French electronic device maker Thomson Multimedia published today sales for the third quarter 2002. Net sales decreased by 2.1 percent to 2,330 million Euros (U.S. $2.28 million). Excluding the effects of currency movements, however, sales grew by 3.8 percent.
According to the company, many of the positive and negative trends already noted during the first half and second quarter continued during the third quarter. Sales in all divisions are affected by the translation effect of a weaker U.S. dollar and some other currencies relative to the Euro.
The quarter was characterized by resilience of consumer purchases of the video content produced by Digital Media Solutions on the one hand and volatility in U.S. consumer purchases of hardware on the other, the company said. In general, July and August were below expectations but September saw stronger sales in many areas. Overall, the group said it saw more robust demand for higher-ticket items, notably televisions (with a positive follow-on impact on tubes demand), relative to smaller-ticket audio, video and telephony goods. Satisfactory progress was achieved in Patents and Licensing towards achieving the full year goal. The lock-out of American West Coast ports at the end of the quarter is a concern.
Thomson rolled-out of a number of programs in the quarter. The company said progress continued at its Digital Media Solutions division with key customer wins in the VHS, film, and post-production activities. Within consumer products, the group launched its new Scenium range of high-end televisions in the U.S. The reaction from retailers and consumers has been very promising, the company said. Thomson started to ship set top boxes to its retail clients to support Echostar's DISH network. The transition of the design and management activities related to video products to Asia was completed during the quarter. The first revenues related to the MPEG-LA patent pool were also received, although only at the end of the quarter. The integration of the businesses acquired in first half 2002, notably Panasonic Disk Services Corporation, proceeded well during the quarter.
Two small acquisitions were announced. Thomson signed an agreement to purchase in cash Canal Plus Technologies from Canal Plus Group for a gross purchase price of 190 million Euros including the cash and liquid assets in the business. According to Thompson, this acquisition will strengthen significantly its position in copy protection and middleware technology and intellectual property. In addition, Thomson signed an agreement to purchase the U.S. Screen advertising business of Val Morgan for a small, undisclosed sum, increasing its important presence in this market.
Third quarter and Year-to-Date 2002 Revenues
For the third quarter 2002, Thomson's consolidated net sales decreased by 2.1 percent to 2,330 million Euros (third quarter 2001, 2,379 million Euros). This variation would have been a growth of 3.8 percent excluding the negative impact of currency changes, notably a weaker US$ compared to the Euro. During the quarter, the changes in perimeter added 224 million Euros of revenues (notably, the consolidation of DSL and new acquisitions such as Panasonic Disk Services, Grass Valley Group, Southern Star Duplitek, Grundig's business, and VidFilm). On a like-for-like basis, therefore, consolidated net sales showed a decline of 11.5 percent or a decline of 5.9 percent excluding the negative impact of currency changes.
For the first three quarters of 2002, group revenues grew by 4.1 percent to 7,320 million Euros compared to 7,033 million Euros for the first three quarters of 2001. This growth would have been 7.1 percent excluding the negative impact of currency changes. During the first three quarters, the changes in perimeter added 445 million Euros of revenues. On a like-for-like basis, therefore, consolidated net sales over the first three quarters showed a decline of 6.5 percent or a decline of 3.8 percent excluding the negative impact of currency changes.
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