Thomson: First Quarter Revenues, Near-term Priorities and Dividend Policy

PARIS (France) — The Board of Directors of Thomson (Euronext Paris: 18453, NYSE:TMS), chaired by François de Carbonnel, met on 14 April 2008 to review revenues for the quarter ending 31 March 2008, an initial action plan from the management team, the Group’s dividend policy, and the outlook for the Group.

Systems

Revenues for the division were €465 million for 1Q08 (1Q07, €565 million). Currency movements decreased revenues during the quarter by €28 million. Revenues at constant currency therefore decreased by 12.8% year-on-year compared to 1Q07. Access Product revenues fell sharply as broadband operators and broadcasters held back orders in the light of increased economic uncertainty. However revenues from Broadcast & Networks were more encouraging with revenues slightly up year-on-year at constant currency.

• In Access Products, Thomson shipped 2.2 million satellite set-top boxes in 1Q08 (vs. 2.1 million in 1Q07), 0.4 million cable set-top boxes (vs. 0.6 million in 1Q07), and 2.2 million access products for telecom operators (vs. 2.6 million in 1Q07) – making a total of 4.8 million access products in the quarter (vs. 5.3 million in 1Q07), down 10% overall.

  For satellite customers, mix was largely unchanged and prices declined. The volume declines in access products for telecom operators reflected in particular lower volumes with European customers.

  The last weeks of March showed an improvement in activity in the Access Products business indicating renewed investment by the Group’s customers.
   

• Broadcast & Networks revenues for the quarter were slightly up at constant currency compared to 1Q07. Broadcast products grew strongly. The LDK8000 high-definition camera continued to sell well in 1Q08, as did editing software and systems, such as servers and the recently-introduced version of the “Aurora” news software. Network products and integration activities declined year-on-year.

The Systems Division also focused on cost reduction and process optimisation programs, notably concerning operating expenses. It upgrades for its supply chain, R&D simplification and quality, and a reorganisation of the sales force in January.

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