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THOMSON: THOMSON : First Half 2009 Results (unaudited)

^{Published on 2009-07-27 05:32:16, Last Modified on 2009-07-27 05:32:27 - Market Wire}
 

PARIS--(Marketwire - July 27, 2009) - First Half 2009 Results (unaudited)

- Group revenues of EUR 1,801 million in first half 2009, a decrease of (1.9)% year over year at current exchange rates and (5.5)% at constant rates mainly due to retail telephony exit

o Revenues from new perimeter of EUR 1,730 million, +2.4% year over year at current rates and (1.2)% at constant rates. Thomson Connect and Licensing activities recorded revenue growth in first half 2009. DVD activity impacted by lower replication volumes, partly offset by mix improvements and stable revenues overall for other Technicolor activities

o Second quarter 2009 Group revenues (10.6)% at current rates and (12.8)% at constant rates. Second quarter 2009 revenues from new perimeter (6.0)% at current rates and (8.1)% at constant rates. On a sequential basis, 2009 second quarter revenues showed a slight increase compared to 2009 first quarter revenues at constant rates

- Increase in operating profitability in first half 2009 with EBIT of EUR 51 million, a EUR 30 million increase year on year, +1.7pt margin improvement

o Operating profitability gains mainly driven by more favourable business mix, cost reduction measures and operating efficiencies across all businesses

- Consolidated net result of EUR (325) million of which EUR (306) million for non cash impairment charge resulting mainly from Grass Valley and PRN asset disposal process

o Excluding impairments and restructuring charges of EUR (305) million, adjusted net result of EUR (20) million in first half 2009, an improvement compared to EUR (89) million in first half 2008

- Net debt of EUR 2,311 million on 30 June 2009, stable compared to EUR 2,357 million at the end of the first quarter 2009. Cash position of EUR 511 million on 30 June 2009

o Group free cash flow of EUR (239) million in first half 2009 mainly due to the one-off working capital increase incurred in first quarter 2009

Paris, 27 July 2009 - The Board of Directors of Thomson (Euronext Paris: 18453, NYSE: TMS), met today to approve the Group's first half 2009 results.

Comment by Frederic Rose, Chairman and CEO

"The first half 2009 results reflect our determination to generate operational profitability and cash flow. These are our two overriding objectives for the months to come as we pursue the execution of our strategy to refocus our business around our content creator customers. This performance, achieved in the midst of our balance sheet restructuring, is a testimony to the commitment of our employees in what was a very challenging environment for Thomson."

Summary of consolidated first half 2009 results (unaudited)

 +-------------------------+---------+---------+------------------+ |In € million unless | 1H 2008| 1H 2009| Change, reported| |otherwise stated | | | | +-------------------------+---------+---------+------------------+ |Technicolor revenues | 814| 797| (2.1)%| +-------------------------+---------+---------+------------------+ |Change at constant rates | | (6.3)%| | +-------------------------+---------+---------+------------------+ |Thomson Connect revenues | 689| 732| +6.2%| +-------------------------+---------+---------+------------------+ |Change at constant rates | | 2.8%| | +-------------------------+---------+---------+------------------+ |Technology revenues | 181| 195| +7.9%| +-------------------------+---------+---------+------------------+ |Change at constant rates | | 5.6%| | +-------------------------+---------+---------+------------------+ |Corporate and other | 151| 77| (48.9)%| |revenues | | | | +-------------------------+---------+---------+------------------+ |Change at constant rates | | (52.0)%| | +-------------------------+---------+---------+------------------+ |Group net revenues from | 1,835| 1,801| (1.9)%| |continuing operations | | | | +-------------------------+---------+---------+------------------+ |Change at constant rates | | (5.5)%| | +-------------------------+---------+---------+------------------+ |Of which new perimeter | 1,690| 1,730| +2.4%| +-------------------------+---------+---------+------------------+ |Change at constant rates | | (1.2)%| | +-------------------------+---------+---------+------------------+ |EBIT+Depreciation and | 136| 156| +14.0%| |Amortization | | | | +-------------------------+---------+---------+------------------+ |EBIT+D&A margin (%) | 7.4%| 8.7%| +1.3 pts | +-------------------------+---------+---------+------------------+ |EBIT from continuing | 21| 51| +30| |operations | | | | +-------------------------+---------+---------+------------------+ |Financial costs (net) | (73)| (10)| +63| +-------------------------+---------+---------+------------------+ |Share of profit/(loss) | (1)| (1)| 0| |from associates | | | | +-------------------------+---------+---------+------------------+ |Income tax | (18)| (36)| (18)| +-------------------------+---------+---------+------------------+ |Profit/(loss) from | (71)| 4| +75| |continuing operations | | | | +-------------------------+---------+---------+------------------+ |Loss from discontinued | (111)| (329)| (218)| |operations | | | | +-------------------------+---------+---------+------------------+ |Net loss, Group share | (182)| (325)| (143)| +-------------------------+---------+---------+------------------+ |Free cash flow* | (109)| (239)| (130)| +-------------------------+---------+---------+------------------+ |Net financial debt | 1,315| 2,311| +996| +-------------------------+---------+---------+------------------+ 

Adjusted indicators (unaudited)

Thomson is presenting, in addition to published results and with the aim to provide a more comparable view of the evolution of its operating performance, a set of adjusted indicators which exclude impairments and restructuring charges.

 +-------------------------+---------+---------+------------------+ |In € million unless | 1H 2008| 1H 2009| Change, reported| |otherwise stated | | | | +-------------------------+---------+---------+------------------+ |Impairment and | 36| 33| (3)| |restructuring included in| | | | |EBIT and EBIT+D&A from | | | | |continuing operations | | | | +-------------------------+---------+---------+------------------+ |Adjusted | 173| 189 | +16| |EBIT+Depreciation and | | | | |Amortization | | | | +-------------------------+---------+---------+------------------+ |Adjusted EBIT+D&A margin | 9.4%| 10.5%| +1.1 pt| |(%) | | | | +-------------------------+---------+---------+------------------+ |Adjusted EBIT | 57| 84| +27| +-------------------------+---------+---------+------------------+ |Adjusted EBIT margin (%) | 3.1%| 4.7%| +1.6 pts| +-------------------------+---------+---------+------------------+ |Impairment and | 57| 272| +215| |restructuring included in| | | | |discontinued operations | | | | +-------------------------+---------+---------+------------------+ |Adjusted net loss, Group | (89)| (20) | +69| |share* | | | | +-------------------------+---------+---------+------------------+ 

Group highlights

- Second quarter 2009 Group revenues amounted to EUR 886 million, down (10.6)% at current rates and (12.8)% at constant rates. Second quarter 2009 revenues from new perimeter down (6.0)% at current rates and (8.1)% at constant rates. The difference between year on year revenue variance for the first and second quarters 2009 results from a significant revenue imbalance between the first two quarters in 2008 related to product delivery timing for a Thomson Connect customer. On a sequential basis, 2009 second quarter revenues showed a slight increase compared to 2009 first quarter revenues at constant rate.

- Group revenues from continuing activities for the first half 2009 were down (1.9)% at current rates compared to first half 2008, and down (5.5)% at constant rates mainly due to exit of retail telephony. Revenues from the Group's new perimeter 2.4% at current rates compared to first half 2008, and down (1.2)% at constant rates. Technicolor activities suffered from a strong decline in SD-DVD replication volumes, but benefited from positive trends in Film activities and from the resilience of the Media Management and Content Distribution businesses. Thomson Connect recorded revenue growth in 1H 09, benefiting from strong demand and stable average selling price overall. Technology revenues increased by 5.6% at constant rates, supported by growth in Licensing business.

- Despite the revenue decrease, the Group recorded a EUR 20 million increase in EBIT+D&A from continuing operations at 156 million, a 8.7% margin in first half 2009. This 1.3 points margin increase was mainly driven by mix improvement, cost reduction measures and operating efficiencies across all businesses. Adjusted EBIT+D&A (from impairments and restructuring charges) amounted to EUR 189 million in first half 2009, a margin increase of 1.1 points compared to first half 2008. Earnings before interest and tax from continuing activities increased to EUR 51 million in first half 2009 compared to EUR 21 million in first half 2008.

- Net result (Group share) amounted to EUR (325) million in first half 2009, reflecting higher impairment and restructuring charges compared to first half 2008. Excluding these charges, the Group adjusted net result amounted to EUR (20) million in first half 2009, a EUR 69 million improvement compared to 1H 2008, reflecting the increase in EBIT from continuing operations and lower financial charges, partly offset by higher deferred tax charges.

- Operating cash flow[1] from continuing operations amounted to EUR 63 million in first half 2009, compared to EUR 51 million in first half 2008. Thomson generated a negative Group free cash flow of EUR (239) million in first half 2009 compared to EUR (109) in first half 2008. Free cash flow from continuing activities amounted to EUR (172) million in first half 2009 mainly due to the one-off working capital increase incurred in first quarter 2009, associated with the alignment of the supplier payment cycle to contractual terms. Free cash flow from discontinued activities improved substantially to EUR (67) million in first half 2009 compared to EUR (150) million in first half 2008 mainly due to exit of Audio Video Accessories businesses.

- Net debt on 30 June 2009 stood at EUR 2,311 million, nearly stable compared to its level of EUR 2,357 million at the end of the first quarter 2009. The cash position of the Group at 30 June 2009 was EUR 511 million, compared to EUR 586 million at the end of the first quarter 2009.

Divisional highlights

Technicolor

Revenues for the quarter are presented in accordance with IFRS, and therefore exclude activities now treated as discontinued. Previously reported revenues for Technicolor in 1H 2008 came to EUR 906 million, of which EUR 92 million from Media Networks business (principally PRN and Screenvision) now treated as discontinued, the. Previous EBIT for Technicolor in 1H 2008 amounted to EUR (34) million, of which EUR (6) million from activities now treated as discontinued.

 +-------------------------+---------+---------+---------+---------+ |In € million | 2Q 2008| 2Q 2009| 1H 2008| 1H 2009| +-------------------------+---------+---------+---------+---------+ |Revenues | 407| 387| 814| 797| +-------------------------+---------+---------+---------+---------+ |Change, as reported (%) | | (4.7)%| | (2.1)%| +-------------------------+---------+---------+---------+---------+ |Change at constant | | (8.9)%| | (6.3)%| |currency (%) | | | | | +-------------------------+---------+---------+---------+---------+ |EBIT+D&A | | | 54| 58| +-------------------------+---------+---------+---------+---------+ |Change, as reported (%) | | | | 7.5%| +-------------------------+---------+---------+---------+---------+ |EBIT+D&A margin (%) | | | 6.6%| 7.3%| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT+D&A | | | 68| 77| +-------------------------+---------+---------+---------+---------+ |Change, as reported (%) | | | | 12.4%| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT+D&A margin | | | 8.4%| 9.7%| |(%) | | | | | +-------------------------+---------+---------+---------+---------+ |EBIT | | | (28)| (9)| +-------------------------+---------+---------+---------+---------+ |EBIT margin (%) | | | (3.5)%| (1.1)%| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT | | | (14)| 9| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT margin (%) | | | (1.7)%| 1.1%| +-------------------------+---------+---------+---------+---------+ 

- resilience of distribution activities and stable volumes in Film release printing with a more favorable mix compared to 1H 2008;

- continued growth in Media Management services and stable Content Distribution business.

The adjusted EBIT+D&A margin of Technicolor increased by 1.3 points in 1H 2009 compared to 1H 2008. Content Services benefited from strong momentum in Media Management services, offset by the impact of lower activity in production and post-production on margins. Physical Media activities were able to mitigate the negative profitability impact associated with lower revenues as a result of an improved business mix and operational efficiency gains linked to restructuring actions. Content Distribution services profitability improved on the back of a tighter control on costs and operating processes.

- Content Services (digital production, post-production and content media management)

During the first half 2009, digital production (visual effects, animation and games) benefited from a sustained level of activity for animation services, but suffered from uncertainties related to the funding of new film projects and from a weak advertising market, which weighed on visual effects activities. However, the Group was able to secure major film projects in the second quarter of 2009, leading to a strong backlog build-up at end of first half 2009.

Post-production revenues were down in first half 2009, with activity levels at historical lows, particularly in North America as a result of the economic environment. This slowdown in activity levels was amplified in the second quarter of 2009 as it became more challenging for non-major studios the raise funding to support the marketing of movie releases.

Media management services showed robust growth in 1Q 2009 which tempered somewhat in 2Q 2009, fueled by higher volumes related to studios catalogs and stronger business in digital post-production services and for packaged media (including compression and authoring for Blu-ray™ discs).

- Physical Media (Film and DVD Services)

 +-------------------------+---------+---------+---------+---------+ |KPIs | 2Q 2008| 2Q 2009| 1H 2008| 1H 2009| +-------------------------+---------+---------+---------+---------+ |Film footage (bn feet) | 1.1| 1.0| 1.8| 1.8| +-------------------------+---------+---------+---------+---------+ |Change (%) | | (7%)| | 0%| +-------------------------+---------+---------+---------+---------+ |DVD volumes (million | 285| 219| 597| 465| |units) | | | | | +-------------------------+---------+---------+---------+---------+ |Change (%) | | (23)%| | (22%)| +-------------------------+---------+---------+---------+---------+ 

SD-DVD replication volumes declined substantially in first half 2009, especially in North America. However, the SD-DVD replication volume impact on margin was partly compensated by:

- a strong improvement in mix year-on-year, with significant volume growth in high-definition discs (Blu-ray™) and lower kiosks volumes;

- the resilience of the distribution business.

- Content Distribution Services

Content Distribution Services revenues were nearly flat in 1H 2009, with limited new opportunities as customers are impacted by a declining advertising market. Key focus in 1H 2009 was on operational improvements and cost reductions in conjunction with the migration of ITV into our UK facility.

Thomson Connect

Revenues for the quarter and six-month operating profitability are presented in accordance with IFRS, and therefore exclude activities now treated as discontinued. Previously reported revenues for Thomson Connect in 1H 2008 amounted to EUR 1,109 million, of which EUR 420 million from activities now treated as discontinued or Other Continuing, principally the Grass Valley business and the remaining European and Asian Telephony businesses. Previous EBIT for Thomson Connect in 1H 2008 amounted to EUR (26) million, of which EUR (21) million from activities now treated as discontinued.

 +-------------------------+---------+---------+---------+---------+ |In € million | 2Q 2008| 2Q 2009| 1H 2008| 1H 2009| +-------------------------+---------+---------+---------+---------+ |Revenues | 402| 364| 689| 732| +-------------------------+---------+---------+---------+---------+ |Change, as reported (%) | | (9.7)%| | | +-------------------------+---------+---------+---------+---------+ |Change at constant | | (12.3)%| | 2.8%| |currency (%) | | | | | +-------------------------+---------+---------+---------+---------+ |EBIT+D&A | | | 32| 52| +-------------------------+---------+---------+---------+---------+ |Change, as reported (%) | | | | 60.1%| +-------------------------+---------+---------+---------+---------+ |EBIT+D&A margin (%) | | | 4.6%| 7.1%| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT+D&A | | | 42| 52| +-------------------------+---------+---------+---------+---------+ |Change, as reported (%) | | | | 24.7%| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT+D&A margin | | | 6.1%| 7.1%| |(%) | | | | | +-------------------------+---------+---------+---------+---------+ |EBIT | | | 3| 9| +-------------------------+---------+---------+---------+---------+ |EBIT margin (%) | | | 0.5%| 1.2%| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT | | | 13| 10| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT margin (%) | | | 1.9%| 1.4%| +-------------------------+---------+---------+---------+---------+ |KPIs | | | | | +-------------------------+---------+---------+---------+---------+ |Cable (m) | 1.5| 1.3| 2.5| 2.7| +-------------------------+---------+---------+---------+---------+ |Satellite (m) | 2.8| 2.4| 5.0| 4.7| +-------------------------+---------+---------+---------+---------+ |Telecom (m) | 2.9| 3.0| 5.1| 5.9| +-------------------------+---------+---------+---------+---------+ |Total Access Products (m)| 7.3| 6.8| 12.7| 13.2| +-------------------------+---------+---------+---------+---------+ |Change | | (6.9)%| | 4.1%| +-------------------------+---------+---------+---------+---------+ 

- Slight growth in Cable volumes, mainly driven by strong demand for Western European operators;

- Slight decline in Satellite volumes due to an unfavourable comparison base against an exceptionally strong 2Q 2008; the mix in Satellite continues to improve with sustained demand for high-end devices (HD-PVR);

- Improved mix in Telecom driven by a sustained demand in high-end devices and multi-service gateways;

- Stable average selling prices overall.

Revenues of the Software Service Platform business in the second quarter 2009 remained very negatively impacted by a significant decline in investments due to the current economic environment.

Despite the negative impact of lower revenues from SSP on margins, operating profitability of the Thomson Connect activity increased in 1H 2009 compared to 1H 2008 on the back of an improved product mix, tighter control over bid processes as well as costs optimization efforts.

- Technology

 +-------------------------+---------+---------+---------+---------+ |In € million | 2Q 2008| 2Q 2009| 1H 2008| 1H 2009| +-------------------------+---------+---------+---------+---------+ |Revenues | 100| 102| 181| 195| +-------------------------+---------+---------+---------+---------+ |Change, as reported (%) | | 2.3%| | 7.9%| +-------------------------+---------+---------+---------+---------+ |Change at constant | | 10.1%| | 5.6%| |currency (%) | | | | | +-------------------------+---------+---------+---------+---------+ |Of which Licensing | 96| 100| 175| 192| |revenues | | | | | +-------------------------+---------+---------+---------+---------+ |Change, as reported (%) | | 4.4%| | 7.3%| +-------------------------+---------+---------+---------+---------+ |Change at constant | | 12.5%| | 9.7%| |currency (%) | | | | | +-------------------------+---------+---------+---------+---------+ |EBIT+D&A | | | 125| 124| +-------------------------+---------+---------+---------+---------+ |Change, as reported (%) | | | | (0.8)%| +-------------------------+---------+---------+---------+---------+ |EBIT+ D&A margin (%) | | | 69.1%| 63.6%| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT+D&A | | | 126| 140| +-------------------------+---------+---------+---------+---------+ |Change, as reported (%) | | | | 11.3%| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT+D&A margin | | | 69.6%| 71.8%| |(%) | | | | | +-------------------------+---------+---------+---------+---------+ |EBIT | | | 118| 116| +-------------------------+---------+---------+---------+---------+ |EBIT margin (%) | | | 65.0%| 59.5%| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT | | | 118| 132| +-------------------------+---------+---------+---------+---------+ |Adjusted EBIT margin (%) | | | 65.2%| 67.7%| +-------------------------+---------+---------+---------+---------+ 

Excluding the impact of a EUR 13 million impairment charge on the trademark portfolio, the adjusted EBIT+D&A of Technology reached EUR 140 million in first half 2009, or 71.8% of revenues, benefiting from higher revenues from the Licensing business.

- Discontinued activities

Total EBIT from discontinued activities amounted to EUR (323) million in 1H 2009. This EBIT loss was largely related to held for sale activities, which included a EUR (276) million impairment charges resulting mainly from estimated transaction values of Grass Valley and PRN.

An analyst conference call hosted by Frederic Rose, Chairman and CEO and Stephane Rougeot, CFO will be held at 15:00 CET today.

Notice

Thomson is a company listed on NYSE Euronext Paris and NYSE stock exchanges, and these materials contain certain statements, including Thomson's current intentions, beliefs or expectations about its balance sheet restructuring and the timetable for completion of the balance sheet restructuring, and its future results of operations, financial condition, liquidity and prospects, that 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 management's current expectations and beliefs and are subject to a number of risks, uncertainties, assumptions and other factors 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 and business conditions as well as conditions specific to the balance sheet restructuring and its implementation, including the ability to obtain the necessary regulatory, shareholder and other approvals, many such factors being outside of our control. Detailed information on the potential factors that could affect the financial results of Thomson is contained in Thomson's public statements and reports (Information Réglementée) and Thomson's filings with U.S. Securities and Exchange Commission.

These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities mentioned herein (the "Securities") have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act").

The Securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. There will be no public offer of the Securities in the United States.

Contacts

External Communications, phone: +33 1 41 86 53 93

Investor Relations, phone: +33 1 41 86 55 95

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

 +-------------------------+--------------------+--+--------------------+--+--+ | | | |Six months ended | | | | | | |June 30, | | | +-------------------------+--------------------+--+--------------------+--+--+ |(€ in millions) |(in euro, except | | | | | | |number of shares) | | | | | +-------------------------+--------------------+--+--------------------+--+--+ | | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Continuing operations | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Revenues | | | 1,835| | | +-------------------------+--------------------+--+--------------------+--+--+ |Cost of sales | | | (1,486)| | | +-------------------------+--------------------+--+--------------------+--+--+ |Gross margin | | | 349| | | +-------------------------+--------------------+--+--------------------+--+--+ |Selling and | | | (206)| | | |administrative expenses | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Research and development | | | (87)| | | |expenses | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Other income (expense) | | | (35)| | | +-------------------------+--------------------+--+--------------------+--+--+ |Profit (loss) from | | | 21| | | |continuing operations | | | | | | |before tax and net | | | | | | |finance costs | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Interest income | | | 9| | | +-------------------------+--------------------+--+--------------------+--+--+ |Interest expense | | | (44)| | | +-------------------------+--------------------+--+--------------------+--+--+ |Other financial income | | | (38)| | | |(expense) | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Net finance costs | | | (73)| | | +-------------------------+--------------------+--+--------------------+--+--+ |Share of profit (loss) | | | (1)| | | |from associates | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Income tax | | | (18)| | | +-------------------------+--------------------+--+--------------------+--+--+ |Profit (loss) from | | | (71)| | | |continuing operations | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Discontinued operations | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Net loss from | | | (111)| | | |discontinued operations | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Net income (loss) | | | (182)| | | +-------------------------+--------------------+--+--------------------+--+--+ |Attributable to: | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |- Equity Holders | | | (182)| | | +-------------------------+--------------------+--+--------------------+--+--+ |- Minority interests | | | -| | | +-------------------------+--------------------+--+--------------------+--+--+ | | | |Six months ended | | | | | | |June 30, | | | +-------------------------+--------------------+--+--------------------+--+--+ |(€ in millions) |(in euro, except | | | | | | |number of shares) | | | | | +-------------------------+--------------------+--+--------------------+--+--+ | | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Weighted average number | | | 262,940,199| | | |of shares outstanding | | | | | | |(basic net of treasury | | | | | | |stock) | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |Earnings (loss) per share| | | | | | |from continuing | | | | | | |operations | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |- basic | | | (0.27)| | | +-------------------------+--------------------+--+--------------------+--+--+ |- diluted | | | (0.27)| | | +-------------------------+--------------------+--+--------------------+--+--+ |- basic | | | (0.42)| | | +-------------------------+--------------------+--+--------------------+--+--+ |- diluted | | | (0.42)| | | +-------------------------+--------------------+--+--------------------+--+--+ |Total earnings (loss) per| | | | | | |share | | | | | | +-------------------------+--------------------+--+--------------------+--+--+ |- basic | | | (0.69)| | | +-------------------------+--------------------+--+--------------------+--+--+ |- diluted | | | (0.69)| | | +-------------------------+--------------------+--+--------------------+--+--+ +-------------------------+--------------------+--+--------------------+--+--+ +-------------------------+-----------+-------------+--+--+-+--+ | | | | | | | | | | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |(€ in millions) | 2008| 2008| | | | | | | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ | | Unaudited| Unaudited| | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Continuing operations | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Revenues | 1,801| | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Cost of sales | (1,440)| | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Gross margin | 361| | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Selling and | (193)| | | | | | |administrative expenses | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Research and development | (78)| | | | | | |expenses | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Other income (expense) | (39)| | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Profit (loss) from | 51| | | | | | |continuing operations | | | | | | | |before tax and net | | | | | | | |finance costs | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Interest income | 4| | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Interest expense | (33)| | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Other financial income | 19| | | | | | |(expense) | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Net finance costs | (10)| | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Share of profit (loss) | (1)| | | | | | |from associates | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Income tax | (36)| | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Profit (loss) from | 4| | | | | | |continuing operations | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Discontinued operations | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Net loss from | (329)| | | | | | |discontinued operations | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Net income (loss) | (325)| | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Attributable to: | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |- Equity Holders | (325)| | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |- Minority interests | -| | | | | | +-------------------------+-----------+-------------+--+--+-+--+ | | | | | | | | | | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |(€ in millions) | 2008| 2008| | | | | | | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ | | Unaudited| Unaudited| | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Weighted average number | | 262,947,221| | | | | |of shares outstanding | | | | | | | |(basic net of treasury | | | | | | | |stock) | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Earnings (loss) per share| | | | | | | |from continuing | | | | | | | |operations | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |- basic | | 0.02| | | | | +-------------------------+-----------+-------------+--+--+-+--+ |- diluted | | 0.02| | | | | +-------------------------+-----------+-------------+--+--+-+--+ |- basic | | (1.25)| | | | | +-------------------------+-----------+-------------+--+--+-+--+ |- diluted | | (1.25)| | | | | +-------------------------+-----------+-------------+--+--+-+--+ |Total earnings (loss) per| | | | | | | |share | | | | | | | +-------------------------+-----------+-------------+--+--+-+--+ |- basic | | (1.23)| | | | | +-------------------------+-----------+-------------+--+--+-+--+ |- diluted | | (1.23)| | | | | +-------------------------+-----------+-------------+--+--+-+--+ +-------------------------+-----------+-------------+--+--+-+--+ 

 +-------------------------+--+--+--------------------+--+--------------------+--+ |(€ in millions) | | |December 31, 2008 | |June 30, 2009 | | | | | |Audited | |Unaudited | | +-------------------------+--+--+--------------------+--+--------------------+--+ |ASSETS | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Non-current assets: | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Property, plant and | | | 541| | 451| | |equipment | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Goodwill | | | 926| | 756| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Other intangible assets | | | 673| | 508| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Investments in associates| | | 7| | 6| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Investments and | | | 52| | 50| | |available-for-sale | | | | | | | |financial assets | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Contract advances | | | 131| | 105| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Deferred tax assets | | | 515| | 486| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Income tax receivable | | | 21| | 9| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Other non-current assets | | | 41| | 36| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Total non-current assets | | | 2,907| | 2,407| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Current assets: | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Inventories | | | 270| | 135| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Trade accounts and notes | | | 968| | 599| | |receivable | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Current accounts with | | | 4| | 8| | |associates and | | | | | | | |joint-ventures | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Derivative financial | | | 85| | 10| | |instruments | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Income tax receivable | | | 32| | 27| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Other current assets | | | 485| | 498| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Cash collateral | | | 38| | 53| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Cash and cash equivalents| | | 769| | 511| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Assets classified as held| | | 33| | 514| | |for sale | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Total current assets | | | 2,684| | 2,355| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Total assets | | | 5,591| | 4,762| | +-------------------------+--+--+--------------------+--+--------------------+--+ +-------------------------+--+ |(€ in millions) | | | | | +-------------------------+--+ |ASSETS | | +-------------------------+--+ |Non-current assets: | | +-------------------------+--+ |Property, plant and | | |equipment | | +-------------------------+--+ |Goodwill | | +-------------------------+--+ |Other intangible assets | | +-------------------------+--+ |Investments in associates| | +-------------------------+--+ |Investments and | | |available-for-sale | | |financial assets | | +-------------------------+--+ |Contract advances | | +-------------------------+--+ |Deferred tax assets | | +-------------------------+--+ |Income tax receivable | | +-------------------------+--+ |Other non-current assets | | +-------------------------+--+ |Total non-current assets | | +-------------------------+--+ |Current assets: | | +-------------------------+--+ |Inventories | | +-------------------------+--+ |Trade accounts and notes | | |receivable | | +-------------------------+--+ |Current accounts with | | |associates and | | |joint-ventures | | +-------------------------+--+ |Derivative financial | | |instruments | | +-------------------------+--+ |Income tax receivable | | +-------------------------+--+ |Other current assets | | +-------------------------+--+ |Cash collateral | | +-------------------------+--+ |Cash and cash equivalents| | +-------------------------+--+ |Assets classified as held| | |for sale | | +-------------------------+--+ |Total current assets | | +-------------------------+--+ |Total assets | | +-------------------------+--+ 

 +-------------------------+--+--+--------------------+--+--------------------+--+ |(€ in millions) | | |December 31, 2008 | |June 30, 2009 | | | | | |Audited | |Audited | | +-------------------------+--+--+--------------------+--+--------------------+--+ |EQUITY AND LIABILITIES | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Shareholders’ equity: | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Common stock (269,890,028| | | 1,012| | 1,012| | |shares at June 30, 2009 | | | | | | | |with nominal value of | | | | | | | |€3.75 per share) | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Treasury shares | | | (159)| | (159)| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Additional paid in | | | 1,643| | 1,643| | |capital | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Subordinated perpetual | | | 500| | 500| | |notes | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Other reserves | | | 139| | 135| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Retained earnings | | | (2,998)| | (3,323)| | |(accumulated deficit) | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Cumulative translation | | | (272)| | (227)| | |adjustment | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Shareholders’ deficit | | | (135)| | (419)| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Minority interests | | | 1| | 1| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Total deficit | | | (134)| | (418)| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Non-current liabilities: | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Borrowings | | | 22| | 17| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Retirement benefits | | | 332| | 310| | |obligations | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Restructuring provisions | | | 17| | 14| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Other provisions | | | 103| | 93| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Deferred tax liabilities | | | 284| | 272| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Other non-current | | | 45| | 70| | |liabilities | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Total non-current | | | 803| | 776| | |liabilities | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Current liabilities : | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Borrowings | | | 2,862| | 2,805| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Derivative financial | | | 46| | 13| | |instruments | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Retirement benefits | | | 71| | 62| | |obligations | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Restructuring provisions | | | 115| | 64| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Other provisions | | | 102| | 76| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Trade accounts and notes | | | 968| | 490| | |payable | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Accrued employee expenses| | | 155| | 112| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Income tax payable | | | 32| | 7| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Other current liabilities| | | 548| | 454| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Payables on acquisition | | | 1| | -| | |of companies | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Liabilities classified as| | | 22| | 321| | |held for sale | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ |Total current liabilities| | | 4,922| | 4,404| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Total liabilities | | | 5,725| | 5,180| | +-------------------------+--+--+--------------------+--+--------------------+--+ |Total deficit and | | | 5,591| | 4,762| | |liabilities | | | | | | | +-------------------------+--+--+--------------------+--+--------------------+--+ +-------------------------+--+--+--------------------+--+--------------------+--+ +-------------------------+--+ |(€ in millions) | | | | | +-------------------------+--+ |EQUITY AND LIABILITIES | | +-------------------------+--+ |Shareholders’ equity: | | +-------------------------+--+ |Common stock (269,890,028| | |shares at June 30, 2009 | | |with nominal value of | | |€3.75 per share) | | +-------------------------+--+ |Treasury shares | | +-------------------------+--+ |Additional paid in | | |capital | | +-------------------------+--+ |Subordinated perpetual | | |notes | | +-------------------------+--+ |Other reserves | | +-------------------------+--+ |Retained earnings | | |(accumulated deficit) | | +-------------------------+--+ |Cumulative translation | | |adjustment | | +-------------------------+--+ |Shareholders’ deficit | | +-------------------------+--+ |Minority interests | | +-------------------------+--+ |Total deficit | | +-------------------------+--+ |Non-current liabilities: | | +-------------------------+--+ |Borrowings | | +-------------------------+--+ |Retirement benefits | | |obligations | | +-------------------------+--+ |Restructuring provisions | | +-------------------------+--+ |Other provisions | | +-------------------------+--+ |Deferred tax liabilities | | +-------------------------+--+ |Other non-current | | |liabilities | | +-------------------------+--+ |Total non-current | | |liabilities | | +-------------------------+--+ |Current liabilities : | | +-------------------------+--+ |Borrowings | | +-------------------------+--+ |Derivative financial | | |instruments | | +-------------------------+--+ |Retirement benefits | | |obligations | | +-------------------------+--+ |Restructuring provisions | | +-------------------------+--+ |Other provisions | | +-------------------------+--+ |Trade accounts and notes | | |payable | | +-------------------------+--+ |Accrued employee expenses| | +-------------------------+--+ |Income tax payable | | +-------------------------+--+ |Other current liabilities| | +-------------------------+--+ |Payables on acquisition | | |of companies | | +-------------------------+--+ |Liabilities classified as| | |held for sale | | +-------------------------+--+ |Total current liabilities| | +-------------------------+--+ |Total liabilities | | +-------------------------+--+ |Total deficit and | | |liabilities | | +-------------------------+--+ +-------------------------+--+ 

 +-------------------------+--+--------------------+--+-----------+--+--+-++ |(€ in millions) | |Six months ended | | | | | || | | |June 30, | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ | | | 2008| | 2009 | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ | | | Unaudited| | Unaudited| | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net income (loss) | | (182)| | (325)| | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Loss from discontinued | |(111) | | (329)| | | || |operations | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Profit (loss) from | | (71)| | 4| | | || |continuing operations | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Summary adjustments to | | | | | | | || |reconcile profit from | | | | | | | || |continuing operations to | | | | | | | || |cash generated from | | | | | | | || |continuing operations | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Depreciation and | | 131| | 120| | | || |Amortization | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Impairment of assets | | 6| | 30| | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net changes in provisions| | -| | (28)| | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |(Profit) / loss on asset | | -| | (3)| | | || |sales | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Interest (income) and | | 35| | 29| | | || |expense | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Other non cash items | | 41| | 35| | | || |(including tax) | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Changes in working | | 14| | (199)| | | || |capital and other assets | | | | | | | || |and liabilities | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Cash generated from / | | 156| | (12)| | | || |(used in) continuing | | | | | | | || |operations | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Interest paid | | (28)| | (51)| | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Interest received | | 13| | 3| | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Income tax paid | | 1| | (15)| | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net operating cash | | 142| | (75)| | | || |generated from / (used | | | | | | | || |in) continuing activities| | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net operating cash used | | (123)| | (58)| | | || |in discontinued | | | | | | | || |operations | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net cash from / (used in)| | 19| | (133)| | | || |operating activities (I) | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Acquisition of | | (13)| | (1)| | | || |subsidiaries, associates | | | | | | | || |and investments, net of | | | | | | | || |cash acquired | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net cash impact from sale| | 10| | (2)| | | || |of investments | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Purchases of property, | | (73)| | (84)| | | || |plant and equipment (PPE)| | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Proceeds from sale of PPE| | 1| | 6| | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Purchases of intangible | | (30)| | (19)| | | || |assets including | | | | | | | || |capitalization of | | | | | | | || |development costs | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Cash collateral (granted | | -| | (16)| | | || |to) / reimbursed by third| | | | | | | || |parties | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Loans (granted to) / | | -| | (11)| | | || |reimbursed by third | | | | | | | || |parties | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net investing cash used | | (105)| | (127)| | | || |in continuing activities | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net investing cash used | | (41)| | (15)| | | || |in discontinued | | | | | | | || |operations | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net cash used in | | (146)| | (142)| | | || |investing activities (II)| | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Proceeds from borrowings | | 500| | 49| | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Repayments of borrowings | | (247)| | (51)| | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net financing cash | | 253| | (2)| | | || |generated from/ (used in)| | | | | | | || |continuing activities | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net financing cash used | | -| | (1)| | | || |in discontinued | | | | | | | || |operations | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net cash provided by / | | 253| | (3)| | | || |(used) in financing | | | | | | | || |activities (III) | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Net (decrease) / increase| | 126| | (278)| | | || |in cash and cash | | | | | | | || |equivalents (I+II+III) | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Cash and cash equivalents| | 572| | 769| | | || |at beginning of period | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Exchange gain / (losses) | | (33)| | 20| | | || |on cash and cash | | | | | | | || |equivalents | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++ |Cash and cash equivalents| | 665| | 511| | | || |at end of period | | | | | | | || +-------------------------+--+--------------------+--+-----------+--+--+-++

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