Netgem Announces Consolidated 2010 First Half Results

France, Neuilly-sur-Seine September 1 2010

First Half of 2010 Results

- Since January 2010 the Netgem Group has refocused on its core technology business, operating profits for the first half of 2010 stood at €25.9 million, up 34% on a like for like basis(1) on the previous year, whilst revenue increased by 6%(2) to € 74.3 million.
- This performance stems from an improvement in gross margin (€ 36.5 million, up 42% on a like for like basis), and is mainly down to continuing efforts to rationalise hardware prices and non-recurring revenues linked to the transfer of license rights to SFR.
- The Group recorded a € 19.7 million consolidated net profit for the first half of 2010, up 54%, representing € 0.53 per share. This includes (i) a € 5.4 million non-recurring non-cash gain due to VideoFutur deconsolidation, (ii) a € 10.7 million corporate tax expense (of which a € 4.6 million deferred tax having no cash impact) and (iii) a € 1.0 million charge encompassing financial and equity associate losses.
- Thanks to this performance, and despite significant cash outlay during the first half of the year (including cash dividends of € 30.4 million(3) and VideoFutur recapitalization for € 10.0 million), the Group still enjoys a sound net cash position and high equity level, respectively amounting to € 34.8 million and € 42.1 million.

Forecast

- Netgem will continue to expand its marketing and business development teams in order to build on its technology and expertise and develop strong commercial relationships with new customers, mainly in the Europe and Asia-Pacific areas. At the same time Netgem will address new business opportunities by reinforcing its product range, such as connected TV technologies, within existing markets.
- Given its current favourable market conditions and sound financial position, Netgem will sustain its investments policy and assess any opportunity that would permit it to accelerate its growth.

(1) First Half 2009 datas adjusted for the contribution of VideoFutur, which was deconsolidated January the 1st, 2010..
(2) See Press Release of July 8th, 2010 « Netgem Announces First-Half 2010 Revenue » http://www.netgem.com/news.php
(3) € 0.11 € per share in June 2010 and in January 2010, payment of an extraordinary cash dividend of € 0.70 per share, coinciding with the distribution of VideoFutur shares.

Consolidated H12010 accounts are made available on the Group’s website (http://www.netgem.com/)