FORM 20-F THOMSON multimedia - Technicolor

GROWL in the United States. These positive factors more than offset increased costs for certain key
components due to increased demand in the components market.
New Media Services
The New Media Services division posted net sales of 0 9 million in 2000. At the end of 2000,
We had deployed in the United States an installed base of 4 million televisions equipped with
electronic program guides, which enabled advertising sales to broadcasters and corporate
advertisers.
The New Media Services division recorded an operating loss of 0 83 million in 2000 compared
with a loss of 0 55 million in 1999, reflecting principally the costs associated with the deployment of
an installed base of televisions equipped with electronic program guides in the United States. We
also increased our research and development expenses in cooperation with Gemstar-TVGuide and
Microsoft (development of TAK technology) and the marketing associated with the introduction of
new services (the launching of TAK in France was announced in the fourth quarter 2000).
Patents and Licensing
Net sales from the Patents and Licensing division reached 0 378 million in 2000 compared with
0 278 million in 1999, representing an increase of 36%. This 36% growth was principally attributable
to increases in the values, compared to the euro, of the U.S. dollar and the Asian currencies in
which Patents and Licensing receives a large portion of its net sales, principally the Japanese Yen.
Contract renewals and conclusions of new contracts more than offset royalty rate decreases in some
contracts. We also strongly developed our licensing programs on digital technologies (such as DVD,
mp3, user interface and storage) as well as third-party licensing programs (such as GSM on behalf
of Alcatel).
Consolidated operating income for the division totaled 0 319 million in 2000, an increase of
46.3% compared with 0 218 million in 1999.
Consolidated results
Net sales
Consolidated net sales in 2000 totaled 0 9,094 million, an increase of 35.9% compared with
0 6,690 million in 1999. At a constant scope of consolidation, consolidated net sales would have
increased by 31.0% in 2000. At a constant scope of consolidation and constant 1999 exchange
rates, consolidated net sales increased by 18.2%.
This growth reflects sales increases in the Displays and Components, Consumer Products and
Patents and Licensing divisions, mainly driven by growth in large and very-large tubes, optical
components, digital and audio products.
Operating income
Cost of net sales amounted to 0 6,915 million in 2000, an increase of 0 1,850 million, or 36.5%,
compared with cost of net sales of 5,065 million in 1999. The increase in cost of net sales in
absolute terms reflected the higher level of net sales in 2000 compared with 1999. Our restructuring
and cost control efforts enabled us to offset partially the impact of a difficult situation in components
supply and increased expenses in New Media Services. Globally, cost of net sales as a percentage
of net sales slightly increased to 76.0% in 2000 compared with 75.7% in 1999.
As a result, our gross margin was 0 2,179 million in 2000, equal to 24.0% of net sales in 2000,
compared with 0 1,625 million in 1999, equal to 24.3% of net sales in 1999.
Selling and marketing expenses were stable at 11.0% of net sales, or 0 998 million in 2000
compared with 0 737 million in 1999. The 0 261 million or 35.4% increase in absolute terms reflected
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