Thomson: Third Quarter 2007 Revenues

PARIS — The Board of Directors of Thomson (Euronext Paris: 18453, NYSE:TMS), chaired by Frank E. Dangeard, met in New York on 17 October 2007 to review revenues for the quarter ending 30 September 2007.

• Thomson reported total revenues of €1,375 million for the quarter. Core Business reported revenues were €1,370 million (3Q06, €1,401 million). Currency movements were significant and decreased Core Business revenues during the quarter by €60 million. Core Business revenues at constant currency were therefore €1,430 million, an increase of just over 2% year-on-year. Perimeter effects were minimal in the quarter.
• Third-quarter revenues for the Services Division were up 1% at constant currency, despite few blockbusters in Film and DVD.
• The Systems Division grew 3% at constant currency. Access Products grew modestly compared to a strong 3Q06 and Broadcast & Networks recorded constant currency revenues slightly above 3Q06.
• Within the Technology Division, our Licensing business performed strongly.
• Revenues for the first nine months of 2007 grew 4.7% at constant currency, in line with our 2007-9 revenue objectives.

Systems

Revenues for the division reached €651 million for 3Q07 (3Q06, €654 million). Currency movements decreased sales during the quarter by €22 million. Revenues at constant currency therefore grew by 3.0% year-on-year, compared to a particularly strong 3Q06 and with Broadcast & Networks returning to growth.

• In Access Products, Thomson shipped 2.7 million satellite set-top boxes in 3Q07 (vs. 3.7 million in 3Q06), 0.6 million cable set-top boxes (vs. 0.4 million in 3Q06), and 2.6 million access products for telecom operators (vs. 2.3 million in 3Q06) – making a total of 5.8 million access products in the quarter (vs. 6.4 million in 3Q06).

  For satellite customers, an increase in average selling prices from the continuing improvement in product mix balanced lower unit volumes.

  Access products for telecom operators grew year-on-year during 3Q07, with continuing roll outs of the France Telecom Livebox and the BT Hub quadruple-play enabled gateway in the UK again the most significant contributors.

  Sales to cable customers grew well. Sales of eMTA devices to Comcast, the North American cable operator, started at the end of the quarter.
   

• Broadcast & Networks showed an increase in revenues at constant currency in the quarter compared to 3Q06. After delays in the first half, the LDK8000 high-definition camera sold well in 3Q07 and a number of other broadcast product lines, including servers, switchers and most notably news & desktop editing systems, performed well. We showcased a beta version of the Infinity professional camcorder in September at the IBC show in Amsterdam, where we registered a good reaction across our service and product range.

  Network product sales also rose, notably with the introduction of the new NetProcessor product range, as well as successes in servers for Video-ondemand applications. The ViBE MPEG-4 encoder with the Mustang chip was demonstrated live at IBC and will be launched this quarter. Key systems orders include transmission equipment for Arqiva and high-definition outside broadcast units for the Abu Dhabi Media Company.

  Operational programs have begun and will realise some cost savings in 2H07, and we will conclude in the fourth quarter a comprehensive review of the consequences for existing products and programs of the current wave of new product introductions. This is expected to lead to a small one-off non-cash charge in 2H07.