d i g i g r a m

D i g i g r a m

24 septembre 2002

Half-year results Merger Aztec - Audemat

D i g i g r a m

Our business

To develop networking solutions

for digital audio

Our expertise

Audio, networks, IT

Digigram’s fundamentals

D i g i g r a m

Broadcast

Market

(63% of global turnover

in 1 HY 2002)

Public Address

Market

(37% of global turnover

in 1 HY 2002)

Tra

dit

ion

al

Acti

vit

y

Gro

wth

Pot e

nt i

al

Two B to B markets

Sound cards, audio editing

software, interfaces for

remote control of radio

stations,…

Audio network terminals

for recording and play

out, audio production

software,…

> Goals for end of 2002 : achieve 40 % of global turnover in the Public Address market


D i g i g r a m

History of strong growth, a global turnover in 2001 of 20.2 million EUR

International scope: 76 % of turnover on June 30, 2002

Confidence of international key players in the market

Permanent technical innovation with R & D representing about 13 % of turnover on June 30, 2002

Low indebted company, with a gearing of 10.6 % on June 30, 2002


D i g i g r a m

Contents

Highlights of first half-year 2002

Half-year results declining

News: agreement signed with Audemat Merger Aztec – Audemat

Maintaining a growth strategy

Market valuation

D i g i g r a m

Contents

Highlights of Highlights of first half-yearfirst half-year

D i g i g r a m

First half-year very active for Digigram


Continuous enhancement of the product portfolio• Launch of new sound cards 4-channel VXpocket,

PCX924-Mic, VX222-Mic, VX442• New networked audio terminals: mpX Platform• Excellent feedback on new audio network technology

EtherSound ® and launch of associated products ESnet et ES8

Sales pressure rewarded• Digitalization of BBC World Service radio stations (more

than 1,000 sound cards)• 1 million $ contract for InnovaSon in the US• OEM contract with Bouyer for audio installations in train

stations (miXart 8 cards)• EtherSound ® contracts with Fostex Japan, Nexo and

Bouyer signed

D i g i g r a m

100 % acquisition of Innova SON complete: Acceleration of development in the public address market

> Operation which entails an increase of the EPS as soon as 2003


A specialist business:Pioneer in the design of digital audio mixing consoles for sound reinforcement in live performance

Terms of operation:- Financed by bank loan (2nd half-year 2002)- Initial stake since January 2001 (44.7 %)- Consolidation as of July 1, 2002

2001 2002e

Turnover 4.2 million € (+ 90% vs 2000) 5 million €Staff 31 people

D i g i g r a m

Acquisition of Innova SON completed:Acceleration of development in the public address market

> Improved penetration of the public address market


Technological synergiesTransfer of skillsLaunch of products under the Innova SON brand name

Optimization of sales networksComplimentary in skills and geographical spreading of distribution channels

D i g i g r a m

Business analysis by market: BROADCAST


First half-year impacted by negative economical context, except for the US where the situation is clearing up

Business Broadcast 1 HY 2001 1 HY 2002 Var. %

US 900 1,135 + 26.1%

Europe* 3,029 2,052 - 32.2 %

France 1,615 1,358 - 15.9 %

Asia 920 768 - 16.5 % 6,464 5,313 - 14.2 %

* outside France

D i g i g r a m


US:US: recovery of radio advertising expenditure

• According to CMR, up 7.5 % in 1st half-year 2002 (source: half-yearly report of advertising expenditure)


0

4

8

12

16

20

Million USD

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

e

Years

Source: Revenu Advertising

Bureau

> Progressive recovery of investment in the radio market in the US

D i g i g r a m



EuropeEurope: radio advertising expenditure down 1.4 % between 2000 and 2001

• (Source: Carat Network)

> Recovery of investment expected for the European radio markets

FranceFrance: radio advertising expenditure down 11.2 % between 2000 and 2001

• (Source: AACC)

D i g i g r a m

Business analysis by market: PUBLIC ADDRESS


1st half-year still suffering from the economical context, except for Asia where volumes recover

Business 1 HY 2001 1 HY 2002 Var. %Public Address (million €)

US 1,601 1,472 - 8.0 %

Europe* 1,029 782 - 24.0 %

France 822 543 - 34.0 %

Asia 184 324 + 76.0 % 3,636 3,121 - 17.8 %

* outside France

D i g i g r a m

Business analysis by market: PUBLIC ADDRESS Market estimated at 8.5 billion $ (market consensus) Business: audio distribution in public venues Applications in a big number of diversified venues

• Exceptional quality and high fidelity of any sound• Utmost clearness of spoken announcements• Announcements and background music• Maximum system security

Technology shift unavoidable• Shift from analog to digital:

– Mixing consoles– Amplifiers, audio processors– Microphones, loudspeakers

• Systems will be network centric:– substantial reduction of wiring costs– flexibility et new possibilities


D i g i g r a m

Digigram Offering Customers Applications

Technology (licences)Networked audio

Devices & cards

Off-the-shelf products

«pro-audio» Manufacturers

and «security & communication»

Integration of our technologies within

their products

VAR (*) Large scale projects

(*) VAR : « value added resellers »

Distributors Projects at smaller scale


Business analysis by market: PUBLIC ADDRESS

> Process of « maturation » may be long

D i g i g r a m


Broadcast market: consolidation of leadership• Continued increase of market share (renewal of

digitalization contracts) => 63 % of turnover 1 HY 2002

Public Address market: Evolution of listing and business development with manufacturers and distributors

• Finalization of contracts in process with 10 major market players (Europe, US, Japan) regarding Digigram’s networked audio technology EtherSound ®

• Europe: contracts signed with several major players• US: set-up of a representative network (reps), OEM contract with

Bombardier signed• China: contracts signed with two major distributors

=> 37 % of turnover 1 HY 2002

Business analysis by market

D i g i g r a m

Business analysis by geographical area


1 HY 1 HY 1 Q 02/01 2 Q 02/01 1 HY 02/01

US 2.5 2.6 - 31.07 + 38.35 + 4.27

Asia 1.1 1.1 + 16.84 - 11.58 - 0.99

France 2.5 2.0 - 20.68 - 18.60 - 19.58

Europe 3.8 2.6 - 45.90 - 14.07 - 30.89(outside France)

in million €

8.410.1 - 30.34%

2001 2002 Variations (%)

- 3.58% - 16.45 %

> Business is globally recovering during the 2nd quarter

D i g i g r a m

Contents

Half-yearHalf-yearresultsresults

D i g i g r a m

Half-year results 2002

Half-year results decreaseDecreased business (- 16.5 % 1st Quarter 2002) with operating expenses almost at the same level

Positive results in the 2nd quarter

(in million €) 1 Q 2002 2 Q 2002 1 Q 2002

Turnover 3.38 5.05 8.43Operating profit (0.59) 0.63 0.04Attributable net profit (0.43) 0.12 (0.31)

D i g i g r a m

(in million €)

Turnover

Gross profit

Operating profit

Non-operating revenue and expenses

Net profit before tax and except. items

Net exceptional loss

Taxes

Net profit bef. amort. of goodwill

Attributable net profit

8.43

6.57

0.04

-0.22

-0.17

-0.07

0.18

-0.05

-0.31

1 HY 2001

10.10

7.51

1.22

0.09

1.31

0

0.39

0.92

0.66

1 HY 2002


Intermediate balance

D i g i g r a m


Increase of gross profit to 78 % (vs. 74 %) in relative value

Decrease of 12.5% in absolute value

Decrease of rate of operating income due to:

Decrease of half-year business 11 % rise in personnel costs

• Effect of recruitments in 2001

D i g i g r a m

1 HY 2001

0.71.1

- 1.10

- 0.9

- 1.0- 1.9

(in million €) Attributable net profitCash flowNet change in WCRNet cash flow from operationsNet cash flow f. invest. activitiesNet cash flow fromfinancing activitiesChange in net cash position

1 HY 2002

(0.3)0.21.82.00.0

- 0.31.6

Cash flow


D i g i g r a m

Fixed assets

Inventories

Operating receivables

Cash and other short-term funds

Other debtFinancial debtProvisions

Shareholders’ equity

total balance15.8 million €

Assets Liabilities

Balance sheet (as of June 30, 2002)

> Gearing of 10.6 %


5.5

2.6

4.7

3

11.6

0.21.22.8

D i g i g r a m


In reaction to the half-year results, Digigram

has submitted on September 23 a

business reengineering planbusiness reengineering planto the employee council for information

and consultation

Business engineering plan

D i g i g r a m

Contents

News: News:

Memorandum of understanding Memorandum of understanding

with Audematwith Audemat

signedsigned

Merger Aztec – AudematMerger Aztec – Audemat

D i g i g r a m

Merger Aztec Radiomedia / Audemat

About Audemat

Market Audio transmission in radio and TV (monitoring, coding)

Business Design and marketing of electronics and software products

Technologies Electronics of digital audio radio transmisssion

Figures (2001) Turnover = 3.2 million €, with 59 % in exportNet profit = 0.1 M€Staff: 30 employees (incl. 12 in R & D)

International Operating in more than 25 countries

Diversified TDF, Towercast (NRJ), CSA (all France), RAI (Italy),Customers Deutsche Telecom, BBC, Teracom (Sweden),

Medialatina (Spain), Swisscom, Radio Centro (Mexico)…

D i g i g r a m


Two European leaders join forces-> acceleration of international growth

perspectives

Brand image Size effects

Complimentary product ranges Technological synergies

Economics of scale

D i g i g r a m


Competitive positionning / development factors, Monitoring and coding

Productdiversity

InternationalCoverage

> A concentrated market

BelarPotomac

Sectra

Aztec -Audemat

Rohde et Schwarz

Burck

D i g i g r a m


Terms of operation Completion of merger

• December 31, 2002 Current Audemat management to manage new entity

Steps of the operation• Transfer of Aztec Radiomedia’s ‘Public Address’ activities

to Digigram SA• Audemat’s contribution to Aztec as merger-absorption• Participation of Audemat shareholders in Aztec of

approximately 60 % via securities exchange

D i g i g r a m


Before merger After merger

Digigram SA

Aztec Radiomedia

Innova SON

100 %100 %

Digigram SA

Aztec Radiomedia/ Audemat

Innova SON

100 %40 %

Financial package of the operation

D i g i g r a m

Contents

Maintaining a Maintaining a growth growth

strategystrategy

D i g i g r a m

Strategy

BROADCAST MARKETReinforce the position of market leader

By:

- Exploiting the complementary product ranges

- Benefiting from larger size, following the Aztec/Audemat merger

- Capitalizing on well established brands Aztec Radiomedia and

Audemat

D i g i g r a m

Repeat the success obtaines in the Broadcast marketStimulate and support shift of installations

Analog technology Digital technology

Based upon:• Our competitive technological advantage

– in audio processing (mixing desks)– in networked audio distribution

• Our reputation• Our international sales coverage

PUBLIC ADDRESS MARKETBecome a major player

Strategy

D i g i g r a m

Objectives

2002 Turnover in 2002 of 19 - 20 million € A balanced net profit (before exceptional charges)

2003 Return to growth and profitability

D i g i g r a m

Contents

Market valuationMarket valuation

D i g i g r a m

FoundersSelf-regulatedFloating

54%

3 %

43 %

Market valuation

Shareholders

D i g i g r a m

Market valuation

Stock data

Euroclear codeMarket sectionNumber of sharesShare prize as of September 20, 2002Capitalization as of September 20, 2002Floating

3578Second Marché

2,100,0003.05 €6.4 M€

43%

D i g i g r a m

Digigram is part of the stock index IT Cac.

Market valuation

Share prizes (in Euros)

Source: Boursorama

D i g i g r a m

October 31, 2002Turnover 3rd Quarters 2002

January 31, 2003Annual turnover 2002

Beginning of march 2003 :Annual results 2002

Market valuation

Timetable for investor communications

D i g i g r a m

DIGIGRAM - Bernard MOSSE - +33 (0)4 76 52 47 47

Web site: www.digigram.com

E-mail: [email protected]

Press releases published on www.actifinews.comwww.digigram.com

Half-yearly investor newsletter (in French)

Investor communications consultant ACTIFIN - Anne ANSELIN - +33 (0)1 56 88 11 11

Investor relations

Contacts

D i g i g r a m

Digigram’s trump cards

High brand recognition Strong technological differentiation A model of growth and a historical profitability that will be

rewarded by the recovery of the economy Market leader position in the broadcast market Development in the Public Address market, Digigram’s

established factor of growth Wide spread and effective distribution network Company with solid financial foundations

> Digigram is ready to benefit from a recovery of the economy

d i g i g r a m

Documents