TECHNICOLOR 472 0 Kommentare Q3 2018 TRADING COMMENTARY - Seite 2

For the quarter, revenues were stable at constant exchange rates compared to last year. Year to date overall sales are below prior year, in large part due to North American video weakness.

North America: revenues with North American customers were down compared to the third quarter of 2017:
- North American cable driven down by lower video demand from Charter. This was partially offset by higher Broadband demand from Comcast and overall demand from syndicated customers, benefiting from a sole supplier role for DOCSIS 3.1 gateways;

Outside the cable segment, North America is also down, mainly driven by the implementation of the customer selectivity program, reducing volumes in the satellite products segment.

Europe, Middle-East & Africa, Asia-Pacific and Latin America: mid-single digit revenue growth due to large orders from the 50+ customers that the Group is focusing on. While sales in Europe, Middle-East and Africa were stable versus last year, both Asia-Pacific and Latin America experienced solid growth.

The component environment and regulatory framework remains challenging:

Although the situation with the prices for memory chips is gradually improving versus prior quarters, costs for MLCCs have continued to increase materially versus prior quarters;
As communicated previously, the Group is reinvoicing the vast majority of identifiable cost increases to its clients;
Concerning the US tariffs applied to some products manufactured in China, due to our already geographically diversified production footprint we have a limited impact in 2018. For instance, the very high volume Docsis 3.1 gateway for Comcast and syndicated customers is produced in Vietnam. Additional actions have been launched to move products out of China.