Technicolor ships 6.0 million Access Products in 2Q10

Thursday, July 29th, 2010
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Announcement of two agreements with Verizon for broadband gateways and DIRECTV for set-top boxes

PARIS, France — The Board of Directors of Technicolor (Euronext Paris: FR0010918292; NYSE: TCH) met yesterday to review the Group’s first half of 2010 results.

In the second quarter of 2010, the Group established a new division –Digital Delivery– to increase its capability to capture the growth resulting from the shift to digital distribution. In addition to Digital Home Products, this division provides content preparation and management services, enabling its customers to deliver an improved end-user entertainment experience.

The Digital Delivery business group brings together the Connect division, the world’s largest supplier of broadband gateway products and the world’s third largest supplier of set top boxes; with the Digital Content Delivery Services activity, which today plays out over 320 TV channels globally and provides media and library services for the management of premium content.

Connect

The pressure on Digital Home Products volumes eased in the second quarter of 2010 on a sequential basis, although volumes decreased compared to the same period of last year:

  • In the Satellite market, volumes continued to be impacted by lower orders for set-top boxes in North America, due to increased levels of returns and refurbishments of previously-deployed products. This negative impact was partly offset by the introduction of a third product line for DIRECTV, where Technicolor is the major supplier, the first deliveries of a HD-PVR product to a European customer, as well as robust growth in South America. In line with the trend of the first quarter of 2010, the Satellite set-top box backlog continued to firm up during the second quarter of 2010, while overall market positions were stable.
  • In the Cable market, volumes grew substantially in the second quarter of 2010 compared to the same period of last year, driven by the first deliveries of a second-generation digital-to-analog adaptor to Comcast, as well as continued growth in shipments of cable modems, notably in South America. Overall cable product mix was however less favorable year-on-year.
  • In the Telecom market, in line with the trend seen in the first quarter of 2010, we continued to reinforce or win back market share with some European customers, mainly as a result of the positive effects of measures aiming at improving software development. The decrease in volumes was largely related to lower shipments of DSL modems, while shipments of broadband gateways increased slightly compared to the same period of last year.

Software Services Platform revenues continued to benefit in the second quarter of 2010 from the progressive recovery of the European VoIP market and market share gains.

Digital Home Products Indicators:

                                Q2 2009  Q2 2010  H1 2009  H1 2010
                                -------  -------  -------  -------
Cable (m)                           1.3      1.7      2.7      2.8
Satellite (m)                       2.4      1.9      4.7      3.4
Telecom (m)                         3.0      2.4      5.9      4.5
Total Digital Home Products (m)     6.8      6.0     13.2     10.8
Change                                     (11)%             (19)%

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