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Thomsonís Revenues Increased by +14% in the First Quarter 2002, Reaching 2.5 billion Euros.Confirmation of 2002 guidance
 

Key Highlights for the first quarter 2002

- First quarter 2002 revenues ahead of expectations and consistent with the Group's full year objectives.
- Revenue increase reflects the ongoing evolution of the Group's profile, with activities increasingly weighted towards media groups (34% of revenues).
- Strong performances by Digital Media Solutions and Displays and Components, both of which delivered double-digit organic growth.
- The successful financial market operations in March 2002 increased Thomson's financial strength as well as the free float and liquidity of its shares. Thomson continued actively to position itself along the video chain during the quarter.


Outlook for the first semester and full year 2002

- Thomson's 2002 objectives were built on a first semester 2002 operating profit in line with the first semester 2001. The first quarter 2002 has slightly exceeded the Group expectation, but an uncertain outlook in the broadband environment leads us not to change our initial view at this stage.
- Thomson reaffirms its 2002 objectives of double-digit growth for its revenues and operating result. Thomson now expects its operating result to grow slightly faster than revenues for the full year.
- These objectives will be achieved by a combination of the organic growth initiatives already announced and by first-time contributions from new acquisitions.

Paris, April 15, 2002 - For the first quarter 2002, Thomson's consolidated revenues reached 2,507 million Euros, an increase of 14.1% over the first quarter 2001. These results, ahead of expectations and consistent with the Group's full year objectives, reflect strong performances in Digital Media Solutions, which delivered double-digit organic growth, and in Displays and Components. At the same time, Thomson maintained its cautious approach to volume growth, in particular in its Consumer Products division. Lower global industry production volumes also impacted Patents & Licensing revenues, during the quarter, although there are encouraging signs of a volume pick-up and the division exceeded the budget for the quarter. The revenue figures also reflect perimeter changes, notably the consolidation of Technicolor for the full quarter.

In Million
1st quarter 2001
1st quarter 2000
Variation
In Euros
In USD
In Euros
In USD
In Euros
In USD
Digital Media Solutions
554
482
148
133
x 3.8
x 3.6
Display and Components
488
425
368
332
+ 33 %
+28 %
Consumer Products
1 383
1203
1 578
1 425
- 12 %
- 16 %
Patents and Licensing
76
67
95
86
- 19 %
- 22%
New Media Services
5
5
7
6
n.s.
n.s
Total Thomson
2 507
2 182
2 197
1 984
+ 14%*
+ 10%

* forex impact : +2.6% / +58 Million of Euros


During the first quarter 2002, Thomson continued actively to position itself along the video chain, expanding its scope of business within the professional and higher growth segments of the media industry (representing 34% of revenues in the quarter):

- Thomson significantly reinforced its service offering to media groups, content owners and broadcasters, expanding its DVD production capacity and customer base through internal investment and the proposed acquisition of Panasonic Disc Services and strengthening its presence in the pacific rim with the announcement of the acquisition of Southern Star Duplitek, Australia's leading DVD, videocassette and CD manufacturer. In addition, Thomson significantly broadened its post-production services through the acquisitions of VidFilm and Still in Motion. Finally, the consolidation of the Grass Valley Group in March 2002 enabled the Group to take a leading position in the professional broadcast market and contributed positively to Sales in March, with positive operating income.
- Thomson expanded its product and system offering to network operators through the consolidation (as of January 1st, 2002) of the DSL modem business acquired from Alcatel. In addition, Nextream, the Group's joint venture in video network infrastructure, is now managed within Broadband Access Products and Systems (part of the Consumer Product division) in order to offer end-to-end solutions to network operators.

Overall, the acquisitions completed in the first quarter, including DSL modems, added € 89 million to Sales.

Review by Division

Digital Media Solutions generated revenues of 554 million Euros, compared to 148 million Euros reported for the first quarter 2001. This increase reflects interalia the consolidation of Technicolor for the full quarter and the consolidation of Grass Valley Group as of March 1st, 2002. Even so, during the first quarter, on a comparable basis, the division delivered double-digit organic growth, recording an increase of nearly 12% compared with last year, driven in particular by the strong performance of its packaged media activity. Packaged media enjoyed a strong unit sales increase of 18%, driven by DVD unit growth, while videocassette unit sales remained stable. In addition, the Group's film and post-production businesses benefited from strong movie releases (Black Hawk Down, E.T). Broadcast Solutions reflected continued slow investment activity by television networks, but started to benefit from the integration of Grass Valley Group, which recorded a strong first month.

Displays and Components generated total revenues of 639 million Euros, an increase of 15.1% compared with the first quarter of 2001. OEM revenues reached 488 million Euros, an increase of 33% versus Q1 2001. The division benefited from strong growth in optical module sales, notably in its supply program with Microsoft for the Xbox. OEM Tubes sales grew both in Europe and the U.S. In the U.S., in a recovering market for very large size tubes, Thomson gained significant value market share. During the quarter, the Group actively pursued its global restructuring program and began the ramp-up of its Mexicali plant, which is proceeding according to plan.

Consumer Products generated revenues of 1,383 million Euros, a decrease of 12.4% compared with a strong first quarter 2001. Although certain key product categories (notably high-end TVs in Europe and the U.S., European decoders and worldwide Communications products) showed resilience and/or growth, Thomson maintained its prudent policy of careful management of mix and inventories. Working capital performance was strong in the quarter. In Television, against a falling market for most product categories, the Group recorded market share gains in High-End and Digital, although these were partially offset by less robust Core-TV sales. Strong growth worldwide in Communications offset price and volume declines in Audio. Broadband Access Product and Systems sales (decoders, high-speed modems and network infrastructure) suffered primarily from slow distributor activity for decoders in the U.S. and Latin America, while this activity continued to grow in Europe. During the quarter, the Group prepared for future growth, announcing new supplier contracts with EchoStar, AT&T and Time Warner Cable, and also integrated the DSL modem activity.

Patents & Licensing net revenues reached 76.4 million Euros for the first quarter 2002, a 19% decrease compared to the first quarter 2001. This results from lower industry volumes, the positive impact of currencies on 2001 results and third-party license programs. The division exceeded expectations for the quarter nonetheless. There are signs of a pick-up in global production volumes and the Group continued the active preparation of new licensing programmes to drive 2002 growth.

Finally, New Media Services revenues were 5 million Euros, driven primarily by Screenvision in the United States.


Outlook


Going forward, Thomson should benefit in 2002 from its internal initiatives, such as investments in tubes and DVD replication capacity, growth in optical modules, key set top box supply agreements, the launch of the Scenium product range in the Americas, the acceleration of licensing of digital technologies and the integration of acquisitions. In addition, Thomson is continuing in 2002 the cost control measures it implemented in the second half of 2001, maintaining its focus on profitability while positioning itself to react to a market upturn.

Thomson's 2002 objectives were built on a first semester 2002 operating profit in line with the first semester 2001. The first quarter 2002 has slightly exceeded the Group expectation, but the uncertain outlook for the broadband environment leads us not to change our initial view at this stage.

Thomson reaffirms its 2002 objectives of double-digit growth for its revenues and operating result. Thomson now expects its operating result to grow slightly faster than revenues for the full year. These objectives will be achieved by a combination of the organic growth initiatives already announced and by first-time contributions from new acquisitions.

For your information, translation of amounts from Euros into US dollars has been made at the rate of 1 euro to 0.8704136 US dollar.

* * *
Certain statements in this press release constitute "forward-looking statements" within the meaning of the "safe harbor" of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on managementís current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements due to changes in global economic, business, competitive market and regulatory factors. More detail information on the potential factors that could affect the financial results of Thomson multimedia is contained in the Thomson multimediaís filings with the U.S. Securities and Exchange Commission.

* * *

About Thomson
With sales of 10.5 billion Euros (U.S. $ 9.3 billion) in 2001 and 73,000 employees in more than 30 countries, Thomson multimedia (Paris Euroclear: 18453) (NYSE: TMS), provides a wide range of video (and enabling) technologies, systems, finished products and services to consumers and professionals in the entertainment and media industries. To advance and enable the digital media transition, Thomson multimedia has five principal activities: Digital Media Solutions, Displays and Components, Consumer Products, Patents and Licensing, and New Media Services. The company distributes its products under the THOMSON, RCA and TECHNICOLOR brand names.


Press Relations
Marc Meyer - Tel: 331.41.86.5003 -
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