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> Half year results 2000
First half 2000 results of Thomson multimedia :
45% revenue growth with doubled operating result
and net profit increased by 175 %
The Group confirms the acceleration of its profitable growth
Paris, July 27, 2000 - For the first half of 2000, Thomson multimedia results show the Group's capacity to develop profitable growth with an increase of the net result to €84 million, or 2.1% of revenues. These results confirm the acceleration of growth witnessed by the Group since mid-1999, with revenues increasing by 45% for the first six months of 2000. The results also confirm the Group's focus on operational performance and its capacity to further improve its profitability, doubling its operating results as compared the same period of 1999. The Group also recorded the results of its strategy to develop interactive services embedded in its products, posting revenues in the New Media Services activity for the first time.
Statements of income - First half 2000 and 1999
|In millions of Euros
||1st half 2000
||1st half 1999
|Group Net Result
Strong revenue growth
The consolidated revenues for the first half of 2000 totaled €4,067 million, an increase of 45% versus the first half of 1999. After a 18.9% growth for the full year 1999, this performance clearly highlights the strong growth of the Group's different businesses, particularly in Displays and Components and Consumer Products. Since January 1st, 2000, the Group consolidates the revenues of ATLINKS, the residential telephony company jointly owned with ALCATEL. Excluding the impact of this consolidation, the Group's revenue increased by 39.9%. The Group's strong position in the United States coupled with currency appreciation compared to the same period last year translated into a favorable impact of exchange rate. Excluding this impact, the Group's revenue increased by 32.6%.
Pursuit of profitability improvement
The Group's operating result reached €167 million, an increase of €87 million compared to the first half of 1999. The progression of the operating margin, to 4.1% of revenues, is largely driven by the growth in revenues, from high-end products, the result of restructuring and reengineering programs initiated since 1997. This progress in profitability enabled the Group to accelerate the deployment of its strategy, especially in New Media Services where development investments negatively impact the operating result by €33 million.
Improvement in all activities - Revenues by activity
|In millions of Euros
||1st half 2000
||1st half 1999
||2000 / 99
|Displays & Components
|New Media Services
|Patents & Licensing
Displays & Components
Displays and Components experienced strong revenue increase in OEM sales, particularly in tubes and optical components, which reached €769 million (+43.9%). The Group is the world leader in the growing large and very large size color TV picture tube market and further improved its product mix on these segments which now account for 68% of its production. The Group also benefited from its leading market positions in optical components and posted significant growth, particularly in DVD-ROM where the Group benefited from its supply agreement with NEC.
The operating result of Displays and Components reached €118 million, an increase of €29 million. The operating margin progressed to 10.1%. reflecting the first impact of the TIGER program launched to further enhance the profitability of the tube business.
Revenues in Consumer Products reached €3,137 million, an increase of 45.8%, driven particularly by the digital products which now accounts for 30% of the revenues.
For the first six months of 2000, the Group had shipped 3.1 million digital set-top boxes, the equivalent of the shipments for the full year 1999. Digital satellite DIRECTV receiving systems in the US continued to show strong demand, and the Group developed its positions in Europe, with a strong sales increase in Canal+.
In digital cable modems, the Group shipped more than 200,000 units, primarily in the US, and started to develop this business in Europe.
The Group continued to improve its market position in Europe for color televisions, reaching a 9.4% share, an improvement of 0.3 points compared to the same period in 1999. Sales of Thomson-branded products in Europe increased significantly and now represent 76% of the Group's revenues in the region.
In the US, the Group also experienced growth in traditional products, especially for audio and communications products. In the communications business, the Group became the market leader in home telephones, through ATLINKS, the joint venture communications company with Alcatel.
The operating result of the Consumer Products activity continued its progression, reaching €22 million, compared to a loss of €35 million in the first half of 1999. This improvement, primarily driven by revenue growth, reflects the continued focus on high-end products and the effects of the restructuring and reengineering programs implemented since 1997.
New Media Services
The Group posted its first revenues, amounting to €1 million for the first half of 2000. At the end of June 2000, the Group had deployed electronic program guides in more than 2.5 millions televisions. This large installed base attracted a number of advertisers, including the principal US broadcast networks and national advertisers such as automobile manufacturers. For the first six months of 2000, the Group increased its expenses to accelerate the implementation of its strategy in this area resulting in an operating loss of €33 million. This result includes the costs of the deployment of an installed base of EPG-equipped TV's in the US. In Europe, the Group strongly invested in order to launch interactive services for televisions particularly through its development of TAK technology.
Patents and Licensing
Revenues in the Patents and Licensing activity reached €154 million, an increase of 33.7% due in particular to the appreciation of Asian currencies. The operating result reached €121 million compared to €95 million in the first half of 1999.
Current result of €143 million, more than threefold The current result reached €143 million, an increase of €102 million. This strong improvement is due to the increase of the operating result, and to €15 million reduction in financial charges, following the capital increase realized in November 1999.
Net Result of €84 million, or 2.1% of revenues The consolidated net result totals €84 million, an increase of €53 million. It includes a non current result of €(40) million, made in particular of a provision of €44 million to cover restructuring costs
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