FORM 20-F THOMSON multimedia - Technicolor

labor costs resulting from the implementation of the division’s restructuring and reengineering
programs in the Americas and in Europe. Within the division, Broadband Access Products recorded
significantly higher profitability levels than other Consumer Products categories.
Patents and Licensing
Net sales from the Patents and Licensing division reached 0 395 million in 2001 compared with
0 378 million in 2000, an increase of 4.5%. At constant 2000 exchange rates, consolidated net sales
would have totaled 0 370 million in 2001, a decrease of 2.1% compared to 2000. This performance
reflects the impact of foreign exchange variations largely attributable to the conversion of
U.S. dollars into euro as well as the negative impact of the softening of worldwide industry sales
volumes, particularly in the second and third quarters of the year. In 2001, Thomson filed 482 priority
applications, an increase of 12% compared with 2000.
Consolidated operating income for the division totaled 0 350 million in 2001, an increase of
0 31 million compared with 0 319 million in 2000.
New Media Services
We have enlarged the scope of our New Media Services division to take into account our
repositioning towards media customers. Previously, the division was focused solely on the field of
interactive television revenues from a consumer-orientated customer base. Although customer
acceptance has been slower than expected, we expect this activity to remain a key part of New
Media Services. In addition, we are actively pursuing a number of initiatives with business customers
that complement and broaden our existing activities in this field.
The New Media Services division posted net sales of 0 44 million in 2001, compared with
0 9 million in 2000. This amount includes 0 24 million generated by ScreenVision, the in-theater
advertising business developed by Technicolor and integrated into the division in 2001. In addition,
we pursued two initiatives, namely the deployment of televisions equipped with on-screen electronic
program guides (EPGs) in the United States and through TAK˛, the interactive television service we
launched in France in early 2001. At the end of 2001, we had an installed base of 6.5 million RCA˛
televisions equipped with electronic program guides in the United States, which enabled sales of
advertising space to broadcasters and corporate advertisers.
The division recorded an operating loss of 0 82 million in 2001, a level comparable with 2000.
This level was maintained by tightly controlling the costs incurred in connection with the deployment
of the two above-mentioned initiatives. We intend to continue investing in this division’s activities
while continuing our efforts to control operating expenses.
Consolidated Results
Net sales
Consolidated net sales in 2001 totaled 0 10,494 million, an increase of 15.4% compared with
0 9,094 million in 2000. At constant 2000 exchange rates, consolidated net sales increased by
13.4%. This revenue growth reflects the development of the Digital Media Solutions division driven
by newly integrated entities (Technicolor, Philips Broadcast and Nextream). On a constant scope of
consolidation, consolidated net sales decreased by 3.5% in 2001.
Operating income
Cost of sales amounted to 0 8,116 million in 2001, or 77.3% of net sales, an increase of 17.4%
compared with cost of net sales of 0 6,915 million in 2000, or 76.0% of net sales. This negative
performance in terms of cost of sales as a percentage of net sales was primarily attributable to our
inability to adjust our cost of net sales in our Displays and Components and Consumer Products
divisions to the decrease in net sales in those divisions.
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