awards as of December 31, 2013The following table provides information about outstanding share options and warrants held by each of our named executive officers at December 31,2013. Our named executive officers did not hold any restricted (free) shares or other share awards as of December 31, 2013. Name Number ofSecuritiesUnderlyingUnexercisedOptions/Warrants (#)Exercisable Number ofSecuritiesUnderlyingUnexercisedOptions/Warrants (#)Unexercisable Option/WarrantExercisePrice (€) Option/WarrantExpirationDate Jean-Baptiste Rudelle 133,998 — 8.28 10/25/2022 29,165 48,608 5.95 4/30/2022 186,000 — 2.10 4/23/2020 Benoit Fouilland 217,457 279,589 5.95 3/20/2022 — 60,000 12.08 9/03/2023 Eric Eichmann — 320,000 10.43 4/18/2023 — 80,000 12.08 9/3/2023 This employee warrant was granted on October 25, 2012 and is exercisable for ordinary shares. 100% of the shares subject to this warrant vested inconnection with our initial public offering. This employee warrant was granted on April 30, 2012 and is exercisable for ordinary shares. 25% of the shares vested on April 30, 2013 with theremaining ordinary shares vesting in twelve equal quarterly installments thereafter, subject to the recipient’s continued service with us. This employee warrant was granted on April 23, 2010. 100% of the shares vested on April 23, 2010. This employee warrant was granted on March 20, 2012 and is exercisable for ordinary shares. 25% of the shares vested on March 20, 2013 with theremaining ordinary shares vesting in twelve equal quarterly installments thereafter, subject to the recipient’s continued employment with us. This employee warrant was granted on September 3, 2013 and is exercisable for ordinary shares. 25% of the shares will vest on September 3, 2014 withthe remaining ordinary shares vesting in twelve equal quarterly installments thereafter, subject to the recipient’s continued employment with us. This share option was granted on April 18, 2013 and is exercisable for ordinary shares. 25% of the shares will vest on April 18, 2014 with theremaining ordinary shares vesting in twelve equal quarterly installments thereafter, subject to the recipient’s continued employment with us.Employment and Related AgreementsWe have entered into employment agreements, offer letters and similar agreements with the following of our executive officers. Except as described belowor in Item 7.B.—Related Party Transactions – Founder Non-Compete Agreements,” there are no arrangements or understanding between us and any of ourexecutive officers providing for benefits upon termination of their employment, other than as required by applicable law.Benoit FouillandIn November 2011, we entered into an employment agreement with Mr. Fouilland, our Chief Financial Officer, with an effective date as of March 1,2012. Under the terms of his employment agreement, Mr. Fouilland is entitled to an annual base salary of €270,000 and is eligible to earn an annual targetbonus of €80,000. Mr. Fouilland’s annual target bonus is now 40% of his annual base salary. Mr. Fouilland’s employment agreement provides for a paymentequal to one year’s total compensation, including the bonus calculated based on the achievement of all objectives, in the event of termination of employmentwithin a period of six months following a change of control, as defined in the agreement, either by way of a dismissal by the Company, except in case of grossnegligence, or a resignation by Mr. Fouilland following a decrease of his compensation or responsibilities. In addition, Mr. Fouilland’s employment agreementincludes restrictions on certain competitive 95(1)(2)(2)(3)(4)(4)(5)(6)(5)(1)(2)(3)(4)(5)(6)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsactivities during the one-year period following the date of his termination of employment subject to payment by us of monthly compensation equal to 33% ofthe monthly gross salary paid to Mr. Fouilland prior to his termination.Greg ColemanIn April 2011, our wholly owned subsidiary Criteo Corp. entered into an at-will offer letter with Mr. Coleman, the President of Criteo Corp. Under theterms of his offer letter, Mr. Coleman is entitled to an annual base salary and certain share option grants. Mr. Coleman is also eligible to participate in ouremployee benefit plans and annual bonus plans.Jean-Louis ConstanzaIn August 2013, we entered into an employment agreement with Mr. Constanza, our Chief Innovation Officer. Under the terms of his employmentagreement, Mr. Constanza is entitled to an annual base salary and certain share option grants. Mr. Constanza is also eligible to participate in our employeebenefit plans and annual bonus plans. In addition, Mr. Constanza’s employment agreement includes restrictions on certain competitive activities during theone-year period following the date of his termination of employment subject to payment by us of monthly compensation equal to no greater than one year of theannual gross salary paid to Mr. Constanza prior to his termination.Eric EichmannWe entered into an employment agreement effective as of March 2013, and certain related letter agreements, with Mr. Eichmann, who currently serves asour Chief Operating Officer. Under the terms of his employment agreement and the related letter agreements, Mr. Eichmann is entitled to an annual base salaryof £240,000 for 2013 and £270,000 for 2014 and is eligible to participate in our employee benefit plans and an annual bonus program with an annual targetbonus of £100,000. Mr. Eichmann was also entitled to and received a welcome bonus of £70,000 as well as reimbursement of certain expenses arising from hisrelocation to London from the United States. As part of his employment agreement, Mr. Eichmann agreed not to engage in certain competitive activities duringthe six month period following the date of his termination of employment with us. This agreement may be terminated by either party with six months’ priorwritten notice and may be terminated by us without notice for cause. If Mr. Eichmann’s employment is terminated by us without cause or terminated byMr. Eichmann for good reason, as defined in the applicable letter agreement, before the first anniversary of the start date Mr. Eichmann would be entitled to an£170,000 severance payment.Franck Le OuayIn March 2006, we entered into an employment agreement with Mr. Le Ouay, our Chief Scientist Officer. Under the terms of his employment agreement,Mr. Le Ouay is entitled to an annual base salary. Mr. Le Ouay’s employment agreement includes restrictions on certain competitive activities during the one-year period following the date of his termination of employment subject to payment by us of monthly compensation in the aggregate equal to no greater than oneyear of the annual gross salary paid to Mr. Le Ouay’s prior to his termination. In July 2013, we entered into an agreement with Mr. Le Ouay pursuant to whichwe paid Mr. Le Ouay €15,000 in respect of the transfer of certain IP related rights accruing under French law in respect of patentable inventions developedwhile employed by us.Romain NiccoliIn March 2006, we entered into an employment agreement with Mr. Niccoli, our Chief Technology Officer. Under the terms of his employmentagreement, Mr. Niccoli is entitled to an annual base salary. Mr. Niccoli’s employment agreement includes restrictions on certain competitive activities duringthe one-year period 96Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsfollowing the date of his termination of employment subject to payment by us of monthly compensation in the aggregate equal to no greater than one year of theannual gross salary paid to Mr. Niccoli prior to his termination. In July 2013, we entered into an agreement with Mr. Niccoli pursuant to which we paidMr. Niccoli €15,000 in respect of the transfer of certain IP related rights accruing under French law in respect of patentable inventions developed whileemployed by us.Jonathan WolfIn May 2009, we entered into an employment agreement with Mr. Wolf, our Chief Product Officer. Under the terms of his employment agreement,Mr. Wolf was initially entitled to an annual base salary of £120,000 and was eligible to participate in an annual bonus program with an annual target bonus of£30,000. Mr. Wolf’s current annual base salary is £152,000 and he is eligible to participate in our employee benefic plans and an annual bonus program withan annual target bonus of £61,000. As part of his employment agreement, Mr. Wolf agreed not to engage in certain competitive activities during the one yearperiod following the date of his termination of employment with us. This agreement may be terminated by either party with three months’ prior written noticeand may be terminated by us without notice for cause.Bonus PlansPursuant to our 2013 bonus plan, our executive officers are eligible to earn annual performance bonuses based on corporate and functional performanceobjectives in 2013. The target awards are calculated as an amount or a percentage of an executive officer’s base salary and varied by executive officer. Thecorporate components are Revenue ex-TAC and Adjusted EBITDA and the functional component is measured by functional performance objectives, each setby our compensation committee. There is also an ability to receive cash for performance in excess of these objectives capped at 200% of the target award.Equity IncentivesWe believe that our ability to grant incentive awards is a valuable and necessary compensation tool that allows us to attract and retain the best availablepersonnel for positions of substantial responsibility, provides additional incentives to employees and promotes the success of our business. Due to Frenchcorporate law and tax considerations, historically, we have granted several different equity incentive instruments to our directors, executive officers, employeesand other service providers. These are: • employee share options (otherwise known as options de souscription d’actions, or OSA), granted to employees of subsidiaries of Criteo S.A.; • employee warrants (otherwise known as bons de souscription de parts de créateurs d’entreprise, or BSPCE), granted only to employees ofCriteo S.A., which under French law may only be issued by growth companies meeting certain criteria, which following the completion of ourinitial public offering we no longer meet; • non-employee warrants (otherwise known as bons de souscription d’actions, or BSA), historically typically granted only to non-employeedirectors and other service providers not eligible for either employee warrants or employee share options, but which may be issued to employees ofCriteo S.A. or its subsidiaries; and • restricted (free) shares (otherwise known as actions gratuites).Our board of directors’ authority to grant these equity incentive instruments and the aggregate amount authorized to be granted must be approved by atwo-thirds majority of the votes held by our shareholders present, represented or voting by mail at the relevant extraordinary shareholders’ meeting. Onceapproved by our shareholders, our board of directors can continue to grant such awards for 18 months for employee warrants and non-employee warrantsauthorized by the shareholders and 38 months for employee share options and restricted (free) shares authorized by the shareholders, in each case from thedate of the applicable shareholders’ approval, but the authority of our board of directors to grant equity incentives may not be extended or increased until the 97Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsnext shareholders’ meeting. As a result, we typically request that our shareholders authorize new pools of equity incentive instruments at every annualshareholders’ meeting. Our board of directors recently approved the submission to our shareholders of a proposal to authorize new pools of equity incentiveinstruments which, if approved, would allow for grants of up to 15% of our fully diluted outstanding ordinary shares as of the date of our shareholders’meeting. In addition, notwithstanding any shareholder authorization, under applicable law following the completion of our initial public offering we are nolonger eligible to issue employee warrants.Employee warrants, employee share options and non-employee warrants are usually granted under similar terms. They expire ten years after the date ofgrant if not exercised earlier according to their vesting schedule (see below). In general, employee warrants, employee share options and non-employee warrantsno longer continue to vest following termination of the employment, office or service of the holder and all vested shares must be exercised within post-termination exercise periods set forth in the grant documents. In the event of certain changes in our share capital structure, such as a consolidation or sharesplit or dividend, French law and applicable grant documentation provides for appropriate adjustments of the numbers of shares issuable and/or the exerciseprice of the outstanding warrants or share options.As of December 31, 2013, employee warrants, employee share options and non-employee warrants allowing for the purchase of an aggregate of9,060,459 ordinary shares, at a weighted average exercise price of €5.82 ($8.02) per share, were outstanding, of which employee warrants, employee shareoptions and non-employee warrants to purchase an aggregate of 3,131,727 ordinary shares were held by our directors and executive officers. As ofDecember 31, 2013 no rights to acquire restricted (free) shares were outstanding and all previously issued restricted (free) shares had fully vested.Since December 31, 2013 we granted employee warrants, employee share options and non-employee warrants to purchase an aggregate of 567,120ordinary shares at a weighted average exercise price of €30.74 ($42.36) per share.Share Options (OSA)We grant share options to employees of subsidiaries of Criteo S.A. pursuant to our Stock Option Plans. Our current plan, the 2013 Stock Option Plan,or 2013 Plan, was adopted by our board of directors in July 2013 and approved by our shareholders at a meeting held on August 2, 2013. Our board ofdirectors and shareholders have also previously adopted the 2012 Stock Option Plan, 2011 Stock Option Plan, the 2010 Stock Option Plan and the 2009Stock Option Plan (collectively, the prior plans, and together with the 2013 Plan, the Stock Option Plans). The terms of the Stock Option Plans aresubstantially the same and at this time new share option grants may only be made pursuant to the 2013 Plan.Share options may be granted to any individual employed by the Company or by any affiliated company under the terms and conditions of anemployment contract. Employee share options may also be granted to our chairman and general managers.The maximum number of our ordinary shares that may be issued pursuant to share options granted under the 2013 Plan is 6,627,237. In addition,under French law, the maximum number of shares issuable upon exercise of outstanding employee share options may not exceed one-third of the outstandingshare capital on a non-diluted basis as at the date of grant. Share options may be granted under the 2013 Plan until October 2, 2016.As of December 31, 2013, options exercisable for an aggregate of 4,543,763 ordinary shares, at a weighted average exercise price of €7.01 ($9.66) pershare, were outstanding, of which options exercisable for 1,706,767 ordinary shares are held by our executive officers.Administration. Our board of directors has the authority to administer the Stock Option Plans. Subject to the terms of the 2013 Plan, our board ofdirectors determines recipients, dates of grant, exercise price of share options, the number of share options to be granted and the terms and conditions of theshare options, including the period of their exercisability and their vesting schedule. 98Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe board of directors has the authority to modify awards outstanding under our Stock Option Plans subject to the consent of the optionee if suchmodification is detrimental to him/her, including in particular the authority to extend the post-termination exercise period after the termination of theemployment.Share Options. The 2013 Plan provides for the grant of incentive share options within the meaning of Section 422 of the Internal Revenue Code of1986, as amended, or the Code, and nonstatutory share options. These share options are granted pursuant to share option agreements adopted by the board ofdirectors. The board of directors determines the exercise price for a share option, within the terms and conditions of the 2013 Plan, provided that the exerciseprice of a share option generally cannot be less than the fair market value of our ordinary shares on the date of grant. Options granted under the 2013 Plan vestat the rate specified by the board of directors.Share options granted prior to March 2011 were generally granted subject to a three-year vesting schedule under which one-third (1/3) of the employeeshare options vest upon the first anniversary of grant and 1/12th at the expiration of each quarter thereafter, subject to continued service. Share options grantedsince March 2011 were generally granted subject to a four-year vesting schedule under which one-fourth (1/4) of the employee share options vest upon the firstanniversary of grant and 1/16th at the expiration of each quarter thereafter subject to continued service.The term of each share option is ten years from the date of grant or, in the case of death or disability of the optionee during such ten-year period, sixmonths from the death or disability of the optionee in accordance with French law. Unless a longer period is specified in the notice of grant or otherwiseresolved by the board of directors, a share option shall remain exercisable for one month following an optionee’s termination of continuous status with theCompany. In the case of an incentive share option, such period cannot exceed three months following the optionee’s termination of continuous status with theCompany. In the event that an optionee’s continuous status terminates as a result of the optionee’s disability, unless otherwise resolved by the board ofdirectors, the optionee may exercise vested options at any time within six months from the date of such termination. In the event of the death of an optioneeduring the term of the options, unless otherwise resolved by the board of directors, the vested options may be exercised at any time within six months followingthe date of death, by the optionee’s estate or by a person who acquired the right to exercise the option by bequest or inheritance.Share options are not transferable and may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will orby laws of descent or distribution and may be exercised, during the lifetime of the optionee, only by the optionee. In addition, shares issued upon exercise ofoptions granted prior to September 28, 2012 to employees who are French tax residents may be subject, for tax purposes, to an additional holding period underthe terms of the applicable stock option plan.U.S. Tax Limitations on Incentive Share Options. The aggregate fair market value, determined at the time of grant, of our ordinary shares issuableunder incentive share options that are exercisable for the first time by an optionee during any calendar year under all of our Stock Option Plans may not exceed$100,000. Options or portions thereof that exceed such limit will generally be treated as nonqualified share options. No incentive share option may be granted toany person who, at the time of the grant, owns or is deemed to own shares possessing more than 10% of our total combined voting power or that of any of ouraffiliates unless (1) the option exercise price is at least 110% of the fair market value of the shares subject to the option on the date of grant, and (2) the term ofthe incentive share option does not exceed five years from the date of grant.Change in Control. In the event of a change in control occurring after the first anniversary of the date of grant, each outstanding share option grantedunder the 2009 Plan will automatically accelerate in full. Further, in the event of a change in control at any time (whether prior to or after the first anniversaryof grant), each outstanding share option granted under the 2010, 2011, 2012 and 2013 Plans will be assumed or an equivalent option or right substituted bythe successor corporation. In the event that the successor corporation does not agree to assume or substitute for the outstanding share options, each share optionthat is not assumed or substituted for, 99Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentswill accelerate and become fully vested and exercisable prior to the consummation of the change in control at such time and on such conditions as the board ofdirectors shall determine. In addition, if a share option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a change incontrol, the board of directors will notify the relevant optionee that his or her option will be fully vested and exercisable for a period of time and the share optionwill terminate upon the expiration of such period.Under the Stock Option Plans, a change in control means (1) a merger of the Company with or into another corporation, other than another corporation,entity or person in which the holders of at least a majority of the voting rights and share capital of the Company outstanding immediately prior to suchtransaction continue to hold a majority of the total voting rights and share capital of the Company outstanding immediately after such transaction, (2) the saleor other form of transfer by one or several shareholders of the Company to any person or group of persons of a number of shares such that the transfereesshall own a majority of the voting rights and share capital of the Company, or (3) the sale, lease or disposition, in a single transaction or in a series of relatedtransactions, of all or substantially all of the assets of the Company other than to a subsidiary or entity controlled by the Company’s shareholders.Amendment and Termination. Our board of directors has the authority to amend, alter, suspend, or terminate our Stock Option Plans, provided thatsuch action does not impair the rights of any optionee without such optionee’s consent. The Company shall obtain shareholder approval of any amendment tothe extent necessary and desirable to comply with applicable laws.Employee Warrants (BSPCE)Employee warrants are granted only to employees of Criteo S.A. who are French tax residents as they carry favorable tax and social security treatmentfor French tax residents. Employee warrants may also be granted to our chairman and general manager and to our deputy general managers. Similar to shareoptions, they entitle a holder to exercise the warrant for the underlying vested shares at an exercise price per share determined by our board of directors and atleast equal to the fair market value of an ordinary share on the date of grant. Employee warrants may only be issued by growth companies meeting certaincriteria, which following the completion of our initial public offering we no longer meet. There is no legal limitation to the size of the employee warrant poolunder French law.As of December 31, 2013, employee warrants exercisable for an aggregate of 3,974,548 ordinary shares, at a weighted average exercise price of €4.77($6.57) per share, were outstanding, of which employee warrants exercisable for 1,289,480 ordinary shares are held by our eligible directors and executiveofficers.Administration. Pursuant to delegations granted at our annual shareholders’ meeting our board of directors determines the recipients, dates of grant andexercise price of employee warrants, the number of employee warrants to be granted and the terms and conditions of the employee warrants, including theperiod of their exercisability and their vesting schedule. The board of directors has the authority to extend the post-termination exercise period of employeewarrants after the termination of the employment agreement.Employee Warrants. Our employee warrants granted prior to March 2011 were generally granted subject to a three-year vesting schedule under whichone-third (1/3) of the employee warrants vest upon the first anniversary of grant and 1/12th at the expiration of each quarter thereafter, subject to continuedservice. Our employee warrants granted since March 2011 were generally granted subject to a four-year vesting schedule under which one-fourth (1/4) of theemployee warrants vest upon the first anniversary of grant and 1/16th at the expiration of each quarter thereafter, subject to continued service. In each case,any warrant which is not exercised before the tenth anniversary of the date of grant will automatically lapse.The term of each employee warrant is ten years from the date of grant or, in the case of death or disability of the beneficiary during such ten-year period,six months from the death or disability of the beneficiary in 100Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsaccordance with French law. Unless a longer period is specified in the notice of grant or otherwise resolved by the board of directors, an employee warrant shallremain exercisable for one month following a beneficiary’s termination of continuous status with the Company.Employee warrants are not transferable and may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than bywill or by laws of descent or distribution and may be exercised, during the lifetime of the beneficiary, only by the beneficiary.Change in Control. Employee warrants granted prior to March 2011 provide that in the event of a change in control, as defined in the relevant grantdocuments, occurring after the first anniversary of the date of grant, unvested warrants will automatically vest in full. Employee warrants granted sinceMarch 2011, other than the employee warrants vesting upon completion of our initial public offering as described below, provide that unvested warrants willonly accelerate in case of a change in control at any time (whether prior to or after the first anniversary of grant) if the acquirer or the successor corporationdoes not agree to assume or substitute equivalent rights for the outstanding employee warrants.Initial Public Offering. The employee warrants granted to the three founders of the Company in October 2012 for an aggregate of 257,688 ordinaryshares fully vested upon approval by our board of directors on October 29, 2013 of our Registration Statement on Form F-1 in connection with our initialpublic offering.Non-Employee Warrants (BSA)Historically, non-employee warrants were typically granted by our board of directors to non-employee directors and other service providers not eligiblefor either employee warrants or employee share options but these warrants may also be granted to employees of Criteo S.A. In addition to any exercise pricepayable by a holder upon the exercise of any non-employee warrant, non-employee warrants need to be subscribed for at a price at least equal to five percent(5%) of the exercise price of the underlying ordinary shares, which subscription price is meant to reflect at least the fair market value of the applicablewarrants on the date of grant. There is no legal limitation to the size of the non-employee warrant pool.As of December 31, 2013, non-employee warrants exercisable for an aggregate of 542,148 ordinary shares, at a weighted average exercise price of €3.55($4.89) per share, were outstanding, of which non-employee warrants exercisable for 135,480 ordinary shares are held by our directors and executive officers.Administration. Pursuant to delegations granted at our annual shareholders’ meeting our board of directors determines the recipients, dates of grant andexercise price of non-employee warrants, the number of non-employee warrants to be granted and the terms and conditions of the non-employee warrants,including the period of their exercisability and their vesting schedule. The board of directors has the authority to extend the post-termination exercise period ofnon-employee warrants after the end of the term of office.Non-Employee Warrants. Our non-employee warrants are generally granted subject to a vesting schedule providing for either: (1) 1/24th at theexpiration of each month following the date of grant, if granted to the advisory board members, or (2) 1/3 to be vested on the date of grant and 1/3 to vest eachyear following the date of appointment of the relevant director, if granted to the independent directors, in both cases subject to continued service. The term ofnon-employee warrants is ten years from the date of grant or, in the case of death or disability of the beneficiary during such ten-year period, six months fromthe death or disability of the beneficiary. Unless a longer period is specified in the notice of grant or otherwise resolved by the board of directors, a non-employee warrant shall remain exercisable for one month following a beneficiary’s termination of continuous status with the Company.Non-employee warrants may be transferred to any person and may be exercised by their holder at any time subject to vesting. 101Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsChange in Control. Most of our non-employee warrants provide that in the event of a change in control, as defined in the relevant grant documents,unvested warrants will automatically vest in full.Initial Public Offering. Non-employee warrants exercisable for an aggregate of 254,100 ordinary shares became immediately exercisable uponcompletion of our initial public offering.Restricted (Free) SharesUnder our 2013 Free Share Plan, we may grant restricted (free) shares to the employees of Criteo S.A. and its subsidiaries. Our current plan, the 2013Free Share Plan, was adopted by our board of directors in July 2013 and approved by our shareholders at a meeting held on August 2, 2013.Restricted (free) shares may be granted to any individual employed by us or by any affiliated company under the terms and conditions of anemployment contract. Restricted free shares may also be granted to our Chairman, our general manager and to our deputy general managers. However no freeshare may be granted to a beneficiary holding more than 10% of our share capital or to a beneficiary who would hold more than 10% of our share capital as aresult of such grant.Share Reserve. The maximum number of our ordinary shares that may be issued under the 2013 Free Share Plan is 6,627,237. In addition, underFrench law, the number of restricted (free) shares may not exceed 10% of the outstanding share capital on a non-diluted basis as at the date of grant. Restricted(free) shares may be granted under the 2013 Free Share Plan until October 2, 2016.As of December 31, 2013, no rights to acquire restricted (free) shares were outstanding and all previously issued restricted (free) shares had fully vested.Administration. Our board of directors has the authority to administer the 2013 Free Share Plan. Subject to the terms of the 2013 Free Share Plan, ourboard of directors determines recipients, dates of grant, the number of restricted (free) shares to be granted and the terms and conditions of the restricted (free)shares, including the length of their acquisition period (period starting on the date of grant during which the beneficiary holds a right to acquire shares for freebut not any shares yet) and holding period (period starting at the end of the acquisition period when the shares are issued and definitively acquired and issuedbut may not be transferred) within the limit determined by the shareholders (in particular the acquisition period is at least two years from the date of grant andthe holding period two years from the end of the acquisition period, it being specified that no holding period will be applicable to the beneficiaries for whom theacquisition period is at least 4 years).The board of directors has the authority to modify awards outstanding under our 2013 Free Share Plan subject to the consent of the beneficiary if suchmodification is detrimental to him/her, including in particular the authority to release a beneficiary from the continued service condition during the acquisitionperiod after the termination of the employment.Free Shares. The restricted (free) shares granted under the 2013 Free Share Plan will be definitively acquired at the end of the acquisition period as setby our board of directors (of a minimum of two years) subject to continued service during the acquisition period, except if the board releases a givenbeneficiary from this condition upon termination of his/her employment contract. At the end of the acquisition period, the beneficiary will be the owner of theshares. However during the holding period (as set by our board of directors with a minimum of two years except if the acquisition period is at least equal tofour years) the shares may not be sold, transferred or pledged.In the event of disability before the end of the acquisition period, the restricted (free) shares shall be definitively acquired by the beneficiary on the date ofdisability. For participants subject to tax in the US, the date of such disability shall be the date such disability is incurred and in all cases such shares shallbe delivered by March 15th of the year following the year in which such disability is incurred. In the event the beneficiary 102Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsdies during the acquisition period, the restricted (free) shares shall be definitively acquired at the date of the request of allocation made by his or herbeneficiaries in the framework of the inheritance provided that such request is made within six (6) months from the date of death.Amendment and Termination. Our board of directors has the authority to amend, alter, suspend, or terminate our 2013 Free Share Plan, provided thatsuch action does not impair the rights of any beneficiary without such beneficiary’s consent. The Company shall obtain shareholder approval of anyamendment to the extent necessary and desirable to comply with applicable laws.C. Board Practices.Board CompositionWe currently have six directors, Under French law and our amended and restated by-laws, or our By-laws, our board of directors must be composed ofbetween three and 18 members. Within this limit, the number of directors is determined by our shareholders. Directors are elected, re-elected and may beremoved at a shareholders’ general meeting with a simple majority vote of our shareholders. Pursuant to our By-laws, our directors are elected for three yearterms. In accordance with French law, our By-laws also provide that our directors may be removed with or without cause by the affirmative vote of the holdersof at least a majority of the votes of the shareholders present, represented by a proxy or voting by mail at the relevant ordinary shareholders’ meeting, and thatany vacancy on our board of directors resulting from the death or resignation of a director, provided there are at least three directors remaining, may be filledby vote of a majority of our directors then in office provided that there has been no shareholders meeting since such death or resignation. Directors chosen orappointed to fill a vacancy are elected by the board of directors for the remaining duration of the current term of the replaced director. The appointment must beratified at the next shareholders’ general meeting. In the event the board of directors would be composed of less than three directors as a result of a vacancy, theremaining directors shall immediately convene a shareholders’ general meeting to elect one or several new directors so there are at least three directors serving onthe board of directors, in accordance with French law.The following table sets forth for each of our directors, their name, the year of their initial appointment as a director and the expiration date of theircurrent term. Name Current Position Year of InitialAppointment TermExpiration Year Jean-Baptiste Rudelle Chairman 2006 2016 Marie Ekeland Director 2006 2016 Dana Evan Director 2013 2015 Hubert de Pesquidoux Director 2012 2015 Dominique Vidal Director 2007 2014 James Warner Director 2013 2016 Served on the board of directors as representative of Elaia Partners until July 2013. Served on the board of directors as representative of Index Venture Associates IV Limited until July 2013.In addition, French law requires that companies having at least 50 employees for a period of 12 months over the last three years set up a Comitéd’Entreprise, or Works’ Council, composed of representatives elected from among the employees. Our Works’ Council was formed in May 2011. Two ofthese representatives, currently Laura Malnar and Sebastien Roblin, are entitled to attend all meetings of the board of directors and the shareholders, in anobserver capacity. 103(1)(2)(1)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDirector IndependenceOur board of directors has undertaken a review of the independence of the directors and considered whether any director has a material relationship withus that could compromise their ability to exercise independent judgment in carrying out the responsibilities of a director. As a result of this review, our board ofdirectors determined that Messrs. de Pesquidoux, Vidal and Warner and Mmes. Ekeland and Evan representing five of our six directors, are “independentdirectors” as that term is defined under the applicable rules and regulations of the SEC and the listing requirements and rules of Nasdaq. In making suchdetermination, our board of directors considered the relationships that each non-employee director has with us and all other facts and circumstances our boardof directors deemed relevant in determining the director’s independence, including the number of ordinary shares beneficially owned by the director and his orher affiliated entities (if any).Role of the Board in Risk OversightOur board of directors is primarily responsible for the oversight of our risk management activities and has delegated to the audit committee theresponsibility to assist our board in this task. The audit committee also monitors our system of disclosure controls and procedures and internal control overfinancial reporting and reviews contingent financial liabilities. The audit committee, among other things, reviews and discusses with management reportsregarding our enterprise risk management activities, including management’s assessment of our major risk exposures and the steps taken to monitor andmanage those exposures.While our board oversees our risk management, our management is responsible for day-to-day risk management processes. Our board of directorsexpects our management to consider risk and risk management in each business decision, to proactively develop and monitor risk management strategies andprocesses for day-to-day activities and to effectively implement risk management strategies adopted by the board of directors. We believe this division ofresponsibilities is the most effective approach for addressing the risks we face.Corporate Governance PracticesAs a French société anonyme, we are subject to various corporate governance requirements under French law. In addition, as a foreign private issuerlisted on Nasdaq, we are subject to the Nasdaq corporate governance listing standards. However, the Nasdaq’s listing standards provide that foreign privateissuers are permitted to follow home country corporate governance practices in lieu of the Nasdaq rules, with certain exceptions. Currently, we intend tocomply with the corporate governance listing standards of Nasdaq to the extent possible under French law.The following are the significant ways in which our corporate governance practices differ from those required for U.S. companies listed on Nasdaq:Audit Committee Responsibilities. As a foreign private issuer, we are required to comply with Rule 10A-3 of the U.S. Securities Exchange Act of 1934,as amended, or the Exchange Act, relating to audit committee composition and responsibilities. Rule 10A-3 provides that the audit committee must have directresponsibility for the nomination, compensation and choice of our auditors, as well as control over the performance of their duties, management of complaintsmade, and selection of consultants. However, if the laws of a foreign private issuer’s home country require that any such matter be approved by the board ofdirectors or the shareholders, the audit committee’s responsibilities or powers with respect to such matter may instead be advisory. Under French law, the auditcommittee may only have an advisory role and appointment of our statutory auditors, in particular, must be decided by the shareholders at our annualmeeting.Equity Compensation Plans. Under French law, we must obtain shareholder approval at a general meeting of the shareholders in order to adopt anequity compensation plan. Generally, the shareholders then delegate to our board of directors the authority to decide on the specific terms of the grant of equitycompensation, within the limits of the shareholders’ authorization. 104Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsQuorum. Nasdaq rules require a listed company to specify that the quorum for any meeting of the holders of common stock be at least 33/% of theoutstanding shares of the Company’s common voting stock. Consistent with French Law, Criteo’s By-laws provide that a quorum requires the presence ofshareholders having at least (1) 20% of the shares entitled to vote in the case of an ordinary shareholders’ general meeting or an extraordinary shareholders’general meeting where shareholders are voting on a capital increase by capitalization of reserves, profits or share premium, or (2) 25% of the shares entitled tovote in the case of any other extraordinary shareholders’ general meeting. If a quorum is not present, the meeting is adjourned. There is no quorum requirementwhen an ordinary general meeting is reconvened, but the reconvened meeting may consider only questions which were on the agenda of the adjourned meeting.When an extraordinary general meeting is reconvened, the quorum required is 20% of the shares entitled to vote, except where the reconvened meeting isconsidering capital increases through capitalization of reserves, profits or share premium. For these matters, no quorum is required at the reconvened meeting.If a quorum is not present at a reconvened meeting requiring a quorum, then the meeting may be adjourned for a maximum of two months.Board CommitteesThe board of directors has established an audit committee, a compensation committee, a nomination and corporate governance committee and a strategycommittee, each of which operates pursuant to a separate charter adopted by our board of directors. The composition and functioning of all of our committeeswill comply with all applicable requirements of the French commercial code, the Exchange Act, Nasdaq, and SEC rules and regulations.In accordance with French law, committees of our board of directors will only have an advisory role and can only make recommendations to our boardof directors. As a result, decisions will be made by our board of directors taking into account non-binding recommendations of the relevant board committee.Audit Committee. Our audit committee reviews our internal accounting procedures, consults with and reviews the services provided by our independentregistered public accountants and assists our board of directors in its oversight of our corporate accounting and financial reporting. Messrs. de Pesquidouxand Warner and Ms. Evan currently serve on our audit committee. Mr. de Pesquidoux is the chairman of our audit committee. Our board has determined thateach member of our audit committee is independent within the meaning of the applicable listing rules and the independence requirements contemplated by Rule10A-3 under the Exchange Act. Our board of directors has further determined that Mr. de Pesquidoux is an “audit committee financial expert” as defined bySEC rules and regulations and that Ms. Evan and Mr. Warner qualify as financially sophisticated under the applicable exchange listing rules. The principalduties and responsibilities of our audit committee include: • making recommendations on the appointment and retention of our independent registered public accounting firm to serve as independent auditor toaudit our consolidated financial statements, overseeing the independent auditor’s work and advising on the determination of the independentauditor’s compensation; • reviewing in advance all audit services and non-audit services to be provided to us by our independent auditors; • recommending procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls,auditing or compliance matters, as well as for the confidential, anonymous submission by our employees of concerns regarding questionableaccounting or auditing matters; • reviewing and discussing with management and our independent auditors the results of the annual audit; • conferring with management and our independent auditors about the scope, adequacy and effectiveness of our internal accounting controls, theobjectivity of our financial reporting and our accounting policies and practices; and • overseeing regulatory compliance and related matters. 10513Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCompensation Committee. Our compensation committee assists our board of directors in reviewing and making recommendations to our board ofdirectors with respect to the compensation of our executive officers and directors. Messrs. Warner and Vidal and Ms. Ekeland currently serve on thecompensation committee. Mr. Warner is the chairman of our compensation committee. Our board of directors has determined that each member of ourcompensation committee is independent within the meaning of the applicable exchange listing rules. The principal duties and responsibilities of ourcompensation committee include: • making recommendations to the board of directors (either as a committee or together with the other independent directors) regarding performancegoals and objectives relevant to the compensation of our chief executive officer, assisting the board of directors in evaluating the performance ofour chief executive officer in light of those goals and objectives, and recommending to the full board of directors for approval the chief executiveofficer’s compensation, including incentive-based and equity-based compensation, based on that evaluation; • making recommendations regarding the compensation of our senior management, as appropriate, including our executive officers; • making recommendations regarding compensation-related policies; • reviewing and discussing with management the compensation discussion and analysis and other compensation information that we may berequired to include in SEC filings; and • preparing any reports of the compensation committee on executive compensation as may be required by the SEC to be included in reports we filewith the SEC.Nomination and Corporate Governance Committee. Our nomination and corporate governance committee mainly assists our board of directors inoverseeing all aspects of the company’s corporate governance functions and making recommendations to the board regarding corporate governance issues.Mr. Vidal and Mmes. Evan and Ekeland, currently serve on the nomination and corporate governance committee. Ms. Evan is the chairman of our nominationand corporate governance committee. The principal duties and responsibilities of our nomination and corporate governance committee include: • assessing the need for new directors and identifying individuals qualified to become directors; • recommending to the board of directors the persons to be nominated for election as directors and to each of the board’s committees; • assessing individual director performance, participation and qualifications; • developing and recommending to the board of directors corporate governance principles; • making recommendations regarding director compensation; and • overseeing an annual evaluation of the board of directors’ performance.Strategy Committee. Our strategy committee assists our board of directors in reviewing and assessing all matters relating to our financing plans andcapital structure, annual capital expenditure budget, and the long-range financial and strategic business development plans. All of our directors currently serveon the strategy committee. Mr. Vidal is the chairman of our strategy committee. 106Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsD.Employees.As of December 31, 2013, we had 810 employees. Our employees employed by French entities are represented by labor unions or covered by collectivebargaining agreements. Management considers labor relations to be good. At each date shown, we had the following employees, broken out by department andgeography: 2011 2012 2013 Function: Research and development 80 132 192 Sales and operations 269 401 491 General and administration 60 96 127 Total 409 629 810 Geography: Europe, Middle East, Africa 309 468 589 Asia 19 47 76 Americas 81 114 145 Total 409 629 810 E.Share Ownership.For information regarding the share ownership of our directors and executive officers, see “Item 6.B.— Compensation — Outstanding equity Awards asof December 31, 2013” and “Item 7.A — Major Shareholders.” Item 7.Major Shareholders and Related Party Transactions A.Major shareholders.The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of January 31, 2014 for: • each beneficial owner of more than five percent (5%) of our outstanding ordinary shares; • each of our directors and executive officers; and • all of our directors and executive officers as a group.Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to personswho possess sole or shared voting power or investment power with respect to those securities and include ordinary shares issuable upon the exercise of shareoptions and warrants that are immediately exercisable or exercisable by April 1, 2014 (60 days after January 31, 2014). Such shares are also deemedoutstanding for purposes of computing the percentage ownership of the person holding the option or warrant, but not the percentage ownership of any otherperson. The percentage ownership information shown in the table is based upon 56,908,066 ordinary shares outstanding as of January 31, 2014.Except as otherwise indicated, to our knowledge, all persons listed below have sole voting and investment power with respect to the shares beneficiallyowned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial ownership for any other purpose. 107Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsExcept as otherwise indicated in the table below, addresses of the directors, executive officers and named beneficial owners are in care of Criteo S.A., 32Rue Blanche 75009 Paris, France. Name of Beneficial Owner Shares Beneficially Owned Number Percentage 5% Shareholders: Bessemer Venture Partners Enforta Cooperatief UA 4,483,714 7.9% Entities affiliated with Elaia Partners 6,371,228 11.2 Entities affiliated with Index Venture Associates IV Limited 11,037,850 19.4 Entities affiliated with Idinvest Partners 10,668,370 18.7 Directors and Executive Officers: Jean-Baptiste Rudelle 4,754,757 8.3 Benoit Fouilland 248,522 * Jean-Louis Constanza — * Greg Coleman 735,930 1.3 Eric Eichmann — * Franck Le Ouay 2,201,323 3.9 Romain Niccoli 2,201,302 3.9 Jonathan Wolf 664,510 1.2 Marie Ekeland 6,371,228 11.2 Dana Evan 20,400 * Hubert de Pesquidoux 20,400 * Dominique Vidal 11,037,850 19.4 James Warner 44,400 * All directors and executive officers as a group (13 persons) 28,300,622 48.1% *Represents beneficial ownership of less than 1%.(1)Consists of 4,483,714 ordinary shares held by Bessemer Venture Partners Enforta Cooperatief UA, a Netherlands cooperative whose sole board memberis Intertrust Management B.V. Investment decisions for Bessemer Venture Partners Enforta Cooperatief UA are made by its board of directors. Deer VII& Co. Ltd is the general partner of Deer VII & Co. L.P., which is the general partner of Bessemer Venture Partners VII L.P., Bessemer Venture PartnersVII Institutional L.P. and BVP VII Special Opportunity Fund L.P., together the BVP Funds. The BVP Funds own 100% of the economic interest inBessemer Venture Partners Enforta Cooperatief UA. By virtue of its position as general partner of Deer VII & Co. L.P., which in turn is the generalpartner of the BVP Funds, Deer VII & Co. Ltd. may be deemed to beneficially own the shares held by Bessemer Venture Partners Enforta CooperatiefUA. J. Edmund Colloton, David J. Cowan, Byron Deeter, Robert P. Goodman, Jeremy S. Levine and Robert M. Stavis are the directors of Deer VII &Co. Ltd. Investment and voting decisions with respect to securities held directly by the BVP Funds are made by the directors of Deer VII Ltd. acting asan investment committee and as such the directors may be deemed to be the beneficial owners (as such term is defined in General Instruction F of Form20-F) of securities held directly by the BVP Funds. Deer VII & Co. Ltd, Deer VII & Co. L.P. and each of the directors of Deer VII & Co. Ltd. disclaimsbeneficial ownership of the shares held by Bessemer Venture Partners Enforta Cooperatief UA. The principal address of Bessemer Venture PartnersEnforta Cooperatief UA is Roeskestraat 123, 1076 EE Amsterdam, The Netherlands.(2)Consists of 4,247,722 ordinary shares held by Elaia Ventures; 611,622 ordinary shares held by 123 Multinova Europe Compartiment Dynamique;344,050 ordinary shares held by 123 Multinova Europe Compartiment Equilibre; 780,280 ordinary shares held by 123 Multinova IV CompartimentDynamique; and 387,554 ordinary shares held by 123 Multinova IV Compartiment Equilibre. Elaia Partners, as the general partner of Elaia Ventures,may be deemed to have shared dispositive power and shared voting power over 108(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(2)(11)(12)(3)(13)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents all of the shares owned by Elaia Ventures. 123 Venture S.A., as the general partner of each of 123 Multinova Europe Compartiment Dynamique, 123Multinova Europe Compartiment Equilibre, 123 Multinova IV Compartiment Dynamique and 123 Multinova IV Compartiment Equilibre (collectively,the “123 Funds”), may be deemed to have shared dispositive power and shared voting power over all of the shares owned by the 123 Funds. 123Venture S.A. has granted management authority over the voting and disposition of the shares to Elaia Partners. As a result, Elaia Partners may also bedeemed to have shared dispositive power and shared voting power over all of the shares owned by the 123 Funds.Marie Ekeland, a member of our board of directors, Philippe Gire and Xavier Lazarus are the partners of Elaia Partners and as such, may be deemed tohave shared voting, investment and dispositive power with respect to the shares held by the 123 Funds for U.S. securities laws purposes. However,none of Ms. Ekeland, Mr. Gire or Mr. Lazarus have individual voting control over Elaia Partners. Investment discretion and voting power reside in theinvestment committee of Elaia Partners and none of Ms. Ekeland, Mr. Gire or Mr. Lazarus are able to exercise control over decisions made by theinvestment committee and, as a result, such persons are not able to control voting, investment or disposition decisions concerning the ordinary shares ofCriteo held by the 123 Funds. Each of Ms. Ekeland, Mr. Gire and Mr. Lazarus disclaim beneficial ownership with respect to such shares except to theextent of their pecuniary interest therein. The principal address of Elaia Partners is 54, rue de Ponthieu, 75008 Paris.(3)Consists of 7,316,326 ordinary shares held by Index Ventures IV (Jersey) LP; 694,444 ordinary shares held by Index Ventures IV Parallel EntrepreneurFund (Jersey) LP; and 157,514 ordinary shares held by Yucca (Jersey) SLP and 2,869,566 ordinary shares held by Fourvest Sàrl. Excludes1,840,800 ordinary shares held by Pentavest Sàrl.Index Venture Associates IV Limited is the general partner of Index Ventures IV (Jersey) LP and Index Ventures IV Parallel Entrepreneur Fund (Jersey)LP, which limited partnerships (the “Funds”) are the owners of Fourvest Sàrl. Yucca (Jersey) SLP is a co-investment vehicle that is contractuallyrequired to mirror the Funds’ investment. Bernard Dallé, David Hall, Paul Willing, Phil Balderson and Sinéad Meehan are the members of the board ofdirectors of Index Venture Associates IV Limited and may be deemed to have shared voting, investment and dispositive power with respect to the sharesheld by these entities. These individuals disclaim beneficial ownership with respect to such shares except to the extent of their pecuniary interest therein.Index Venture Management LLP advises Index Ventures IV (Jersey) LP and Index Ventures IV Parallel Entrepreneur Fund (Jersey) LP but does not havevoting, investment and dispositive power with respect to the shares held by these entities. Index Venture Management LLP also advises Pentavest Sàrl ona non-binding basis. Dominique Vidal, a member of our board of directors, is a Partner of Index Venture Management LLP. Mr. Vidal disclaimsbeneficial ownership of these shares except to the extent of his pecuniary interest therein.The principal address of Index Venture Associates IV Limited, Index Ventures IV (Jersey) LP, Index Ventures IV Parallel Entrepreneur Fund (Jersey) LPand Yucca (Jersey) SLP is Ogier House, The Esplanade, St. Helier, Jersey JE4 9WG, Channel Islands. The principal address for Fourvest Sàrl andPentavest Sàrl is 1-3 Boulevard de la Foire, 1528 Luxembourg.(4)Consists of 197,706 ordinary shares held by Allianz Eco Innovation; 164,644 ordinary shares held by Allianz Eco Innovation 2; 79,352 ordinaryshares held by Allianz Eco Innovation 3; 2,179,728 ordinary shares held by Allianz Innovation 6; 2,074,366 ordinary shares held by AllianzInnovation 7; 596,694 ordinary shares held by Capital Croissance; 322,104 ordinary shares held by Capital Croissance 2; 94,374 ordinary sharesheld by Capital Croissance 4; 93,716 ordinary shares held by Capital Croissance 5; 36,280 ordinary shares held by Idinvest Croissance; 2,396,722ordinary shares held by Idinvest Croissance 2005; 95,500 ordinary shares held by Idinvest Flexible 2016; 197,134 ordinary shares held by IdinvestPatrimoine; 123,802 ordinary shares held by Idinvest Patrimoine 2; 18,310 ordinary shares held by La Banque Postale Innovation 11; 582,538ordinary shares held by La Poste Innovation 8; 88,952 ordinary shares held by Objectif Innovation 3; 124,532 ordinary shares held by ObjectifInnovation 4; 59,650 ordinary shares held by Objectif Innovation 5; 529,162 ordinary shares held by Objectif Innovation Patrimoine; 348,946ordinary shares held by Objectif Innovation Patrimoine 2; 133,572 ordinary shares held by Objectif Innovation Patrimoine 4; 106,196 ordinary sharesheld by Objectif Innovation Patrimoine n°5; and 24,390 ordinary 109Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents shares held by Stratégie PME 2011 (collectively the “Idinvest Funds”). As the management company of each of the Idinvest Funds, Idinvest PartnersS.A. may be deemed to have shared dispositive power and shared voting power over all of the shares owned by the Idinvest Funds. 51% of IdinvestPartners’ share capital is held by ADFI3, and all of the share capital of ADFI3 is held by IDI. All powers with respect to the voting and disposition of theordinary shares owned by the Idinvest Funds and managed by Idinvest Partners are maintained by an investment committee of Idinvest Partners.Because of the powers vested in the investment committee and its composition, neither ADFI3 nor IDI are able to exercise control over the composition of,or decisions made by the investment committee and, as a result, such persons are not able to control voting, investment or disposition decisionsconcerning the shares owned by the Idinvest Funds.Benoist Grossmann and Christophe Baviere are the managing partners of Idinvest Partners, and as such, may be deemed to have shared voting,investment and dispositive power with respect to the shares held by the Idinvest Funds, for U.S. securities laws purposes. However, voting anddispositive decision-making with respect to the shares is held by the investment committee of Idinvest Partners. Because of the powers vested in theinvestment committee and its composition, neither Mr. Grossmann nor Mr. Baviere are able to exercise control over voting, investment or dispositiondecisions over the ordinary shares of Criteo held by the Idinvest Funds. Mr. Grossmann and Mr. Baviere disclaim beneficial ownership with respect tosuch shares except to the extent of their pecuniary interest therein. The principal address of Idinvest Partners is 117, avenue des Champs Elysees,75008 Paris.(5)Includes 354,023 ordinary shares issuable upon the exercise of warrants exercisable by April 1, 2014 (60 days after January 31, 2014).(6)Includes 248,522 ordinary shares issuable upon the exercise of warrants exercisable by April 1, 2014 (60 days after January 31, 2014).(7)Includes 500,930 ordinary shares issuable upon the exercise of options and warrants exercisable by April 1, 2014 (60 days after January 31, 2014).(8)Includes 165,091 ordinary shares issuable upon the exercise of options and warrants exercisable by April 1, 2014 (60 days after January 31, 2014).(9)Includes 165,090 ordinary shares issuable upon the exercise of warrants exercisable by April 1, 2014 (60 days after January 31, 2014).(10)Includes 381,148 ordinary shares issuable upon the exercise of options exercisable by April 1, 2014 (60 days after January 31, 2014).(11)Includes 20,400 ordinary shares issuable upon the exercise of a warrant exercisable by April 1, 2014 (60 days after January 31, 2014).(12)Includes 20,400 ordinary shares issuable upon the exercise of warrants exercisable by April 1, 2014 (60 days after January 31, 2014).(13)Includes 44,400 ordinary shares issuable upon the exercise of warrants exercisable by April 1, 2014 (60 days after January 31, 2014).The significant changes in the percentage ownership held by our principal shareholders since January 1, 2011 are as a result of the transactionsdescribed in our prospectus dated October 29, 2013, filed with the SEC pursuant to Rule 424(b), under the heading “Related Party Transactions –Transactions with our Principal Shareholders – Sales of Preferred Shares” and the dilution resulting from our initial public offering. None of our principalshareholders have voting rights different than our other shareholders.B. Record holdersAs of January 31, 2014, assuming that all of our ordinary shares represented by ADSs are held by residents of the United States, approximately 19.1%of our outstanding ordinary shares were held in the United States by 60 holders of record and 38.3% of our outstanding ordinary shares were held in Franceby 66 holders of record. At such date, there were outstanding 9,294,967 ADSs, each representing one of our ordinary shares, and in the aggregaterepresenting 16.3% of our outstanding ordinary shares. At such date there was one holder of record registered with the Bank of New York Mellon, depositaryof the ADSs. The actual number of holders is greater 110Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsthan these numbers of record holders, and includes beneficial owners whose ADSs are held in street name by brokers and other nominees. This number ofholders of record also does not include holders whose shares may be held in trust by other entities.C. Related Party Transactions.Since January 1, 2013, we have engaged in the following transactions with our directors, executive officers and holders of more than five percent(5%) of our outstanding voting securities and their affiliates, which we refer to as our related-parties.Transactions with Our Principal ShareholdersConversion of Preferred Shares and Termination of Shareholders AgreementOn August 2, 2013, our shareholders authorized the automatic conversion of all of our outstanding preferred shares into ordinary shares effectiveimmediately prior to the completion of our initial public offering. All outstanding preferred shares automatically converted into ordinary shares immediatelyprior to the completion our initial public offering.We were party to a shareholders’ agreement under which certain of our shareholders agreed to vote in a certain way with respect to the election ofdirectors. This agreement terminated upon the closing of our initial public offering and there are no remaining contractual obligations regarding the election ofour directors.Registration Rights AgreementWe entered into a Registration Rights Agreement dated as of August 30, 2013 with the holders of our then outstanding preferred shares. Pursuant to theRegistration Rights Agreement, certain holders of our ordinary shares are entitled to certain rights with respect to registration of such shares under the SecuritiesAct. These shares are referred to as registrable securities.The registration of ordinary shares pursuant to the exercise of registration rights described below would enable the holders to trade these shares withoutrestriction under the Securities Act when the applicable registration statement is declared effective. Unless our ordinary shares are listed on a national securitiesexchange or trading system and a market for our ordinary shares not held in the form of ADSs exists, any Registrable Securities sold pursuant to an exerciseof the registration rights described below will be sold in the form of ADSs. Subject to any limitations under French law, we will pay the registration expenses,other than underwriting discounts, selling commissions and share transfer taxes, of the shares registered pursuant to the demand, piggyback and Form F-3registrations described below.Generally, in an underwritten offering, the managing underwriter, if any, has the right, subject to specified conditions, to limit the number of shares theholders may include. The demand, piggyback and Form F-3 registration rights described below will expire five years after the effective date of the registrationstatement relating to our initial public offering (October 29, 2018), or, with respect to any particular holder, at such time that such holder can sell its sharesunder Rule 144 of the Securities Act during any three month period.Demand Registration Rights. Under our registration rights agreement, beginning six months after the completion of our initial public offering, upon thewritten request of the holders of at least 30% of the registrable securities that we file a registration statement under the Securities Act covering registrablesecurities which would reasonably be expected to result in proceeds to the sellers (net of underwriting discounts and commissions) of at least $5.0 million, weare obligated to use our reasonable best efforts to register the sale of all registrable securities that the holders may request in writing to be registered. We arerequired to effect no more than two registration statements that are declared or ordered effective. We may postpone the filing of a 111Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsregistration statement for up to 90 days once in a 12-month period if in the good faith judgment of our board of directors such registration would be materiallydetrimental to us. The managing underwriter of any underwritten offering will have the right to limit, due to marketing reasons, the number of shares registeredby these holders.Piggyback Registration Rights. If we register any of our securities for sale to the public for cash consideration, either for our own account or for theaccount of other security holders, we will also have to register all registrable securities that the holders of such securities request in writing be registered. Thispiggyback registration right does not apply to a registration relating to any of our equity plans, share purchase or similar plan, a transaction under Rule 145 ofthe Securities Act or a registration in which the only ordinary shares being registered are ordinary shares issuable upon conversion of debt securities which arealso being registered. The managing underwriter of any underwritten offering will have the right to limit, due to marketing reasons, the number of sharesregistered by these holders. However, in any registration for our account, after any such reduction, the registrable securities included shall be not less than 30%of the total number of ordinary shares registered for sale.Form F-3 Registration Rights. The holders of at least 30% of our registrable securities then outstanding can also request that we register all or a portionof their shares on Form F-3, or if we are no longer a foreign private issuer on Form S-3, if we are eligible to file a registration statement on those forms and theaggregate price to the public of the shares offered is in excess of $1.0 million (net underwriting discounts and commissions, if any). We are required to effectno more than two registration statements that are declared or ordered effective in any calendar year. We may postpone the filing of a registration statement for upto 90 days once in a 12-month period if in the good faith judgment of our board of directors such registration would be materially detrimental to us.Agreements with Our Directors and Executive OfficersFounder Non-Compete AgreementsEach of Messrs. Rudelle, Le Ouay and Niccoli is party to a non-compete agreement under which each of them agreed not to engage in certain competitiveactivities during the one year period following the date of his termination of employment with us. Unless we elect to waive these restrictions within 15 daysfollowing the date of termination of employment, we will be required to make a lump sum payment of 50% of the applicable individual’s total grosscompensation for the 12-month period preceding the date of his termination of employment within 30 days following the date of termination of employment.Employment and Related AgreementsWe have entered into employment and related agreements with certain of our executive officers. See “Item 6.B — Compensation — Employment andRelated Agreements.”Equity AwardsSince January 1, 2013, we granted the following options and warrants to purchase ordinary shares to our directors and executive officers: GrantDate Type ofGrant Number ofOrdinarySharesUnderlyingAwards (#) ExercisePrice (€) ExpirationDate Eric Eichmann 4/18/2013 SO 320,000 10.43 4/18/2023 9/3/2013 SO 80,000 12.08 9/3/2023 Dana Evan 3/6/2013 BSA 30,600 9.65 3/6/2023 Benoit Fouilland 9/3/2013 BSPCE 60,000 12.08 9/3/2023 Hubert de Pesquidoux 3/6/2013 BSA 10,200 9.65 3/6/2023 James Warner 3/6/2013 BSA 10,200 9.65 3/6/2023 2/7/2013 BSA 20,400 9.65 2/7/2023 Jean-Louis Constanza 1/29/2014 SO 296,000 25.91 1/29/2024 112(1)(2)(2)(5)(2)(3)(4)(4)(²)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents BSPCE refers to employee warrants, SO refers to share options, and BSA refers to non-employee warrants. 25% of the shares vest twelve months from the date of grant with the remaining ordinary shares vesting in twelve equal quarterly installments thereafter,subject to the recipient’s continued employment with us. 1/3 of the shares vested on the date of grant, 1/3 of the shares vested on October 25, 2013 and 1/3 of the shares will vest on October 25, 2014, subject torecipient’s continued service. 1/3 of the shares vested on the date of grant, 1/3 of the shares vested on February 7, 2014 and 1/3 of the shares will vest on February 7, 2015, subject torecipient’s continued service. 1/3 of the shares vested on the date of grant, 1/3 of the shares will vest on March 6, 2014 and 1/3 of the shares will vest on March 6, 2015, subject torecipient’s continued service.Director Compensation ArrangementsOur independent directors who are not affiliated with one of our significant shareholders (i.e., Messrs. de Pesquidoux and Warner and Ms. Evan) arecurrently entitled to the following annual compensation for serving on the board of directors and each committee of the board of directors: • Attendance fees: €25,000 for six board meetings; and • Attendance fees for board committee chairperson: €15,000 for six committee meetings.Additionally, upon joining the board of directors, each independent director is currently offered the opportunity to purchase equity warrants entitlingthem to subscribe for 30,600 of our ordinary shares at their fair value as of the date of grant. One-third of these warrants vest upon the grant date and anadditional one third vest on each of the first and second anniversary of the appointment date of the relevant director, subject to the directors’ continued servicethrough the vesting date and no shares acquired upon exercise may be sold before the third anniversary of grant, except in case of a change of control.Our other directors receive no compensation for their service as directors but are reimbursed for reasonable expenses incurred in connection withattending board and committee meetings.Indemnification ArrangementsUnder French law, provisions of by-laws that limit the liability of directors are prohibited. However, French law allows sociétés anonymes to contractfor and maintain liability insurance against civil liabilities incurred by any of their directors and officers involved in a third-party action, provided that theyacted in good faith and within their capacities as directors or officers of the company. Criminal liability cannot be indemnified under French law, whetherdirectly by a company or through liability insurance.We maintain liability insurance for our directors and officers, including insurance against liability under the Securities Act of 1933, as amended, andwe have entered into agreements with our directors and executive officers to provide contractual indemnification. With certain exceptions and subject tolimitations on indemnification under French law, these agreements provide for indemnification for damages and expenses including, among other things,attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding arising out of his or her actions inthat capacity. We believe that this insurance and these agreements are necessary to attract qualified directors and executive officers. D.Interests of Experts and Counsel.Not applicable. 113(1)(2)(3)(4)(5)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsItem 8.Financial Information A.Consolidated Statements and Other Financial Information.Consolidated Financial StatementsOur consolidated financial statements are appended as part of this annual report at the end of this annual report, starting at page F-1.Legal ProceedingsFrom time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are notpresently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on ourbusiness, results of operations, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defenseand settlement costs, diversion of management resources and other factors.Dividend Distribution PolicyWe have never declared or paid any cash dividends on our ordinary shares. We do not anticipate paying cash dividends on our equity securities in theforeseeable future and intend to retain all available funds and any future earnings for use in the operation and expansion of our business.Subject to the requirements of French law and our by-laws, dividends may only be distributed from our statutory retained earnings. See “Item 10. B —Memorandum and Articles of Association” for further details on the limitations on our ability to declare and pay dividends. Dividend distributions, if any,will be made in euros and converted into U.S. dollars with respect to the ADSs, as provided in the deposit agreement. B.Significant Changes.Since December 31, 2013, the following significant change has occurred.On February 20, 2014, we announced we acquired 100% of the equity of Tedemis S.A., a leading provider of real-time personalized email marketingsolutions that help advertisers turn web visitors into customers, for €17.0 million in upfront cash plus €4.0 million payable in cash over a two-year period ifcertain milestones are met.In February 2014, we entered into two loan agreements with Bpifrance Financement (French Public Investment Bank) to support our development. Thefirst agreement is a fixed rate seven-year term loan for €3.0 million. This amount will be amortized quarterly after a two-year period. The interest rate will bedetermined based on the French State Long Term rate published the month before the drawing (that shall not occur after May 20, 2014). The second agreementis a three-year revolving credit facility for a maximum amount of €3.0 million in the first year, and decreasing by €1.0 million in each subsequent year. Theinterest rate is Euribor 3 months plus a 0.70% margin. A 0.30% commitment fee is due on a quarterly basis depending on the amount used. 114Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsItem 9.The Offer and Listing. A.Offer and Listing Details.The ADS have been listed on Nasdaq under the symbol “CRTO” since October 30, 2013. Prior to that date, there was no public trading market forADSs or our ordinary shares. Our initial public offering was priced at $31.00 per ADS on October 29, 2013. The following table sets forth for the periodsindicated the high and low sales prices per ordinary share as reported on Nasdaq: Per ADS High Low Year Ended December 31, 2013: Fourth Quarter (beginning October 30) $45.00 $28.27 Year Ended December 31, 2014: First Quarter (through March 5) $59.26 $31.00 Month Ended: October 2013 (beginning October 30) $45.00 $33.33 November 2013 $37.61 $28.27 December 2013 $36.10 $31.50 January 2014 $38.95 $31.00 February 2014 $54.20 $33.17 March 2014 (through March 5) $59.26 $51.15 On March 5, 2014, the last reported sale price of the ADSs on Nasdaq was $58.90 per share. B.Plan of Distribution.Not applicable. C.Markets.The ADS have been listed on Nasdaq under the symbol “CRTO” since October 30, 2013. D.Selling Shareholders.Not applicable. E.Dilution.Not applicable. F.Expenses of the issue.Not applicable. Item 10.Additional Information. A.Share Capital.Not applicable. 115Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsB.Memorandum and Articles of Association.The information set forth in our prospectus dated October 29, 2013, filed with the SEC pursuant to Rule 424(b), under the headings “Description ofShare Capital – Key Provisions of our By-Laws and French Law Affecting our Ordinary Shares,” “Limitations Affecting Shareholders of a FrenchCompany” and “Differences in Corporate Law” is incorporated herein by reference. C.Material Contracts.We entered into an underwriting agreement among J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and Jefferies LLC as representatives of theunderwriters on October 29, 2013, with respect to the ADSs sold in our initial public offering. We have agreed to indemnify the underwriters against certainliabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make in respect of such liabilities. D.Exchange Controls.Under current French foreign exchange control regulations there are no limitations on the amount of cash payments that we may remit to residents offoreign countries. Laws and regulations concerning foreign exchange controls do, however, require that all payments or transfers of funds made by a Frenchresident to a non-resident such as dividend payments be handled by an accredited intermediary. All registered banks and substantially all credit institutions inFrance are accredited intermediaries. E.Taxation.U.S. Federal Income Tax ConsequencesThe following discussion is limited to the material U.S. federal income tax consequences relating to the purchase, ownership and disposition of ADSsby U.S. Holders (as defined below). This discussion applies to U.S. Holders that purchase ADSs and hold such ADSs as capital assets. This discussion isbased on the U.S. Internal Revenue Code of 1986, as amended, or the Code, U.S. Treasury regulations promulgated thereunder and administrative andjudicial interpretations thereof, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect. This discussion doesnot address all of the U.S. federal income tax consequences that may be relevant to specific U.S. Holders in light of their particular circumstances or to U.S.Holders subject to special treatment under U.S. federal income tax law (such as certain financial institutions, insurance companies, broker-dealers and tradersin securities or other persons that generally mark their securities to market for U.S. federal income tax purposes, tax-exempt entities, retirement plans, regulatedinvestment companies, real estate investment trusts, certain former citizens or residents of the United States, persons who hold ADSs as part of a “straddle,”“hedge,” “conversion transaction,” “synthetic security” or integrated investment, persons that have a “functional currency” other than the U.S. dollar, personsthat own (or are deemed to own) 10% or more (by voting power or value) of our shares, corporations that accumulate earnings to avoid U.S. federal income tax,partnerships and other pass-through entities, and investors in such pass-through entities). This discussion does not address any U.S. state or local or non-U.S. tax consequences or any U.S. federal estate, gift or alternative minimum tax consequences.As used in this discussion, the term “U.S. Holder” means a beneficial owner of the ADSs that is, for U.S. federal income tax purposes, (1) anindividual who is a citizen or resident of the United States, (2) a corporation (or entity treated as a corporation for U.S. federal income tax purposes) created ororganized in or under the laws of the United States, any state thereof, or the District of Columbia, (3) an estate the income of which is subject to U.S. federalincome tax regardless of its source or (4) a trust (x) with respect to which a court within the United States is able to exercise primary supervision over itsadministration and one or more United States persons have the authority to control all of its substantial decisions or (y) that has elected under applicable U.S.Treasury regulations to be treated as a domestic trust for U.S. federal income tax purposes. 116Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIf an entity treated as a partnership for U.S. federal income tax purposes holds the ADSs, the U.S. federal income tax consequences relating to aninvestment in the ADSs will depend in part upon the status and activities of such entity and the particular partner. Any such entity should consult its own taxadvisor regarding the U.S. federal income tax consequences applicable to it and its partners of the purchase, ownership and disposition of the ADSs.For United States federal income tax purposes, U.S. Holders of ADSs will be treated as the beneficial owners of the underlying shares represented by theADSs and the exchange of ADSs for our ordinary shares will not be subject to U.S. federal income tax.Persons considering an investment in the ADSs should consult their own tax advisors as to the particular tax consequences applicable tothem relating to the purchase, ownership and disposition of the ADSs, including the applicability of U.S. federal, state and local tax laws andnon-U.S. tax laws.DistributionsSubject to the discussion below under “Passive Foreign Investment Company Consequences,” a U.S. Holder that receives a distribution with respect toADSs generally will be required to include the gross amount of such distribution (before reduction for any French withholding taxes) in gross income as adividend when actually or constructively received to the extent of the U.S. Holder’s pro rata share of our current and/or accumulated earnings and profits (asdetermined under U.S. federal income tax principles). To the extent a distribution received by a U.S. Holder is not a dividend because it exceeds the U.S.Holder’s pro rata share of our current and accumulated earnings and profits, it will be treated first as a tax-free return of capital and reduce (but not below zero)the adjusted tax basis of the U.S. Holder’s ADSs. To the extent the distribution exceeds the adjusted tax basis of the U.S. Holder’s ADSs, the remainder will betaxed as capital gain. Because we may not account for our income in accordance with U.S. federal income tax purposes, U.S. Holders should expect alldistributions to be reported to them as dividends.The U.S. dollar value of any distribution on the ADSs made in euros generally should be calculated by reference to the exchange rate between the U.S.dollar and the euro in effect on the date of receipt (or deemed receipt) of such distribution by the U.S. Holder regardless of whether the euros so received are infact converted into U.S. dollars at that time. If the euros received are converted into U.S. dollars on the date of receipt (or deemed receipt), a U.S. Holdergenerally should not recognize currency gain or loss on such conversion. If the euros received are not converted into U.S. dollars on the date of receipt (ordeemed receipt), a U.S. Holder generally will have a basis in such euros equal to the U.S. dollar value of such euros on the date of receipt. Any gain or loss ona subsequent conversion or other disposition of such euros by such U.S. Holder generally will be treated as ordinary income or loss and generally will beincome or loss from sources within the United States for U.S. foreign tax credit purposes.Distributions on the ADSs that are treated as dividends generally will constitute income from sources outside the United States for foreign tax creditpurposes and generally will constitute passive category income. Such dividends will not be eligible for the “dividends received” deduction generally allowed tocorporate shareholders with respect to dividends received from U.S. corporations. Dividends paid by a “qualified foreign corporation” are eligible for taxationat a reduced capital gains rate rather than the marginal tax rates generally applicable to ordinary income provided that a holding period requirement (more than60 days of ownership, without protection from the risk of loss, during the 121-day period beginning 60 days before the ex-dividend date) and certain otherrequirements are met. Each U.S. Holder is advised to consult its tax advisors regarding the availability of the reduced tax rate on dividends to its particularcircumstances. However, if we are a passive foreign investment company, or PFIC, for the taxable year in which the dividend is paid or the preceding taxableyear (see discussion below under “—Passive Foreign Investment Company Consequences”), we will not be treated as a qualified foreign corporation, andtherefore the reduced capital gains tax rate described above will not apply. 117Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsA non-United States corporation (other than a corporation that is classified as a PFIC for the taxable year in which the dividend is paid or the precedingtaxable year) generally will be considered to be a qualified foreign corporation (a) if it is eligible for the benefits of a comprehensive tax treaty with the UnitedStates which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange ofinformation provision, or (b) with respect to any dividend it pays on ADSs which are readily tradable on an established securities market in the United States.The ADSs are listed on Nasdaq, which is an established securities market in the United States, and we expect the ADSs to be readily tradable on Nasdaq.Accordingly, we believe that dividends we pay on the ADSs will meet the conditions required for the reduced tax rate. There can be no assurance that the ADSswill be considered readily tradeable on an established securities market in the United States in later years.A U.S. Holder may be subject to French withholding taxes on dividends paid on the ADSs or ordinary shares. A U.S. Holder may be eligible, subject toa number of complex limitations, to claim a foreign tax credit in respect of any foreign withholding taxes imposed on dividends received on the ADSs (orordinary shares underlying the ADSs) at a rate applicable to the U.S. Holder. A U.S. Holder may instead claim a deduction instead of a credit for UnitedStates federal income tax purposes in respect of such withholdings, but only for a year in which such U.S. Holder elects to do so for all creditable foreignincome taxes. The rules governing the foreign tax credit are complex. Each U.S. Holder is advised to consult its tax advisors regarding the availability of theforeign tax credit under its particular circumstances.Sale, Exchange or Other Disposition of the ADSsSubject to the discussion below under “Passive Foreign Investment Company Consequences,” a U.S. Holder generally will recognize capital gain or lossfor U.S. federal income tax purposes upon the sale, exchange or other disposition of ADSs in an amount equal to the difference, if any, between the amountrealized (i.e., the amount of cash plus the fair market value of any property received) on the sale, exchange or other disposition and such U.S. Holder’sadjusted tax basis in the ADSs, both amounts determined in U.S. dollars. Such capital gain or loss generally will be long-term capital gain taxable at a reducedrate for non-corporate U.S. Holders or loss if, on the date of sale, exchange or other disposition, the ordinary share was held by the U.S. Holder for more thanone year. Any capital gain of a non-corporate U.S. Holder that is not long-term capital gain is taxed at ordinary income rates. The deductibility of capital lossesis subject to limitations. Any gain or loss recognized from the sale or other disposition of the ADSs will generally be gain or loss from sources within theUnited States for U.S. foreign tax credit purposes.Passive Foreign Investment Company ConsequencesIn general, a corporation organized outside the United States will be treated as a PFIC in any taxable year in which either (1) at least 75% of its grossincome is “passive income” or (2) on average at least 50% of the average quarterly value of its assets is attributable to assets that produce passive income or areheld for the production of passive income. Passive income for this purpose generally includes, among other things, dividends, interest, royalties, rents, andgains from commodities transactions and from the sale or exchange of property that gives rise to passive income. Assets that produce or are held for theproduction of passive income generally include cash, even if held as working capital or raised in a public offering, marketable securities and other assets thatmay produce passive income. In determining whether a foreign corporation is a PFIC, a proportionate share of the income and assets of each corporation inwhich it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.We do not believe we were a PFIC in 2013 and based on the nature of our business, the projected composition of our income and the projectedcomposition and estimated fair market values of our assets, we do not expect to be a PFIC in 2014 or a subsequent year. Nevertheless, because thedetermination of our PFIC status is made annually after the close of each taxable year, because we hold and expect to continue to hold a substantial amount ofcash and cash equivalents, and because the calculation of the value of our assets may be based in part on the value of the ADSs and ordinary shares, whichmay fluctuate considerably, it is difficult to 118Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentspredict whether we will be a PFIC in any taxable year. Even if we determine that we are not a PFIC after the close of our taxable year, there can be no assurancethat the Internal Revenue Service, or the IRS, will agree with our conclusion. Because PFIC status is a fact-intensive determination made on an annual basis,no assurance can be given that we are not or will not become a PFIC and our United States counsel expresses no opinion with respect to our PFIC status in2014 and also expresses no opinion with respect to our predictions or past determinations regarding our PFIC status in the future.If we are a PFIC in any taxable year during which a U.S. Holder owns ADSs, such U.S. Holder could be liable for additional taxes and interest chargesupon (1) a distribution paid during a taxable year that is greater than 125% of the average annual distributions paid in the three preceding taxable years, or, ifshorter, the U.S. Holder’s holding period for the ADSs, and (2) any gain recognized on a sale, exchange or other disposition, including a pledge, of the ADSs,whether or not we continue to be a PFIC. In these circumstances, the tax will be determined by allocating such distribution or gain ratably over the U.S.Holder’s holding period for the ADSs. The amount allocated to the current taxable year (i.e., the year in which the distribution occurs or the gain is recognized)and any year prior to the first taxable year in which we are a PFIC will be taxed as ordinary income earned in the current taxable year. The amount allocated toother taxable years will be taxed at the highest marginal rates in effect for individuals or corporations as applicable to ordinary income for each such taxableyear, and an interest charge, generally applicable to underpayments of tax, will be added to the tax. If we are a PFIC for any year during which a U.S. Holderholds the ADSs, we must generally continue to be treated as a PFIC by that holder for all succeeding years during which the U.S. Holder holds ADSs, unlesswe cease to meet the requirements for PFIC status and the U.S. Holder makes a “deemed sale” election with respect to the ADSs. If such election is made, theU.S. Holder will be deemed to have sold ADSs it holds at their fair market value on the last day of the last taxable year in which we qualified as a PFIC, andany gain from such deemed sale would be subject to the consequences described above. After the deemed sale election, the U.S. Holder’s ADSs with respect towhich the deemed sale election was made will not be treated as shares in a PFIC unless we subsequently become a PFIC.If we are a PFIC for any taxable year during which a U.S. Holder holds the ADSs or ordinary shares and one of our non-United States subsidiaries isalso a PFIC (i.e., a lower-tier PFIC), such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC andwould be subject to the rules described above on certain distributions by the lower-tier PFIC and a disposition of shares of the lower-tier PFIC even though suchU.S. Holder would not receive the proceeds of those distributions or dispositions. Each U.S. Holder is advised to consult its tax advisors regarding theapplication of the PFIC rules to any of our subsidiaries.The tax consequences that would apply if we were a PFIC would be different from those described above if a timely and valid “mark-to-market” electionis made by a U.S. Holder for the ADSs. An electing U.S. Holder generally would take into account as ordinary income each year, the excess of the fair marketvalue of the ADSs held at the end of the taxable year over the adjusted tax basis of such ADSs held by such U.S. Holder. The U.S. Holder would also takeinto account, as an ordinary loss each year, the excess of the adjusted tax basis of such ADSs over their fair market value at the end of the taxable year, butonly to the extent of the excess of amounts previously included in income over ordinary losses deducted as a result of the mark-to-market election. The U.S.Holder’s tax basis in the ADSs would be adjusted to reflect any income or loss recognized as a result of the mark-to-market election. Any gain from a sale,exchange or other disposition of the ADSs in any taxable year in which we are a PFIC would be treated as ordinary income and any loss from such sale,exchange or other disposition would be treated first as ordinary loss (to the extent of any net mark-to-market gains previously included in income) andthereafter as capital loss. If, after having been a PFIC for a taxable year, we cease to be classified as a PFIC, the U.S. Holder would not be required to take intoaccount any latent gain or loss in the manner described above and any gain or loss recognized on the sale or exchange of the ADSs would be classified as acapital gain or loss.A mark-to-market election is available to a U.S. Holder only for “marketable stock.” Generally, stock will be considered marketable stock if it is“regularly traded” on a “qualified exchange” within the meaning of 119Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsapplicable U.S. Treasury regulations. A class of stock is regularly traded during any calendar year during which such class of stock is traded, other than inde minimis quantities, on at least 15 days during each calendar quarter. The ADSs will be marketable stock as long as they remain listed and are regularlytraded. A mark-to-market election will not apply to the ADSs for any taxable year during which we are not a PFIC, but will remain in effect with respect to anysubsequent taxable year in which we become a PFIC. Such election will not apply to any subsidiary that we own. Accordingly, a U.S. Holder may continue tobe subject to the PFIC rules with respect to any lower-tier PFICs notwithstanding the U.S. Holder’s mark-to-market election for the ADSs.The tax consequences that would apply if we were a PFIC would also be different from those described above if a U.S. Holder were able to make a valid“qualified electing fund,” or QEF, election. As we do not expect to provide U.S. Holders with the information required in order to permit a QEF election, U.S.Holders should assume that a QEF election will not be available.Each U.S. Holder who is a shareholder of a PFIC must file an annual report containing certain information.The U.S. federal income tax rules relating to PFICs are complex. U.S. Holders are urged to consult their own tax advisers with respect tothe purchase, ownership and disposition of ADSs, the consequences to them of an investment in a PFIC, any elections available with respect tothe ADSs and the IRS information reporting obligations with respect to the purchase, ownership and disposition of ADSs in the event we areconsidered a PFIC.Medicare TaxIn general, a United States person that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, issubject to a 3.8% tax on the lesser of (1) the United States person’s “net investment income” for the relevant taxable year and (2) the excess of the United Statesperson’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and$250,000, depending on the individual’s circumstances). A holder’s net investment income will include its gross dividend income and its net gains from thedisposition of ADSs, unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or businessthat consists of certain passive or trading activities). If you are a United States person that is an individual, estate or trust, you are encouraged to consult yourtax advisors regarding the applicability of the Medicare tax to your income and gains in respect of your investment in the ADSs.Information Reporting and Backup WithholdingU.S. Holders may be required to file certain U.S. information reporting returns with the IRS with respect to an investment in the ADSs, including,among others, IRS Form 8938 (Statement of Specified Foreign Financial Assets). Substantial penalties may be imposed upon a U.S. Holder that fails tocomply with the required information reporting.Dividends on and proceeds from the sale or other disposition of the ADSs may be reported to the IRS unless the U.S. Holder establishes a basis forexemption. Backup withholding may apply to amounts subject to reporting if (1) the holder fails to provide an accurate taxpayer identification number orotherwise establish a basis for exemption, or (2) is described in certain other categories of persons.Any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against a U.S. Holder’s U.S. federal incometax liability if the required information is furnished by the U.S. Holder on a timely basis to the IRS.THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OFIMPORTANCE TO A PROSPECTIVE INVESTOR. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISORABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN ADSs IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES. 120Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsFrench Tax ConsequencesThe following describes the material French income tax consequences to U.S. Holders (as defined below) of purchasing, owning and disposing of theADSs and ordinary shares, or the Securities.This discussion does not purport to be a complete analysis or listing of all potential tax effects of the acquisition, ownership or disposition of oursecurities to any particular investor, and does not discuss tax considerations that arise from rules of general application or that are generally assumed to beknown by investors. All of the following is subject to change. Such changes could apply retroactively and could affect the consequences described below.France has recently introduced a comprehensive set of new tax rules applicable to French assets that are held by or in foreign trusts. These rules, amongother things, provide for the inclusion of trust assets in the settlor’s net assets for purpose of applying the French wealth tax, for the application of French giftand death duties to French assets held in trust, for a specific tax on capital on the French assets of foreign trusts not already subject to the French wealth taxand for a number of French tax reporting and disclosure obligations. The following discussion does not address the French tax consequences applicable tosecurities held in trusts. If securities are held in trust, the grantor, trustee and beneficiary are urged to consult their own tax adviser regarding the specific taxconsequences of acquiring, owning and disposing of securities.The description of the French income tax and wealth tax consequences set forth below is based on the Convention Between the Government of the UnitedStates of America and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxeson Income and Capital of August 31, 1994, or the Treaty, which came into force on December 30, 1995 (as amended by any subsequent protocols, includingthe protocol of January 13, 2009), and the tax guidelines issued by the French tax authorities in force as of the date of this Annual Report on Form 20-F.For the purposes of this discussion, the term “U.S. Holder” means a beneficial owner of securities that is (1) an individual who is a U.S. citizen orresident for U.S. federal income tax purposes, (2) a U.S. domestic corporation or certain other entities created or organized in or under the laws of the UnitedStates or any state thereof, including the District of Colombia, or (3) otherwise subject to U.S. federal income taxation on a net income basis in respect ofsecurities.If a partnership holds securities, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. Ifa U.S. Holder is a partner in a partnership that holds securities, such holder is urged to consult its own tax adviser regarding the specific tax consequences ofacquiring, owning and disposing of securities.This discussion applies only to investors that hold our securities as capital assets that have the U.S. dollar as their functional currency, that are entitledto Treaty benefits under the ‘‘Limitation on Benefits’’ provision contained in the Treaty, and whose ownership of the securities is not effectively connected to apermanent establishment or a fixed base in France. Certain U.S. Holders (including, but not limited to, U.S. expatriates, partnerships or other entitiesclassified as partnerships for U.S. federal income tax purposes, banks, insurance companies, regulated investment companies, tax-exempt organizations,financial institutions, persons subject to the alternative minimum tax, persons who acquired the securities pursuant to the exercise of employee share options orotherwise as compensation, persons that own (directly, indirectly or by attribution) 5% or more of our voting stock or 5% or more of our outstanding sharecapital, dealers in securities or currencies, persons that elect to mark their securities to market for U.S. federal income tax purposes and persons holdingsecurities as a position in a synthetic security, straddle or conversion transaction) may be subject to special rules not discussed below.U.S. Holders are urged to consult their own tax advisers regarding the tax consequences of the purchase, ownership and disposition of securities in lightof their particular circumstances, especially with regard to the ‘‘Limitations on Benefits’’ provision. 121Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsEstate and Gift Taxes and Transfer TaxesIn general, a transfer of securities by gift or by reason of death of a U.S. Holder that would otherwise be subject to French gift or inheritance tax,respectively, will not be subject to such French tax by reason of the Convention between the Government of the United States of America and the Governmentof the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Estates, Inheritances and Gifts,dated November 24, 1978, unless the donor or the transferor is domiciled in France at the time of making the gift or at the time of his or her death, or thesecurities were used in, or held for use in, the conduct of a business through a permanent establishment or a fixed base in France.Pursuant to Article 235 ter ZD of the Code général des impôts (French Tax Code, or FTC), purchases of shares or ADSs of a French company listed ona regulated market of the European Union or an exchange formally acknowledged by the French Financial Market Authority (AMF) are subject to a 0.2%French tax on financial transactions provided that the issuer’s market capitalization exceeds 1 billion euros as of December 1 of the year preceding the taxationyear. Nasdaq is not currently acknowledged by the French AMF but this may change in the future. A list of French relevant companies whose marketcapitalization exceeds 1 billion euros as of December 1 of the year preceding the taxation year is published annually by the French State.Purchases of Criteo’s securities may become subject to such tax if Criteo’s market capitalization exceeds 1 billion euros and Nasdaq is acknowledged bythe French AMF.In the case where Article 235 ter ZD of the FTC is not applicable, (i) transfers of shares issued by a listed French company are subject to uncappedregistration duties at the rate of 0.1% if the transfer is evidenced by a written statement (“acte”) executed either in France or outside France, whereas (ii)transfers of shares which are not listed are subject to uncapped registration duties at the rate of 0.1% notwithstanding the existence of a written statement(“acte”). As ordinary shares of Criteo are not listed, their transfer is subject to uncapped registration duties at the rate of 0.1% notwithstanding the existence ofa written agreement (“acte”).Wealth TaxThe French wealth tax (impôt de solidarité sur la fortune) applies only to individuals and does not generally apply to securities held by a U.S. resident,as defined pursuant to the provisions of the Treaty, provided that such U.S. Holder does not own directly or indirectly more than 25% of the issuer’s financialrights.Taxation of DividendsDividends paid by a French corporation to non-residents of France are generally subject to French withholding tax at a rate of 30%. Dividends paid by aFrench corporation in a non-cooperative State or territory, as defined in Article 238-0 A of the FTC, will generally be subject to French withholding tax at a rateof 75%. However, eligible U.S. Holders entitled to Treaty benefits under the ‘‘Limitation on Benefits’’ provision contained in the Treaty who are U.S.residents, as defined pursuant to the provisions of the Treaty, will not be subject to this 30% or 75% withholding tax rate, but may be subject to thewithholding tax at a reduced rate (as described below).Under the Treaty, the rate of French withholding tax on dividends paid to an eligible U.S. Holder who is a U.S. resident as defined pursuant to theprovisions of the Treaty and whose ownership of the ordinary shares or ADSs is not effectively connected with a permanent establishment or fixed base thatsuch U.S. Holder has in France, is generally reduced to 15%, or to 5% if such U.S. Holder is a corporation and owns directly or indirectly at least 10% of theshare capital of the issuer; such U.S. Holder may claim a refund from the French tax authorities of the amount withheld in excess of the Treaty rates of 15%or 5%, if any.For U.S. Holders that are not individuals but are U.S. residents, as defined pursuant to the provisions of the Treaty, the requirements for eligibility forTreaty benefits, including the reduced 5% or 15% withholding tax 122Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsrates contained in the ‘‘Limitation on Benefits’’ provision of the Treaty, are complicated, and certain technical changes were made to these requirements by theprotocol of January 13, 2009. U.S. Holders are advised to consult their own tax advisers regarding their eligibility for Treaty benefits in light of their ownparticular circumstances.Dividends paid to an eligible U.S. Holder may immediately be subject to the reduced rates of 5% or 15% provided that such holder establishes beforethe date of payment that it is a U.S. resident under the Treaty by completing and providing the depositary with a treaty form (Form 5000). Dividends paid to aU.S. Holder that has not filed the Form 5000 before the dividend payment date will be subject to French withholding tax at the rate of 30%, or 75% if paid in anon-cooperative State or territory (as defined in Article 238-0 A of the FTC), and then reduced at a later date to 5% or 15%, provided that such holder dulycompletes and provides the French tax authorities with the treaty forms Form 5000 and Form 5001 before December 31 of the second calendar year followingthe year during which the dividend is paid. Certain qualifying pension funds and certain other tax-exempt entities are subject to the same general filingrequirements as other U.S. Holders except that they may have to supply additional documentation evidencing their entitlement to these benefits.Form 5000 and Form 5001, together with instructions, will be provided by the depositary to all U.S. Holders registered with the depositary. Thedepositary will arrange for the filing with the French Tax authorities of all such forms properly completed and executed by U.S. Holders of ordinary shares orADSs and returned to the depositary in sufficient time so that they may be filed with the French tax authorities before the distribution in order to obtainimmediately a reduced withholding tax rate.The withholding tax refund, if any, ordinarily occurs within 12 months from filing the applicable French Treasury Form, but not before January 15 ofthe year following the calendar year in which the related dividend was paid.Tax on Sale or Other DispositionIn general, under the Treaty, a U.S. Holder who is a U.S. resident for purposes of the Treaty will not be subject to French tax on any capital gain fromthe redemption (other than redemption proceeds characterized as dividends under French domestic tax law or administrative guidelines), sale or exchange ofordinary shares or ADSs unless the ordinary shares or the ADSs form part of the business property of a permanent establishment or fixed base that the U.S.Holder has in France. Special rules apply to U.S. Holders who are residents of more than one country. F.Dividends and paying agents.Not applicable. G.Statement by Experts.Not applicable. H.Documents on display.We are subject to the information reporting requirements of the Exchange Act applicable to foreign private issuers and under those requirements will filereports with the SEC. Those reports may be inspected without charge at the locations described below. As a foreign private issuer, we are exempt from the rulesunder the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from thereporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act tofile periodic reports and financial statements with the SEC as frequently or as promptly as United States companies whose securities are registered 123Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsunder the Exchange Act. Nevertheless, we will file with the U.S. Securities and Exchange Commission an Annual Report on Form 20-F containing financialstatements that have been examined and reported on, with and opinion expressed by an independent registered public accounting firm, and we intend to submitquarterly interim consolidated financial data to the SEC under cover of the SEC’s Form 6-K.We maintain a corporate website at www.criteo.com. We intend to post our Annual Report on Form 20-F on our website promptly following it being filedwith the SEC. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report on Form 20-F. We haveincluded our website address in this Annual Report on Form 20-F solely as an inactive textual reference.You may also review a copy of this Annual Report on Form 20-F, including exhibits and any schedule filed herewith, and obtain copies of suchmaterials at prescribed rates, at the Securities and Exchange Commission’s Public Reference Room in Room 1580, 100 F Street, NE, Washington, D.C.20549-0102. You may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and otherinformation regarding registrants, such as Criteo, that file electronically with the Securities and Exchange Commission.With respect to references made in this Annual Report on Form 20-F to any contract or other document of Criteo, such references are not necessarilycomplete and you should refer to the exhibits attached or incorporated by reference to this Annual Report on Form 20-F for copies of the actual contract ordocument. I.Subsidiary Information.Not applicable. Item 11.Quantitative and Qualitative Disclosures About Market Risk.Qualitative and Quantitative Disclosures about Market RiskMarket risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our marketrisk exposure is primarily the result of fluctuations in interest rates and foreign exchange rates as well as, to a lesser extent, inflation. Please see note 4 to ourconsolidated financial statements for further information on a historical basis with respect to certain of these risks.Foreign Currency Exchange RiskWe have foreign currency risks related to our revenues and operating expenses denominated in currencies other than our functional currency, the euro,principally the U.S. dollar, the Japanese Yen, the British Pound and the Brazilian Real. Movements in foreign currencies in which we transact business willsignificantly affect future net earnings. For example, if the average value of the U.S. dollar had been 10% higher relative to the euro during 2013, our netincome would have decreased by €0.3 million, if the average value of the British Pound had been 10% higher relative to the euro during 2013, our net incomewould have decreased by €0.3 million and if the average value of the Brazilian Real had been 10% higher relative to the euro during 2013, our net income wouldhave decreased by €0.6 million.We recently began using foreign exchange derivative products to manage a portion of the risk of fluctuations in the U.S. dollar/euro exchange rate. Weidentified $30 million of future expenses and investments in U.S. dollars over 2014 for which we have entered into forward contracts to convert a portion ofour available euros into U.S. dollars for the purpose of funding these expenses and investments. The related derivative financial instruments have beenrecorded as current financial liabilities and the related value of the derivative financial instruments as of December 31, 2013 was recognized in theConsolidated Statement of Comprehensive 124Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIncome for € 0.1 million. We also decided to sell $90 million in 2014 through put and collar instruments. The related premiums have been recorded as currentfinancial assets and valued as of December 31, 2013 at €0.6 million. The currency translation of the $90 million as of December 31, 2013 generated a€0.7 million loss in financial income.We do not use derivative financial instruments for speculative purposes nor do we hedge our foreign currency exposure in a manner that would entirelyeliminate the effect of changes in foreign currency exchange rates on net income and cash flows. By their nature, derivative financial instruments involve risk,including the credit risk of non-performance by counterparties. As a result, our maximum potential loss may exceed the amount recognized on the statement offinancial position. In order to minimize counterparty credit risk, we use multiple investment grade financial institutions and limit the notional amountavailable for each counterparty. We have reviewed the counterparty risk related to these derivative positions and do not believe there is significant risk withrespect to these instruments.Interest Rate RiskWe maintain a short-term investment portfolio consisting mainly of highly liquid, short-term money market funds, which we consider to be cashequivalents. These investments earn interest at variable rates and, as a result, decreases in market interest rates would generally result in decreased interestincome. A 1.0% decline in interest rates occurring January 1, 2014 and sustained through the year ended December 31, 2014, would not be material. We do notenter into investments for trading or speculative purposes.Inflation RiskWe do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subjectto significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harmour business, financial condition and results of operations. Item 12.Description of Securities Other than Equity Securities. A.Debt Securities.Not applicable. B.Warrants and Rights.Not applicable. C.Other Securities.Not applicable. D.American Depositary Shares.The Bank of New York Mellon, as depositary, registers and delivers American Depositary Shares, also referred to as ADSs. Each ADS represents oneordinary share (or a right to receive one ordinary share) deposited with the principal Paris office of BNP Paribas or any successor, as custodian for thedepositary. Each ADS will also represent any other securities, cash or other property which may be held by the depositary in respect of the depositary facility.The depositary’s corporate trust office at which the ADSs will be administered is located at 101 Barclay Street, New York, New York 10286. Thedepositary’s principal executive office is located at One Wall Street, New York, New York 10286. 125Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsA deposit agreement among us, the depositary and the ADS holders sets out the ADS holder rights as well as the rights and obligations of the depositary.New York law governs the deposit agreement and the ADRs. A copy of the Agreement is incorporated by reference as an exhibit to this Annual Report on Form20-F.Fees and ExpensesPursuant to the terms of the deposit agreement, the holders of ADSs will be required to pay the following fees: Persons depositing or withdrawing ordinary shares or ADSs must pay: For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) • Issue of ADSs, including issues resulting from a distribution ofordinary shares or rights or other property • Cancellation of ADSs for the purpose of withdrawal, including if the depositagreement terminates$0.05 (or less) per ADS • Any cash distribution to youA fee equivalent to the fee that would be payable if securities distributed to youhad been ordinary shares and the shares had been deposited for issue of ADSs • Distribution of securities distributed to holders of deposited securities whichare distributed by the depositary to you$0.05 (or less) per ADS per calendar year, which fee will initially be set at $0.02per ADS per calendar year but may be changed at any time • Depositary servicesRegistration or transfer fees • Transfer and registration of ordinary shares on our share register to or fromthe name of the depositary or its agent when you deposit or withdraw sharesExpenses of the depositary • Cable, telex and facsimile transmissions (when expressly provided in thedeposit agreement) • Converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxes • As necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecurities • As necessaryThe depositary collects its fees for delivery and surrender of ADSs directly from investors depositing ordinary shares or surrendering ADSs for thepurpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees fromthe amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services bydeduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. Thedepositary may collect any of its fees by deduction from any cash distribution payable to ADS holders that are obligated to pay those fees. The depositary maygenerally refuse to provide for-fee services until its fees for those services are paid.From time to time, the depositary may make payments to us to reimburse or share revenue from the fees collected from ADS holders, or waive fees andexpenses for services provided, generally relating to costs and expenses arising out of establishment and maintenance of the ADS program. In performing itsduties under the deposit agreement, the depositary may use brokers, dealers or other service providers that are affiliates of the depositary and that may earn orshare fees or commissions. 126Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPART II Item 13.Defaults, Dividend Arrearages and Delinquencies.Not applicable. Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.Initial Public OfferingIn November 2013 we sold 9,294,967 ADSs, each representing one ordinary share, nominal value €0.025, in our initial public offering at a publicoffering price of $31.00 per share, for aggregate gross proceeds to us of approximately $288.1 million. The net offering proceeds to us, after deductingunderwriting discounts and commissions totaling approximately $19.4 million and offering expenses totaling approximately $7.8 million, were approximately€191.2 ($260.9 million). The offering commenced on October 14, 2013 and did not terminate before all of the securities registered in the registration statementwere sold. The effective date of the registration statement, File No. 333-191223, for our initial public offering of ADSs was October 29, 2013. J.P. MorganSecurities LLC, Deutsche Bank Securities Inc. and Jefferies LLC acted as joint book-running managers of the offering. and as representatives of theunderwriters.A portion of the net proceeds from our initial public offering was used for general corporate purposes. The balance is held in cash and cash equivalentsand is intended to also be used for general corporate purposes. None of the net proceeds of our initial public offering were paid directly or indirectly to anydirector, officer, general partner of ours or to their associates, persons owning ten percent or more of any class of our equity securities, or to any of ouraffiliates. Item 15.Controls and Procedures.Our chief executive officer and chief financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of December 31, 2013, have concluded that, as of such date, our disclosure controls and procedures were effective and ensuredthat information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management,including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure and is recorded, processed,summarized and reported within the time periods specified by the SEC’s rules and forms.This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of thecompany’s registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly publiccompanies.There were no changes in our internal control over financial reporting that occurred during the period covered by this annual report that have materiallyaffected, or that are reasonably likely to materially affect, our internal control over financial reporting. Item 15T.Controls and Procedures.Not applicable. Item 16.Reserved.Not applicable. 127Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsItem 16A.Audit Committee Financial Expert.Our Board has determined that Mr. de Pesquidoux is an audit committee financial expert as defined by the Securities and Exchange Commission rulesand has the requisite financial sophistication under the applicable rules and regulations of the Nasdaq Stock Market. Mr. de Pesquidoux is independent assuch term is defined in Rule 10A-3 under the Exchange Act and under the listing standards of the New York Stock Exchange. Item 16B.Code of Business Conduct and EthicsWe have adopted a Code of Business Conduct and Ethics, or the Code of Conduct, that is applicable to all of our employees, executive officers anddirectors. The Code of Conduct is available on our website at http://ir.criteo.com/governance.cfm. The nomination and corporate governance committee of ourboard of directors is responsible for overseeing the Code of Conduct and is required to approve any waivers of the Code of Conduct for employees, executiveofficers and directors. We expect that any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website. Item 16C.Principal Accountant Fees and Services.Deloitte & Associés has served as our independent registered public accounting firm for 2012 and 2013. Our accountants billed the following fees to usfor professional services in each of those fiscal years: Year Ended December 31, 2013 2012 (euro in thousands) Audit Fees €1,831 €286 Total €1,831 €286 “Audit Fees” are the aggregate fees billed for the audit of our annual financial statements. This category also includes services that generally theindependent accountant provides, such as consents and assistance with and review of documents filed with the SEC. In 2013, “Audit Fees” also include feesbilled for assurance and related services regarding our initial public offering.“Audit-Related Fees” are the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit and are notreported under Audit Fees.“Tax Fees” are the aggregate fees billed for professional services rendered by the principal accountant for tax compliance, tax advice and tax planningrelated services.“Other Fees” are any additional amounts billed for products and services provided by the principal accountant.There were no “Audit Related Fees,” “Tax Fees” or billed or paid during 2012 or 2013.Neither our audit committee nor our board of directors has adopted a pre-approval policy for the engagement of our independent accountant to performcertain audit and non-audit services. Item 16D.Exemptions from the Listing Standards for Audit Committees.Not applicable. 128Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsItem 16EPurchases of Equity Securities by the Issuer and Affiliated Purchasers.Not applicable. Item 16F.Change in Registrant’s Certifying Accountant.Not applicable. Item 16G.Corporate Governance.OverviewAs a French société anonymes, we are subject to various corporate governance requirements under French law. In addition, as a foreign private issuerlisted on Nasdaq, we are subject to the Nasdaq corporate governance listing standards. However, the Nasdaq’s listing standards provide that foreign privateissuers are permitted to follow home country corporate governance practices in lieu of the Nasdaq rules, with certain exceptions. Currently, we intend tocomply with the corporate governance listing standards of Nasdaq to the extent possible under French law.The following are the significant ways in which our corporate governance practices differ from those required for U.S. companies listed on Nasdaq:Audit Committee Responsibilities. As a foreign private issuer, we are required to comply with Rule 10A-3 of the U.S. Securities Exchange Act of1934, as amended, or the Exchange Act, relating to audit committee composition and responsibilities. Rule 10A-3 provides that the audit committee must havedirect responsibility for the nomination, compensation and choice of our auditors, as well as control over the performance of their duties, management ofcomplaints made, and selection of consultants. However, if the laws of a foreign private issuer’s home country require that any such matter be approved bythe board of directors or the shareholders, the audit committee’s responsibilities or powers with respect to such matter may instead be advisory. Under Frenchlaw, the audit committee may only have an advisory role and appointment of our statutory auditors, in particular, must be decided by the shareholders at ourannual meeting.Equity Compensation Plans. Under French law, we must obtain shareholder approval at a general meeting of the shareholders in order to adopt anequity compensation plan. Generally, the shareholders then delegate to our board of directors the authority to decide on the specific terms of the grant of equitycompensation, within the limits of the shareholders’ authorization.Quorum. Nasdaq rules require a listed company to specify that the quorum for any meeting of the holders of common stock be at least 33 1/3% of theoutstanding shares of the Company’s common voting stock. Consistent with French Law, Criteo’s By-laws provide that a quorum requires the presence ofshareholders having at least (1) 20% of the shares entitled to vote in the case of an ordinary shareholders’ general meeting or an extraordinary shareholders’general meeting where shareholders are voting on a capital increase by capitalization of reserves, profits or share premium, or (2) 25% of the shares entitled tovote in the case of any other extraordinary shareholders’ general meeting. If a quorum is not present, the meeting is adjourned. There is no quorum requirementwhen an ordinary general meeting is reconvened, but the reconvened meeting may consider only questions which were on the agenda of the adjourned meeting.When an extraordinary general meeting is reconvened, the quorum required is 20% of the shares entitled to vote, except where the reconvened meeting isconsidering capital increases through capitalization of reserves, profits or share premium. For these matters, no quorum is required at the reconvened meeting.If a quorum is not present at a reconvened meeting requiring a quorum, then the meeting may be adjourned for a maximum of two months. Item 16H.Mine Safety Disclosure.Not applicable. 129Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPART III Item 17.Financial Statements.See pages F-1 through F-58 of this Annual Report on Form 20-F. Item 18.Financial Statements.Not applicable. Item 19.Exhibits.The following exhibits are filed as part of this Annual Report on Form 20-F: Incorporated by ReferenceExhibit Description Schedule/Form FileNumber Exhibit FileDate1.1# By-laws (statuts) of the registrant (English translation) 2.1 Form of Deposit Agreement, including the Form of American DepositaryReceipt F-1 333-191223 4.1 October 2, 20134.1 Commercial Lease between Orosdi and the registrant dated January 20,2012 (English translation) F-1 333-191223 10.1 October 2, 20134.2 Sublease Agreement between DST Realty of NY and Criteo Corp., datedApril 12, 2012 F-1 333-191223 10.2 October 2, 20134.3 Form of Registration Rights Agreement by and among the registrant andcertain investors signatory thereto, dated as of August 30, 2013 F-1 333-191223 10.3 October 23, 20134.4† Form of Indemnification Agreement between the registrant and each of itsexecutive officers and directors F-1 333-191223 10.4 October 23, 20134.5† Non-Compete Agreement between the registrant and each of Messrs.Rudelle, Le Ouay and Niccoli F-1 333-191223 10.5 October 2, 20134.6† Stock Option Plans—2009, 2010, 2011, 2012, 2013 (including forms ofStock Option Grant Agreement and Exercise Notice) F-1 333-191223 10.6 October 2, 20134.7† Summary of BSA Plan F-1 333-191223 10.7 September 18, 20134.8† Summary of BSPCE Plan F-1 333-191223 10.8 September 18, 20134.9† 2013 Free Share Plan F-1 333-191223 10.9 October 2, 20134.10† Form of BSA Grant Document (English translation) F-1 333-191223 10.10 September 18, 20134.11† Form of BSPCE Grant Document (English translation) F-1 333-191223 10.11 September 18, 2013 130Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Incorporated by ReferenceExhibit Description Schedule/Form FileNumber Exhibit FileDate4.12† Employment Agreement between the registrant and Benoit Fouilland,dated November 18, 2011 (English translation) F-1 333-191223 10.12 October 2, 20134.13† Employment Agreement between registrant and Jonathan Wolf, datedMay 18, 2009 F-1 333-191223 10.13 September 18, 20134.14†# Employment Agreement between registrant and Eric Eichmann,effective as of March 2013, and related side letters 8.1# List of subsidiaries of the registrant 12.1# Certificate of Chief Executive Officer pursuant to Securities ExchangeAct Rules 13a-14(a) and 15d-14(a) as adopted pursuant to §302 of theSarbanes-Oxley Act of 2002 12.2# Certificate of Chief Financial Officer pursuant to Securities ExchangeAct Rules 13a-14(a) and 15d-14(a) as adopted pursuant to §302 of theSarbanes-Oxley Act of 2002 13.1# Certificate of Chief Executive Officer pursuant to 18 U.S.C. §1350,as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 13.2# Certificate of Chief Financial Officer pursuant to 18 U.S.C. §1350, asadopted pursuant to §906 of the Sarbanes-Oxley Actof 2002 15.1# Consent of Deloitte & Associés †Indicates management contract or compensatory plan.#Filed herewith. 131Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIndex to Consolidated Financial Statements Page Annual Financial Statements for the Years Ended December 31, 2011, 2012 and 2013: Report of Deloitte & Associés, Independent Registered Public Accounting Firm F-2 Consolidated Statements of Income for the Years Ended December 31, 2011, 2012 and 2013 F-3 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2011, 2012 and 2013 F-4 Consolidated Statements of Financial Position as of December 31, 2011, 2012 and 2013 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2011, 2012 and 2013 F-6 Consolidated Statements of Changes in Equity for the Years Ended December 31, 2011, 2012 and 2013 F-7 Notes to the Consolidated Financial Statements F-8 F-1Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsReport of Independent Registered Public Accounting FirmTo the Board of Directors and Shareholders of Criteo S.A.Paris, FranceWe have audited the accompanying consolidated statements of financial position of Criteo S.A. and subsidiaries (the “Company”) as of December 31, 2011,2012 and 2013, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in theperiod ended December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinionon these financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is notrequired to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal controlover financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion onthe effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Criteo S.A. and subsidiaries as ofDecember 31, 2011, 2012 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013,in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board./s/ Deloitte & AssociésNeuilly-sur-Seine, FranceMarch 5, 2014Represented by Fabien Brovedani F-2Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsConsolidated Statements of Income Year Ended December 31, Notes 2011 2012 2013 (in thousands of euros,except per share data) Revenue 5 €143,562 €271,855 €443,960 Cost of revenue: Traffic acquisition costs 6 (79,060) (157,707) (264,952) Other cost of revenue (5,690) (12,662) (21,956) Gross profit 58,812 101,486 157,052 Operating expenses: Research and development expenses 6/7 (8,786) (14,285) (32,175) Sales and operations expenses 6/7 (30,830) (58,047) (82,816) General and administrative expenses 6/7 (9,309) (20,208) (31,387) Total operating expenses (48,925) (92,540) (146,378) Income from operations 9,887 8,946 10,674 Financial income (expense) 9 628 (1,559) (6,868) Income before taxes 10,515 7,387 3,806 Provision for income taxes 10 (4,391) (6,556) (2,413) Net income €6,124 €831 €1,393 Net income available to shareholders of Criteo S.A. €6,124 €981 €1,065 Net income available to non-controlling interests €— €(150) €328 Net income allocated to shareholders per share: Basic 19 €0.140 €0.022 €0,022 Diluted 19 €0.129 €0.020 €0,019 The accompanying notes form an integral part of these consolidated financial statements. F-3Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsConsolidated Statements of Comprehensive Income Year Ended December 31, 2011 2012 2013 (in thousands of euros) Net income €6,124 €831 €1,393 Foreign currency translation differences, net of taxes (262) 383 1,317 Foreign currency translation differences (262) 383 1,317 Income tax effect — — — Actuarial gains (losses) on employee benefits, net of taxes — (255) (40) Actuarial gains (losses) on employee benefits — (300) (47) Income tax effect — 45 7 Financial instruments, net of taxes — — (83) Fair value change on financial instruments — — (98) Income tax effect — — 15 Comprehensive income €5,862 €959 €2,587 Attributable to shareholders of Criteo S.A. €5,862 €1,074 €2,254 Attributable to non-controlling interests €— €(115) €333 The accompanying notes form an integral part of these consolidated financial statements. F-4Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsConsolidated Statements of Financial Position Year Ended December 31, Notes 2011 2012 2013 (in thousands of euros) Goodwill 12 €— €— €4,191 Intangible assets 13 300 721 6,624 Property, plant and equipment 14 5,847 14,566 24,716 Non-current financial assets 15 916 6,924 7,627 Deferred tax assets 10 1,238 1,026 4,486 Total non-current assets 8,301 23,237 47,644 Trade receivables, net of allowances 16 33,423 60,685 87,643 Current tax assets 10 18 1,866 8,014 Other current assets 17 5,850 8,080 13,466 Cash and cash equivalents 18 16,382 43,262 234,343 Total current assets 55,673 113,893 343,466 Total assets €63,974 €137,130 €391,110 Year Ended December 31, Notes 2011 2012 2013 (in thousands of euros) Share capital 19 €368 €1,178 €1,421 Additional paid-in capital 17,262 46,542 241,468 Currency translation reserve (317) 72 1,384 Consolidated reserves 2,369 11,913 19,523 Retained earnings 6,124 981 1,065 Equity—attributable to shareholders of Criteo S.A. 25,806 60,686 264,861 Non-controlling interests — (245) 213 Total equity 25,806 60,441 265,074 Financial liabilities—non current portion 22 — 4,181 6,119 Retirement benefit obligation 21 165 582 925 Deferred tax liabilities — 15 303 Total non-current liabilities 165 4,778 7,347 Financial liabilities—current portion 22 877 2,072 5,197 Provisions 691 755 830 Trade payables 22,260 50,340 75,889 Current tax liabilities 3,928 3,203 1,549 Other current liabilities 10,247 15,541 35,224 Total current liabilities 24 38,003 71,911 118,689 Total liabilities 38,168 76,689 126,036 Total equity and liabilities €63,974 €137,130 €391,110 The accompanying notes form an integral part of these consolidated financial statements. F-5(1)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsConsolidated Statements of Cash Flows Year Ended December 31, 2011 2012 2013 (in thousands of euros) Net income €6,124 €831 €1,393 Non-cash and non-operating items 9,148 15,920 21,558 Amortization and provisions 3,360 5,751 12,195 Share-based payment expense 1,395 3,556 6,876 Net gain or loss on disposal of non-current assets (2) 31 45 Interest paid — 19 9 Non-cash financial income and expenses 4 8 20 Change in deferred taxes (157) 219 (3,697) Income tax for the period 4,548 6,336 6,110 Changes in working capital related to operating activities (5,541) 3,427 12,965 (Increase)/decrease in trade receivables (17,862) (29,041) (31,433) Increase/(decrease) in trade payables 10,418 30,304 33,704 (Increase)/decrease in other current assets (1,257) (2,616) (5,560) Increase/(decrease) in other current liabilities 3,160 4,780 16,254 Income taxes paid (2,764) (8,366) (11,211) Cash from operating activities 6,967 11,812 24,705 Acquisition of intangible assets, property, plant and equipment (6,400) (13,584) (22,003) Proceeds from disposal of intangible assets, property, plant and equipment — 11 90 Change in other non-current financial assets (125) (6,037) (6,220) Cash used for investing activities (6,525) (19,610) (28,133) Issuance of long-term borrowings — 6,100 8,000 Repayments of borrowings (230) (436) (3,450) Interest paid — (19) (9) Proceeds from capital increase 471 30,081 192,175 Change in other financial liabilities — 177 — Cash from financing activities 241 35,903 196,716 Change in net cash and cash equivalents 683 28,105 193,289 Net cash and cash equivalents at beginning of period 15,187 15,685 43,262 Effect of exchange rate changes on cash and cash equivalents (185) (528) (2,208) Net cash and cash equivalents at end of period €15,685 €43,262 €234,342 See note 19The accompanying notes form an integral part of these consolidated financial statements. F-6(2)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsConsolidated Statements of Changes in Equity Sharecapital Additionalpaid-incapital Currencytranslationreserve Consolidatedreserves Retainedearning Equityattributable toshareholdersof Criteo S.A. Non-controllinginterests Totalshareholders’equity (in thousands of euros) Balance at January 1, 2011 360 16,799 (59) (3,733) 4,714 18,081 — 18,081 Net income — — — — 6,124 6,124 — 6,124 Other comprehensive income (loss) — — (262) — — (262) — (262) Total comprehensive income (loss) — — (262) — 6,124 5,862 — 5,862 Allocation of net income (loss) from prior period — — — 4,714 (4,714) — — — Issuance of ordinary and preferred shares 8 463 — — — 471 — 471 Share-based compensation — — — 1,395 — 1,395 — 1,395 — — 4 (7) — (3) — (3) Balance at December 31, 2011 368 17,262 (317) 2,369 6,124 25,806 — 25,806 Net income (loss) — — — — 981 981 (150) 831 Other comprehensive income (loss) — — 348 (255) — 93 35 128 Total comprehensive income (loss) — — 348 (255) 981 1,074 (115) 959 Allocation of net income (loss) from prior period — — — 6,124 (6,124) — — — Issuance of ordinary and preferred shares 810 29,271 — — — 30,081 — 30,081 Share-based compensation — — — 3,485 — 3,485 72 3,557 Other changes in equity — — 41 199 — 240 (202) 38 — 9 — (9) — — — — Balance at December 31, 2012 €1,178 €46,542 €72 €11,913 €981 €60,686 €(245) €60,441 Net income 1,065 1,065 328 1,393 Other comprehensive income (loss) — — 1,312 (123) — 1,189 5 1,194 Total comprehensive income (loss) 1,312 (123) 1,065 2,254 333 2,587 Allocation of net income (loss) from prior period — — — 981 (981) — — — Issuance of ordinary and preferred shares 243 194,926 — — — 195,169 — 195,169 Share-based compensation — — — 6,750 — 6,750 125 6,876 Other changes in equity — — — 2 — 2 — 2 Balance at December 31, 2013 €1,421 €241,468 €1,384 €19,523 €1,065 €264,861 €213 €265,075 See note 19A portion of consolidated reserves is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regulartransfer.The accompanying notes form an integral part of these consolidated financial statements. F-7(1)(1)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNotes to the Consolidated Financial StatementsCriteo S.A. is a global technology company specialized in digital performance advertising. We leverage large volumes of granular data to efficiently andeffectively engage and convert customers on behalf of our advertiser clients. In these notes, Criteo S.A. is referred to as the Parent and together with itssubsidiaries, collectively, as the Company or we. The Company uses its proprietary predictive software algorithms coupled with its deep insights intoexpressed consumer intent and purchasing habits to price and deliver highly relevant and personalized internet and mobile display advertisements in real time.Note 1—Significant Events and Transactions of the PeriodsChanges in capital2-for-5 Reverse Share SplitOn August 2, 2013, our shareholders approved a 2-for-5 reverse split of our outstanding shares, effective on August 20, 2013 (15 days afternotice of the split was published in the French Bulletin des Annonces Légales, or BALO). All share-related disclosures, including per value, shareprices, number of ordinary shares, preferred shares, share options and warrants, exercise prices of share options and warrants and related fair value pershare, and net income (loss) per share calculations, have been recast to reflect the 2-for-5 reverse share split for all periods presented.Share capital increase—Initial Public Offering (IPO) on NasdaqOn October 29, 2013, according to the authorization given by the Parent’s shareholders General Meeting on August 2, 2013, the board of Directorsapproved a share capital increase resulting from our Initial Public Offering (IPO). On November 3, 2013, the board of Directors approved acomplementary share capital increase resulting from the exercise of the overallotment option from the underwriters. The total net proceeds amounted to$269 million (€197.0 million) (see note 19).Considering the exposure of the proceeds received to the $/€ exchange rate fluctuations, we assessed our future expenses and investmentsdenominated in $ and have set up an hedging strategy as described in note 4.Changes in the scope of consolidationAD-X TrackingOn July 11, 2013, we acquired 100% of the equity of AD-X Limited, or ADX, a mobile analytics and attribution technology company. Ad-Xprovides a solution for businesses to track and optimize mobile display advertising campaigns delivered to smartphones and tablets through mobileadvertising networks and other marketing solutions.This business combination is accounted for under the acquisition method in accordance with revised IFRS 3—Business Combinations (“IFRS3”). The determination of the fair values of assets acquired and liabilities assumed has been performed and the impact of the transaction is reflected inour consolidated financial statements as of December 31, 2013. The goodwill of €4.2 million arising from the acquisition (see note 12) consists largely ofthe synergies and economies of scale expected from combining the operations of Ad-X and the Company.Creation of Criteo Advertising (Beijing) Co.Ltd and Criteo Singapore Pte.LtdThe companies are 100% held and controlled by the Company. They are included in the Company’s consolidation scope as of December 31, 2013. F-8Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNote 2—General Information and Statement of ComplianceGeneral InformationThe accompanying Consolidated Financial Statements and notes present the operations of Criteo S.A., and its subsidiaries. Criteo S.A., the parentcompany, is a corporate venture under French law (société anonyme) and has its registered office located at 32, rue Blanche, 75009 Paris.Our Consolidated Financial Statements as of December 31, 2013 have been prepared under the responsibility of Criteo S.A.’s management. TheConsolidated Financial Statements were approved by the Board of Directors of Criteo S.A. on March 4, 2014.All amounts are expressed in thousands of euros, unless stated otherwise.The closing date of Consolidated Financial Statements is December 31 of each year. Individual statements included into these Consolidated FinancialStatements have been prepared at the closing date of the consolidated statements, i.e. December 31, and cover the twelve-month period then ended.Statement of ComplianceOur Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by theInternational Accounting Standard Board (“IASB”) and whose application is mandatory for the year ending December 31, 2013. Comparative figures arepresented for December 31, 2011 and 2012.IFRS include International Financial Reporting Standards (IFRS), International Accounting Standards (“the IAS”), as well as the interpretations issuedby the Standing Interpretations Committee (“the SIC”), and the International Financial Reporting Interpretations Committee (“IFRIC”). The main accountingmethods used to prepare the Consolidated Financial Statements are described below. These methods were used for all years presented.The following new standards and amendments have been adopted by Criteo from January 1, 2013 but have had no impact on the Company’sconsolidated financial statements: • IFRS 10 Consolidated Financial Statements. This requires consolidation of an investee based on control, i.e. when it is exposed, or has rights,to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee • IFRS 11 Joint Arrangements. This requires classification of joint arrangements as either joint operations, where assets, liabilities, revenues andexpenses are accounted for proportionally in accordance with the agreement, or as joint ventures, which are accounted for under the equity method. • IFRS 12 Disclosures of interests in other entities. This brings together the disclosure requirements that apply to subsidiaries, associatedcompanies, joint ventures, structured entities and unconsolidated structured entities. • IFRS 13 Fair value measurement. This standard requires or permits fair value measurements or disclosures and provides a single IFRSframework for measuring fair value and requires disclosures about fair value measurement. • Amendment to IAS 1 Presentation of Financial Statements. This amendment introduces a requirement to group items presented in “Othercomprehensive income” on the basis of whether they are potentially reclassifiable to profit or loss subsequently. F-9Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsRecently-issued accounting pronouncements that may be relevant to the Company’s operations but have not yet been adopted are outlined below.Management has not yet completed its assessment of these pronouncements and is therefore not currently able to estimate reliably the impact of their adoptionon the Company’s results or financial position. • In 2009, 2010 and 2011, IFRS 9 Financial Instruments was issued which will substantially change the classification and measurement offinancial instruments, hedging requirements and the recognition of certain fair value changes in the consolidated financial statements. Currently,only new requirements on the classification and measurement for financial assets and financial liabilities have been issued. The mandatoryeffective date for requirements issued as part of IFRS 9 will be determined once the project is closer to completion. • IFRIC 21 Levies, an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets, was issued in May 2013 and isrequired to be adopted on January 1, 2014. The interpretation clarifies that the obligating event giving rise to a liability to pay a levy to agovernment agency is the activity that triggers the payment.The accounting policies and measurement principles adopted for the consolidated financial statements as of and for the year ended December 31, 2013are the same as those used in the audited consolidated financial statements as of and for the year ended December 31, 2012.Note 3—Principles and Accounting MethodsBasis of PreparationThe Consolidated Financial Statements have been prepared assuming a going concern and using the historical cost principle with the exception of certainassets and liabilities that are measured at fair value in accordance with IFRS. The categories concerned are detailed in the following notes. F-10Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsConsolidation MethodsWe have control over all our subsidiaries, and consequently they are all fully consolidated. The table below presents at each period’s end and for allentities included in the consolidation scope the following information: • Country of incorporation and • Percentage of voting rights and ownership interests. Year Ended December 31, 2011 2012 2013 Country VotingRights OwnershipInterest VotingRights OwnershipInterest VotingRights OwnershipInterest ConsolidationMethodParent Criteo S.A. France 100% 100% 100% 100% 100% 100% Parent CompanyFrench subsidiary Criteo France SAS France 100% 100% 100% 100% 100% 100% Fully consolidatedForeign subsidiaries Criteo Ltd UnitedKingdom 100% 100% 100% 100% 100% 100% Fully consolidatedCriteo Corp United States 100% 100% 100% 100% 100% 100% Fully consolidatedCriteo GmbH Germany 100% 100% 100% 100% 100% 100% Fully consolidatedCriteo KK Japan — — 66% 66% 66% 66% Fully consolidatedCriteo Do Brasil LTDA Brazil — — 100% 100% 100% 100% Fully consolidatedCriteo BV Netherlands — — 100% 100% 100% 100% Fully consolidatedCriteo Pty Australia — — 100% 100% 100% 100% Fully consolidatedCriteo Srl Italy — — 100% 100% 100% 100% Fully consolidatedCriteo Advertising (Beijing)Co. Ltd China — — — — 100% 100% Fully consolidatedCriteo Singapore Pte. Ltd Singapore — — — — 100% 100% Fully consolidatedAd-X Ltd UnitedKingdom — — — — 100% 100% Fully consolidatedFunctional Currency and Translation of Financial Statements in Foreign CurrencyThe Consolidated Financial Statements are presented in euros, which is also the functional currency of the Parent. The statements of financial positionof consolidated entities having a functional currency different from the euro are translated into euros at the closing exchange rate (spot exchange rate at thestatement of financial position date), and the statements of income, statements of comprehensive income and statements of cash flow of such consolidatedentities are translated at the average period to date exchange rate. The resulting translation adjustments are included in equity under the caption “Cumulativetranslation adjustment” in the Consolidated Statements of Changes in Equity.Conversion of Foreign Currency TransactionsForeign currency transactions are converted to euros at the rate of exchange applicable on the transaction date. At period-end, foreign currency monetaryassets and liabilities are converted at the rate of exchange prevailing on that date. The resulting exchange gains or losses are recorded in the ConsolidatedStatements of Income in “Other financial income (loss)” with the exception of exchange differences arising from monetary items that form part of the reportingentity’s net investment in a foreign operation which are recognized in other comprehensive income; they will be recognized in profit or loss on disposal of thenet investment. F-11Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsBusiness CombinationsThe acquisition method is used in accounting for business combinations. The consideration transferred to obtain control of a subsidiary is calculated asthe sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Company, which includes the fairvalue of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.Identifiable assets acquired and liabilities assumed are recognized in a business combination regardless of whether they have been previously recognizedin the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition date fairvalues.Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the fair value of the consideration transferredover the sum of the recognized amount of any non-controlling interest in the acquiree and the acquisition-date fair values of identifiable net assets.When the cost of the acquisition is below the fair value of the Company’s share in the assets, liabilities and contingent liabilities of the acquiree, thedifference is recognized directly in the income statement.If the initial accounting for a business combination can only be determined provisionally, provisional values of the assets and liabilities should beadjusted within one year from the acquisition date, in accordance with IFRS 3.The impact of capital gains or losses and of depreciation charges and reversals recognized after 12 months of the acquisition date in relation to the valuesassigned to assets acquired and liabilities assumed at the time of the first consolidation is recognized prospectively, as the income of the period of change andfuture periods, if any, without adjusting Goodwill except in the case of the correction of an error, in accordance with IAS 8—Accounting policies, changes inaccounting estimates and errors.Intangible Assets (excluding Goodwill)Acquired intangible assets are accounted for at acquisition cost, less cumulative amortization and any impairment loss. Acquired intangible assets areprimarily composed of software amortized on a straight-line basis over their estimated useful lives comprised between one and five years. Intangible assets arereviewed for impairment whenever events or changes in circumstances such as, but not limited to, significant declines in revenue, earnings or cash flows ormaterial adverse changes in the business climate indicate that the carrying amount of an asset may be impaired.Costs related to customized internal-use software that have reached the development stage are capitalized. These capitalized costs include costs associatedwith our internal SAP solution, such as our licenses related thereto and the interfaces for, and testing of, this solution. Capitalization of such costs beginswhen the preliminary project stage is complete and stops when the project is substantially complete and is ready for its intended purpose. In making thisdetermination, several analyses for each phase were performed, including analysis of the feasibility, availability of resources, intention to use and futureeconomic benefits. Amortization of these costs begins when capitalization stops and is calculated on a straight-line basis over the assets’ useful lives estimatedat three to five years. Other pre- and post-implementation costs related to our internal SAP solution have been expensed as incurred.Our research and development efforts are focused on enhancing the performance of our solution and improving the efficiency of the services we deliver toour clients. All development costs, principally headcount-related costs, are expensed as management determines that technological feasibility is reached shortlybefore the release of those products and as a result, the development costs incurred after the establishment of technological feasibility and before the release ofthose products are not material and accordingly are expensed as incurred. F-12Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsProperty, Plant and EquipmentProperty, plant and equipment are accounted for at acquisition cost less cumulative depreciation and any impairment loss.Depreciation is calculated on a straight-line basis over the assets’ estimated useful lives as follows: Fixtures and Fittings (mainly composed of leasehold improvements) 5 to 10 years Furniture and Equipment (mainly composed of datacenter and office equipment) 1 to 5 years Leasehold improvements are depreciated over their useful life or over the lease term, whichever is shorter.The gains and losses on disposal of assets are determined by comparing selling price with the net book value of the disposed asset. Residual values andthe duration of assets’ useful lives are revised and, if applicable, adjusted at each closing date for each reporting period.Impairment of AssetsGoodwill, Intangible Assets, Property, Plant and EquipmentIn accordance with IAS 36—Impairment of Assets, whenever events or changes in market conditions indicate a risk of impairment of intangibleassets, property, plant and equipment, a detailed review is carried out in order to determine whether the net carrying amount of such assets remains lower thantheir recoverable amount, which is defined as the greater of fair value (less costs to sell) and value in use. Goodwill is tested once a year for impairment .Valuein use is measured by discounting the expected future cash flows from continuing use of the asset and its ultimate disposal.In the event that the recoverable value is lower than the net carrying value, the difference is recognized as an impairment loss. Impairment losses forproperty, plant and equipment or intangible assets with finite useful lives can be reversed if the recoverable value becomes higher than the net carrying value(but not exceeding the loss initially recorded).LeasesAssets acquired under finance leases are capitalized when the lease contract transfers substantially all the risks and rewards incidental to ownership tous. Criteria used to assess whether a contract should be classified as a finance lease or an operating lease include: • the term of the lease compared with the useful life of the asset; • total future lease payments compared with fair value of the asset financed; • whether or not ownership is transferred at the end of the lease term; • existence of a purchase option favorable to the lessee; and • type of asset leased.Financial Assets and Liabilities, Excluding Derivative Financial InstrumentsFinancial assets, excluding cash, consist exclusively in loans and receivables. Loans and receivables are non-derivative financial assets with a payment,which is fixed or can be determined, not listed on an active market. They are included in current assets, except those that mature more than twelve monthsafter the reporting date. F-13Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsLoans are measured at amortized cost using the effective interest method. The recoverable amount of loans and advances is estimated whenever there isan indication that the asset may be impaired and at least on each reporting date. If the recoverable amount is lower than the carrying amount, an impairmentloss is recognized in the Consolidated Statements of Income.We carry our accounts receivable at net realizable value. On a periodic basis, our management evaluates our accounts receivable and determines whetherto provide an allowance or if any accounts should be written down and charged to expense as a bad debt. The evaluation is based on a past history ofcollections, current credit conditions, the length of time the account is past due and a past history of write downs. A receivable is considered past due if wehave not received payments based on agreed-upon terms.A higher default rate than estimated or a deterioration in our clients’ creditworthiness could have an adverse impact on our future results. Allowances fordoubtful accounts on trade receivables are recorded in “Sales and operations expenses” in our Consolidated Statements of Income. We generally do not requireany security or collateral to support our receivables.Financial liabilities are initially recorded at their fair value at the transaction date. Subsequently they are measured at amortized cost using the effectiveinterest method.Derivative financial instrumentsWe buy and sell derivative financial instruments (mainly put, forward, forward buying and selling) with a view to managing and reducing our exposureto the risk of exchange rate fluctuations. We deal only with first-class financial institutions. Under IAS 39, financial instruments may only be classified ashedges when we can demonstrate and document the effectiveness of the hedging relationship at inception and throughout the life of the hedge.The effectiveness of the hedge is determined by reference to changes in the value of the derivative instrument and the hedged item. The ratio must remainwithin 80% to 125%.Derivative financial instruments are recognized in the balance sheet at their market value on the reporting date in financial current assets or liabilities.Changes in fair value are recorded as follows: • cash flow hedges: the portion of the gain or loss on the financial instrument that is determined to be an effective hedge is recorded directly to equity.The ineffective portion is recorded to the income statement; • fair value hedges and financial instruments not designated as hedges : changes in fair value are recorded to the income statement.Market value is the price quoted by an external provider.In accordance with amendment to IFRS 7—Financial instruments: Disclosures, financial instruments are presented in three categories based on ahierarchical method used to determine their fair value : a) level one : fair value calculated using quoted prices in an active market for identical assets andliabilities ; b) level two : fair value calculated using valuation techniques based on observable market data such as prices of similar assets and liabilities orparameters quoted in an active market; c) level three: fair value calculated using valuation techniques based wholly or partially on unobservable inputs suchas prices in an active market or a valuation based on multiples for unlisted companies. F-14Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCash and Cash EquivalentsCash includes cash on hand and demand deposits with banks. Cash equivalents include short-term, highly liquid investments, for which the risk ofchanges in value is considered to be insignificant. Demand deposits therefore meet the definition of cash equivalents. Cash equivalents are measured at fairvalue and any changes are recognized in the Consolidated Statements of Income.Employee BenefitsDepending on the laws and practices of the countries in which we operate, employees may be entitled to compensation when they retire or to a pensionfollowing their retirement. For state-managed plans and other defined contribution plans, we recognize them as expenses when they become payable, ourcommitment being limited to our contributions.In accordance with IAS 19, the liability with respect to defined benefit plans is estimated using the projected unit credit method. Under this method,each period of service gives rise to an additional unit of benefit entitlement and each unit is valued separately to obtain the final obligation. The final amount ofthe liability is then discounted.The main assumptions used to calculate the liability are: • discount rate; • inflation rate; • future salary increases; and • employee turnover.Service costs are recognized in profit or loss and are allocated by function.Finance costs are presented as part of “Financial income (expense)” in the Consolidated Statements of Income.Effective January 1, 2012, we started recognizing actuarial gains and losses in other comprehensive income. Actuarial gains and losses arise as a resultof changes in actuarial assumptions or experience adjustments (differences between the previous actuarial assumptions and what has actually occurred). Webelieve it results in providing more relevant information, minimizing the effect of volatility in the Consolidated Statement of Income. Prior periods have notbeen modified as the effect of the change in accounting policy on prior periods is immaterial.ProvisionsWe recognize provisions in accordance with IAS No. 37—Provisions, Contingent Liabilities and Contingent Assets, if the following three conditionsare met: • we have a present obligation (legal or constructive) towards a third-party that arises from an event prior to the closing date; • it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and • the obligation amount can be estimated reliably.With respect to litigations and claims that may result in a provision to be recognized, we exercise significant judgment in measuring and recognizingprovisions or determining exposure to contingent liabilities that are related to pending litigation or other outstanding claims. These judgment and estimates aresubject to change as new information becomes available. F-15Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsRevenue RecognitionWe sell personalized display advertisements featuring product-level recommendations either directly to clients or to advertising agencies, which wecollectively refer to as our clients, and generate revenue when a user clicks on the banner ad. We price our advertising campaigns on a cost per click (“CPC”)model based on the number of clicks generated by users on each advertising campaign.Revenue is recognized when the related services are delivered based on the specific terms of the contract, which are commonly based on specified CPCsand related campaign budgets. We recognize revenue when four basic criteria are met: (1) persuasive evidence exists of an arrangement with the client reflectingthe terms and conditions under which the services will be provided; (2) services have been provided or delivery has occurred; (3) the fee is fixed ordeterminable; and (4) collection is reasonably assured. Collectability is assessed based on a number of factors, including the creditworthiness of a client, thesize and nature of a client’s website and transaction history. Amounts billed or collected in excess of revenue recognized are included as deferred revenue. Anexample of this deferred revenue would be arrangements where clients request or are required by us to pay in advance of delivery.We recognize revenue from the delivery of display advertisements in the period in which the display advertisements are delivered. Specifically, werecognize revenue for display ad delivery through our solution once the consumer clicks on the personalized banner displayed by us on the client’s website forCPC ad campaigns. For CPC ad campaigns, sales are valued at the fair value of the amount received. Rebates and discounts granted to clients, along with freeor extended advertising campaigns, are recorded as a deduction from revenue.We also generate revenue from the sale of personalized display advertisements on a cost per thousand impressions (“CPM”) basis or on a cost peracquisition (“CPA”) basis as well as fees for packaged sales of advertising on our clients’ websites. We recognize revenue on a CPM basis as impressions aredelivered, while revenue on a CPA basis is recognized once the final user purchases an item on the advertiser’s website. Fees related to packaged sales arerecognized monthly on a flat fee basis.In the normal course of business, we act as an intermediary in executing transactions with third parties. The determination of whether revenue should bereported on a gross or net basis is based on an assessment of whether we are acting as the principal or an agent in our transactions. In determining whether weact as the principal or an agent, we follow the accounting guidance for principal-agent considerations. The determination of whether we are acting as a principalor an agent in a transaction involves judgment and is based on an evaluation of the terms of each arrangement. While none of the factors individually areconsidered presumptive or determinative, because we are the primary obligor and are responsible for (1) identifying and contracting with third-party clients;(2) establishing the selling prices of the display advertisements sold; (3) performing all billing and collection activities, including retaining credit risk; and(4) bearing sole responsibility for fulfillment of the advertising, we act as the principal in these arrangements and therefore report revenue earned and costsincurred related to these transactions on a gross basis.Cost of RevenueOur cost of revenue primarily includes traffic acquisition costs and other cost of revenue.Traffic Acquisition Costs. Traffic acquisition costs consist primarily of purchases of impressions from publishers on a CPM basis. We purchaseimpressions directly from publishers or third-party intermediaries, such as advertisement exchanges. We recognize cost of revenue on a publisher by publisherbasis as incurred. Costs owed to publishers but not yet paid are recorded in our Consolidated Statements of Financial Position as accounts payable andaccrued expenses. F-16Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsUnder our current agreements with our publishers, we only commit to purchase a defined volume of impressions from any given publisher to the extentthat a pre-determined click through rate (“CTR”) is reached. If the publisher fails to reach the targeted volume of impressions, we can either terminate theagreement or reduce our commitment to buy impressions accordingly.Other Cost of Revenue. Other cost of revenue includes expenses related to third-party hosting fees, depreciation of data center equipment and datapurchased from third parties that we leverage in our solution.Share-Based CompensationShares, share options and share warrants are exclusively awarded to our employees or administrators. As required by IFRS 2—Share-Based Payment(“IFRS 2”), these awards are measured at their fair value on the date of grant. The fair value is calculated with the most relevant formula regarding thesettlement and the conditions of each plan. The fair value is recorded in personnel expenses (allocated by function in the Consolidated Statements of Income)on a straight line basis over each milestone composing the vesting period with a corresponding increase in shareholders’ equity.At each closing date, we re-examine the number of options likely to become exercisable. If applicable, the impact of the review of the estimate isrecognized in the Consolidated Statement of Income with a corresponding adjustment in equity.Income TaxesWe did elect to classify the French business tax, Cotisation sur la Valeur Ajoutée des Entreprises (“CVAE”) as an income tax in compliance with IAS 12—Income Taxes (“IFRS 12”).The French Research Tax Credit, Crédit d’Impôt Recherche (“CIR”), is a French tax incentive to stimulate research and development (“R&D”).Generally, the CIR offsets the income tax to be paid and the remaining portion (if any) can be refunded at the end of a three-fiscal year-period. The CIR iscalculated based on the claimed volume of eligible R&D expenditures by us. As a result, the CIR is presented as a deduction to “Research and developmentexpenses” in the Consolidated Statements of Income. We have exclusively claimed R&D performed in France for purposes of the CIR.Deferred taxes are recorded on all temporary differences between the financial reporting and tax bases of assets and liabilities, and on tax losses, usingthe liability method. Differences are defined as temporary when they are expected to reverse within a foreseeable future. We may only recognize deferred taxassets if, based on the projected taxable incomes within the next three years, we determine that it is probable that future taxable profit will be available againstwhich the unused tax losses and tax credits can be utilized. If future taxable profits are considerably different from those forecasted that support recordingdeferred tax assets, we will have to revise downwards or upwards the amount of deferred tax assets, which would have a significant impact on our financialresults. This determination requires many estimates and judgments by our management for which the ultimate tax determination may be uncertain. Inaccordance with IAS 12, tax assets and liabilities are not discounted. Amounts recognized in the Consolidated Financial Statements are calculated at the levelof each tax entity included in the consolidation scope.Operating SegmentsIn accordance with IFRS 8—Operating Segments, segment information reported is constructed on the basis of internal management data used forperformance analysis of businesses and for the allocation of resources. An operating segment is a distinct component of the Company which is engaged in thesupply of distinct products and services and which is exposed to risks and returns different from the risks and the returns of other operating segments. F-17Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOur chief operating decision-maker is our Chief Executive Officer (“CEO”). On a monthly basis, the CEO reviews consolidated data for revenue,revenue excluding traffic acquisition costs (revenue ex-TAC) and Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, share-based compensation, service costs (pension) and acquisition-related deferred price consideration) for the purposes of allocating resources and evaluatingfinancial performance.We have concluded that our operations constitute one operating and reportable segment.Use of EstimatesOur Consolidated Financial Statements are prepared in accordance with IFRS. The preparation of our Consolidated Financial Statements requires us tomake estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. We base our estimates andassumptions on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions onan ongoing basis. Our actual results may differ from these estimates.The most significant areas that require management judgment and estimates relate to (1) the recognition of revenue and particularly, the determination asto whether revenue should be reported on a gross or a net basis; (2) the evaluation of our trade receivables and the recognition of a valuation allowance; (3) therecognition of our deferred tax assets; (4) the recognition and measurement of intangible assets and particularly costs capitalized in relation to our customizedinternal-use software; (5) the recognition and measurement of liabilities in relation to litigations and claims; (6) recognition of identifiable intangible assets andgoodwill in the context of business combinations; and (7) the measurement of share-based compensation. The accounting policies for these areas are discussedelsewhere in these Consolidated Financial Statements.Earnings Per ShareIn accordance with IAS 33—Earnings Per Share, basic earnings per share (“EPS”) are calculated by dividing the net income attributable toshareholders of the Parent by the weighted average number of shares outstanding. The weighted average number of shares outstanding is calculated accordingto movements in share capital.In addition, we calculate diluted earnings per share by dividing the net income attributable to shareholders of the Parent by the weighted average numberof shares outstanding plus any potentially dilutive shares not yet issued.Note 4—Financial Risk ManagementCredit RiskThe maximum exposure to credit risk at the end of each reported period is represented by the carrying amount of financial assets, and summarized inthe following table: As of December 31, 2011 2012 2013 (in thousands of euros) Non-current financial assets €916 €6,924 €7,627 Trade receivables, net of allowances 33,423 60,685 87,643 Other current assets 5,850 8,080 13,466 Cash and cash equivalents 16,382 43,262 234,343 Total €56,571 €118,951 €343,079 F-18Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsTrade ReceivablesCredit risk is defined as an unexpected loss in cash and earnings if the client is unable to pay its obligations in due time. We perform internal ongoingcredit risk evaluations of our clients. When a possible risk exposure is identified, we require prepayments.For each period presented, the aging of trade receivables and allowances for potential losses is as follows: As of December 31, 2011 2012 2013 Grossvalue % Impairment % Grossvalue % Impairment % Grossvalue % Impairment % (€ in thousands of euros) Not yet due €22,471 66.9% €— — €34,190 55.4% €— — €63,439 70,9% €— — 0-30 days 9,050 26.9% — — 21,382 34.7% (3) 0.3% 19,654 22,0% (12) 0,7% 31-60 days 1,180 3.5% — — 3,128 5.1% (36) 3.7% 2,236 2,5% (33) 1,8% 60-90 days 272 0.8% (8) 4.5% 826 1.3% (67) 6.8% 1,008 1,1% (108) 5,9% > 90 days 628 1.9% (170) 95.5% 2,142 3.5% (877) 89.2% 3,140 3,5% (1,681) 91,7% Total €33,601 100% €(178) 100% €61,668 100% €(983) 100% €89,477 100% €(1,834) 100% Cash and Cash EquivalentsCash and cash equivalents are exclusively invested in secured investments such as interest-bearing deposits.Market RiskForeign Currency RiskA 10% increase or decrease of the Sterling Pound, the U.S. Dollar, the Japanese Yen or the Brazilian Real against the euro would have impacted theConsolidated Statements of Income and Consolidated Statement of Changes in Equity including non-controlling interests as follows: Year Ended December 31, 2011 2012 2013 (€ in thousands of euros) EUR/GBP +10% -10% +10% -10% +10% -10% Net income impact €150 €(150) €(331) €331 €(289) €289 Net equity impact €(75) €75 €(333) €333 €(1,138) €1,138 Year Ended December 31, 2011 2012 2013 (€ in thousands of euros) EUR/USD +10% -10% +10% -10% +10% -10% Net income impact €(913) €913 €(1,515) €1,515 €(264) €264 Net equity impact €(1,425) €1,425 €(2,813) €2,813 €51 €(51) Year Ended December 31, 2011 2012 2013 (€ in thousands of euros) EUR/JPY +10% -10% +10% -10% +10% -10% Net income impact €(141) €141 €1 €(1) €96 €(96) Net equity impact €(129) €129 €(72) €72 €62 €(62) F-19Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Year Ended December 31, 2011 2012 2013 (€ in thousands of euros) EUR/BRL +10% -10% +10% -10% +10% -10% Net income impact €12 €(12) €(264) €264 €(604) €604 Net equity impact €30 €(30) €(278) €278 €(775) €775 The proceeds of the IPO received in US dollars (note 1) have increased our exposure to $/€ exchange rate fluctuations. In order to mitigate this risk, wehave set up the following hedging strategy: • we have identified $ 30 million future expenses and investments over 2014 for which a cash flow hedging relationship has been documented inaccordance with IAS 39. The related derivative financial instruments have been recorded as current financial liabilities and the related valuation asof December 31, 2013 was recognized in the Consolidated Statement of Comprehensive Income for € 0.1 million. • we decided to sell in 2014 $ 90 million through put and collar instruments. The related premiums have been recorded as current financial assetsand valued as of December 31, 2013 at €0.6 million. The translation of the $ 90 million into euro as of December 31, 2013 generated a€0.7 million loss in financial income. • $100 million was converted into euros in December 2013 with no significant impact in the financial income. • the remaining balance was primarily used to fund our US subsidiary to enable intragroup settlement of current debts.Counter Party RiskAs of December 31, 2013, we show a positive net cash position. Since 2012, we have utilized a cash pooling arrangement for all the Euro-zone entities,reinforcing cash management centralization. Investment and financing decisions are carried out by our internal treasury function. We only deal withcounterparties with high credit ratings.Liquidity RiskThe following tables summarize for each period presented, the remaining contractual maturities of our financial liabilities and lease commitments: December 31, 2011 Carryingvalue Contractualcash flows Lessthan 1year 1 to 5years 5 years + (in thousands of euros) Financial liabilities €877 €877 €877 €— €— Other non-current liabilities — — — — — Trade payables 22,260 22,260 22,260 — — Other current liabilities 10,247 10,247 10,247 — — Operating lease arrangements — 2,270 1,522 748 — Total €33,384 €35,654 €34,906 €748 €— F-20Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents December 31, 2012 Carryingvalue Contractualcash flows Less than1 year 1 to 5years 5 years + (in thousands of euros) Financial liabilities €6,253 €6,474 €2,190 €4,284 €— Trade payables 50,340 50,340 50,340 — — Other current liabilities 15,541 15,541 15,541 — — Operating lease arrangements — 33,538 7,281 22,571 3,686 Total €72,134 €105,893 €75,352 €26,855 €3,686 December 31, 2013 Carryingvalue Contractualcash flows Less than1 year 1 to 5years 5 years + (in thousands of euros) Financial liabilities €11,316 €11,316 €5,197 €6,119 €— Trade payables 75,889 75,889 75,889 — — Other current liabilities 35,224 35,224 35,224 — — Operating lease arrangements — 61,180 9,870 34,091 17,219 Total €122,429 €183,609 €126,180 €40,210 €17,219 Note 5—Breakdown of Revenue and Non-Current Assets by Geographical AreasFor the purposes of allocating resources and evaluating financial performance, the CEO reviews consolidated data for revenue, revenue excluding trafficacquisition costs (revenue ex-TAC), Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, share-based compensation, service costs(pension) and acquisition-related deferred price consideration) and Adjusted Net Income (net income before share-based compensation expense, acquisition-related deferred price consideration, amortization of acquisition-related intangible assets and the tax impact of the foregoing adjustments).The Company operates in the following three geographical markets: • Americas: North and South Americas, • EMEA: Europe, Middle-East and Africa, and • Asia-Pacific.Revenue generation is highly dependent on traffic acquisition costs and given the fact that our recommendation engine and technical platforms arestructured in a way so as to optimize revenue ex-TAC, our management believes that revenue data are relevant when accompanied by revenue ex-TACinformation.The following tables disclose our consolidated revenue for each geographical area for each of the reported periods. Revenue by geographical area is basedon the location of advertisers’ campaigns. Americas EMEA Asia-Pacific Total (in thousands of euros) December 31, 2011 €22,013 €119,798 €1,751 €143,562 December 31, 2012 67,787 172,499 31,569 271,855 December 31, 2013 123,004 237,801 83,155 443,960 Revenue generated in France amounted to €41.7 million, €49.3 million and €59.9 million for the periods ended December 31, 2011, 2012 and 2013respectively. F-21Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsRevenue generated in other significant countries where we operate is presented in the following table: Year Ended December 31, 2011 2012 2013 (in thousands of euros) America United States €19,536 €53,126 €91,589 EMEA Germany 28,327 41,144 55,410 United Kingdom 21,047 35,357 43,866 Asia Pacific Japan 841 23,435 67,901 In 2011, 2012, and 2013, our largest client represented 5.4%, 5.2% and 5.1%, respectively, of our consolidated revenue.Other InformationFor each reported period, non-current assets (corresponding to the net book value of tangible and intangible assets) are presented in the table below. Thegeographical information results from the locations of legal entities. Holding Americas Of which:United States Europe Asia-Pacific Of which:Japan Total (in thousands of euros) As of December 31, 2011 €3,338 €1,797 €1,795 €500 €512 €496 €6,147 As of December 31, 2012 8,259 3,868 3,855 592 2,568 2,495 15,287 As of December 31, 2013 18,015 7,807 7,793 1,943 3,575 3,479 31,340 Note 6—Nature of Expenses Allocated by FunctionNature of Expenses Allocated to Cost of Revenue Year Ended December 31, 2011 2012 2013 (in thousands of euros) Traffic acquisition costs €(79,060) €(157,707) €(264,952) Other cost of revenue (5,690) (12,662) (21,956) Hosting cost (3,345) (6,872) (12,177) Depreciation and amortization (2,010) (3,648) (7,846) Data acquisition costs (335) (1,817) (1,557) Other — (325) (376) Total cost of revenue €(84,750) €(170,369) €(286,908) F-22Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNature of Expenses Allocated to Research and Development Year Ended December 31, 2011 2012 2013 (in thousands of euros) Personnel expenses €(6,308) €(9,033) €(23,829) Personnel expenses excluding share-basedpayment and research tax credit (7,673) (10,981) (23,716) Share-based payment (180) (429) (2,049) Research tax credit 1,545 2,377 1,936 Other cash operating expenses (1,919) (4,917) (7,511) Subcontracting and other headcount relatedcosts (919) (1,950) (3,835) Rent and facilities costs (938) (2,372) (3,338) Consulting and professional fees (62) (407) (305) Marketing costs — (72) (27) Other — (116) (6) Other non-cash operating expenses (559) (335) (835) Depreciation and amortization (51) (166) (915) Net change in allowance for doubtful accounts — — — Net change in other provisions (508) (169) 80 Total research and development expenses €(8,786) €(14,285) €(32,175) Nature of Expenses Allocated to Sales and Operations Year Ended December 31, 2011 2012 2013 (in thousands of euros) Personnel expenses €(22,730) €(39,078) €(51,011) Personnel expenses excluding share-based payment (21,831) (37,278) (48,210) Share-based payment (899) (1,800) (2,801) Other cash operating expenses (7,806) (17,313) (29,908) Subcontracting and other headcount related costs (1,985) (5,365) (9,292) Rent and facilities costs (3,436) (6,153) (6,609) Consulting and professional fees — — — Marketing costs (1,998) (3,191) (3,217) Other (387) (2,604) (10,790) Other non-cash operating expenses (294) (1,656) (1,897) Depreciation and amortization (227) (847) (1,792) Net change in allowance for doubtful accounts (67) (809) (105) Net change in other provisions — — — Total sales and operations expenses €(30,830) €(58,047) €(82,816) F-23Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNature of Expenses Allocated to General and Administrative Year Ended December 31, 2011 2012 2013 (in thousands of euros) Personnel expenses €(4,714) €(9,842) €(15,092) Personnel expenses excluding share-based payment (4,398) (8,515) (13,066) Share-based payment (316) (1,327) (2,026) Other cash operating expenses (4,098) (10,071) (15,398) Subcontracting and other headcount related costs (754) (3,373) (7,519) Rent and facilities costs (592) (1,540) (2,437) Consulting and professional fees (2,622) (4,911) (4,900) Marketing costs — — — Other (130) (247) (542) Other non-cash operating expenses (497) (295) (897) Depreciation and amortization (239) (107) (566) Net change in allowance for doubtful accounts — — — Net change in other provisions (258) (188) (331) Total general and administrative expenses €(9,309) €(20,208) €(31,387) Note 7—Allocation of Personnel ExpensesAllocation of Personnel Expenses By Function Year Ended December 31, 2011 2012 2013 (in thousands of euros) Research and development €(6,533) €(9,033) €(23,829) Sales and operations (22,505) (39,078) (51,011) General and administrative (4,714) (9,842) (15,092) Total personnel expenses €(33,752) €(57,953) €(89,932) Allocation of Personnel Expenses by Nature Year Ended December 31, 2011 2012 2013 (in thousands of euros) Wages and salaries €(26,534) €(44,069) €(62,429) Severance pay (304) (140) (842) Social charges (6,853) (12,140) (17,442) Payroll taxes (247) (425) (1,407) Acquisition-related deferred price consideration — — (2,363) Share-based payment (1,395) (3,556) (6,876) Profit sharing — — (509) Research tax credit (classified as a reduction of R&D expenses) 1,581 2,377 1,936 Total personnel expenses €(33,752) €(57,953) €(89,932) F-24Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNote 8—Share-Based CompensationShare Options Plans and Employee Warrants Grants (BSPCE)The Board of Directors has been authorized by the general meeting of the shareholders to grant employee warrants (Bons de Souscription de Parts deCréateur d’Entreprise or “BSPCE”) and to implement share options plans as follows: • Issuance of 2,112,000 BSPCE, authorized at the General Meeting of Shareholders on October 24, 2008, making available up to 2,112,000BSPCE until April 24, 2010 (“Plan 1”); • Issuance of 1,472,800 BSPCE, authorized at the General Meeting of Shareholders on April 16, 2009, making available up to 1,472,800 BSPCEuntil October 16, 2010 (“Plan 2”); • 1,584,000 Share Options, authorized at the General Meeting of Shareholders on September 9, 2009, making available up to 1,584,000 shareoptions until November 8, 2012. This Plan has been amended at the General Meeting of Shareholders on November 16, 2010, making availableup to 2,700,000 share options or BSPCE (“Plan 3”); • Issuance of 361,118 BSPCE, granted to Criteo co-founders at the General Meeting of Shareholders on April 23, 2010 (“Plan 4”); • 2,800,000 BSPCE or Share Options, authorized at the General Meeting of Shareholders on November 18, 2011, making available up to2,800,000 share options or BSPCE (“Plan 5”); • 1,654,290 BSPCE or Share Options, authorized at the General Meeting of Shareholders on September 14, 2012, making available up to1,654,290 share options or BSPCE (“Plan 6”). • 6,627,237 BSPCE or Share Options, authorized at the General Meeting of Shareholders on August 2, 2013, making available up to 6,627,237share options or BSPCE (“Plan 7”).Plans 1 and 2The BSPCE may be exercised by the beneficiary on the basis of the following vesting schedule: • up to one third (1/3) of the BSPCE on the first anniversary of the date of grant; • up to one twelfth (1/12) at the expiration of each quarter following the first anniversary of the date of grant, and this during twenty-four(24) months thereafter; and • at the latest within ten (10) years from the date of grant.Upon exercise of the BSPCE, we offer beneficiaries settlement of the BSPCE in newly issued ordinary shares of the Parent.Parent shares were not traded on a stock exchange at the date of grant. Consequently exercise prices were determined by reference to the latest capitalincrease as of the date of grant, unless the Board of Directors decided otherwise. F-25Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDetails of BSPCE Plans 1 and 2 Plan 1 Plan 2 Date of grant (Board of Directors) Oct 24,2008 Jan 20,2009 May 7,2009 July 7,2009 Jan 20,2010 March 11,2010 May 20,2010 July 7,2010 Sept 14,2010 Vesting period 3 years (non-linear) 3 years (non-linear) Plan expiration date Oct 24,2018 Jan 20,2019 May 7,2019 July 7,2019 Jan 20,2020 March 11,2020 May 20,2020 July 7,2020 Sept 14,2020 Number of BSPCE granted 227,040 411,840 462,000 264,000 237,600 33,840 82,800 74,800 25,200 Share entitlement per BSPCE 1 1 1 1 1 1 1 1 1 Exercise price €0.45 €0.45 €0.70 €0.70 €0.70 €0.70 €2.10 €2.10 €2.10 Valuation method used Black and Scholes Black and Scholes Grant date share fair value €0.20 €0.20 €0.20 €0.20 €0.70 €0.70 €0.70 €0.70 €0.70 Expected volatility 53.0% 54.8% 55.6% 55.7% 55.5% 55.2% 55.5% 55.3% 55.4% Average life of BSPCE 8 years 8 years 8 years 8 years 8 years 8 years 8 years 8years 8 years Discount rate 4.10% 3.56% 3.66% 3.68% 3.52% 3.44% 3.03% 2.98% 2.74% Expected dividends — — — — — — — — — Performance conditions N/A N/A N/A N/A N/A N/A N/A N/A N/A Fair value per BSPCE €0.10 €0.10 €0.08 €0.08 €0.45 €0.45 €0.28 €0.28 €0.28 Based on similar listed entities. Based on Obligation Assimilables du Tresor, i.e. French government bonds with a ten-year maturity (“TEC 10 OAT floating-rate bonds”).Change in Number of BSPCE Outstanding Year Ended December 31, Number of BSPCE 2011 2012 2013 Balance at beginning of period 3,807,600 1,164,977 1,161,377 Granted during the period — — — Forfeited during the period (147,023) (1,200) — Exercised during the period (748,135) (2,400) (26,640) Expired during the period — — — Effect of the 2-for-5 reverse share split that occurred on August 20, 2013 (1,747,465) — — Balance at end of period 1,164,977 1,161,377 1,134,737 Breakdown of the Closing Balance Year Ended December 31, 2011 2012 2013 Number of BSPCE Outstanding Exercisable Outstanding Exercisable Outstanding Exercisable BSPCE with exercise price of €0.45 263,120 246,913 263,120 263,120 263,120 263,120 BSPCE with exercise price of €0.70 783,777 581,092 783,777 761,156 757,137 757,137 BSPCE with exercise price of €2.10 118,080 54,300 114,480 90,960 114,480 114,480 Total 1,164,977 882,305 1,161,377 1,115,236 1,134,737 1,134,737 Weighted average remaining contractual life (in years) 7.6 6.6 5.6 F-26(1)(2)(1)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPlan 3According to the initial plan adopted by the Parent’s shareholders General Meeting on September 9, 2009, the Board of Directors was authorized to grantup to 1,584,000 share options with the following vesting schedule: • up to one third (1/3) of the options on the first anniversary of the date of grant; • up to one twelfth (1/12) at the expiration of each quarter following the first anniversary of the date of grant, and this during twenty-four(24) months thereafter; and • at the latest within ten (10) years from the date of grant.The initial plan was amended by the General Meeting of the Parent’s shareholders on November 16, 2010. According to such amended plan, the Boardof Directors is authorized to grant up to 2,700,000 BSPCE or share options until May 16, 2012 (BSPCE) and January 16, 2014 (share options) respectively.On June 28, 2011 the shareholders’ meeting extended the autorization to issue the above-mentioned BSPCE until December 28, 2012.The vesting schedule attached to the amended plan is as follows: • up to one fourth (1/4) of the BSPCE/share options on the first anniversary of the date of grant; • up to one-sixteenth (1/16) at the expiration of each quarter following the first anniversary of the date of grant, and this during thirty-six(36) months thereafter; and • at the latest within ten (10) years from the date of grant.For the initial and amended plans, upon exercise of the BSPCE or share options, we offer beneficiaries/optionees settlement of the BSPCE or shareoptions in newly issued ordinary shares of the Parent.Parent shares were not traded on a stock exchange at the date of grant. Consequently, exercise prices were determined by reference to the latest capitalincrease as of the date of grant, unless the Board of Directors decided otherwise. F-27Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDetails of BSPCE / Share Option Plan 3 Date of grant (Board of Directors) Sept 9,2009 Nov 17,2009 Jan 20,2010 March 11,2010 May 20,2010 July 7,2010 July 7,2010 Sept 14,2010 Sept 14,2010 Vesting period 3 years (non-linear) Plan expiration date Sept 9,2019 Nov 17,2019 Jan20,2020 March 11,2020 May 20,2020 July 7,2020 July 7,2020 Sept 14,2020 Sept 14,2020 Number of options granted 670,560 77,520 79,680 332,400 63,600 210,000 3,600 57,000 64,200 Type : Share Option (S.O.) / BSPCE S.O. S.O. S.O. S.O. S.O. S.O. S.O. S.O. S.O. Share entitlement per option 1 1 1 1 1 1 1 1 1 Exercise price €0.20 €0.70 €0.70 €0.70 €2.10 €0.70 €2.10 €0.70 €2.10 Valuation method used Black and Scholes Grant date share Fair-value €0.20 €0.20 €0.70 €0.70 €0.70 €0.70 €0.70 €0.70 €0.70 Expected volatility 55.7% 55.7% 55.5% 55.2% 55.5% 55.3% 55.3% 55.4% 55.4% Average life of option 8 years 8 years 8 years 8 years 8 years 8 years 8years 8 years 8 years Discount rate 3.59% 3.58% 3.52% 3.44% 3.03% 2.98% 2.98% 2.74% 2.74% Expected dividends — — — — — — — — — Performance conditions N/A N/A N/A N/A N/A N/A N/A N/A N/A Fair value per option €0.13 €0.08 €0.45 €0.45 €0.28 €0.43 €0.28 €0.43 €0.28 Based on similar listed entities. TEC 10 OAT floating-rate bonds. Plan 3—Amended—Part 1 Date of grant (Board of Directors) Nov16,2010 Nov 16,2010 Nov16,2010 Jan 11,2011 Jan 11,2011 Jan 11,2011 Mar 16,2011 Mar16,2011 Mar 16,2011 Vesting period 4 years (non-linear) Plan expiration date Nov16,2020 Nov 16,2020 Nov 16,2020 Jan 11,2021 Jan 11,2021 Jan 11,2021 Mar 16,2021 Mar 16,2021 Mar 16,2021 Number of options granted 72,600 31,200 64,800 66,000 2,400 158,400 102,240 165,600 195,840 Type : Share Option (S.O.) / BSPCE S.O. S.O. BSPCE S.O. S.O. BSPCE S.O. S.O. BSPCE Share entitlement per option 1 1 1 1 1 1 1 1 1 Exercise price €0.70 €2.10 €2.10 €0.70 €2.10 €2.10 €0.70 €2.10 €2.10 Valuation method used Black and Scholes Grant date share fair-value €0.70 €0.70 €0.70 €0.70 €0.70 €0.70 €0.70 €0.70 €0.70 Expected volatility 55.0% 55.0% 55.0% 57.8% 57.8% 57.8% 55.1% 55.1% 55.1% Average life of option 8years 8 years 8 years 8 years 8 years 8 years 8 years 8 years 8 years Discount rate 3.00% 3.00% 3.00% 3.35% 3.35% 3.35% 3.49% 3.49% 3.49% Expected dividends — — — — — — — — — Performance conditions N/A N/A N/A N/A N/A N/A N/A N/A N/A Fair value per option €0.43 €0.28 €0.28 €0.45 €0.30 €0.30 €0.45 €0.28 €0.28 Based on similar listed entities. TEC 10 OAT floating-rate bonds. F-28(1)(2)(1)(2)(1)(2)(1)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Plan 3—Amended—Part 2 Date of grant (Board of Directors) April 7,2011 May 18,2011 May 18,2011 June 28,2011 June 28,2011 Sept 21,2011 Sept 21,2011 Vesting period 4 years (non-linear) Plan expiration date April 7,2021 May18,2021 May18,2021 June28,2021 June28,2021 Sept21,2021 Sept21,2021 Number of options granted 960,000 339,600 124,800 140,700 17,400 227,800 62,000 Type : Share Option (S.O.) / BSPCE S.O. S.O. BSPCE S.O. BSPCE S.O. BSPCE Share entitlement per option 1 1 1 1 1 1 1 Exercise price €0.70 €2.98 €2.98 €5.95 €5.95 €5.95 €5.95 Valuation method used Black and Scholes Grant date share fair-value €0.70 €4.98 €4.98 €4.98 €4.98 €4.98 €4.98 Expected volatility 55.0% 54.7% 54.7% 54.1% 54.1% 53.5% 53.5% Average life of option 8 years 8 years 8 years 8 years 8 years 8 years 8 years Discount rate 3.76% 3.69% 3.69% 3.38% 3.38% 2.62% 2.62% Expected dividends — — — — — — — Performance conditions YES N/A N/A N/A N/A N/A N/A Fair value per option €0.45 €3.63 €3.63 €2.88 €2.88 €2.80 €2.80 Based on similar listed entities. TEC 10 OAT floating-rate bonds. Options subject to performance condition: Among the 960,000 share options granted in April 7, 2011, 180,000 are subjected to performance conditionsbased on revenue excluding traffic acquisition costs targets that were met in 2012.Change in Number of BSPCE / Share Options Outstanding Year Ended December 31, Number of BSPCE / Share Options 2011 2012 2013 Balance at beginning of period 4,154,100 3,387,172 2,718,153 Granted during the period 6,406,950 — — Forfeited during the period (1,017,721) (417,004) (63,692) Exercised during the period (1,075,401) (255,015) (320,698) Expired during the period — — — Effect of the 2-for-5 reverse share split that occurred on August 20, 2013 (5,080,756) — — Balance at end of period 3,387,172 2,718,153 2,333,763 F-29(1)(2)(A)(1)(2)(A)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsBreakdown of the Closing Balance Year Ended December 31, 2011 2012 2013 Number of BSPCE / Share Options Outstanding Exercisable Outstanding Exercisable Outstanding Exercisable Share Options with exercise price of €0.20 290,311 217,733 266,991 266,991 266,991 266,991 Share Options with exercise price of €0.70 1,680,121 283,730 1,372,322 650,570 1,075,280 763,055 Share Options / BSPCE with exercise price of €2.10 695,040 71,900 496,740 255,717 450,392 342,955 Share Options / BSPCE with exercise price of €2.98 337,200 — 253,200 94,950 244,800 153,000 Share Options / BSPCE with exercise price of €5.95 384,500 — 328,900 110,712 296,300 171,788 Total 3,387,172 573,363 2,718,153 1,378,940 2,333,763 1,697,789 Weighted average remaining contractual life (in years) 8.0 8.0 7.0 Plan 4This plan has been exclusively granted to our co-founders by the Parent’s shareholders. The granted BSPCE can be exercised immediately, withoutvesting period, and, at the latest by April 23, 2020.Upon exercise of the BSPCE, we offer beneficiaries settlement of the options in newly issued shares of the Parent’s ordinary shares.Parent shares were not traded on a stock exchange at the date of grant. Consequently exercise prices were determined by reference to the latest capitalincrease at the date of grant, i.e. €2.10.Details of BSPCE Plan 4Date of grant (Board of Directors) April 23, 2010Vesting period NonePlan expiration date April 23, 2020Number of options granted 361,118Type: Share Option (S.O.) / BSPCE BSPCEShare entitlement per option 1 ordinary shareExercise price €2.10Valuation method used Black and ScholesGrant date share fair value € 2.10Expected volatility 55.2%Average life of option 8 yearsDiscount rate 3.4%Expected dividends — Performance conditions N/AFair value per option €1.33 Based on similar listed entities. TEC 10 OAT floating-rate bonds. F-30(1)(2)(1)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsChange in Number of BSPCE / Share Options Outstanding Year Ended December 31, Number of BSPCE 2011 2012 2013 Balance at beginning of period 902,796 361,118 361,118 Granted during the period — — — Forfeited during the period — — — Exercised during the period — — — Expired during the period — — — Effect of the 2-for-5 reverse share split that occurred on August 20, 2013 (541,678) — — Balance at end of period 361,118 361,118 361,118 Breakdown of the Closing Balance Year Ended December 31, 2011 2012 2013 Number of BSPCE Outstanding Exercisable Outstanding Exercisable Outstanding Exercisable BSPCE with exercise price of €2.10 361,118 361,118 361,118 361,118 361,118 361,118 Total 361,118 361,118 361,118 361,118 361,118 361,118 Weighted average remaining contractual life (in years) 8.3 7.3 6.3 Plan 5On November 18, 2011 the Parent’s shareholders’ General Meeting authorized the Board of Directors to grant up to 2,800,000 share options or BSPCE,until January 18, 2015 and May 18, 2013 respectively. The Board of Directors is also entitled to determine the terms and conditions for each grant, includingthe vesting schedule and the exercise price.Upon exercise of the share option or BSPCE, we offer optionees/beneficiaries settlement of the options in newly issued ordinary shares of the Parent.The vesting schedule attached to all the grants referring to plan 5 is as follows : • up to one fourth (1/4) of the BSPCE/share options on the first anniversary of the date of grant; • up to one-sixteenth (1/16) at the expiration of each quarter following the first anniversary of the date of grant, and this during thirty-six(36) months thereafter; and • at the latest within ten (10) years from the date of grant.Parent shares were not traded on a stock exchange at the date of grant. Consequently, exercise prices were determined by reference to the latest capitalincrease as of the date of grant, unless the Board of Directors decided otherwise. F-31Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDetails of BSPCE / Share Option Plan 5 Date of grant (Board of Directors) Nov 18,2011 Nov 18,2011 Jan 26,2012 Jan 26,2012 Mar 20,2012 Mar 20,2012 April 30,2012 April 30,2012 May 22,2012 May 22,2012 Vesting period 4 years (non-linear) Plan expiration date Nov 18,2021 Nov18,2021 Jan 26,2022 Jan 26,2022 Mar 20,2022 Mar 20,2022 April 30,2022 April 30,2022 May 22,2022 May 22,2022 Number of options granted 155,400 1,200 163,600 36,000 115,600 528,446 460,568 582,547 31,600 152,800 Type: Share Option (S.O.) / BSPCE S.O. BSPCE S.O. BSPCE S.O. BSPCE S.O. BSPCE S.O. BSPCE Share entitlement per option 1 1 1 1 1 1 1 1 1 1 Exercise price €5.95 €5.95 €5.95 €5.95 €5.95 €5.95 €5.95 €5.95 €5.95 €5.95 Valuation method used Black and Scholes Grant date share Fair value €4.98 €4.98 €4.98 €4.98 €4.98 €4.98 €4.98 €4.98 €4.98 €4.98 Expected volatility 52.9% 52.9% 52.5% 52.5% 52.2% 52.2% 52.5% 52.5% 52.1% 52.1% Average life of option 8 years 8 years 8 years 8 years 8 years 8 years 8 years 8 years 8 years 8 years Discount rate 3.53% 3.53% 3.16% 3.16% 2.86% 2.86% 2.99% 2.99% 2.79% 2.79% Expected dividends — — — — — — — — — — Performance conditions N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Fair value per option €2.85 €2.85 €2.80 €2.80 €2.75 €2.75 €2.78 €2.78 €2.75 €2.75 Based on similar listed entities. TEC 10 OAT floating-rate bonds.Change in number of BSPCE / Share Option Outstanding Year Ended December 31, Number of BSPCE / Share Options 2011 2012 2013 Balance at beginning of period — 156,400 2,087,162 Granted during the period 391,500 2,071,162 — Forfeited during the period (500) (140,400) (83,581) Exercised during the period — — (74,282) Effect of the 2-for-5 reverse share split that occurred on August 20, 2013 (234,600) — — Balance at end of period 156,400 2,087,162 1,929,299 Breakdown of the closing balance Year Ended December 31, 2011 2012 2013 Number of BSPCE / Share Options Outstanding Exercisable Outstanding Exercisable Outstanding Exercisable Share Options / BSPCE with exercise price of €5.95 156,400 — 2,087,162 16,000 1,929,299 721,031 Total 156,400 — 2,087,162 16,000 1,929,299 721,031 Weighted average remaining contractual life (in years) 9.9 9.3 8.3 F-32(1)(2)(1)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPlan 6According to this plan adopted by the Parent’s shareholders’ General Meeting on September 14, 2012 the Board of Directors is authorized to grant up to1,654,290 share options or BSPCE, until November 14, 2015 and March 14, 2014 respectively. The Board of Directors is also entitled to determine theterms and conditions for each grant, including the vesting schedule and the exercise price.Upon exercise of the share option or BSPCE, we offer optionees/beneficiaries settlement of the options in newly issued ordinary shares of the Parent.On October 25, 2012, the Board of Directors of the Parent granted 75,400 share options and 116,240 BSPCE, free of any performance conditions withthe following vesting schedule: • up to one fourth (1/4) of the BSPCE/share options on the first anniversary of the date of grant; • up to one-sixteenth (1/16) at the expiration of each quarter following the first anniversary of the date of grant, and this during thirty-six(36) months thereafter; and • at the latest within ten (10) years from the date of grant.On February 7, 2013, the Board of Directors of the Parent granted 114,720 share options and 181,040 BSPCE, free of any performance conditions withthe following vesting schedule: • For 82,720 share options and 151,040 BSPCE - up to one fourth (1/4) of the BSPCE/share options on the first anniversary of the date of grant; -up to one-sixteenth (1/16) at the expiration of each quarter following the first anniversary of the date of grant, and this during thirty-six(36) months thereafter; and -at the latest within ten (10) years from the date of grant. • For 30,000 BSPCE -up to four tenth (4/10) of the BSPCE at the expiration of a twenty four (24) months period from the date of grant; -up to one twentieth (1/20) at the expiration of each quarter following the initial twenty four (24) months period, and this during thirty-six(36) months thereafter; and -at the latest within ten (10) years from the date of grant. • For 32,000 share options -up to one fourth (1/4) of the share options at the expiration of a twelve (12) months period from December 1, 2012; -up to one sixteenth (1/16) at the expiration of each quarter following the initial twelve (12) months period, and this during thirty-six(36) months thereafter; and -at the latest within ten (10) years from the date of grant.On April 18, 2013, the Board of Directors of the Parent granted 523,920 share options and 54,200 BSPCE, free of any performance conditions with thefollowing vesting schedule: • up to one fourth (1/4) of the BSPCE/share options on the first anniversary of the date of grant; • up to one-sixteenth (1/16) at the expiration of each quarter following the first anniversary of the date of grant, and this during thirty-six(36) months thereafter; and • at the latest within ten (10) years from the date of grant. F-33Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDetails of BSPCE / Share Options Plan 6 Date of grant (Board of Directors) Oct 25,2012 Oct 25,2012 Oct 25,2012 Feb 7,2013 Feb 7,2013 Feb 7,2013 April 18,2013 April 18,2013 Vesting period 4 years(non-linear) 12 months 4 years(non -linear) 5 years(non-linear) 4 years(non-linear) Plan expiration date Oct25,2022 Oct 25,2022 Oct 25,2022 Feb 7,2023 Feb 7,2023 Feb 7,2023 April 18,2023 April 18,2023 Number of options granted 75,400 116,240 257,688 151,040 114,720 30,000 54,200 523,920 Type: Share Option (S.O.) / BSPCE S.O. BSPCE BSPCE BSPCE S.O. BSPCE BSPCE S.O. Share entitlement per option 1 1 1 1 1 1 1 1 Exercise price €8.28 €8.28 €8.28 €9.65 €9.65 €9.65 €10.43 €10.43 Valuation method used Black and Scholes Grant date share Fair value €6.43 €6.43 €6.43 €5.45 €5.45 €5.45 €5.83 €5.83 Expected volatility 50.2% 50.2% 50.2% 49.6% 49.6% 49.6% 50.1% 50.1% Average life of option 8years 8 years 8 years 8 years 8 years 8 years 8 years 8 years Discount rate 2.20% 2.20% 2.20% 2.27% 2.27% 2.27% 1.80% 1.80% Expected dividends — — — — — — — — Performance conditions N/A N/A N/A N/A N/A N/A N/A N/A Fair value per option €3.28 €3.28 €3.28 €5.45 €5.45 €5.45 €5.83 €5.83 Based on similar listed entities. TEC 10 OAT floating-rate Bonds. On October 25, 2012, the Board of Directors of the Parent also granted a total of 257,688 BSPCE to our co-founders. The conditions of exercise ofthese BSPCE are linked to a future liquidity event or a transfer of control of the Company, and the number of options that can be exercised aredetermined by the event’s date which cannot occur after March 31, 2014. Based on the assumptions known as at December 31, 2012, we determinedthat the compensation expense will be recognized over a one-year period. This assumption has been confirmed on 2013.Change in Number of BSPCE / Share Options Outstanding Year Ended December 31, Number of BSPCE / Share Options 2011 2012 2013 Balance at beginning of period — — 447,889 Granted during the period — 1,123,324 873,880 Forfeited during the period — (3,600) (103,671) Exercised during the period — — (13,850) Expired during the period — — — Effect of the 2-for-5 reverse share split that occurred on August 20, 2013 — (671,835) — Balance at end of period 447,889 1,204,248 F-34(3)(1)(2)(1)(2)(3)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsBreakdown of the Closing Balance Year Ended December 31, 2011 2012 2013 Number of BSPCE / Share Options Outstanding Exercisable Outstanding Exercisable Outstanding Exercisable Share Options / BSPCE with exercise price of €8.28 — — 447,889 — 381,648 287,928 Share Options / BSCE with exercise price of €9.65 — — — — 284,040 — Share Options / BSPCE with exercise price of €10.43 — — — — 538,560 — Total — — 447,889 — 1,204,248 287,928 Weighted average remaining contractual life (in years) — 9.8 9.1 Plan 7According to this plan adopted by the Parent’s shareholders’ General Meeting on August 2, 2013 the Board of Directors is authorized to grant up to6,627,237 share options or BSPCE, until August 2016 (share options) and BSPCE (October 2013). The Board of Directors is also entitled to determine theterms and conditions for each grant, including the vesting schedule and the exercise price.Upon exercise of the share option or BSPCE, we offer optionees/beneficiaries settlement of the options in newly issued ordinary shares of the Parent.On September 3, 2013, the Board of Directors of the Parent granted 1,001,704 share options and 327,700 BSPCE, free of any performance conditionswith the following vesting schedule: • up to one fourth (1/4) of the BSPCE/share options on the first anniversary of the date of grant; • up to one-sixteenth (1/16) at the expiration of each quarter following the first anniversary of the date of grant, and this during thirty-six(36) months thereafter; and • at the latest within ten (10) years from the date of grant.On December 4, 2013, the Board of Directors of the Parent granted 236,180 share options, free of any performance conditions with the following vestingschedule: • up to one fourth (1/4) of the share options on the first anniversary of the date of grant; • up to one-sixteenth (1/16) at the expiration of each quarter following the first anniversary of the date of grant, and this during thirty-six(36) months thereafter; and • at the latest within ten (10) years from the date of grant. F-35Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDetails of BSPCE / Share Options Plan 7 Date of grant (Board of Directors) Sept 3, 2013 Sept 3, 2013 Dec 4, 2013 Vesting period 4 years (non-linear) 4 years (linear) Plan expiration date Sept 3, 2023 Sept 3, 2023 Dec 4, 2023 Number of options granted 330,160 1,001,704 236,180 Type: Share Option (S.O.) / BSPCE BSPCE S.O S.O Share entitlement per option 1 1 1 Exercise price €12.08 €12.08 €25.48 Valuation method used Black and Scholes Grant date share Fair-value €12.08 €12.08 €25.48 Expected volatility 50.1% 50.1% 50.1% Average life of option 8 years 8 years 8 years Discount rate 2.31% 2.31% 2.40% Expected dividends — — — Performance conditions N/A N/A N/A Fair value per option €6.85 €6.85 €14.53 Based on similar listed entities. TEC 10 OAT floating-rate Bonds.Change in Number of BSPCE / Share Options Outstanding Year Ended December 31, Number of BSPCE / Share Options 2011 2012 2013 Balance at beginning of period — — — Granted during the period — — 1,565,584 Forfeited during the period — — (10,440) Exercised during the period — — — Expired during the period — — — Balance at end of period — — 1,555,144 Breakdown of the Closing Balance Year Ended December 31, 2011 2012 2013 Number of BSPCE / Share Options Outstanding Exercisable Outstanding Exercisable Outstanding Exercisable Share Options / BSPCE with exercise price of €12.08 — — — — 1,318,964 — Share Options / BSCE with exercise price of €25.48 — — — — 236,180 — Total — — — — 1,555,444 — Weighted average remaining contractual life (in years) — — 9.7 F-36(1)(2)(1)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNon-Employee Warrants (Bons de Souscription d’Actions or BSA)In addition to the free shares, share options and BSPCE grants, the shareholders of the Parent also authorized the grant of non-employee warrants orBons de Souscription d’Actions (“BSA”), as described hereafter.Plan AOn November 17, 2009, shareholders of the Parent decided to grant 231,792 non-employee warrants with the following vesting schedule: • up to one-eight (1/8) at the expiration of each quarter following the date of grant, and this during twenty-four (24) months; and • at the latest within ten (10) years as from the date of grant.Upon exercise of the non-employee warrants, we offer settlement of the options in newly issued ordinary shares of the Parent.Parent shares were not traded on a stock exchange at the date of grant. As a consequence, the exercise price was determined by reference to the latestcapital increase as of the date of grant.Plan BOn March 11, 2010, shareholders of the Parent decided to grant 277,200 non-employee warrants, possibly subjected to performance conditions and thefollowing vesting schedule: • up to one third (1/3) of the non-employee warrants on the first anniversary of the date of grant; • then up to one twelfth (1/12) at the expiration of each quarter following the first anniversary of the beginning of the vesting period, and this duringtwenty-four (24) months thereafter; and • at the latest within ten (10) years as from the date of grant.Upon exercise of the non-employee warrants, we offer settlement of the options in newly issued ordinary shares of the Parent.This plan is divided into three tranches whose features are listed below: Tranche 1 Tranche 2 Tranche 3Number of options granted 158,400 79,200 39,600Performance conditions N/A —Monthly grossmargin in Germany €750 thousand—Manager Full-Time —FY 2010 grossmargin in Germany €5,300 thousandBeginning of Vesting Period Jan 1, 2010 May 1, 2010 Jan 1, 2010All the performance conditions have been achieved during the period ended December 31, 2010.Parent shares were not traded on a stock exchange at the date of grant. Consequently, the exercise price was determined by reference to the latest capitalincrease as of the date of grant. F-37Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPlan COn November 16, 2010, shareholders of the Parent decided to grant up to 180,000 non-employee warrants to the members of the advisory board, an adhoc committee comprised of certain independent directors and executive officers. The granted non-employee warrants may be exercised on the basis of thefollowing vesting schedule: • up to one-twenty fourth (1/24) at the expiration of each month following the date of grant, and this during twenty-four (24) months, and • at the latest within ten (10) years as from the date of grant.Upon exercise of the non-employee warrants, we offer optionees settlement of the options in newly issued ordinary shares of the Parent.Parent shares were not traded on a stock exchange at the date of grant. Consequently, the Board of Directors determined the exercise price by reference tothe latest capital increase, i.e., April 16, 2009.Plan DAccording to this plan adopted by the Parent’s shareholders’ General Meeting on September 14, 2012, the Board of Directors is authorized to grant up to120,000 non-employee warrants until March 14, 2014. The Board of Directors is also entitled to determine the terms and conditions for each grant, includingthe vesting schedule and the exercise price.When the optionee is a member of the advisory board, the non-employee warrants can be exercised according the following schedule: • up to one-twenty fourth (1/24) at the expiration of each month following the date of grant, and this during twenty-four (24) months; and • at the latest within ten (10) years as from the date of grant.Otherwise, when the optionee is not a member of the advisory board, the vesting schedule attached to Plan D non-employee warrants granted during theperiod ended December 31, 2012 was: • One-third (1/3) at the date of grant; • One third (1/3) at the first anniversary of the date of grant; • One third (1/3) at the second anniversary of the date of grant; and • at the latest within ten (10) years as from the date of grant.Upon exercise of the non-employee warrants, we offer settlement of the non-employee warrants in newly issued ordinary shares of the Parent.On February 7, 2013 and on March 6, 2013, the Board of Directors of the Parent granted 20,400 and 51,000 respectively non-employee warrants tooptionees (not member of the advisory board) according to the vesting schedule as indicated above. F-38Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDetails of Non-Employee Warrants Non-EmployeeWarrantPlan A Non-Employee WarrantPlan B Non-Employee WarrantPlan C Date of grant Nov 17, 2009 March 11, 2010 March 11, 2010 March 11, 2010 Nov 16, 2010 June 28, 2011 Sept 21, 2011 Vesting period 2 years (linear) 3 years (non-linear) 2 years (linear) Plan expiration date Nov 17, 2019 March 11,2020 March 11,2020 March 11,2020 Nov 16,2020 June 28,2021 Sept 21,2021 Number of warrantsgranted 231,792 158,400 79,200 39,600 96,000 24,000 72,000 Share entitlement perwarrant 1 1 1 1 1 1 1 Share warrant price €0.02 €0.11 €0.09 €0.07 €0.04 0.30 €0.30 Exercise price €0.70 €0.70 0.70 €0.70 0.70 €5.95 €5.95 Valuation methodused Black and Scholes Grant date share fairvalue 0.20 €0.70 €0.70 €0.70 €0.70 €4.98 €4.98 Expected volatility 55.7% 55.2% 55.2% 55.2% 55.0% 54.1% 53.5% Average life ofwarrant 8 years 8 years 8 years 8 years 8 years 8 years 8 years Discount rate 3.58% 3.44% 3.44% 3.44% 3.00% 3.38% 2.62% Expected dividends — — — — — — — Performanceconditions N/A N/A YES YES N/A N/A N/A Fair value per warrant €0.05 €0.33 €0.35 0.38 €0.40 €2.58 €2.50 Based on similar listed entities. TEC 10 OAT floating-rate bonds. Non-employee Warrant Plan D Date of grant Oct 25, 2012 Oct 25, 2012 Feb 7, 2013 Mar 6, 2013 Vesting period 2 years(linear ) 2 years(non-linear ) 2 years(linear ) 2 years(linear ) Plan expiration date Oct 25, 2022 Oct 25, 2022 Feb 7, 2023 Mar 6, 2023 Number of warrants granted 33,984 20,400 20,400 51,000 Share entitlement per warrant 1 1 1 1 Stock warrant price €0.43 €0.43 €0.48 €0.48 Exercise price €8.28 €8.28 €9.65 €9.65 Valuation method used Black and Scholes Grant date stock Fair-value €6.43 €6.43 €9.65 €9.65 Expected volatility 50.2% 50.2% 50.0% 50.0% Average life of warrant 8 years 8 years 8 years 8 years Discount rate 2.20% 2.20% 2.27% 2.13% Expected dividends — — — — Performance conditions N/A N/A N/A N/A Fair value per warrant €2.85 €2.85 €4.98 €4.98 Based on similar listed entity TEC 10 OAT floating-rate Bonds F-39(1)(2)(1)(2)(1)(2)(1)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsChange in Number of Non-Employee Warrants As of December 31, Number of Non-Employee Warrants 2011 2012 2013 Balance at beginning of period 1,512,480 398,100 472,164 Granted during the period 180,000 78,384 71,400 Forfeited during the period (35,010) — (1,416) Exercised during the period (662,220) (4,320) — Expired during the period — — — Effect of the 2-for-5 reverse share split that occurred on August 20, 2013 (597,150) — — Balance at end of period 398,100 472,164 542,148 Breakdown of the Closing Balance As of December 31, 2011 2012 2013 Non-Employee Warrants NumberOutstanding NumberExercisable RemainingContractualLife (Years) NumberOutstanding NumberExercisable RemainingContractualLife (Years) NumberOutstanding NumberExercisable RemainingContractualLife (Years) Plan B—Non-employee warrants with exercise price of €0.70 254,100 141,625 8.1 254,100 254,100 7.1 254,100 254,100 6.1 Plan C—Non-employee warrants with exercise price of €0.70 72,000 38,984 8.9 67,680 67,680 7.8 67,680 67,680 6.9 Plan C—Non-employee warrants with exercise price of €5.95 72,000 10,000 9.6 96,000 60,000 8.7 96,000 60,000 7.7 Plan D—Non-employee warrants with exercise price of €8.28 — — — 54,384 9,632 9.8 52,968 16,314 8.8 Plan D—Non-employee warrants with exercise price of €9.65 — — — — — — 71,400 27,200 9.2 Total 398,100 190,609 — 472,164 391,412 — 542,148 425,294 — F-40Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsReconciliation with the Consolidated Statement of Income Year Ended December 31, 2011 2012 2013 R&D S&O G&A Total R&D S&O G&A Total R&D S&O G&A Total (in thousands of euros) Free shares €— €— €— €— €— €— €— €— €— €— €— €— Share options / BSPCE (180) (899) (233) (1,312) (429) (1,800) (1,142) (3,371) (2,049) (2,801) (1,567) (6,417) Plans 1 and 2 (11) (43) (1) (55) (3) (12) (1) (16) — — — — Plans 3 and 3 amended (159) (681) (230) (1,070) (166) (542) (177) (885) (65) (232) (85) (382) Plan 4 — — — — — — — — — — — — Plan 5 (10) (175) (2) (187) (177) (1,203) (868) (2,248) (456) (129) (696) (1,281) Plan 6 — — — — (83) (43) (96) (222) (1,140) (1,294) (531) (2,965) Plan 7 — — — — — — — — (388) (1,146) (255) (1,789) Non-employee warrants — — (83) (83) — — (185) (185) — — (459) (459) Plan A — — (2) (2) — — — — — — — — Plan B — — (29) (29) — — (9) (9) — — — — Plan C — — (52) (52) — — (130) (130) — — (91) (91) Plan D — — — — — — (46) (46) — — (368) (368) Total €(180) €(899) €(316) €(1,395) €(429) €(1,800) €(1,327) €(3,556) €(2,049) €(2,801) €(2,026) €(6,876) Note 9—Financial Income and ExpensesThe Consolidated Statements of Income line item “Financial income (expense)” can be broken down as follows: Year Ended December 31, 2011 2012 2013 (in thousands of euros) Financial income from cash equivalents €80 €204 €620 Foreign exchange gain (loss) 552 (1,755) (7,127) Other financial expense (4) (8) (361) Total financial income (expense) €628 €(1,559) €(6,868) The significant foreign exchange loss for the period ended December 31, 2013 consists primarily of exchange differences arising on the settlement ortranslation into functional currency of monetary statement of financial position items labeled in euros of foreign subsidiaries that have a currency differentfrom the euro. Criteo K.K. (Japan), Criteo Corp. (United States) and Criteo do Brasil (Brazil) are the primary contributors especially due to translation of theirpayable balances in euro. F-41Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNote 10—Income TaxesBreakdown of Income TaxesThe Consolidated Statements of Income line item “Income taxes” can be broken down as follows: Year Ended December 31, 2011 2012 2013 (in thousands of euros) Current tax €(4,548) €(6,337) €(6,110) Deferred tax 157 (219) 3,697 Income taxes €(4,391) €(6,556) €(2,413) As mentioned in Note 3—Principles and Accounting Methods, the French Research Tax Credit is not included in the line item “Income taxes” butdeducted from “Research and development expenses” (see note 7—Allocation of personnel expenses).French business tax (CVAE) is included in the current tax balance for an amount of €509,000, €969,000 and €1,156,000 for the years endedDecember 31, 2011, 2012 and 2013 respectively.Reconciliation between the Effective and Nominal Tax ExpenseThe following table shows the reconciliation between the effective and nominal tax expense at the nominal standard French rate of 33.33% (excludingadditional contributions): Year Ended December 31, 2011 2012 2013 (€ in thousands of euros) Income before taxes €10,515 €7,387 €3,806 Theoretical group tax rate 33.33% 33.33% 33.33% Nominal tax expense €(3,505) €(2,462) €(1,269) Increase / decrease in tax expense arising from: Permanent differences €(482) €(1,731) €(606) Research tax credit 527 792 707 Share-based compensation (465) (1,185) (2,292) Non recognition of deferred tax assets related to tax losses and temporary differences (3,329) (5,894) (3,573) Utilization or recognition of previously unrecognized tax losses 851 569 1,790 French CVAE included in income taxes (509) (969) (1,156) Special tax deductions 3,155 4,608 3,703 Effect of different tax rates (81) 112 381 Other differences (553) (396) (98) Effective tax expense €(4,391) €(6,556) €(2,413) Effective tax rate: 41.8% 88.8% 63.4% For the period ended December 31, 2012, the significant balance of permanent differences is mainly affected by the tax option we did elect for regardingour Brazilian subsidiary, Criteo do Brasil LTDA. Under this tax option reserved to Brazilian companies with revenues less than B$ (Brazilian Real)48 million, the income tax rates apply to presumptive profits. As of December 2013, the option has been changed, and the Brazilian subsidiary is taxedon effective profits. F-42(1)(2)(3)(4)(1)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents For 2011 and 2012, unrecognized deferred tax assets were mainly related to the tax losses of Criteo Corp. (United States). Based on the projected taxableprofit within the next three years, we determined that it is now probable that future taxable profit will be available against which the tax losses and taxcredits can be utilized. Therefore, deferred tax assets were recognized for €2.4 million as of December 31, 2013. For 2013, unrecognized deferred taxassets mainly correspond to the 2013 tax losses of Criteo do Brasil (Brazil). The 2013 balance includes the recognition of a portion of previously tax losses of Criteo Corp. and Criteo Ltd. Special tax deductions refer to the application of a reduced income tax rate for technology royalties income invoiced by the Parent to its subsidiaries.Deferred Tax Assets and LiabilitiesThe following table shows the changes in the major sources of deferred tax assets and liabilities: DefinedBenefitObligation TaxLosses Other Deferred TaxAssets TangibleAssets Other Deferred TaxLiabilities Limitation ofDeferredTax Assets Deferred TaxPosition (in thousands of euros) Balance at January 1, 2011 €29 €3,453 €68 €3,550 €(54) €(15) €(69) €(2,408) €1,073 Recognized in profit or loss 26 1,531 2,252 3,809 (35) (66) (101) (3,551) 157 Recognized in other comprehensive income — — — — — — — — — Currency translation adjustments — 261 145 406 (3) (12) (15) (383) 8 Balance at December 31, 2011 55 5,245 2,465 7,765 (92) (93) (185) (6,342) 1,238 Recognized in profit or loss 39 5,038 (306) 4,771 (352) 61 (291) (4,699) (219) Recognized in other comprehensive income 100 — — 100 — — — (55) 45 Currency translation adjustments — (266) (39) (305) 10 — 10 242 (53) Balance at December 31, 2012 €194 €10,017 €2,120 €12,331 €(434) €(32) €(466) €(10,854) €1,011 Recognized in profit or loss 118 5,648 2,027 7,793 (737) 27 (710) (3,386) 3,697 Recognized in other comprehensive income 16 — 33 49 — — — (27) 22 Change in consolidation scope — — — — (371) — (371) — (371) Currency translation adjustments — (641) (339) (980) 47 2 49 755 (176) Balance at December 31, 2013 €328 €15,024 €3,841 €19,193 €(1,495) €(3) €(1,498) €(13,512) €(4,183) For the years 2011 and 2012, limitation of deferred tax primarily relates to Criteo Corporation (United States) unrecognized tax losses. In 2013, weconsidered that it was probable that sufficient taxable income will be available within the next three years to recognize a portion of previous tax losses.Therefore deferred tax assets have been recognized up to €2.4million as of December 31, 2013.As at December 31, 2011, 2012 and 2013, unrecognized deferred tax assets amounted to €7.6 million, €11.9 million and €13.5 million respectively.These amounts mainly related to unrecognized accumulated tax losses of Criteo Corporation (€3.9 million, €8.3 million and €10.0 million respectively) andCriteo do Brazil in 2013 (€1.8 million in 2013). F-43(2)(3)(2) (4)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsProvisions in Relation to Tax ContingencyIn 2011 we underwent a tax inspection covering the fiscal years 2008 and 2009. At the end of 2011, we received a tax assessment notice for which aprovision has been recognized for €0.5 million. Further to another tax inspection in 2013, no significant reassessment was received. The provision has beenmaintained as of December 31, 2013.Current tax assetsThe total amount of €8.0 million corresponds to prepayments of income taxes mainly performed by Criteo SA and Criteo Gmbh.Note 11—Categories of Financial Assets and Financial LiabilitiesFinancial AssetsThe following schedules disclose our financial assets categories for the presented periods: As of December 31, 2011 Carryingvalue Loans andreceivables Assetsdesignated atFVTPL Fair value (in thousands of euros) Non-current financial assets €916 €916 €— €916 Trade receivables, net of allowances 33,423 33,423 — 33,423 Other current assets 5,850 5,850 — 5,850 Other current financial assets — — — — Cash and cash equivalents 16,382 — 16,382 16,382 Total €56,571 €40,189 €16,382 €56,571 Fair value through profit or loss. As of December 31, 2012 Carryingvalue Loans andreceivables Assetsdesignated atFVTPL Fair value (in thousands of euros) Non-current financial assets €6,924 €6,924 €— €6,924 Trade receivables, net of allowances 60,685 60,685 — 60,685 Other current assets 8,080 8,080 — 8,080 Cash and cash equivalents 43,262 — 43,262 43,262 Total €118,951 €75,689 €43,262 €118,951 Fair value through profit or loss F-44(1)(1)(1)(1)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents As of December 31, 2013 Carryingvalue Loans andreceivables Assetsdesignated atFVTPL Fair value (in thousands of euros) Non-current financial assets €7,627 €7,627 €— €7,627 Trade receivables, net of allowances 87,643 87,643 — 87,643 Other current assets 13,466 12,878 588 13,466 Cash and cash equivalents 234,343 — 234,343 234,343 Total €343,079 €108,148 €234,931 €343,079 Fair value through profit or loss.Financial LiabilitiesThe following schedules disclose our financial liabilities categories for the presented periods: As of December 31, 2011 Carryingamount Amortizedcost Liabilitiesdesignated atFVTPL Fair value (in thousands of euros) Financial liabilities 877 877 — 877 Trade payables 22,260 22,260 — 22,260 Other current liabilities 10,247 10,247 — 10,247 Total 33,384 33,384 — 33,384 Fair value through profit or loss. As of December 31, 2012 Carryingamount Amortizedcost Liabilitiesdesignated atFVTPL Fair value (in thousands of euros) Financial liabilities 6,253 6,253 — 6,253 Trade payables 50,340 50,340 — 50,340 Other current liabilities 15,541 15,541 — 15,541 Total 72,134 72,134 — 72,134 Fair value through profit or loss. As of December 31, 2013 Carryingamount Amortizedcost Liabilitiesdesignated atFVTPL Fair value (in thousands of euros) Financial liabilities €11,316 €11,213 €103 €11,316 Trade payables 75,889 75,889 — 75,889 Other current liabilities 35,224 35,224 — 35,224 Total €122,429 €122,326 €103 €122,429 Fair value through profit or loss. F-45(1)(1)(1)(1)(1)(1)(1)(1)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNote 12—Goodwill Goodwill (in thousandsof euros) Net book value at January 1, 2013 €— Additions to goodwill 4,100 Disposal of goodwill — Currency translation adjustment 91 Impairment expense — Net book value at December 31, 2013 €4,191 On July 11, 2013, Criteo completed the acquisition of 100% of the shares of AD-X, an English mobile analytics and attribution technology companythat allows businesses to track, monitor and create reports with respect to online display advertising campaign performance on mobile devices andapplications. The global amount of the acquisition is €9.1 million (£7.9 million, based on the exchange rate of €1.1591 for £1.00 as of July 11, 2013),composed as follows: €5.5 million (£4.7 million) paid in cash at the acquisition date, €0.3 million (£0.3 million) paid by installments to one of the sellers withno condition of continued employment, considered as part of the initial purchase price, €3.3 million (£2.9 million) paid by installments at anniversary dates tothe sellers unless their employment terminates, considered as post-combination remuneration expenses.As of December 31, 2013, further to the purchase price allocation the following assets have been identified: customer relationships for €0.7 million (£0.6million), technology for €1.1 million (£0.9 million), deferred taxes for €0.4 million (£0.3 million). Residual goodwill has been valued at €4.2 million (£3.5million). Post-combination remuneration of €2.4 million expenses were accounted and are presented as R&D personal expenses.Identified intangibles assets are amortized and an impairment test will be performed on the goodwill annually.Acquisition costs amounting to €0.4 million (£0.3 million) were fully expensed as incurred.The impact of AD-X business in our 2013 Consolidated statement of Income is not material. F-46Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNote 13—Intangible AssetsChanges in net book value during the presented periods are summarized below: Software OtherIntangibleAssets Total (in thousands of euros) Net book value at January 1, 2011 € 21 € 2 € 23 Additions to intangible assets 566 — 566 Disposal of intangible assets (2) (2) Amortization expense (287) — (287) Net book value at December 31, 2011 300 — 300 Gross value at end of period 594 — 594 Accumulated depreciation and impairment at end of period (294) — (294) Net book value at January 1, 2012 300 — 300 Additions to intangible assets 65 674 739 Disposal of intangible assets — — — Amortization expense (318) — (318) Net book value at December 31, 2012 47 674 721 Gross value at end of period 653 674 1,327 Accumulated depreciation and impairment at end of period (606) — (606) Net book value at January 1, 2013 47 674 721 Additions to intangible assets 5,793 3 5,796 Disposal of intangible assets — — — Amortization expense (1,335) (350) (1,685) Change in consolidation scope — 1,760 1,760 Currency translation adjustments (1) 33 32 Other 674 (674) — Net book value at December 31, 2013 5,178 1,446 6,624 Gross value at end of period 7,117 1,802 8,919 Accumulated depreciation and impairment at end of period €(1,939) €(356) €(2,295) Additions to intangible assets are mainly composed of an upgrade of our production software licenses and Ad-X identified intangibles (customerrelationships and technology) further to the purchase price allocation (materialized under the change in consolidation scope). F-47Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNote 14—Property, Plant and EquipmentChanges in net book value during the presented periods are summarized below : Fixturesand Fittings Furnitureand Equipment Total (in thousands of euros) Net book value at January 1, 2011 €118 €1,887 €2,005 Additions to tangible assets 391 5,540 5,931 Disposal of tangible assets — — — Amortization expense (264) (1,976) (2,240) Currency translation adjustments 8 143 151 Net book value at December 31, 2011 253 5,594 5,847 Gross value at end of period 529 8,663 9,192 Accumulated depreciation and impairment at end of period (276) (3,069) (3,345) Net book value at January 1, 2012 253 5,594 5,847 Additions to tangible assets 1,191 12,154 13,345 Disposal of tangible assets (1) (36) (37) Amortization expense (284) (4,166) (4,450) Finance lease — 232 232 Currency translation adjustments (15) (356) (371) Net book value at December 31, 2012 1,144 13,422 14,566 Gross value at end of period 1,332 20,328 21,660 Accumulated depreciation and impairment at end of period (188) (6,906) (7,094) Net book value at January 1, 2013 1,144 13,422 14,566 Additions to tangible assets 302 20,066 20,368 Disposal of tangible assets (5) (130) (135) Amortization expense (434) (9,001) (9,435) Finance lease — 409 409 Currency translation adjustments (40) (1,017) (1,057) Other 192 (192) — Net book value at December 31, 2013 1,159 23,557 24,716 Gross value at end of period 1,705 38,920 40,625 Accumulated depreciation and impairment at end of period €(546) €(15,363) €(15,909) Movements in property plant and equipment mainly include servers equipment in the French, U.S. and Japanese subsidiaries where the Company’sdata centers are located.Note 15—Non-Current Financial AssetsNon-current financial assets are mainly composed of guarantee deposits for office rentals. The main changes for the twelve-month period endedDecember 31, 2013 arise from a €0.5 million interest-bearing bank deposit that has been pledged in relation with a guaranty provided by the depositary bankwith regards to the 2008 and 2009 tax reassessment and a €0.3 million security deposit related to our new Japanese premises. F-48Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNote 16—Trade ReceivablesThe following table shows the breakdown in trade receivables net book value for the presented periods: As of December 31, 2011 2012 2013 (in thousands of euros) Trade accounts receivable €33,362 €59,666 €86,813 Invoices to be issued 239 2,003 2,663 Gross value at end of period 33,601 61,669 89,476 (Less) allowance for doubtful accounts (178) (984) (1,833) Net book value at end of period € 33,423 € 60,685 € 87,643 Changes in allowance for doubtful accounts are summarized below: As of December 31, 2011 2012 2013 (in thousands of euros) Balance at beginning of period €(109) €(178) €(984) Allowance for doubtful accounts (67) (809) (980) Reversal of provision — — 261 Change in consolidation scope — — (126) Currency translation adjustment (2) 3 (4) Balance at end of period € (178) € (984) € (1,833) Note 17—Other Current AssetsThe following table shows the breakdown in other current assets net book value for the presented periods: As of December 31, 2011 2012 2013 (in thousands of euros) Prepayments to suppliers €323 €183 €476 Employee-related receivables 95 11 33 Taxes receivables 4,486 6,536 10,771 Other debtors 2 42 — Prepaid expenses 944 1,308 1,598 Financial instruments 588 Gross book value at end of period 5,850 8,080 13,466 (Less) allowance for doubtful accounts — — — Net book value at end of period € 5,850 € 8,080 13,466 F-49Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsTaxes receivables are primarily composed of VAT receivables and research tax credit receivables. Prepaid expenses mainly consist in office rentaladvance payments. Financial instruments corresponds to the premiums paid and valued at fair value at closing date in the context of our hedging strategy asdescribed in note 4.Note 18—Cash and Cash EquivalentsConsolidated Statement of Financial PositionThe following table presents for each reported period, the breakdown of cash and cash equivalents: As of December 31, 2011 2012 2013 (in thousands of euros) French SICAV—Eurozone market €1,455 €— €— Interest-bearing bank deposits 5,831 22,616 17,993 Cash 9,096 20,646 216,350 Cash and cash equivalents € 16,382 € 43,262 € 234,343 Consolidated Statement of Cash FlowsNet cash and cash equivalents at end of the reporting period, as presented in the Consolidated Statements of Cash Flows can be reconciled with therelated items in the Consolidated Statements of Financial Position, as follows: As of December 31, 2011 2012 2013 (in thousands of euros) Cash and cash equivalents €16,382 €43,262 €234,343 Less bank overdrafts (697) — (1) Net cash and cash equivalents € 15,685 € 43,262 € 234,342 Note 19—Share CapitalWe manage our capital to ensure that entities in the Company will be able to continue as a going concern while maximizing the return to stakeholdersthrough the optimization of the debt and equity balance.Our capital structure consists of net financial debt (financial liabilities as detailed in notes 22 and 23 offset by cash and bank balances) and equity(comprising issued capital, reserves, retained earnings and non-controlling interests).We are not subject to any externally imposed capital requirements.On October 29, 2013 and November 3, 2013, the Parent’s share capital was increased pursuant to the two following transactions: • in the context of our Initial Public Offering, a share capital increase of a nominal amount of € 202,064.50 by way of the issuance, at the price pershare of $31.00 (share premium included), of 8,082,580 ordinary shares with a nominal value of €0.025 each, corresponding to a subscriptionof a total amount (share premium included) of $250,559,980 before deduction of underwriters fees. Based on the exchange rate of €0.7331 for a$1 as of October 31, 2013, the total subscription amounted to €183,681,533.61 (before deduction of underwriters fees). F-50Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents • in the context of the exercise of the overallotment option from the underwriters, a share capital increase of a nominal amount of €30,309.67 by wayof issuance, at the price per share of $31.00 (share premium included), of 1,212,387 ordinary shares with a nominal value of 0.025 each,corresponding to a subscription of a total amount (share premium included) of $ 37,583,997, before deduction of underwriters fees. Based on theexchange rate of €0.7331 for a $1 as of October 31, 2013, the total subscription amounted to €27,552,230.04 (before deduction of underwritersfees).Issued CapitalAs of December 31, 2013, the Parent’s share capital is composed of 56,856,070 ordinary shares, each with a nominal value of €0.025 i.e. a totalamount of €1,421,401.75.The series of preferred shares existing as of December 31, 2011 and 2012 were convertible upon the occurrence of certain liquidity events (e.g. an initialpublic offering) into ordinary shares on a 1:1 basis, with the exception of the Series D preferred shares whose conversion ratio could be adjusted depending onthe initial public offering price of our ordinary shares. In the context of our Initial Public Offering in October 2013, the conversion conditions were met and allpreferred shares (Series A, B, C and D) have been converted into ordinary shares on a 1:1 basis.Change in Number of Shares (Number of Shares) OrdinaryShares PreferredSharesSeries A PreferredSharesSeries B PreferredSharesSeries C PreferredSharesSeries D Total Balance at January 1, 2011 9,594,516 7,183,256 15,336,596 3,890,814 — 36,005,182 Effect of the 2-for-5 reverse share split that occurred on August 20,2013 (5,756,710) (4,309,953) (9,201,957) (2,334,488) — (21,603,108) Effect of change in nominal value from €0,01 to €0,0033 7,675,613 5,746,604 12,269,276 3,112,651 — 28,804,144 Issue of shares under share option plans 729,422 — — — — 729,422 Issue of shares under exercise of share warrants 264,888 — — — — 264,888 Balance at December 31, 2011 12,507,729 8,619,907 18,403,915 4,668,977 — 44,200,528 Adopted by Criteo S.A. General Meeting of Shareholders on August 2, 2013. Adopted by Criteo S.A. General Meeting of Shareholders on June 28, 2011 (Number of Shares) OrdinaryShares PreferredsharesSeries A PreferredsharesSeries B PreferredsharesSeries C PreferredsharesSeries D Total Balance at January 1, 2012 12,507,729 8,619,907 18,403,915 4,668,977 — 44,200,528 Issue of shares under capital increase in cash — — — — 2,660,753 2,660,753 Issues of share under share option plans 261,736 — — — — 261,736 Balance at December 31, 2012 12,769,465 8,619,907 18,403,915 4,668,977 2,660,753 47,123,017 Adopted by Criteo S.A. Ordinary and Extraordinary Meeting of Shareholders of September 14, 2012. Corresponding share capital increase as of December 31, 2012 to be approved by the Board of Directors. F-51(1)(2)(1)(2)(1)(2)(1)(2)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents(Number of Shares) OrdinaryShares PreferredsharesSeries A PreferredsharesSeries B PreferredsharesSeries C PreferredsharesSeries D Total Balance at January 1, 2013 12,769,465 8,619,907 18,403,915 4,668,977 2,660,753 47,123,017 Issue of shares under capital increase in cash 9,294,967 — — — — 9,294,967 Issues of share under share option plans 438,086 — — — — 438,086 Conversion into ordinary shares 34,353,552 (8,619,907) (18,403,915) (4,668,977) (2,660,753) — Balance at December 31, 2013 56,856,070 — — — — 56,856,070 Adopted by Criteo S.A. General Meeting of Shareholders on August 2, 2013 and approved by the Board of Directors on November 5, 2013 Adopted by the Board of Directors on February 7, 2013, April18, 2013, September 3, 2013 and December 4, 2013 and Criteo S.A. General Meeting ofShareholders on August 2, 2013. Adopted by Criteo S.A. General Meeting of Shareholders on August 2, 2013.Reconciliation between the Equity and the Cash Effects of Capital Increases As ofDecember 31, 2013 (in millions ofeuros) Total net proceeds €197.0 IPO expenses (5.7) Exercise of stock-options 0.9 Total cash effect of capital increase €192.2 Income tax impact 3.0 Total impact on equity €195.2 Note 20—Earnings Per ShareBasic Earnings Per ShareWe calculate basic earnings per share by dividing the net income for the period attributable to shareholders of the Parent by the weighted average numberof shares outstanding. Preferred shares had the same rights on the result for the period and dividends as ordinary shares for purposes of calculating earningsper share. As a result, all outstanding ordinary and preferred shares have been taken into consideration for purposes of calculating basic EPS. Basic earningsper share have been computed to give effect to the 2-for-5 reverse share split of Parent’s share capital as approved by Criteo S.A. General Meeting ofShareholders on August 2, 2013 and effective as of August 20, 2013. Year Ended December 31, 2011 2012 2013 (€ in thousands of euros) Net income attributable to shareholders of Criteo S.A. €6,124 €981 €1,065 Weighted average number of shares outstanding 43,793,904 45,143,188 48,692,148 Basic earnings per share €0.140 €0.022 €0.022 F-52(1)(2)(3)(1)(2)(3)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDiluted Earnings Per ShareWe calculate diluted earnings per share by dividing the net income attributable to shareholders of the Parent by the weighted average number of sharesoutstanding plus any potentially dilutive shares not yet issued from share-based compensation plans (see note 8). As noted in note 19, preferred shares havebeen converted into ordinary shares according to a 1:1 conversion ratio in the context of the Initial Public Offering which occurred in October 2013: there are nomore preferred shares outstanding as of December 2013. Consequently all potential dilutive effect from shares is considered.For each period presented, a contract to issue a certain number of shares (i.e. share option, share warrant or BSPCE contracts) is assessed as potentiallydilutive, if it is “in the money” (i.e., the exercise or settlement price is inferior to the average market price). As of December 31, 2011 and 2012, the Parentshares were not traded on a stock exchange, the market price was determined based on Parent ordinary share’s fair value assumptions described in note 8, i.e.€4.98 for 2011 and €6.43 for 2012. From 2013, the closing share price has been taken into account for the calculation i.e. $34.2 (€24.8) at December 31,2013.Dilution is defined as a reduction of earnings per share or an increase of loss per share. As the exercise of all outstanding share options and warrantswould decrease loss per share, they are considered to be anti-dilutive and excluded from the calculation of loss per share.Diluted earnings per share have been computed to give effect to the 2-for-5 reverse share split of Parent’s share capital as approved by Criteo S.A.General Meeting of Shareholders on August 2, 2013 and effective as of August 20, 2013. Year Ended December 31, 2011 2012 2013 (in thousands of euros) Net income attributable to shareholders of Criteo S.A. €6,124 €981 €1,065 Weighted average number of shares outstanding used to determine basic earningsper share 43,793,904 45,143,188 48,692,148 Dilutive effect of : Share awards — — — Share options and BSPCE 3,447,890 3,157,780 6,025,689 Share warrants 280,170 286,698 456,928 Weighted average number of shares outstanding used to determine dilutedearnings per share 47,521,964 48,586,666 55,174,764 Diluted earnings per share €0.129 €0.020 €0.019 F-53Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNote 21—Employee BenefitsDefined Benefit PlansAccording to the French law and Syntec Collective Agreement, French employees are entitled to compensation paid on retirement.The following table summarizes the changes in the defined benefit obligation (DBO): Year Ended December 31, 2011 2012 2013 (in thousands of euros) Defined benefit obligation present value—beginning of period €86 €165 €582 Service cost 61 110 281 Finance cost 4 8 15 Actuarial losses 14 299 47 Defined benefit obligation present value—end of period € 165 € 582 € 925 The reconciliation of the changes in the present value of Defined Benefit Obligation with the Consolidated Statements of Income for the presented periodsis illustrated in the following table: Year Ended December 31, 2011 2012 2013 (in thousands of euros) Service cost €(61) €(110) €(281) Finance cost (4) (8) (15) Actuarial losses (14) (299) (47) Total defined benefits plan expenses (79) (417) (343) Of which: Other comprehensive loss — (299) (47) Research and development expenses — — (109) Sales and operations expenses — — (105) General and administrative expenses (75) (110) (67) Financial expense (4) (8) (15) The main assumptions used for the purposes of the actuarial valuations are listed below: As of December 31, 2011 2012 2013 Discount rate (Corp AA) 4.6% 2.7% 3.2% Expected rate of salary increase 5.0% 5.0% 5.0% Expected rate of social charges 40.0% 40.0% 40.0% Estimated retirement age 65 years old 65 years old 65 years old Life table INSEE—2003-2005 Staff turnover assumptions: Less than 30 years old 10% 10% 10% 30-45 years old 5% 5% 5% More than 45 years 0% 0% 0% F-54Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDefined Contribution PlansThe total expense recognized in the Consolidated Statements of Income represents contributions payable to these plans by us at specified rates. Year Ended December 31, 2011 2012 2013 (in thousands of euros) Defined contributions plans included in personnel expenses €(1,081) €(1,706) €(3,129) Note 22—Financial LiabilitiesThe changes in current and non-current financial liabilities during the period ended December 31, 2013 are illustrated in the following schedule: As ofDecember 31,2012 Newborrowings Repayments Change Other Currencytranslationadjustment As ofDecember 31,2013 (in thousands of euros) Borrowings €3,875 €8,000 €— €— €(5,964) €— €5,911 Financial liabilities relating to finance leases 129 — — — 79 — 208 Other financial liabilities 177 — — — (177) — — Non-current portion 4,181 8,000 — — (6,062) — 6,119 Borrowings 1,995 — (3,255) — 5,964 — 4,704 Other financial liabilities — — — — — — — Financial liabilities relating to finance leases 77 — (195) — 330 — 212 Other financial liabilities — — — — 177 — 177 Bank overdrafts — — — 1 — 1 Financial derivatives — — — 103 — — 103 Current portion 2,072 — (3,450) 104 6,471 — 5,197 Borrowings 5,870 8,000 (3,255) — — — 10,615 Financial liabilities relating to finance leases 206 — (195) — 409 — 420 Other financial liabilities 177 — — — — — 177 Bank overdrafts — — — 1 — — 1 Financial derivatives — — — 103 — — 103 Total €6,253 €8,000 €(3,450) €104 €409 €— €11,316 In 2012 and 2013, we have entered into four loan agreements with third-party financial institutions dedicated to financing tangible assets as indicatedbelow: Granting Date Amount(in thousandsof euros) FixedRate Settlement Date August 27, 2012 €2,500 2.65% September 5, 2015 September 28, 2012 1,100 2.50% November 5, 2015 December 28, 2012 2,500 2.40% December 28, 2015 June 7, 2013 8,000 2.30% June 7, 2016 Borrowings €14,100 F-55Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWe are party to two loan agreements with Caisse D’Epargne et de Prévoyance d’Auvergne et du Limousin, or CEPAL, providing an aggregate of€3.6 million, consisting of a €2.5 million loan to finance certain capital expenditures and a €1.1 million loan to finance our SAP licenses. The €2.5 millionCEPAL loan bears interest at fixed rate of 2.65% per annum. The €1.1 million CEPAL loan bears interest at 2.50% per annum. The combined outstandingprincipal and interest for each CEPAL loan are payable in equal monthly installments based upon the applicable date of such loan. Each CEPAL loan maturesin 2015. At December 31, 2013, there was €2.2 million outstanding on the CEPAL loans.We also party to two loan agreements with Le Credit Lyonnais, or LCL, providing a €2.5 million and a €8.0 million loan to finance certain capitalexpenditures in 2013. The €2.5 million LCL loan bears interest at fixed rate of 2.40% per annum. The €8.0 million LCL loan bears interests at a fixed rate of2.30% per annum. The combined outstanding principal and interest LCL loan is payable in equal monthly installments and matures in December 2015 andJune 2016. At December 31, 2013, there was €8.4 million outstanding on the LCL loans.All of these loans are unsecured and contain customary events of default but do not contain any affirmative, financial or negative covenants.We are also party to short-term credit line and overdraft facilities with HSBC plc, LCL and Credit Industriel et Commercial, or CIC. Our facilities withthese banks, we may draw up to a maximum of €9.4 million collectively as of December 31, 2013. Any loans or overdraft under these short-term facilitiesbear interest based on the one month EURIBOR rate or three month EURIBOR rate. As these facilities are exclusively short term credit and overdrafts facilities,our banks have the ability to terminate such facilities on short notice. All of these short-term facilities are unsecured and contain customary events of defaultbut do not contain any affirmative, financial or negative covenants.Note 23—Net Financial DebtIt is noted that we use a financial performance indicator being “net financial debt” defined as being total financial liabilities minus total cash and cashequivalents. As disclosed in Notes 4 and 19, market risks are monitored by our management, which has set guidelines for managing our consolidated netfinancial debt, especially in respect of its liquidity, interest rate, foreign exchange rate and counterparty risks exposure in the months to come, and reviewspast management (realized transactions, financial results).The following tables show the net financial debt maturity and allocation by currency.Net Financial Debt Maturity CarryingValue Maturity 2014 2015 2016 2017 2018 (in thousands of euros) Borrowings €10,615 €4,675 €4,539 €1,372 €— €— Financial liabilities relating to finance leases 420 212 186 22 — — Other financial liabilities 177 177 — — — — Bank overdrafts 1 1 — — — — Financial derivatives 103 103 — — — — Financial liabilities 11,316 5,168 4,725 1,394 — — Cash and cash equivalents (234,343) — — — — — Net financial debt €(223,027) €5,168 €4,725 €1,394 € — € — Includes interest accrued through December 31, 2013. F-56(1)(1)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNet Financial Debt by Currency CarryingValue EUR Currency GBP USD BRL JPY KRW Other (in thousands of euros) Borrowings €10,615 €10,615 €— €— €— €— €— €— Financial liabilities relating to finance leases 420 420 — — — — — — Other financial liabilities 177 177 — — — — — — Bank overdrafts 1 1 — — — — — — Financial derivatives 103 103 — — — — — — Financial liabilities 11,316 11,316 — — — — — — Cash and cash equivalents (234,343) (182,632) (1,360) (32,552) (909) (6,727) (1,810) (8,353) Net financial debt €(223,027) €(171,316) €(1,360) €(32,552) €(909) €(6,727) €(1,810) €(8,353) Includes interest accrued through December 31, 2013.Note 24—Other Current LiabilitiesOther current liabilities are presented in the following table: As of December 31, 2011 2012 2013 (in thousands of euros) Client prepayments €234 €876 €2,414 Employee-related payables 6,585 8,701 14,340 Taxes payable 3,286 5,299 13,069 Accounts payable relating to capital expenditures 100 599 4,995 Other creditors 6 61 406 Deferred revenues 34 5 — Total € 10,245 € 15,541 € 35,224 Note 25—CommitmentsOperating Lease ArrangementsFuture payment obligations under non-cancellable operating leases for each presented period are listed below: Less than1 year 1 to 5 years 5 years + Total (in thousands of euros) Minimum property rental payments at December 31, 2011 €1,522 €748 €— €2,270 Minimum property rental payments at December 31, 2012 7,281 22,571 3,686 33,538 Minimum property rental payments at December 31, 2013 9,870 34,091 17,219 61,180 Operating Lease ExpensesThe corresponding amounts expensed during the reported periods are as follows: Year Ended December 31, 2011 2012 2013 (in thousands of euros) Property rental expenses €(2,135) €(5,515) €(8,923) F-57(1)(1)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCredit Lines Facilities and Bank OverdraftsWe have been granted credit line facilities and are authorized to draw up to a maximum of €9.4 million at year-end. None of these credit lines were drawnas of December 31, 2013.Note 26—Related PartiesThe Executive Officers as of December 31, 2013 are: • Jean-Baptiste Rudelle—Chairman of the Board, Chief Executive Officer and Co-Founder • Romain Niccoli—Chief Technology Officer, Deputy Chief Executive Officer and Co-Founder • Franck Le Ouay—Chief Scientist Officer, Deputy Chief Executive Officer and Co-Founder • Jonathan Wolf—Chief Product Officer • Greg Coleman—President of Criteo Corp • Benoit Fouilland—Chief Financial Officer • Jean-Louis Constanza—Chief Innovation Officer • Eric Eichmann—Chief Operating OfficerTotal compensation for the executive team, including social contributions, is summarized in the following table: Year Ended December 31, 2011 2012 2013 (in thousands of euros) Short-term benefits €(2,745) €(3,381) €(3,404) Long-term benefits (9) (4) (167) Share-based compensation (207) (1,979) (2,621) Total €(2,961) €(5,364) €(6,192) As of December 31, 2011 and 2012, the short term benefits were including employee and employers’ social contributions. As of December 31, 2013, theemployer’s social contributions are not included in the disclosure.Note 27—Subsequent EventsTedemis AcquisitionOn February 20, 2014, we announced we acquired Tedemis, a leading provider of real-time personalized email marketing solutions that help advertisersturn web visitors into customers. We acquired 100% equity in Tedemis for an initial amount of €17.0 million in upfront cash. The additional payments,which amount to €4.0 million are conditioned to agreed milestones over a 2 year period. This business combination will be accounted for under the acquisitionmethod in accordance with IFRS 3. The impact of the transaction will be reflected in our consolidated financial statements as of March 31, 2014. Thedetermination of the fair value of assets acquired and liabilities assumed will be performed within twelve months after the acquisition date.Loan AgreementIn February 2014, we entered into two loan agreements with Bpifrance Financement (French Public Investment Bank) to support our development. Thefirst agreement is a fixed rate seven-year term loan for €3.0 million. This amount will be amortized quarterly after a two-year period. The interest rate will bedetermined based on the French State Long Term rate published the month before the drawing (that shall not occur after May 20, 2014). The second agreementis a three-year revolving credit facility for a maximum amount of €3.0 million in the first year, and decreasing by €1.0 million in each subsequent year. Theinterest rate is Euribor 3 months plus a 0.70% margin. A 0.30% commitment fee is due on a quarterly basis depending on the amount used. F-58(1)(1)Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsSIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned tosign this annual report on its behalf. Criteo S.A./s/ Jean-Baptiste RudelleBy: Jean-Baptiste RudelleTitle: Chief Executive OfficerDate: March 5, 2014Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsEXHIBIT INDEX Incorporated by ReferenceExhibit Description Schedule/Form FileNumber Exhibit FileDate1.1# By-laws (statuts) of the registrant (English translation) 2.1 Form of Deposit Agreement, including the Form of AmericanDepositary Receipt F-1 333-191223 4.1 October 2, 20134.1 Commercial Lease between Orosdi and the registrant dated January 20,2012 (English translation) F-1 333-191223 10.1 October 2, 20134.2 Sublease Agreement between DST Realty of NY and Criteo Corp.,dated April 12, 2012 F-1 333-191223 10.2 October 2, 20134.3 Form of Registration Rights Agreement by and among the registrant andcertain investors signatory thereto, dated as of August 30, 2013 F-1 333-191223 10.3 October 23, 20134.4† Form of Indemnification Agreement between the registrant and each ofits executive officers and directors F-1 333-191223 10.4 October 23, 20134.5† Non-Compete Agreement between the registrant and each of Messrs.Rudelle, Le Ouay and Niccoli F-1 333-191223 10.5 October 2, 20134.6† Stock Option Plans—2009, 2010, 2011, 2012, 2013 (including formsof Stock Option Grant Agreement and Exercise Notice) F-1 333-191223 10.6 October 2, 20134.7† Summary of BSA Plan F-1 333-191223 10.7 September 18, 20134.8† Summary of BSPCE Plan F-1 333-191223 10.8 September 18, 20134.9† 2013 Free Share Plan F-1 333-191223 10.9 October 2, 20134.10† Form of BSA Grant Document (English translation) F-1 333-191223 10.10 September 18, 20134.11† Form of BSPCE Grant Document (English translation) F-1 333-191223 10.11 September 18, 20134.12† Employment Agreement between the registrant and Benoit Fouilland,dated November 18, 2011 (English translation) F-1 333-191223 10.12 October 2, 20134.13† Employment Agreement between registrant and Jonathan Wolf, datedMay 18, 2009 F-1 333-191223 10.13 September 18, 20134.14†# Employment Agreement between registrant and Eric Eichmann,effective as of March 2013, and related side letters 8.1# List of subsidiaries of the registrant Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Incorporated by ReferenceExhibit Description Schedule/Form FileNumber Exhibit FileDate12.1# Certificate of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)and 15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002 12.2# Certificate of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)and 15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002 13.1# Certificate of Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuantto §906 of the Sarbanes-Oxley Act of 2002 13.2# Certificate of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuantto §906 of the Sarbanes-Oxley Actof 2002 15.1# Consent of Deloitte & Associés †Indicates management contract or compensatory plan.#Filed herewith.Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 1.1FOR INFORMATION PURPOSES ONLYCRITEOA French société anonyme (corporation) with share capital of €1,422,701.65Registered office: 32 Rue Blanche, 75009 ParisParis Trade and Companies Registry no. 484 786 249 UPDATED BYLAWSas of March 4, 2013Copy certified as true to the original bythe Chairman and Chief Executive Officer Jean-Baptiste RudelleSource: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.TITLE ILEGAL FORM, NAME, PURPOSES, REGISTERED OFFICE AND TERM OF THE COMPANYARTICLE 1 ~ LEGAL FORMThe Company was incorporated as a société par actions simplifiée (simplified corporation) and subsequently converted into a société anonyme by adecision adopted by the shareholders on March 3, 2006.It is governed by Book II of the Commercial Code (Code de Commerce) and by these bylaws.ARTICLE 2 ~ NAMEThe Company’s name is:CRITEOIn all instruments and documents issued by the Company and intended for third parties, the Company’s name shall always be immediately preceded orfollowed by the words “société anonyme” or the acronym “SA” and by the amount of share capital.ARTICLE 3 ~ PURPOSESThe Company’s purposes, directly or indirectly, both in France and abroad, are: • Providing IT services and software, acting as a communication agency, providing consulting services to companies and engaging in distance sales; • Taking equity stakes or acquiring interests in all commercial, industrial, financial, real or personal property companies and enterprises by creating newcompanies, making contributions, subscribing for or purchasing securities or corporate rights, carrying out corporate mergers and entering into alliances orconsortia, whether by taking equity stakes or otherwise; • Managing, administering and disposing of said equity stakes, including providing consulting services in the fields of administration and management, inparticular commercial, financial and administrative administration and management; and • More broadly, engaging in all financial, commercial, industrial and personal or real property operations that may be directly or indirectly related to thepurposes above or any similar or connected purposes that may promote the Company’s expansion or development in France and abroad.ARTICLE 4 ~ REGISTERED OFFICEThe Company’s registered office is located at:32 Rue Blanche, 75009 Paris. 2Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.It may be transferred to any other location within the same département (county) or any adjacent département by a decision of the Board of Directors,provided such decision is ratified by the next ordinary general shareholders’ meeting, and anywhere else by a decision adopted by an extraordinary generalshareholders’ meeting.If a transfer is decided by the Board of Directors, the Board is authorized to amend the bylaws and perform the publication and filing formalities required as aresult, provided it is stated that the transfer is subject to the aforementioned ratification.ARTICLE 5 ~ TERMThe term of the Company shall be ninety-nine (99) years from the date of its registration with the Trade and Companies Registry, except in the event it isdissolved before the expiration of its term or if said term is extended by an extraordinary general shareholders’ meeting.*** *** ******TITLE IISHARE CAPITAL AND SHARESARTICLE 6 ~ SHARES CAPITALThe Company has a share capital of €1,422,701.65. It is divided into 56,908,066 shares with a par value of € 0.025 each, all fully paid-up and of the samecategory.ARTICLE 7 ~ LEGAL FORMAll shares shall be registered shares. Shares shall be registered in an account, in accordance with the law.ARTICLE 8 ~ SHARE TRANSFERS 8.1.All share transfers shall be carried out in accordance with the law. All expenses generated by a share transfer shall be borne by the transferee. 8.2.Shares are freely transferable.ARTICLE 9 ~ RIGHTS AND OBLIGATIONS PERTAINING TO SHARESThe rights and obligations pertaining to shares follow the shares, regardless of who holds the shares and share transfers shall include all dividends declaredbut not paid and future dividends and, if applicable, the relevant share of reserve funds and provisions. 3Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Ownership of a share shall ipso facto be deemed the shareholder’s approval of these bylaws and of decisions adopted by general shareholders’ meetings.Except as otherwise provided by the law, each shareholder shall have in general meetings as many votes as the number of shares he or she owns, provided thatall required payments due for such shares have been met. For the same par value, each share entitles its holder to one vote.Each share carries a right to a share of corporate assets, of profits, and of liquidation surplus, proportional to the number and nominal value of the existingshares.Whenever it is necessary to hold more than one share, whether or not preferred shares, or securities to exercise any right, the shareholders or holders ofsecurities shall take it upon themselves to pool the number of shares or securities required.ARTICLE 10 ~ PAYMENT FOR SHARESAmounts to be paid, in cash, as payment for shares subscribed pursuant to a capital increase shall be payable in accordance with the requirements imposedby an extraordinary general shareholders’ meeting.The initial payment shall not be less than one-fourth, at the time of a capital increase, of the par value of the shares. If applicable, the initial payment shallinclude the entire amount of the issue premium.The Board of Directors shall make calls for payment of the balance, in one or more installments, within a period of five years from the date the capitalincrease is completed.Each shareholder shall be notified of the amounts called and the date on which the corresponding sums are to be paid at least fifteen days before the due date.Shareholders who do not pay amounts owed on the shares they hold by the due date shall automatically and without the need for a formal demand for paymentowe the Company late payment interest calculated on a daily basis, on the basis of a 365 day year, as of the due date at the legal rate in commercial matters,plus three points, without prejudice to the Company’s personal action against the shareholder in breach and the enforcement measures authorized by law.*** *** ****** 4Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.TITLE IIIMANAGEMENT OF THE COMPANYARTICLE 11 ~ BOARD OF DIRECTORS 11.1.CompositionThe Company shall be managed by a Board composed of individuals or legal entities whose number shall be determined by the ordinary general shareholders’meeting within the limits set by the law.At the time they are appointed, legal entities shall designate an individual as their permanent representative to the Board of Directors. The term of office of thepermanent representative shall have the same duration as the term of office of the legal entity he represents. If a legal entity removes its permanent representativefrom office, it shall immediately appoint a replacement. The same provision shall also apply in the event of the death or resignation of the permanentrepresentative.Directors’ terms of office shall last three years, with a year being defined as the period between two consecutive ordinary general shareholders’ meetings.Directors’ terms of office shall end at the conclusion of the ordinary general shareholders’ meeting that votes on the financial statements for the past fiscal yearheld in the year during which said directors’ terms of office expire.Directors are always eligible for reappointment. They may be removed from office at any time by a decision of a general shareholders’ meeting.In the event of one or more vacancies on the Board of Directors due to death or resignation, the Board may make temporary appointments between two generalshareholders’ meetings.A director appointed to replace another director shall serve only for the remaining portion of his predecessor’s term of office.Appointments made by the Board pursuant to the preceding paragraph shall be submitted for ratification by the next ordinary general shareholders’ meeting.If such appointments are not ratified, decisions adopted and acts performed by the Board shall nevertheless remain valid.If the number of directors falls below the statutory minimum, the remaining directors shall immediately convene an ordinary general shareholders’ meeting forthe purpose of completing the membership of the Board.Company employees may be appointed as directors. However, their employment contracts must correspond to actual employment. In such case, employees donot lose the benefit of their employment contracts.The number of directors who are parties to an employment contract with the Company shall not exceed one-third of the directors in office.The number of directors over the age of 70 shall not exceed one-third of the directors in office. If this limit is exceeded during the directors’ terms of office, theoldest director shall automatically be deemed to have resigned at the conclusion of the next general shareholders’ meeting. 5Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.11.2.ChairmanThe Board of Directors shall elect a Chairman from among its members, who shall be an individual. The Board shall determine the duration of his term ofoffice, which shall not exceed his term of office as director, and may remove him from office at any time. The Board shall set his compensation.The Chairman shall organize and manage the work of the Board and report thereon to the general shareholders’ meetings. The Chairman shall ensure thesatisfactory functioning of the Company’s governing bodies and, in particular, ensure that the directors are able to perform their duties.The Chairman of the Board shall not be over the age of 70. If the Chairman reaches this age limit during his term of office as Chairman, he shallautomatically be deemed to have resigned. The Chairman’s term of office shall continue until the next Board of Directors’ meeting, at which his successorshall be appointed. Subject to this provision, the Chairman of the Board is always eligible for reappointment.ARTICLE 12 ~ BOARD OF DIRECTORS 12.1.The Board of Directors shall meet as often as required by the Company’s interests.12.2. The Chairman shall give the directors notice of Board meetings. Notice may be given by any means, whether written or oral.The Chief Executive Officer may also request the Chairman to convene a meeting of the Board of Directors to consider a specific agenda.In addition, directors representing at least one-third of Board members may validly convene a Board meeting. In such case, they shall state the agenda for themeeting.If a Works Council has been created, the representatives of such Council, appointed in accordance with the provisions of the Labor Code (Code du Travail),shall be given notice of all Board of Directors’ meetings.Board meetings shall be held at the registered office or at any other place in France or abroad. 12.3.For the Board to deliberate validly, at least one-half of its members shall be present.Decisions of the Board of Directors shall be adopted by a majority of votes cast. In the event of a tie vote, the Chairman shall have the power to break the tie.12.4. The Board of Directors may adopt internal rules and regulations, which may provide inter alia that, for purposes of calculating the quorum andmajority, directors who participate in Board meetings by videoconference or other means of telecommunication in compliance with the laws and regulations inforce will be deemed to be present. This provision shall not apply to decisions concerning (i) the approval of the annual financial statements or the Board ofDirectors’ management report; (ii) if applicable, the preparation of consolidated financial statements or the group management rapport, and (iii) the removalfrom office of the Chief Executive Officer for any other cause than willful misconduct.12.5. Each director shall receive the information necessary to perform his duties and hold his corporate office, and may obtain copies of all documents hedeems of use.12.6. Any director may, including by letter, telegram or fax, grant another director a proxy to represent him at a Board meeting, but no director may hold morethan one proxy at any meeting. 6Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.12.7. Copies or extracts of the minutes of Board of Directors’ meetings shall be validly certified by the Chairman of the Board of Directors, the ChiefExecutive Officer, the Executive Vice-Presidents, a director temporarily appointed to act as Chairman or an agent duly authorized for such purpose.ARTICLE 13 ~ POWERS OF THE BOARD OF DIRECTORSThe Board of Directors shall establish the Company’s business policies and ensure they are carried out. Subject to the powers expressly granted toshareholders’ meetings, and within the limits of the corporate purposes, the Board of Directors may consider any issue relating to the proper operation of theCompany and shall resolve matters that concern the Company by its decisions.In its relations with third parties, the Company shall be bound by the acts of the Board of Directors that exceed the scope of the corporate purposes, unless theCompany proves that the third party was aware, or that in light of the circumstances could not have been unaware, that the act was not within said corporatepurposes. However, the mere publication of the bylaws shall not constitute such proof.The Board of Directors shall carry out all verifications and audits it deems necessary.Furthermore, the Board of Directors shall exercise the special powers conferred on it by law.ARTICLE 14 ~ EXECUTIVE MANAGEMENT14.1.1. The Company’s executive management functions shall be performed, under the Chairman’s responsibility, by the Chairman of the Board of Directorsor another individual appointed by the Board of Directors, who shall hold the title of Chief Executive Officer.The Chef Executive Officer shall have the broadest possible powers to act in all circumstances in the name of the Company. The Chief Executive Officer shallexercise his powers within the limits of the corporate purposes and subject to the powers expressly granted by law to shareholders’ meetings and to the Boardof Directors.He shall represent the Company in its dealings with third parties. The Company shall be bound by acts of the Chief Executive Officer that exceed the scope ofthe corporate purposes, unless the Company is able to prove that the third party was aware, or that in light of the circumstances could not have been unaware,that the act was not within said corporate purposes. However, the mere publication of the bylaws shall not be sufficient to constitute such proof.14.1.2. The Chief Executive Officer shall not be over 70 years of age. If the Chief Executive Officer reaches this age limit, he shall automatically be deemed tohave resigned. The Chief Executive Officer’s term of office shall continue until the next Board of Directors’ meeting, at which a new Chief Executive Officershall be appointed.14.1.3. If the Chief Executive Officer is a director, the term of his position shall not exceed his term of office as director.The Board of Directors may remove the Chief Executive Officer from office at any time. If the removal from office is decided without just cause, the ChiefExecutive Officer removed from office may claim damages unless he also holds the position of Chairman of the Board of Directors. 7Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.14.1.4. By a decision adopted by a majority vote of the directors present or represented, the Board of Directors shall choose between the two executivemanagement methods described in Article 14.1.1, paragraph 1. The shareholders and third parties shall be informed of such choice in the manner prescribedby the laws and regulations.The choice made by the Board of Directors shall remain in effect until a contrary decision of the Board or, at the Board’s discretion, for the duration of theChief Executive Officer’s term of office.If the Company’s executive management functions are carried out by the Chairman of the Board of Directors, the provisions concerning the Chief ExecutiveOfficer shall apply to him.In accordance with the provisions of Article 706-43 of the Code of Criminal Procedure, the Chief Executive Officer may validly delegate to any person of hischoice the authority to represent the Company in connection with criminal proceedings that may be initiated against the Company.14.2.1. Pursuant to a proposal of the Chief Executive Officer, the Board of Directors may authorize one or more individuals to assist the Chief ExecutiveOfficer in the capacity of Executive Vice-President.In agreement with the Chief Executive Officer, the Board of Directors shall determine the scope and duration of the powers granted to the Executive Vice-Presidents. The Board of Directors shall set their compensation. If an Executive Vice-President is a director, the term of his position shall not exceed his term ofoffice as director.Vis-à-vis third parties, Executive Vice-Presidents shall have the same powers as the Chief Executive Officer. Executive Vice-Presidents have inter alia thepower to initiate legal proceedings.No more than five Executive Vice-Presidents shall be appointed.Pursuant to a proposal of the Chief Executive Officer, the Executive Vice-President(s) may be removed from office by the Board of Directors at any time. If theremoval from office is decided without just cause, an Executive Vice-President removed from office may claim damages.Executive Vice-Presidents shall not be over 70 years of age. If an Executive Vice-President in office reaches this age limit, he shall automatically be deemed tohave resigned. The Executive Vice-President’s term of office shall continue until the next Board of Directors’ meeting, at which a new Executive Vice-Presidentmay be appointed.If the Chief Executive Officer leaves office or is unable to perform his duties, unless otherwise decided by the Board of Directors, the Executive Vice-President(s) shall remain in office and retain their powers until the appointment of a new Chief Executive Officer.Vis-à-vis third parties, the Executive Vice-Presidents shall have the same powers as the Chief Executive Officer.ARTICLE 15 ~ BOARD OBSERVERSPursuant to a proposal of the Board of Directors, an ordinary general shareholders’ meeting may appoint Board observers. The Board of Directors may alsoappoint Board observers directly, subject to ratification by the next general shareholders’ meeting.No more than five Board observers shall be appointed, and they shall constitute a panel. They shall be appointed, without restriction, on the basis of theirexpertise.Board observers shall be appointed for a term of three years, which shall expire at the conclusion of the ordinary general shareholders’ meeting that votes onthe financial statements for the previous fiscal year. 8Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The panel of Board observers shall review matters that the Board of Directors or its Chairman submits to it for its opinion. The Board observers shall attendBoard of Directors’ meetings and shall take part in deliberations in a non-voting capacity. However, their absence shall not affect the validity of the Board’sdeliberations.They shall be given notice of Board meetings in the same manner as the directors.The Board of Directors may remunerate the Board observers by allocating an amount from the directors’ fees granted annually by a general shareholders’meeting.ARTICLE 16 ~ AGREEMENTS SUBJECT TO AUTHORIZATION16.1. Guarantees, pledges and other security interests granted by the Company shall be authorized by the Board of Directors in accordance with therequirements prescribed by law.16.2. All agreements made directly or through an intermediary between the Company and its Chief Executive Officer, an Executive Vice-President, a director, ashareholder holding more than 10% of voting rights or, if the shareholder is a company, with the company controlling such shareholder within the meaning ofArticle L. 223-3 of the Commercial Code, shall require the prior approval of the Board of Directors.The foregoing shall also apply to agreements in which any of the persons described in the previous paragraph has an indirect interest.Agreements made between the Company and any enterprise in which the Chief Executive Officer, an Executive Vice-President or a director is an owner, apartner with unlimited liability, a manager, a director, a member of the Supervisory Board, or, generally, is a person with management responsibilities in suchenterprise, shall also require prior authorization.The prior authorization of the Board of Directors shall be required, in accordance with the requirements prescribed by law.The foregoing provisions shall not apply to agreements concerning ordinary transactions that are entered into on arm’s length terms.ARTICLE 17 ~ PROHIBITED AGREEMENTSDirectors who are not legal entities shall be prohibited from obtaining, in any form whatsoever, loans from the Company, current account or other overdraftfacilities from the Company or to have the Company provide a guarantee or pledge securing their undertakings to third parties.The same prohibition shall apply to the Chief Executive Officer, the Executive Vice-Presidents and to the permanent representatives of directors that are legalentities. The foregoing provision shall also apply to the spouses, ascendants and descendants of the persons referred to in this article, as well as to allintermediaries. 9Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ARTICLE 18 ~ STATUTORY AUDITORSThe Company shall be audited, in accordance with the requirements prescribed by law, by one or more statutory auditors who meet the eligibility requirementsprescribed by law. If the requirements prescribed by law are met, the Company shall appoint at least two statutory auditors.Each statutory auditor shall be appointed by an ordinary general shareholders’ meeting.An ordinary shareholders’ meeting shall appoint one or more alternate statutory auditors, which shall replace the principal statutory auditors in the event theyrefuse or are unable to perform their duties, or in the event of their resignation or death.If an ordinary general shareholders’ meeting fails to appoint a statutory auditor, any shareholder may petition the court to appoint one, after having duly joinedthe Chairman of the Board of Directors to the proceedings. The term of office of a statutory auditor appointed by the court shall expire when an ordinaryshareholders’ meeting appoints the statutory auditor(s).*** *** ******TITLE IVGENERAL SHAREHOLDERS’ MEETINGSARTICLE 19General shareholders’ meetings shall be convened and shall meet in the manner prescribed by law.If the Company wishes to give notice of meetings electronically, instead of by mail, it must first obtain the agreement of the shareholders concerned, who shallprovide their email address.Meetings shall be held at the registered office or at any other location specified in the notice of meeting.The right to participate in general shareholders’ meetings is proved by the registration of shares in the shareholder’s name, as of the date of the generalshareholders’ meeting, in the registered share accounts kept by the Company.Shareholders who do not attend the general shareholders’ meeting personally may choose one of three following options: • Granting a proxy to another shareholder, his spouse or his partner in a French domestic partnership (PACS), or • Voting by mail, or • Sending a proxy to the Company without specifying any voting instructions,in accordance with the requirements prescribed by the laws and regulations. 10Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.In accordance with the requirements prescribed by the laws and regulations in force, the Board of Directors may arrange for shareholders to participate andvote by videoconference or means of telecommunication that allow them to be identified. If the Board of Directors decides to exercise this right for a particularshareholders’ meeting, such Board decision shall be mentioned in the announcement and/or notice of the meeting. Shareholders who participate inshareholders’ meetings be videoconference or any of the other means of telecommunication referred to above, as selected by the Board of Directors, shall bedeemed present for the purposes of calculating the quorum and majority.Shareholders’ meetings shall be chaired by the Chairman of the Board of Directors or, in the absence thereof, by an Executive Vice-President, if he is adirector, or by a director specifically appointed for such purpose by the Board. Failing this, the shareholders’ meeting shall elect its own chairman.The duties of vote counter shall be performed by the two members of the shareholders’ meeting who are present and hold the highest number of votes, and whoagree to perform such duties. The officers shall appoint a secretary, who may but need not be a shareholder.An attendance sheet shall be kept, in accordance with the requirements prescribed by law.An ordinary general shareholders’ meeting can be validly conducted pursuant to a first notice of meeting only if the shareholders present or represented hold atleast one-fifth of the shares having the right to vote. An ordinary general shareholders’ meeting convened pursuant to a second notice of meeting may deliberatevalidly regardless of the number of shareholders present or represented.Decisions of ordinary general meetings shall be adopted by a simple majority of the votes cast by the shareholders present or represented.An extraordinary general shareholders’ meeting can be validly conducted pursuant to a first notice of meeting only if the shareholders present or representedhold at least one-fourth of the shares having the right to vote. An extraordinary general shareholders’ meeting can be validly conducted pursuant to a secondnotice of meeting only if the shareholders present or represented hold at least one-fifth of the shares having the right to vote.Decisions of extraordinary general meetings shall be adopted by a two-thirds majority of the votes cast by the shareholders present or represented.Copies or extracts of shareholder meeting minutes may be validly certified by the Chairman of the Board of Directors, a director who holds the position ofChief Executive Officer or the secretary of the meeting.Ordinary and extraordinary general shareholders’ meetings shall exercise their respective powers in accordance with the requirements prescribed by law.*** *** ******TITLE VCORPORATE INCOMEARTICLE 20 ~ FISCAL YEAREach fiscal year shall last one year, starting on January 1 and ending on December 31. 11Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ARTICLE 21 ~ PROFITS – STATUTORY RESERVE FUNDAn amount of at least five percent (5%) shall be deducted from the profits for the fiscal year, reduced by prior losses, if any, in order to constitute the reservefund known as the “statutory reserve fund”. Such deduction shall cease to be mandatory when the amount in the statutory reserve fund is equal to one-tenth ofshare capital.The distributable profits are comprised of the profits for the fiscal year, reduced by prior losses and the deduction required by the previous paragraph, andincreased by profits carried forward.ARTICLE 22 ~ DIVIDENDSIf the financial statements for the fiscal year, as approved by a general shareholders’ meeting, show a distributable profit, the general shareholders’ meetingshall post it to one or more reserve funds that they have the power to appropriate or use, carry it forward or distribute it in the form of dividends.After having confirmed the existence of reserve funds available to it, a general shareholders’ meeting may decide to distribute amounts withdrawn from suchreserve funds. In such case, the decision shall expressly state the reserve items from which the withdrawals are made. However, dividends shall first bewithdrawn from the distributable profits for the fiscal year.The procedures for paying dividends shall be set by a general shareholders’ meeting or, failing this, by the Board of Directors.However, dividends shall be paid within a maximum period of nine months from the end of the fiscal year.The shareholders’ meeting called to approve the accounts of the financial year may grant to each shareholder, for all or part of the dividend available fordistribution, a choice between payment in the form of cash or in the form of shares.In the same manner, each shareholder may be granted, for all or part of the interim dividends available for distribution, a choice between payment of saidinterim dividends in the form of cash or in the form of shares.The offer of a payment in the form of shares, the price and the terms of issue of shares, as well as the request for payment in the form of shares, and the termsof acknowledgement of the subsequent share capital increase are provided by the laws and regulations.In the event that a balance sheet prepared during or at the end of the fiscal year and certified as accurate by the statutory auditor(s) shows that since the end ofthe previous fiscal year the Company has generated a profit after necessary depreciation allowances and provisions have been booked, after deducting, ifapplicable, previous losses and sums to be booked into reserve funds as required by law or these bylaws, and after taking into account profits carriedforward, the Board of Directors may decide to distribute interim dividends before the financial statements for the fiscal year have been approved, as well as theamount thereof and the distribution date. The amount of such interim dividends shall not exceed the amount of profits as defined in this paragraph.*** *** ****** 12Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.TITLE VIDISSOLUTION – LIQUIDATIONARTICLE 23 ~ EARLY DISSOLUTIONAn extraordinary general shareholders’ meeting may, at any time, decide to dissolve the Company before the expiration of its term.ARTICLE 24 ~ LOSS OF ONE-HALF OF SHARE CAPITALIf as a result of losses reported in the accounting documents, the Company’s shareholders’ equity falls below one-half of share capital, the Board of Directorsshall, within four months following the approval of the financial statements reporting such loss, convene an extraordinary general shareholders’ meeting todecide whether to dissolve the Company before the expiration of its term.If it is decided not to dissolve the Company, no later than the end of the second fiscal year following the fiscal year in which the loss is observed, and subjectto the legal provisions with respect to the minimum capital of sociétés anonymes, the Company shall reduce its share capital by an amount at least equal tolosses that cannot be set off against reserve funds, if during such period shareholders’ equity has not been reconstituted to an amount at least equal to one-halfof share capital.If a general shareholders’ meeting is not held or if such shareholders’ meeting is unable to validly deliberate after it had been convened a second time, anyinterested party may petition the Commercial Court to dissolve the Company.ARTICLE 25 ~ EFFECTS OF DISSOLUTIONThe Company shall be in liquidation from the time it is dissolved, regardless of the reason there for. The Company’s legal personality shall continue to existfor the purposes of the liquidation until completion of the liquidation proceedings.During the entire duration of the liquidation proceedings, general shareholders’ meetings shall have the same powers as during the Company’s existence.Shares shall remain negotiable until completion of the liquidation proceedings.The Company’s dissolution shall be binding vis-à-vis third parties only as of the date that notice thereof has been published with the Trade and CompaniesRegistry.ARTICLE 26 ~ APPOINTMENT OF LIQUIDATORS – POWERSWhen the Company’s term expires or if the Company is dissolved before the expiration of its term, a general shareholders’ meeting shall decide the method ofliquidation, appoint one or more liquidators and establish their powers, which the liquidators shall exercise in accordance with the law. The appointment ofliquidators shall cause the duties of the directors, Chairman, Chief Executive Officer and Executive Vice-Presidents to end.ARTICLE 27 ~ LIQUIDATION – CONCLUSION OF LIQUIDATION PROCEEDINGSIn the event of the Company’s dissolution or liquidation, after payment of the liabilities, the remaining assets shall be used first for the payment to theshareholders of the par value of their shares which has not been amortized. Then, the balance, if any, shall be divided among all the shareholders. 13Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Upon completion of the liquidation proceedings, the shareholders shall be convened to vote on the final accounts, the discharge to be granted to the liquidatorsfor the performance of their duties, the termination of their duties and to certify the completion of the liquidation proceedings.The completion of the liquidation proceedings shall be published in accordance with the law.TITLE VIINOTICESARTICLE 28All notices required by these bylaws shall be sent by certified mail, return receipt requested, or served by a bailiff (acte extra-judiciaire). At the same time, acopy of the notice shall be sent to the addressee by ordinary mail.—oo0oo— 14Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 4.14 UK Employment AgreementEMPLOYERCRITEO LTD., whose registered office is at 5th Floor, Mappin House 4 Winsley Street London W1W 8HF, United Kingdom(“the Company”); andEMPLOYEEEric Eichmann, (“the Employee”), born on the ######## ####, residing at #### ### ###### ##### #### ## ##### ### 1.Commencement and duration 1.1This employment agreement (“Employment Agreement”), which is made in accordance with Section 1 of the Employment Right Act 1996. sets outthe terms and conditions of the Employee’s employment with the Company. 1.2The Employee’s employment with the Company will commence on the 25th of March 2013 at the latest (the “Commencement Date”) and will continueunless and until terminated in accordance with either Clause 1.3 or Clause 14 below. For the purposes of the Employment Rights Act 1996, theEmployee’s period of continuous employment commenced on a date to be agreed CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 9721545141/24Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 1.3The first six months of the Employee’s employment shall be a probationary period. If the Company deems it appropriate the six month period may heextended by giving notice to the Employee in writing. This period, including any extension thereto, is known as the “Probationary Period”. During theProbationary Period, the Employee’s performance and suitability for continued employment will be monitored. During the Probationary Period, theEmployee’s employment will be terminable by either party giving the other 1 month’s written notice. The Company reserves the right to pay theEmployee in lieu of this notice period. At the end of the Probationary Period the Employee will be informed in writing if he has successfully completedthe Probationary Period. 2.Function and scope of duties 2.1The Employee shall be employed in the position as Chief Revenue Officer. The Employee shall devote all of his working time, skill and attention to hisrole at the Company and will act in the best interests of the Company at all times. 2.2The Employee will perform all acts, duties and obligations lawfully given to him by the Company to the best of his ability and will comply with suchorders as may be designated by the Company and which are reasonably consistent with his position. 2.3The Employee shall not have any authority to legally bind or commit the Company. 2.4The Employee will undertake any travel (whether within or outside the United Kingdom) as may be required by the Company. 2.5Subject always to the Employee retaining the a position commensurate with the Employee’s status, the Company may, in its absolute discretion, varyfrom time to time the functions and duties of the Employee. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 2.6The Employee will at all times comply with any codes, policies, procedures and rules of the Company from time to time in place. 3.Place of work 3.1The Employee’s place of work will be at the London premises, located at Mappin House, 4 Winsley Street, London, W1W 8HF, but the Employeemay be offered to change his location in the United Kingdom or relocate to France or the US as may be necessary on reasonable notice. Such offer shallrequire the Employee’s consent. 4.Hours of workThe Employee’s core working hours will be 40 hours per week. Standard office hours are 9am to 5.30pm. These hours may by agreement with theEmployee’s manager be varied. The Employee may also be required to work such additional hours as are necessary for the proper performance of hisduties. No additional compensation is provided for any overtime worked in excess of core working hours. In accordance with Regulation 5 of theWorking Time Regulations 1998 the Employee agrees that Regulations 4(1) will not apply to the employment. The parties acknowledge for thepurposes of the Working Time Regulations 1998 that the Employee is a managing executive with autonomous decision making powers. 5.Base Salary, Expenses and Deductions 5.1The Employee’s basic gross salary is £240,000 per year. The salary accrues from day to day and is payable monthly in arrears on or before the lastworking day of each month, less deductions for tax and NI contributions. The Employee’s salary will be reviewed on an annual basis although theCompany will he under no obligation to increase it in any year. It has been agreed that this basic gross salary would be raised to £270,000 per year inFY 2014. 5.2The Employee will be paid or reimbursed for any reasonable expenses wholly, properly and necessarily incurred by him in accordance with theCompany’s expenses policy as detailed in the Company Web intranet site. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 5.3The Company is entitled at any time during the Employee’s employment, or in any event on termination, to deduct from the Employee’s remunerationhereunder: (a)any sum owed by the Employee to the Company or to any Group Company at any time and for any reason including but not limited to anyoutstanding loans, advances, expenses, the cost of repairing any damage or loss to the Company’s property caused by the Employee (and ofrecovering the same), any sums due from the Employee under Clause 7.2. below and any other monies owed by the Employee to the Company;and (b)all appropriate deductions for income tax, employee national insurance contributions and all other statutory deductions due in respect of hissalary and any other benefits provided to him by the Company or any Group Company. 6.Bonus 6.1The Employee may be eligible to receive an annual bonus in accordance with Schedule 3. 6.2In relation to bonus, the following general provisions apply: 6.2.1.a payment in respect of any particular period/financial year will not create any contractual entitlement to any future payment or theamount of any future payment; 6.2.2.No Bonus will be paid for the year if the Employee’s employment is terminated by the Employee, or by the Employer for grossmisconduct at or prior to the date when a Bonus might otherwise have been payable. A prorated Bonus will be paid if the Employee’semployment is terminated by the Employer for any reason other than gross misconduct at or prior to the date when a Bonus mightotherwise have been payable; CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 6.2.3.terms applicable to any bonus entitlement may be amended, replaced or withdrawn at any time and for any reason in the absolutediscretion of the Company. 7.Holidays 7.1In addition to the Public holidays normally applicable in England, the Employee is also entitled to 25 working days’ paid holiday in each completeholiday year. The Company’s holiday year is from 1 January to 31 December. Holiday requests shall be subject to prior consultation with and theadvance approval of the Employee’s manager. 7.2On the commencement and termination of the Employee’s employment, the Employee will be treated as having accrued holiday on a pro rata basis of1/260th days’ holiday for each complete month of service in that holiday year calculated by reference to the Employee’s first or last date at work (asappropriate). If, on the termination of the Employee’s employment, the Employee has exceeded his accrued holiday entitlement, this excess will bededucted from any sums due to the Employee. If the Employee has holiday entitlement still owing the Company may, at its sole discretion, require theEmployee to take all or part of his outstanding holiday during his notice period or to pay the Employee a sum in lieu of holiday accrued but untaken inthe holiday year in which his employment terminates. 7.3Save with the prior written consent of the Company, untaken holiday entitlement for any one calendar year which is not used may not be carriedforward to any subsequent year and shall be forfeited. 7.4Employees on sickness absence will be expected to notify the Company of their intention to take holiday in the usual way. Any such request will besubject to the Company’s prior approval. For the avoidance of doubt, any period of holiday taken during sickness absence will also be regarded as acontinuation of that sickness absence and will not constitute a return to work. Payment for days of holiday taken during sickness absence will be asset out in Clause 8.3 below. Any payment made in respect of that holiday will discharge in full any entitlement to Company Sick Pay for the sameperiod. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 7.5The Company may require the Employee to take any accrued and outstanding holiday entitlement (including during sickness absence) by givingnotice at any time. 8.Illness 8.1If the Employee is absent from work on account of sickness or injury, he must: (a)notify his manager before 10:00 am on the first morning of absence giving the reason for the absence and inform him/her of the expected date ofreturn; and (b)complete and return to the Company a self-certification form in respect of the first seven days (including weekends) of any sickness; and (c)Provide the Company with a medical certificate from his GP or other registered medical practitioner for periods of sickness of over sevenconsecutive calendar days. Thereafter medical certificates should be submitted regularly to cover the full absence. On each occasion a medicalcertificate expires and the Employee does not anticipate returning to work immediately thereafter, he must notify the Company on the firstmorning following expiry of the medical certificate. 8.2The Company reserves the right to require the Employee to undergo a medical examination (at the Company’s expense) with a medical practitionernominated by the Company. The Employee shall co-operate in ensuring the prompt delivery to the Company of such report and shall authorise his ownmedical practitioner to supply all such information as may be required by that doctor and. if so requested by the Company authorise his medicalpractitioner to disclose to the Company his opinion of the Employee’s state of health. 8.3Subject to the Employee’s compliance with clauses 8.1 and 8.2 above, where the Employee is unable to perform his duties due to sickness or injury,the Employee will continue to receive CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. his salary and benefits in full for any continuous period of 6 months or an aggregate period of 90 days in any consecutive 12 month period(“Company Sick Pay”). Any payments due under this clause 8.3 are inclusive of any Statutory Sick Pay (“SSP”) that the Employee may be entitled toreceive and of any amounts payable under any insurance scheme, less normal deductions for tax and national insurance. The Employee’s entitlementto Company Sick Pay and SSP are subject to the Company’s right to terminate the Employee’s employment in accordance with Clauses 1.3 and 14 ofthis Agreement and the Company shall not be liable to provide, or compensate for the loss of, such benefit(s). 9.Pension 9.1The Company does not currently operate an occupational pension scheme in respect of the Employee’s employment and there is therefore nocontracting-out certificate in force in relation to the State Second Pension. 10Other activities 10.1The Employee must not in any way directly or indirectly (i) be engaged or employed in. or (ii) concerned with (in any capacity whatsoever): or(iii) provide services to. any other business or organisation where this is or is likely to be in conflict with the interests of the Company of any GroupCompany, or where this may adversely affect the efficient discharge of his duties during the term of the Employment Agreement, except with the priorwritten consent of the Company, irrespective of whether he receives financial compensation for these activities, save that nothing in this clause 10 shallprevent the Employee from being: (a)the holder of not more than three per cent of any class of stock, shares or debentures or other securities in any company which is listed and/ordealt in on any Recognised Investment Exchange; or (b)interested as shareholder or director only in such companies as the Company from time to time agrees in writing, such agreement not to beunreasonably withheld or CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. withdrawn so long as none of such interests of the Employee shall prejudice the business interests of the Company or any Group Companyand for so long as the Employee continues to comply with the provisions of this clause 10. 11.Reasonableness of Restrictions11.1 The Employee recognises that, whilst performing his duties hereunder he will have access to and come into contact with Confidential Information(as defined in Clause 13 below) belonging to the Company or to Group Companies and will obtain personal knowledge of and influence over its or theircustomers and/or employees. The Employee therefore agrees that the restrictions contained or referred to in Clause 12, Clause 13 and Schedule 1 arereasonable and necessary to protect the legitimate business interests of the Company and its Group Companies both during and after the termination ofthe Employee’s employment. 11.2The Employee acknowledges that he had the opportunity to receive independent legal advice on the terms and effect of this Agreement including thereasonableness of restrictions. 12.Post-Termination Obligations 12.1The Employee agrees to observe the post-termination covenants set out in Schedule 1 of this Agreement. 12.2The Employee agrees that in the event of him receiving from any person, company, business entity or other organisation an offer of employment eitherduring the continuance of this Agreement or during the continuance in force of any of the restrictions set out in Schedule 1, he will provide to suchperson, company, business entity or other organisation making the offer of employment a full and accurate copy of Clause 13 and Schedule 1 of thissigned Agreement. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 13.Confidentiality/Proprietary information and Business Ethics 13.1In addition to and without prejudice to the Employee’s common law obligations to keep information secret, the Employee will not (except for thepurpose of performing his duties or unless ordered to do so by a court of competent jurisdiction) either during his employment or after its terminationdirectly or indirectly: use any Confidential Information for his own purposes or those of any other person, company, business entity or otherorganisation whatsoever: or disclose or communicate Confidential Information to any person, company, business entity or other organisationwhatsoever, and the Employee will use his best endeavours to prevent the improper use, disclosure or communication of Confidential Information: (a)concerning the business of the Company or any Group Company and which comes to the Employee’s attention during the course of or inconnection with his employment with the Company or any Group Company from any source within the Company or any Group Company; or (b)concerning the business of any person having dealings with the Company or any Group Company and which is obtained in circumstances inwhich the Company or any Group Company is subject to a duty of confidentiality in relation to that information. 13.2For the purposes of this Agreement, Confidential Information means: (a)any information of a confidential nature (whether trade secrets, other private or secret information including secrets and information relating tocorporate strategy, business development plans, product designs, intellectual property, business contacts, terms of business with customersand potential customers and/or suppliers, annual budgets, management accounts and other financial information) whether or not it isspecifically designated as confidential or secret; and/or CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (b)any confidential report or research undertaken by or for the Company or any Group Company before or during the course of the Employee’semployment; and/or (c)lists or compilations of the names and contact details of the individuals or clients and counterparts with whom the Company or any GroupCompany transacts business; and/or (d)details of all computer systems, whether front or back office, and/or data processing or analysis software developed by the Company or anyGroup Company; and/or (e)details of the requirements, financial standing, terms of business and dealings with any company or group company of any client of theCompany or any Group Company; and/or (f)methods of manufacturing, storing, distributing and labelling any products manufactured by the Company or any Group Company; and/or (g)contact details of all employees and directors of the Company or any Group Company together with details of their remuneration and benefits;and/or (h)information so designated by the Company or any Group Company or which to the Employee’s knowledge has been supplied to the Companyor any Group Company subject to any obligation of confidentiality. 13.3The restrictions contained in this Clause 13 shall not apply to any disclosures required by law, and shall cease to apply to any ConfidentialInformation which subsequently comes into the public domain, other than by way of unauthorised disclosure by the Employee or a third party. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 13.4The Employee shall not at any time during the continuance of his employment with the Company make any notes or memoranda relating to any matterwithin the scope of the Company’s or any Group Company’s business, dealings or affairs otherwise than for the benefit of the Company or any GroupCompany. 13.5The obligations of the Employee under this Clause 13 shall continue to apply after the termination of the Employee’s employment irrespective of thereason for termination. 14Termination Provisions 14.1Subject to Clause 1.3 and this Clause 14, the Employee’s employment may be terminated by either party giving the other the longer of six month’swritten notice of termination. 14.2The Company reserves the right to terminate the Employee’s employment without notice or pay in lieu of notice if: (i)the Employee is guilty of misconduct or commits any serious or (having been given notice in writing) persistent breach or non-observance ofany of his obligations to the Company or any Group Company (whether under this Agreement or otherwise); (j)the Employee refuses or neglects to comply with any lawful acts or directions given to him by the Board; (k)the Employee is guilty of any serious breach or non-observance of any of the provisions of this Agreement or directions of the Board or relevantrules and/or codes issued by or on behalf of any Recognised Stock Exchange or is guilty of any continued or successive breaches or non-observance of any of such provisions or directions in spite of written warning to the contrary by the Board; (l)the Employee is convicted of any criminal offence by a court of competent jurisdiction (other than a minor motoring offence for which a fine orother noncustodial penalty is imposed); CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (m)the Employee commits any act of theft or other dishonesty either at or outside work; (n)the Employee carries out or neglects to carry out any action which in the reasonable opinion of the Company may seriously damage the interestsof the Company or wilfully or negligently breaches any legislation or any regulation to which the company may be subject which may result inany penalties being imposed on him or any Directors of the Company; (o)the Employee commits any act of deliberate discrimination or harassment on grounds of race, sex or disability; (p)the Employee is adjudged bankrupt or enters into any composition or arrangement with or for the benefit of his creditors including a voluntaryarrangement under the Insolvency Act 1986; (q)the Employee becomes of unsound mind or a patient for the purpose of any statute relating to mental health; (r)the Employee is convicted of an offence under the Criminal Justice Act 1993 (or the Financial Services Authority becomes entitled to impose apenalty on the Executive pursuant to section 123 of the Financial Services and Markets Act 2000) or the Executive is otherwise convicted orfound liable under any other present or future statutory enactment or regulation relating to insider dealing and/or market abuse; (s)the Employee becomes prohibited by law or is disqualified or is liable to be disqualified from being a director. 14.3Once notice has been given by either party, the Company may, in its absolute discretion, terminate the Employee’s employment at any time during theapplicable notice period by making a payment in lieu of the remaining period of notice. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 14.4Any payment in lieu of notice shall consist of the Employee’s basic salary for the number of days of the notice entitlement which the Employee has notreceived, and include any other entitlements, benefits, incentives, bonus, commission or holiday entitlement referable to the Employee’s employmentwhich would have accrued to the Employee had he/she remained employed during the notice period, and shall be subject to deductions for income taxand national insurance contributions as appropriate. 14.5The Company reserves the right to require the Employee not to attend at work and/or not to undertake all or any of his duties of employment and/or notto have any contact other than on a purely social basis with suppliers, clients, customers or specified employees of the Company or any GroupCompany during any period of notice (whether given by the Employee or the Company), provided always that the Company shall continue to pay theEmployee’s salary and contractual benefits whilst the Employee remains employed by the Company. 14.6On termination of the Employee’s employment he must immediately return to the Company in accordance with its instructions all equipment,correspondence, records, specifications, software, disks, models, notes, reports and other documents and any copies thereof and any other propertybelonging to the Company or any Group Company (including but not limited to keys, credit cards, laptops, mobile phone, equipment) which are inhis possession or under his control. The Employee agrees that he will, if required to do so by the Company, confirm in writing that he has compliedwith his obligations under this Clause 14.6. 14.7The Company may, in its absolute discretion, suspend the Employee on full pay and benefits pending any investigation into any allegation relating tothe Employee’s conduct or performance. 14.8The Employee authorises the Company, and any agent instructed by the Company, to access any programme or data held on any computer used bythe Employee in the course of performing his duties of employment (and regardless of whether the programme or data is related to the Employee’s dutiesof employment), including but limited to access to the Employee’s mailbox after termination. The Employee should clean his mailbox of personal andprivate emails on termination. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 15.Collective AgreementsThere are no collective agreements applicable to the Employee’s employment. 16.Data Protection 16.1The Company will hold certain personal information about the Employee as part of its general employee records. These records may contain theEmployee’s name, address and contact details, date of birth, marital status, educational background, history with the Company, job title, areas ofexpertise, employment applications, references, social security/national insurance number, bank details, performance appraisals, working timerecords, details of holiday and other leave, details of salary, remuneration and benefits including salary reviews, and other records (“Data”). TheCompany has become aware of this Data in a number of ways - directly from the Employee, from others and otherwise over time through theCompany’s relationship with the Employee - and may receive and/or retain it in various forms (whether in writing, electronically, verbally orotherwise). 16.2The Company uses such Data for personnel, administration, employee, work and general business management purposes and to comply with itsobligations regarding the keeping of employee/worker records. The Employee’s right of access to this data is as prescribed by law. The Company alsoprocesses information relating to the Employee’s ethnic background for ethnic monitoring purposes, and information relating to the Employee’s health,both of which may amount to sensitive personal data (“Sensitive Data”). The information that the Company holds relating to the Employee’s healthmay include records of sickness absence, self-certification forms and medical certificates (including any medical reports). The purpose of keeping thissort of information is to administer Company and Statutory Sick Pay, medical benefits, to monitor and manage sickness absence and to comply withthe Company’s legal obligations. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 16.3The Company may need to make Data and Sensitive Data available to other Group Companies for the purposes set out above. Likewise, the Companymay also need to make Data and Sensitive Data available to accountants, auditors, lawyers and other outside professional advisors, and to partiesproviding products and/or services to the Company (including, without limitation. IT systems suppliers, pension, benefits and payrolladministrators), to legal and regulatory authorities (including HM Revenue & Customs), to any potential purchasers of the Company or its business(on a confidential basis) and as required by law (the “Recipients”). Although most Recipients are located in the European Economic Area, others maybe located, or have relevant operations elsewhere. Therefore, it may be necessary to transfer the Employee’s Data and Sensitive Data to countries locatedoutside the European Economic Area. 16.4By signing this Employment Agreement, the Employee specifically consents to: (1) the Company processing Data and Sensitive Data relating to himfor personnel, administration, employee, work and business management purposes (examples of which are set out above): (2) the receipt, possession,use, retention and transfer of Data and Sensitive Data by Recipients for the purposes detailed above and (3) the Company monitoring and recordingany use that Employee makes of the Company’s electronic communications facilities for the purpose of ensuring that this Agreement and any relevantpolicies are being complied with and for legitimate business purposes. The Company will use this right of monitoring reasonably and in accordancewith applicable laws. 17.Grievance and Disciplinary Procedures 17.1Details of the Company’s non-contractual disciplinary and grievance procedures can be obtained from the HR Manager in the UK. 18.Definitions 18.1“Board” means the board of directors of the Company at any given time or any properly appointed committee of the Board. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 18.2“The Company” shall include the successors in title and assigns of the Company. 18.3“Group Company” means any company which is a holding company of the Company or a subsidiary undertaking of the Company or of anyholding company (as such expressions arc defined in sections 736 and 735A Companies Act 1985) and “Group” shall be defined accordingly; 18.4“Recognised Investment Exchange” has the meaning given to it in section 285 of the Financial Services and Markets Act 2000. 19.General 19.1This Agreement supersedes and is in substitution for all previous letters of engagement, agreements and arrangements, whether oral or in writingrelating to the subject matter hereof between the Company and the Employee all of which shall be deemed to have been terminated by mutual consent.This Agreement constitutes the entire agreement between the Employee and the Company of the terms upon which the Employee is employed. 19.2The Company reserves the right to make changes to any of the terms and conditions of employment contained in this Agreement to reflect the changingneeds of the business. The Company will notify the Employee in writing of the date upon which any such change will take effect. 19.3Before the Company can employ you, it must be sure that there are no reasons which may prevent it from doing so. For example, your contract withyour previous employer may contain restrictions which prohibit the Employee from working with the Company or may mean that the Employeecannot carry out some of his job responsibilities. By signing this Agreement the Employee warrants to the Company that he is not bound by or subjectto any such agreements, arrangements, restrictions or understandings. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 19.4By signing this Agreement the Employee also warrants to the Company that he is entitled to work in the United Kingdom without any additionalapprovals and that he will notify the Company immediately if he/she ceases to be so entitled during the employment. 19.5No failure or delay by either party in exercising any right, power or privilege under this Agreement shall operate as a waiver of such right nor shall anysingle or partial exercise by either party of any right, power or privilege under this Agreement preclude any further exercise of such right, power orprivilege or the exercise of any other right, power or privilege. 19.6Nothing in this Agreement is intended to confer any rights on any person not a party to this Agreement under the Contracts (Rights of Third Parties)Act 1999 and no consent of any such person shall be needed for the termination or amendment of this Agreement. 19.7If this Agreement is terminated because of the liquidation of the Company for the purpose of amalgamation or reconstruction and the Employee isoffered employment with such amalgamated or reconstructed company on terms no less favourable in all material respects than the terms of thisAgreement the Employee shall have no claim against the Company in respect of such termination. 19.8Any notice or communication given or required under this Agreement may be served by personal delivery or by leaving the same at or by sending thesame through the post addressed in the case of the Company to its registered office from time to time and in the case of the Employee to his aforesaidaddress or to the address provided from time to time by the Employee to the Company for the purposes of its employment records or by facsimiletransmission. 19.9Any notice sent by post shall be deemed to have been served 24 hours after the time of posting by first class mail and service thereof shall besufficiently proved by proving that the CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. notice was duly despatched through the post in a pre paid envelope addressed as aforesaid. In the case of facsimile transmission it shall be deemed tohave been received when in the ordinary course of such transmission it would be received by the addressee or if transmitted after 5pm or on a day thatis not an ordinary business day on the next business day. 19.10The provisions and sub-provisions of this Agreement are severable and if any provision or sub-provision or identifiable part thereof of theEmployment Agreement is held to be invalid or unenforceable by any Court of competent jurisdiction then such invalidity or unenforceability will notaffect the validity or unenforceability of the remaining provisions or sub-provisions or identifiable parts thereof. 19.11This Employment Agreement is governed by and construed in accordance with the laws of England. The parties agree that the English courts haveexclusive jurisdiction in the event that any dispute may arise from this Employment Agreement 19.12Clause headings are inserted for convenience only and will not affect the construction of this Agreement.IN WITNESS whereof the parties hereto have executed this Agreement as a Deed the day and year first above written. EXECUTED AS A DEED : by Criteo Ltd : acting by JB Rudelle : CEO SIGNED AS A DEED : by Eric Eichmann : CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SCHEDULE 11. Post-termination covenants1.1 For the purposes of this Schedule 1 the following expressions shall have the following meanings:(A) “Relevant Employee” means any person employed by or who renders or rendered services to the Company or any Group Company in a RelevantBusiness and who has client responsibility or influence over a Relevant Customer and/or who is in possession of confidential information about a RelevantCustomer of the Company or a Group Company and who in any such case was so employed or so rendered services during the period of 12 months before theRelevant Date and had dealings with the Employee during that period;(B) “Relevant Date” means the earlier of (1) the date the employment terminates, and (2) the start of any period of garden leave under clause 11.5 of theEmployment Agreement;(C) “Relevant Business” means any business or part of a business involving the supply of Restricted Goods and/or Services;(D) “Restricted Goods and/or Services” means performance display advertising products and solutions;(E) “Relevant Customer” shall mean any customer or potential customer of the Company or any Group Company with whom the Employee had dealingsduring the period of 12 months before the Relevant Date, was in possession of confidential information regarding, or to whom terms of business had beenprovided and with whom the Employee had dealings during the period of 12 months before the Relevant Date or was in possession of confidential information. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 1.2 In order to safeguard the legitimate business interests of the Company and any Group Company and particularly the goodwill of the Company and anyGroup Company in connection with its clients, suppliers and employees the Employee undertakes with the Company (for itself and as trustee for each GroupCompany) that, and so that each undertaking below shall constitute an entirely separate, severable and independent obligation of the Employee, he will not(except with the prior written consent of the Company) directly or indirectly:(A) during his employment or for a period of 6 months after the Relevant Date entice or solicit or endeavour to entice or solicit away from the Company or anyGroup Company any Relevant Customer;during his employment or for a period of 6 months after the Relevant Date employ or otherwise engage any Relevant Employee;(B) during his employment or for a period of 6 months after the Relevant Date, in competition with the Company or any Group Company, solicit, supply orendeavour to supply or be engaged in the supply of Restricted Goods and/or Services within the United Kingdom, in France or the USA;during his employment or for a period of 6 months after the Relevant Date to the detriment of the Company or any Group Company, persuade or endeavour topersuade any of the Company’s suppliers and customers to cease doing business or materially reduce its business with the Company or any Group Company.1.3 While the restrictions set out at Clause 2 are considered by the Employee and the Company to be reasonable in all the circumstances, it is recognised thatsuch restrictions may fail for reasons unforeseen and, accordingly, it is agreed that if any of the restrictions shall be adjudged to be void as going beyond whatis reasonable in all the circumstances for the protection of the interests of the Company but that they would be valid if part of the wording were deleted and/orif the periods (if any) specified were reduced and/or the areas dealt with reduced in scope, the said restrictions shall apply with such modifications as may benecessary to make them valid and effective. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.SCHEDULE 2Inventions and ImprovementsThe Provisions of Schedule 2 apply. 1.For the purposes of this Schedule 2 the following words and expressions shall have the following meanings:“Intellectual Property Rights” means (i) copyright, patents, know-how, confidential information, database rights, and rights in trade marks anddesigns (whether registered or unregistered), (ii) applications for registration, and the right to apply for registration, for any of the same, and (iii) all otherintellectual property rights and equivalent or similar forms of protection existing anywhere in the world;“Invention” means any method, idea, concept, experimental work, theme, invention, discovery, process, model, formula, prototype, sketch, drawing,plan, composition, design, configuration, improvement or modification of any kind conceived, developed, discovered, devised or produced by theEmployee alone or with one or more others during his employment and which pertains to or is actually or potentially useful to the activities from time totime of the Company (or any Group Company) or any product or service of the Company (or any Group Company) or which pertains to. results fromor is suggested by any work which the Employee or any other employee of the Company (or any Group Company) has done or may during hisemployment do for the Company (or any Group Company). 2.The Employee shall promptly disclose and deliver to the Company in confidence full details of each Invention (whether or not it was made, devised ordiscovered during normal working hours or using the facilities of the Company, and whether or not the Employee considers that by virtue of section 39Patents Act 1977 rights to such Invention fail to vest in the Company) to enable the Company to determine whether rights to such Invention vest in theCompany, upon the making, devising or discovering of the same and shall at the expense of the Company give all such explanations, demonstrationsand instructions as the Company may deem appropriate to enable the full and effectual working, production and use of the same. To the extent that byvirtue of section 39 Patents Act 1977 rights to such Invention vest in the Employee the Company shall return to the Employee any documentationprovided by the CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Employee pursuant to this paragraph of Schedule 2 and the Company shall keep such details confidential unless or until such time as such details arein or enter the public domain, other than by a breach of this Agreement. 3.The Employee assigns (in so far as title has not automatically vested in the Company through the Employee’s employment) to the Company with fulltitle guarantee by way of future assignment all copyright, database right, design right and other similar rights for the full terms (including any extensionor renewals) throughout the world in respect of all works, designs or materials (including, without limitation, source code and object code for software)originated, conceived, written or made by the Employee during the period of his employment (except only those works or designs originated, conceived,written or made by the Employee wholly outside his normal working hours which are wholly unconnected with any business activity undertaken orplanned to be undertaken by the Company or any Group Company) to hold for the Company absolutely. This assignment shall include the right to suefor damages and/or other remedies in respect of any infringement (including prior to the date of this Agreement). 4.The Employee irrevocably and unconditionally waives in favour of the Company any and all moral rights conferred on him by Chapter IV of Part I ofthe Copyright Designs and Patents Act 1988 for any work in which copyright or design right is vested in the Company whether by this Schedule 2 orotherwise. 5.The Employee shall, without additional payment to him (except to the extent provided in section 40 Patents Act 1977, or any similar provision ofapplicable law) at the request and expense of the Company and whether or not during the continuance of his employment, promptly execute alldocuments and do all acts, matters and things as may be necessary or desirable to enable the Company or its nominee to obtain, maintain, protect andenforce any Intellectual Property Right vested in the Company (save only to the extent that any Intellectual Property Rights fail to vest in the Company byvirtue of section 39 Patents Act 1977) in any or all countries relating to the Intellectual Property Right and to enable the Company to exploit anyIntellectual Property Right vested in the Company. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.6.The Employee shall not do anything (whether by omission or commission) during his employment or at any time after the date his employmentterminates to affect or imperil the validity of any Intellectual Property Right obtained, applied for or to be applied for by the Company or its nominee,and in particular the Employee shall not disclose or make use of any Invention which is the property of the Company without the prior written consentof the Company. The Employee shall during or after the termination of his employment with the Company, at the request and expense of the Company,provide all reasonable assistance in obtaining, maintaining and enforcing the Intellectual Property Right or in relation to any proceeding relating to theCompany’s right, title or interest in any Intellectual Property Right. 7.Without prejudice to the generality of the above clauses, the Employee irrevocably authorises the Company to appoint a person to be his attorney in hisname and on his behalf to execute any documents and do any acts, matters or things as may be necessary for or incidental to grant the Company the fullbenefit of the provisions of this Schedule 2. 8.The obligations of the Employee under this Schedule 2 shall continue to apply after the termination of his employment for whatever reason. 9.For the avoidance of doubt, nothing in this Agreement shall oblige the Company (or any other Group Company) to seek protection for or exploit anyIntellectual Property Right. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.SCHEDULE 3The provisions of Schedule 3 shall apply.Bonus 1.The Employee will be eligible to participate in an annual Bonus programme (the “Bonus Programme”). The Bonus Programme runs from 1 January to31 December each year. Any payments under the Bonus Programme are payable on a yearly basis and are paid at the same time as salary in the quarterfollowing the close of the relevant Bonus year.No Bonus will be paid for the year if the Employee’s employment is terminated by the Employee, or by the Employer for gross misconduct at or prior tothe date when a Bonus might otherwise have been payable. A prorated Bonus will be paid if the Employee’s employment is terminated by the Employerfor any reason other than gross misconduct at or prior to the date when a Bonus might otherwise have been payable. The Company reserves the absoluteright to amend the terms of the Bonus Programme, replace the Bonus Programme with an alternative programme, or withdraw the Bonus Programme inits entirety, at any lime and for any reason. 2.Annual Bonus will be based on Yearly Individual Targets. 3.Annual Bonus that may be payable in any one calendar year to the Employee will be £100,000 at 100% achieved target, capped at 200%. 4.The Company may alter the terms of any Bonus targets or withdraw them altogether at any time without prior notice. 5.The Employee’s Bonus under the Bonus Programme for the calendar year will be calculated on a pro rata basis from the date on which the Employee’semployment commences. CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Criteo Ltd5th Floor, Mappin House 4Winsley StreetLondonW1W 8HF29th January 2013Dear Eric,CRITEO Ltd is pleased to offer you the position of Chief Revenue Office from the 1st of April 2013 at the latest.Further to the conditions and remuneration described on your contract, we would like to offer you a welcome bonus of £70,000 (seventy thousand pounds),which will be paid upon completion of 6 months employment with the Company.If the employment relationship ends during the first year due to you resigning or due to termination by Criteo Ltd for misconduct, you shall refund thewelcome bonus.In case of constructive dismissal, meaning when an employee is forced to leave his job against his will because of the employer’s conduct, or in case ofdismissal (except in case of termination for misconduct) during the first year of Employment within the Company from the start date, Criteo shall pay to youan aggregate severance amount of £170,000.The reasons the employee leaves his/her job must be serious, for example, the employer: • doesn’t pay the employee’s or suddenly demote the employee for no reason • force the employee to accept unreasonable changes to how his/her work - eg telling the employee to work night shifts when his/her contract is onlyfor day work • let other employees harass or bully the employeeFor the avoidance of doubt, the severance amount shall be paid in addition to the Employee’s payment in lieu of notice pursuant to his UK EmploymentAgreement.This written offer is valid until the 12th of February 2013, end of business day Eastern Standard Time, and will expire thereafter.We look forward to you joining Criteo. Yours Sincerely /s/ JB Rudelle /s/ Eric EichmannJB Rudelle ERIC EICHMANNCEO CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Criteo Ltd5th Floor, Mappin House4 Winsley StreetLondonW1W 8HF29th January 2013Dear EricFurther to our recent discussions, Criteo is delighted to offer you the position of Chief Revenue Officer, based in London.We would like to assist you and your family in relocating to London from Washington and therefore extend the following relocation package, as part of ouroffer; • International removal from Washington DC to London • Services of a relocation Company to find a housing and support your installation • Tax assistance of a referenced provider to fulfill your tax return in the UK for 2 years • Two round trips for your spouse and children (economy class) to find accommodation in London • Temporary housing if required for up to six months (hotel or furnished apartment) • Once permanent housing has been found, a monthly housing allowance of £6.000 per month up to 12 month max • Until your family is set up in London, you will carry out 3 business trips per month, travelling in business class, at the Company’s expenses. Thismay be also done through necessary business travels.We look forward to you joining Criteo, if you have any questions relating to your offer you should not hesitate to put them to meThis written offer is valid until the 12th of February 2013, end of business day Eastern Standard Time, and will expire thereafter. Yours Sincerely /s/ JB Rudelle /s/ Eric EichmannJB Rudelle ERIC EICHMANNCEO CRITEO LTD - Registred office : 5th Floor, Mappin House 4 Winsley Street London W1W 8HFCompagny registration No. 6903951 VAT Registration No. 972154514Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 8.1Subsidiaries of Criteo S.A. Name of Subsidiary State or Other Jurisdiction of IncorporationCriteo France SAS FranceCriteo Ltd United KingdomCriteo GmbH GermanyCriteo Srl ItalyCriteo Corp. DelawareCriteo B.V. NetherlandsCriteo Do Brasil Desenvolvimento De Servicos De Internet Ltda. BrazilCriteo Australia Pty Ltd AustraliaCriteo K.K. JapanAd-X Limited United KingdomCriteo Advertising (Beijing) Co., Ltd. ChinaCriteo Singapore PTE. LTD. SingaporeTedemis S.A. FranceSource: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 12.1Certification by the Chief Executive Officer pursuant toSecurities Exchange Act Rules 13a-14(a) and 15d-14(a)as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002I, Jean-Baptiste Rudelle, certify that: 1.I have reviewed this annual report on Form 20-F of Criteo S.A.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; 4.The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared; (b)Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered bythe annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financialreporting; and 5.The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internalcontrol over financial reporting. Date: March 5, 2014/s/ Jean-Baptiste RudelleName: Jean-Baptiste RudelleTitle: Chief Executive OfficerSource: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 12.2Certification by the Chief Financial Officer pursuant toSecurities Exchange Act Rules 13a-14(a) and 15d-14(a)as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002I, Benoit Fouilland, certify that: 1.I have reviewed this annual report on Form 20-F of Criteo S.A.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; 4.The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared; (b)Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered bythe annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financialreporting; and 5.The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internalcontrol over financial reporting. Date: March 5, 2014/s/ Benoit FouillandName: Benoit FouillandTitle: Chief Financial OfficerSource: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 13.1Certification by the Chief Executive Officer pursuant to18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report of Criteo S.A. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2013 as filed with the Securitiesand Exchange Commission on the date hereof (the “Report”), I, Jean-Baptiste Rudelle, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.§ 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 5, 2014/s/ Jean-Baptiste RudelleName: Jean-Baptiste RudelleTitle: Chief Executive OfficerSource: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 13.2Certification by the Chief Financial Officer pursuant to18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report of Criteo S.A. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2013 as filed with the Securitiesand Exchange Commission on the date hereof (the “Report”), I, J Benoit Fouilland, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 5, 2014/s/ Benoit FouillandName: Benoit FouillandTitle: Chief Financial OfficerSource: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 15.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the Registration Statement No. 333-192024 on Form S-8 of our report dated March 5, 2014, relating to theconsolidated financial statements of Criteo S.A. and subsidiaries, appearing in the Annual Report on Form 20-F for the year ended December 31, 2013. /s/ Deloitte & AssociésRepresented by Fabien BrovedaniNeuilly-sur-Seine, FranceMarch 5, 2014Source: Criteo S.A., 20-F, March 06, 2014Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

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