Paris – Although TV/video sales in the United States were impacted by difficult market conditions, especially for VCRs and lower-end televisions, Thomson Multimedia to eke out a small increase in its consumer products division in the first half of 2001.
Declining product sales were partially offset by continued growth in digital products such as televisions and DVD players, said the company. Thomson, that did not break out its second-quarter numbers, said first-half revenues in Consumer Products reached $2.7 billion, a 1.4 percent increase over the $2.66 billion recorded in the year-ago six months.
Thomson Consumer Products sales were negatively impacted by the ‘hold price’ policy designed to protect the division’s profitability, said the company. In the second quarter, Thomson decided to revise consumer product sales-growth objectives in the United States in order to protect its margins.
The company said it did benefit from strong growth in audio product sales, which registered a 31 percent increase in the United States and Europe.
Thomson Multimedia, which produces product under the RCA brand, said Earnings Before Interest and Taxes (EBIT) for the first six months at its Consumer Products division jumped 52 percent to $30.4 million, compared with $20 million in the year-ago period. This was driven by the initiation of the group’s Consumer Products repositioning strategy toward value market share and a permanent focus on restructuring and profitability improvement, said the company.
At the end of the first half, Thomson implemented in its Consumer Products division a ‘profound reorganization,’ whereby TV/Video activity is set to be managed on a worldwide basis, as is the case already for all other Thomson business categories. RCA Scenium product was introduced at the end of the half to fuel the repositioning of the RCA brand, thus consolidating Thomson’s worldwide branding strategy.
Overall, company revenue for the first half climbed 16 percent to $4.7 billion, compared with $4.1 billion in the first half of 2000. EBIT was up 34 percent to $224 million, compared with $167 million in the year-ago six months. Net sales climbed 32 percent to $111 million, compared with $84 million in the same six months in 2000.
Thomson, which expects the same difficult ‘trading environment’ to continue for the remainder of the year, and possibly into 2002, said its full-year 2001 outlook for revenue growth is 20 percent, with EBIT growth similar to the first-half level.