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Thomson Cites CE 'Improvement' Even As Q3 Sales Slide

10/15/2003 10:44:00 AM Eastern

Paris - Although third quarter revenue for Thomson's consumer products segment dropped 12.6 percent, coming in at $859.6 million, down from $1.1 billion in the year-ago period, the company said this result was 'a sharp improvement on the first half trend.'

Including currency movements, the decline was 20.9 percent.

Thomson said 'activity [in the third quarter] showed an improving trend in the Americas — notably in the second part of the quarter — benefited from a strategy focused on Essentials products, together with a broader range of high-end television sets.'

Within its consumer products segment, Thomson's strategy is to transition its business toward higher value-added services by growing its 'essentials' business and changing its 'mainstream' business. Essentials products include accessories, after-sales, portable audio/video and communications. Mainstream products include televisions and home A/V devices.

In the third quarter, Thomson completed the integration of its newly acquired Recoton CE accessories business into essentials and launched new products, notably in very large TVs and personal video players, into both its mainstream and essentials businesses.

Thomson noted improved third quarter activity in the United States in high end products, including a full range of flat screen televisions and an expanded offering of HDTV products. It claimed both market share and revenue were positively impacted for these categories in the three months.

For core TVs, Thomson said the U.S. market remained difficult, with price pressure in all categories. Also, the market for home audio and video products continued to see sharp price declines, with the consumer products segment maintaining a hold-price policy.

In its Essentials business, which represented 43 percent of sales for the consumer products division, Thomson said it benefited during the third quarter from a broader client base, and the introduction of new products and services for its customers. It began the integration of customers of the former Recoton business, which enhanced, in particular, its North American client base and expanded significantly its product range. Also, new portable audio and video products included a range of MP3 portable audio and video devices.

For the nine months, consumer products segment sales decreased 20.2 percent, to $2.5 billion, down from $3.6 billion in the same period in 2002. Including currency movement, sales dropped 29.5 percent.

Consolidated Thomson sales for the third quarter hit $2.4 billion, down 4.8 percent from the same quarter a year ago, when sales reached $2.7 billion. Including currency movements, sales dropped 13.6 percent.

For the nine months, Thomson sales declined 9.9 percent, reaching $6.8 billion, compared with the $8.6 billion reported year-on-year. Including currency movements, sales slid 20.1 percent. On a comparative basis, following an addition to net sales in the first three-quarters, consolidated net sales for the period showed a decline of 14.5 percent, excluding currency movements.

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