Thomson: Near-term Priorities and Third Quarter Revenues

PARIS (France) — Thomson (Euronext Paris: 18453, NYSE:TMS) reported total revenues of €1,170 million for the quarter (3Q07, €1,348 million). Currency movements were significant and impacted revenues adversely during the quarter by €72 million. Revenues at constant currency were therefore €1,242 million, a decrease of 7.9% year-on-year.

In the current macroeconomic environment, the third quarter has demonstrated the resilience of a number of the Group’s businesses, most notably DVD Services and Licensing. Some parts of Systems slowed at the end of the quarter.

Third quarter business review – Systems (Thomson Grass Valley)

Revenues for the Systems Division were €541 million for 3Q08 (3Q07, €650 million). Currency movements decreased revenues during the quarter by €25 million. Revenues at constant currency therefore decreased by 13.0% year-on-year compared to 3Q07. Revenues declined in both the Broadcast & Networks and Access Products businesses.

Access Product revenues were adversely affected by the retail telephony activity which is exposed to US retail spending. Satellite set-top box sales also declined. Sales of gateways for telcos performed well and cable products grew significantly. Thomson shipped 2.5 million satellite set-top boxes in 3Q08 (vs. 2.7 million in 3Q07), 1.4 million cable set-top boxes and modems/eMTAs (vs. 1.0 million in 3Q07), and 2.5 million access products for telecom operators (vs. 2.6 million in 3Q07) with improved mix – making a total of 6.3 million access products in the quarter (vs. 6.3 million in 3Q07), flat overall. During the quarter we commenced shipments of the cable digital-to-analog converter box to Comcast under the contract announced in July 2008.

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