Thomson maintains its focus on profitability and cash flow improvement as market conditions remained challenging in 3Q 2009 

10/22/2009

• 3Q 2009 revenues at constant currency down 19.4% for continuing activities and down 15.4% on new perimeter

   - 9M 2009 Group’s net revenues from continuing activities amounted to €2,603 million, down 8.3% at current currency and down 10.4% at constant currency compared to 9M 2008. 9M 2009 revenues from new perimeter activities declined by 6.3% at constant currency.

   - 3Q 2009 Group’s net revenues from continuing activities amounted to €803 million, down 20.2% at current currency and down 19.4% at constant currency compared to 3Q 2008. 3Q 2009 revenues from new perimeter activities declined by 15.4% at constant currency.

   - In challenging market conditions, Thomson estimates it has maintained or strengthened its market positions across all businesses except in Access Products in Europe. Revenue decrease in 3Q 2009 results from weak orders from some Connect customers, continuing weakness of the DVD replication market and closure of the North American telephony business at the end of 2008. Licensing revenues slightly increased at constant currency.

   - Thomson was able to offset the decline in revenues by executing operational efficiencies to improve its operating profitability and cash flow.



• Cash position at €551 million end of September, a €40 million increase vs. June 2009

   - Operating cash flow from continuing activities was positive over the quarter and showed a material improvement over 3Q 2008.

   - Group free cash flow was positive in 3Q 2009. The Group’s estimated cash position at the end of the quarter amounted to €551 million, compared to €511 million on 30 June 2009. Estimated net financial debt as of September 30, 2009 stood at €2,170 million compared to €2,311 million as of June 30, 2009.



• Update on balance sheet restructuring

   - Thomson continues to work towards the implementation of the restructuring announced on 24 July 2009, which is supported by a majority of its senior creditors.

   - Since July 24th, Thomson has received support from additional senior creditors, in some cases subject to satisfaction of conditions and completion of the ISDA auction process.

   - The ISDA process to unwind the CDS has taken more time than expected and is now anticipated to be completed by the end of October 2009. Thomson will then be in a position to identify new senior creditors and proceed to solicit their support for the restructuring. Therefore, Thomson now expects to proceed with its Extraordinary General Meeting in the first quarter of 2010.



• Update on divestments

   - Thomson is pursuing discussions for the disposal of Grass Valley activities and confirms it is premature at this stage to anticipate the outcome of the negotiations.

   - Following signature of a multi-year agreement between PRN and Wal-Mart, the PRN disposal process has been resumed.

   - The Screenvision US disposal is in final stages of discussions.


 
Paris (France), October 22, 2009 – The Board of Directors of Thomson (Euronext Paris: 18453, NYSE: TMS), met on Wednesday October 21, 2009 to review revenues for the quarter ending September 30, 2009 and the status of the balance sheet restructuring process.

Comment by Frederic Rose, Chairman and CEO
“ While market conditions remained challenging, our continued focus on cash generation and profitability resulted in measurable results without material loss of market share. Our focus is now clearly to address our operational performance in Connect while increasing market share in our Technicolor activities. The extension of our agreement with Paramount, the sustained growth in visual effects and the industry endorsement of Technicolor 3D offer are positive signs of our ability to develop our businesses with content providers. Finally, we have started to lay the groundwork for future licensing programs, leveraging our refocused research efforts.”

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