KEY FIGURES. Net Operating Profit (in million EUR) Turnover (in million EUR) KEY FIGURES, CONSOLIDATED AND AUDITED ACCORDING TO IFRS STANDARDS

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EUROPE, AFRICA, MIDDLE-EAST EVS Broadcast Equipment S.A. (EVS group headquarters)

Liege Science Park, Rue du Bois Saint-Jean 16 4102 Ougrée, BELGIUM Tel : +32(4) 361 70 00, Fax : +32(4) 361 70 99 E-mails : Sales: sales@evs.tv Marketing: marketing@evs.tv Recruitment: f.lemineur@evs.tv Technical support: support@evs.tv

Corporate & Investors relations: corpcom@evs.tv XDC S.A.

Liege Science Park, Avenue du Pré Aily 6 4031 Angleur, BELGIUM

Tel : +32(4) 364 12 00, Fax : +32(4) 364 12 99 E-mail : info@xdcinema.com

AMERICAS EVS Inc. & XDC Inc., 9 Law Drive, Suite 200, NJ 07004 Fairfield, USA

Tel : +1 (973) 575 7811, Fax : +1 (973) 575 7812 Hotline : +1 (973) 575 7813

E-mail EVS : evsusa@evs.tv E-mail XDC : usa@xdcinema.com

ASIA-PACIFIC

EVS Broadcast Equipment Ltd. Room 430, Block D, D.B. Plaza Discovery Bay, Lantau Island Hong Kong

Tel : +852 2914 2501, Fax : +852 2914 2505 E-mail EVS : sales@evs-asia.com.hk E-mail XDC: asia@evs-cinema.com EVS – REPRESENTATION OFFICE IN BEIJING Room No. 702A, 7th Floor, Beijing Canway Building 66 Nan Li Shi Lu

100045 Beijing – P. R. CHINA E-mail : china@evs.tv

EUROPE EVS France S.A., 32-36, Rue de Bellevue, 92100 Boulogne-Billancourt, FRANCE Tel : +33 1 46 99 9000, Fax : +33 1 46 99 9009 Hotline : +32 495 28 4000 E-mail : france@evs.tv EVS Italy s.r.l., Via Cipro 102 25124 Brescia, ITALIE Tel : +39-030-2427134, Fax : +39-030-2478182 E-mail : italy@evs.tv EVS Broadcast UK Ltd,

Kingfisher House 21-23 Elmfield Road, Bromley Kent BR1- 1LT, UK

Tel : +44 (208) 315 6551, Fax : +44 (208) 315 6560 E-mail : uk@evs.tv

Version anglaise disponible sur demande.

A N N U A L R E P O R T 2 0 0 4 Turnover

(in million EUR) Net Operating Profi t(in million EUR)

EVS STOCK PRICE EVOLUTION (in million EUR)

KEY FIGURES, CONSOLIDATED AND AUDITED ACCORDING TO IFRS STANDARDS

(in million EUR) 2002(1) 2003 2004 %04/03

Operating income 36.4 39.1 49.9 +28%

Operating result (EBITA)(2) 7.8 12.3 24.2 +97% Net profi t 2.0 4.5 21.5 +377% Net profi t from operations(3) 4.7 7.6 16.7 +120%

Net margin(4) 13% 19% 33% n.c.

Return on equity at the beginning

of the year 21% 33% 100% n.c.

Per share in EUR

Number of shares on 31 December

excluding own shares 2 727 016 2 707 342 2 739 123

Net profi t from operations per share(5) 1.72 2.81 6.10 +117% Dividend/Capital reimbursement

per share 0.48 4.00 5.00 +25%

Pay-out ratio 28% 142% 82%

Average stock price (before split) 19.20 24.21 49.40 Highest stock price (before split) 26.78 34.54 82.50 Lowest stock price (before split) 13.92 17.80 32.50 Stock price at closing date (before split) 19.80 32.00 80.80 Average volume exchanged daily

(before split) 2 017 4 600 9 038

Capital as of 31/12,

before dividend allocation 24 715 27 809 38 101 Market capitalisation as of 31/12 57.0 89.6 227.4 Price/Earning ratio (excluding net cash)(6) 12.1 9.0 12.4 (1) 2001 and 2002 fi gures are disclosed according to Belgian GAAP.

(2) EBITA means “Earnings Before Interest Taxes and Amortization” and corresponds to the operating result before amortization of goodwill. The EBITA margin is the EBITA divided by the operating income.

(3) The net operating profi t is the net profi t (group share) exclu-ding goodwill amortization and extraordinary income taking tax items into account.

(4) The net profi t margin is the net profi t from operations divided by the operating income.

(5) Calculated on the basis of the number of stock options except own shares and excluding warrants.

(6) “ Excluding net cash ” means that the company’s market capitalisation (stock price) has been reduced by the cash of the company less its short and long-term debts, net cash being 20 million EUR. 0 10 20 30 40 50 01(1) 02(1) 03 04 0 20 40 60 80 100 120 98 99 00 01 02 03 04 05 0 5 10 15 20 01(1) 02(1) 03 04

A N N U A L R E P O R T 2 0 0 4

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EUROPE, AFRICA, MIDDLE-EAST EVS Broadcast Equipment S.A. (EVS group headquarters)

Liege Science Park, Rue du Bois Saint-Jean 16 4102 Ougrée, BELGIUM Tel : +32(4) 361 70 00, Fax : +32(4) 361 70 99 E-mails : Sales: sales@evs.tv Marketing: marketing@evs.tv Recruitment: f.lemineur@evs.tv Technical support: support@evs.tv

Corporate & Investors relations: corpcom@evs.tv XDC S.A.

Liege Science Park, Avenue du Pré Aily 6 4031 Angleur, BELGIUM

Tel : +32(4) 364 12 00, Fax : +32(4) 364 12 99 E-mail : info@xdcinema.com

AMERICAS EVS Inc. & XDC Inc., 9 Law Drive, Suite 200, NJ 07004 Fairfield, USA

Tel : +1 (973) 575 7811, Fax : +1 (973) 575 7812 Hotline : +1 (973) 575 7813

E-mail EVS : evsusa@evs.tv E-mail XDC : usa@xdcinema.com

ASIA-PACIFIC

EVS Broadcast Equipment Ltd. Room 430, Block D, D.B. Plaza Discovery Bay, Lantau Island Hong Kong

Tel : +852 2914 2501, Fax : +852 2914 2505 E-mail EVS : sales@evs-asia.com.hk E-mail XDC: asia@evs-cinema.com EVS – REPRESENTATION OFFICE IN BEIJING Room No. 702A, 7th Floor, Beijing Canway Building 66 Nan Li Shi Lu

100045 Beijing – P. R. CHINA E-mail : china@evs.tv

EUROPE EVS France S.A., 32-36, Rue de Bellevue, 92100 Boulogne-Billancourt, FRANCE Tel : +33 1 46 99 9000, Fax : +33 1 46 99 9009 Hotline : +32 495 28 4000 E-mail : france@evs.tv EVS Italy s.r.l., Via Cipro 102 25124 Brescia, ITALIE Tel : +39-030-2427134, Fax : +39-030-2478182 E-mail : italy@evs.tv EVS Broadcast UK Ltd,

Kingfisher House 21-23 Elmfield Road, Bromley Kent BR1- 1LT, UK

Tel : +44 (208) 315 6551, Fax : +44 (208) 315 6560 E-mail : uk@evs.tv

Version anglaise disponible sur demande.

A N N U A L R E P O R T 2 0 0 4 Turnover

(in million EUR) Net Operating Profi t(in million EUR)

EVS STOCK PRICE EVOLUTION (in million EUR)

KEY FIGURES, CONSOLIDATED AND AUDITED ACCORDING TO IFRS STANDARDS

(in million EUR) 2002(1) 2003 2004 %04/03

Operating income 36.4 39.1 49.9 +28%

Operating result (EBITA)(2) 7.8 12.3 24.2 +97% Net profi t 2.0 4.5 21.5 +377% Net profi t from operations(3) 4.7 7.6 16.7 +120%

Net margin(4) 13% 19% 33% n.c.

Return on equity at the beginning

of the year 21% 33% 100% n.c.

Per share in EUR

Number of shares on 31 December

excluding own shares 2 727 016 2 707 342 2 739 123

Net profi t from operations per share(5) 1.72 2.81 6.10 +117% Dividend/Capital reimbursement

per share 0.48 4.00 5.00 +25%

Pay-out ratio 28% 142% 82%

Average stock price (before split) 19.20 24.21 49.40 Highest stock price (before split) 26.78 34.54 82.50 Lowest stock price (before split) 13.92 17.80 32.50 Stock price at closing date (before split) 19.80 32.00 80.80 Average volume exchanged daily

(before split) 2 017 4 600 9 038

Capital as of 31/12,

before dividend allocation 24 715 27 809 38 101 Market capitalisation as of 31/12 57.0 89.6 227.4 Price/Earning ratio (excluding net cash)(6) 12.1 9.0 12.4 (1) 2001 and 2002 fi gures are disclosed according to Belgian GAAP.

(2) EBITA means “Earnings Before Interest Taxes and Amortization” and corresponds to the operating result before amortization of goodwill. The EBITA margin is the EBITA divided by the operating income.

(3) The net operating profi t is the net profi t (group share) exclu-ding goodwill amortization and extraordinary income taking tax items into account.

(4) The net profi t margin is the net profi t from operations divided by the operating income.

(5) Calculated on the basis of the number of stock options except own shares and excluding warrants.

(6) “ Excluding net cash ” means that the company’s market capitalisation (stock price) has been reduced by the cash of the company less its short and long-term debts, net cash being 20 million EUR. 0 10 20 30 40 50 01(1) 02(1) 03 04 0 20 40 60 80 100 120 98 99 00 01 02 03 04 05 0 5 10 15 20 01(1) 02(1) 03 04

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INFORMATION TO SHAREHOLDERS

Letter to Shareholders 2 Corporate Governance 4 Historical Background 5 EVS in a nutshell 6 2004 Key Facts 7 Management Report 2004 8 Shareholding as of 31 December 2005 16

Profit Allocation Policy 17

Stock Market Report 18

PRODUCTS AND MARKETS

20

Integrated TV production systems, XT[2] technology 22

Broadcast solutions 26

Solutions for Digital Cinema 28

EVS WORLDWIDE

30

GENERAL INFORMATION

34

CORPORATE GOVERNANCE

37

IFRS CONSOLIDATED

FINANCIAL STATEMENTS

41

IFRS consolidated income statement 41

IFRS consolidated balance sheet 42

IFRS consolidated cash flow statement 44

IFRS consolidated statement of changes in net equity 46 Reconciliation of the 2004 accounts between

Belgian GAAP and IFRS 47

BELGIAN GAAP CONSOLIDATED

FINANCIAL STATEMENTS

48

Auditor’s Report 48

Belgian GAAP consolidated income statement 49

Belgian GAAP consolidated balance sheet 50

Belgian GAAP appendices and comments 52

PARENT COMPANY

FINANCIAL STATEMENTS

63

Statutory Management Report 64

Belgian GAAP statutory Income Statement 65

Belgian GAAP statutory Balance Sheet 66

Appendix 68

GLOSSARY

69

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Dear Shareholders,

The year of our 10th anniversary was marked by a considerable increase in our activities. We

deli-vered more than 500 new digital systems to the most prestigious broadcasters around the world, translating into sales approaching a total of 50 million EUR and a net current result at a record level of 16 million EUR. We not only saw a rise in our stock market price, but we also experienced, in particular, increased liquidity and the arrival of new shareholders, aware of our particular posi-tioning in a niche market characterised by strong growth. Our innovation strategy of serving the customer and concentrating on niche markets seems to be bearing fruit.

Firstly, let us take a look at innovation: listening to customers, identifying their operating workflows, anticipating their needs and suggesting creative and reliable solutions enables them to serve mil-lions of TV viewers. The product is at the heart of our business. Intense interaction between cus-tomers and our development teams provides the driving force for our growth. Secondly, serving our customers: today, over 2 000 operators all over the world use our equipment and applications on a daily basis, often in tough conditions or in environments subject to intense pressure, as it is the case in the majority of live transmissions of major events aimed at hundreds of millions of TV viewers. Our teams train, advise and assist our customers, including operators, engineers, directors and producers. One of our priorities is to find a rapid solution to the customer’s challenge. Finally, our positioning in niche markets: the world of television production is complex and involves the most advanced digital technologies. We concentrate on the products and applications in which we have the greatest competence and strive to create new niches of activity.

As announced at the beginning of 2004, we have reorganised the group’s portfolio of operations. In September 2004, we sold our French subsidiary, NETIA, to the company’s management, staff and financial partners. Despite a good product, the radio network digital automation market continues to be tough and very competitive. NETIA also made a negative contribution to the consolidated results in 2002, 2003 and 2004. EVS is now able to focus on digital video technologies for televi-sion networks thanks to its extensive experience in both digital audio and video. In December, we revitalised our digital cinema activities by affecting a spin-out and attracted financial partners, with whom we intend to install a digital cinema network as rapidly as possible with a critical size sufficient to benefit essential economies of scale. Finally, we increased the company’s payout, dis-tributing 11 million EUR to shareholders while maintaining self-financing of organic growth.

LETTER TO SHAREHOLDERS

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Digital conversion is in full development and the advent of High Definition Television (HDTV) will speed up the digitisation of the entire industry, from production to supply to TV viewers. In light of this, we have strengthened our development teams and our sales force by taking on more than 20 new staff. Our strong growth encourages us to be even bolder and the company is becoming increasingly professionalized. The last two years have enabled us to position ourselves as one of the leaders in the cycle of replacing production unit trucks with greater penetration of XT and high definition applications. We aim to increase our market share within the broadcast industry, mainly at the expense of the tape (cassette). We are addressing the processes where speed of execution is a critical factor for success as well as applications derived from live production, such as the talk-shows that follow sports events. Our “Speed To Air“ strategy is now more relevant than ever.

The main issues for 2005 lie in the release of new generations of products, both for television and digital cinema, and in our endeavours to constantly improve our direct service to the television sta-tions. We are continuing to structure the group so as to pursue growth, with the pace of this growth depending particularly on how quickly the HDTV format is adopted in Europe. The XDC initiative is meeting with growing success in the cinema industry and we feel that XDC will become a reference for that sector in the future. Whilst remaining dependent on the general economic climate and the US dollar exchange rate, EVS is positioned to continue its profitable growth over the coming years.

Laurent MINGUET, Pierre L’HOEST, Michel COUNSON, Managing Director Managing Director Chairman

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CORPORATE GOVERNANCE

Board Members as of December 31, 2004

Michel COUNSON, Chairman & Executive Director Laurent MINGUET, Managing Director & CEO Pierre L’HOEST, Managing Director & CEO S.A. CYTINDUS, represented by Michel DELLOYE Francis BODSON, Independent Director Jean DUMBRUCH, Executive Director

S.P.R.L. LYS CONSEIL, represented by Laurent LEVAUX, Independent Director

Jacques GALLOY, Executive Director & CFO Pierre RION, Independent Director

Audit Committee

S.P.R.L. LYS CONSEIL, represented par Laurent LEVAUX, Chairman S.A. CYTINDUS, represented by Michel DELLOYE

Jacques GALLOY, Executive Director & CFO

Compensation Committee

Francis BODSON, Chairman

S.P.R.L. LYS CONSEIL, represented by Laurent LEVAUX, Independent Director

Pierre L’HOEST, Managing Director & CEO

Group Executive Committee

Michel COUNSON, EVS Broadcast Equipment S.A. Chairman & Executive Director Laurent MINGUET, XDC S.A. Managing Director & CEO

Pierre L’HOEST, EVS Broadcast Equipment S.A. Managing Director & CEO Jacques GALLOY, EVS group Executive Director & CFO

Statutory Auditor

Philippe PIRE, Ernst & Young S.C.C. (B160) Boulevard d’Avroy, 38 · BE-4000 Liège Belgium

EVS Broadcast Equipment S.A.

Liege Science Park

Rue du Bois Saint-Jean, 16 · BE-4102 Ougrée Belgium Tel. : +32 (4) 361 70 00

Fax : +32 (4) 361 70 99 corpcom@evs.tv www.evs-global.com

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HISTORICAL BACKGROUND

EVS Broadcast Equipment S.A. was founded in February 1994 by Laurent MINGUET, Pierre L’HOEST and Michel COUNSON. The founders of EVS aimed to develop equipment for the digital recording of pictures on hard disks (disk recorders) for profes-sionals within the television industry: the Broadcasters.

In September 1995, EVS developed a super digital hard disk recorder in partnership with Panasonic, who released the first Super Motion camera (3 times more pictures than a classi-cal camera) for the Atlanta Olympic Games. This enhanced the international reputation of EVS.

In 1997, EVS opened two subsidiaries in the United States and Hong Kong to market its equipment on the American and Asian continents.

In July 1998, EVS opened a subsidiary in France in order to follow up the important developments of the World Cup market, in which the group took part.

In October 1998, EVS listed on the first market of the Brussels Stock Exchange and collected 7.4 million EUR. This amount has been used to guarantee the company’s expansion, increase its reputation and attract top quality employees.

In 1999, EVS set up a two further subsidiaries in Italy and the United Kingdom.

In 2000, in order to vitalise its growth, EVS opted for and invested in video broadcasting systems and digital cinema. EVS was involved in Euro2000, the 2000 World Expo in Hanover and the Olympic Games in Sydney, for which NHK, the dominant Japanese television station, asked the company to develop a high definition recorder prototype.

In 2002, EVS deployed the XT platform at the 2002 FIFA World Cup for the first time, networking more than 80 recorders. EVS teams also assisted customers at the Winter Olympics in Salt Lake City. The Latin American markets were followed up by the New York office, while a new office was opened in Los Angeles, particularly for the needs of digital cinema.

In spring 2003, EVS opened new premises with a total floor area of 3 200 square metres: a superb blend of glass, wood and con-crete erected in a green setting to reflect the company’s growth. The futuristic building incorporates the latest digital technolo-gies and contains new training and multi-media rooms as well as a digital cinema screening room.

2003 signalled the real take-off of High Definition Television in the USA, South Korea, Australia and Japan. In America, ESPN set up the event by producing 100 sports retransmissions in high definition after having three new production OB vans built, each incorporating 6 EVS XT HD units.

2004 marked the 10th anniversary of EVS by setting a new record

for sales. EVS demonstrated the interoperability of its new prod-ucts with Sony, Panasonic, Thomson and Leitch at the major NAB trade fair in Las Vegas. In April, RTL broadcast the first news report made using the new digital tools from the “CleanEdit®“suite. In December 2004, the XDC digital cinema initiative was vital-ised by the spin-out operation and the raising of 9 million EUR. XDC positioned itself as the biggest deployment initiative for digital cinema in Europe.

In January 2005, our USA teams assisted those at FOX with the installation of an architecture comprising 20 networked XT HD servers for the production and retransmission in high definition of the Super Bowl by FOX to more than 170 million TV viewers.

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EVS IN A NUTSHELL

SALES (in million EUR)

DIGITAL CINEMA SOLUTIONS

EVS is the leader in live mobile digital video production systems. Its products have become a global standard. The XT production platform enables the creation, editing and exchange of video fi les, giving rise to the acknowledged development of operating methods inTV production. Over 2 000 operators of all nationalities use the group’s applications on a daily basis. EVS has developed extensive know-how in the processing of compressed video sig-nals. This is illustrated by the setting up of the fi rst digital TV news-room in Belgium and Near Video On Demand (NVOD) systems for pay-per-view packages.

EVS intends to continue its role as the innovator of the

migra-tion from analogue to digital technology for television processes. Today, 75% of the image processing methods in television net-works are based on tape. In mobile production at the global level, only 20% of cameras are recorded on a hard disk. In the new high defi nition trucks, the level of penetration is approaching 50%. The car replacement cycle is accelerating as a result of the appearance of the HDTV format. The same is true in the television stations, with the cassette gradually being replaced by new digital solutions. EVS is focusing, in particular, on applications, for which the speed of production is a key factor for success. This is the “Speed To Air” strategy. EVS is also faced with other major exciting challenges!

For some years now, EVS has been convinced that the cinema will be the last massmedium to be digitalised. It is a matter of providing a digital solution to replace the 35mm reels used to project movies in the cinemas. The integrated XDC solution meets the needs of the cinema operators, as well as the fi lm distributors and producers. On the one hand, and for a modest monthly rental, XDC provides operators with a complete system (secure server, projector, antenna, satellite, etc.). On the other

hand, XDC enables distributors to encode, transport and ensure the quality control of digitalised copies at a cost 25% below the current cost for a 35mm copy. On a potential market of 100 000 cinemas worldwide, 300 are presently projecting digital feature fi lms, with a hundred of these using XDC servers. More than 70 000 “digital” screenings have been carried out so far for around 100 different fi lms. The potential is around the level of the calcu-lated risk taken by XDC. Digital conversion is underway.

0 10 20 30 40 50 01 02 03 04 0.0 0.2 0.4 0.6 0.8 1.0 01 02 03 04 (TV systems staff: 118)

(Digital cinema staff: 25)

TELEVISION SYSTEMS

Integrated TV production systems plus TV production

and digital broadcasting systems

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2004 KEY FACTS

EVS • UNITED STATES • February 2004

CBS Sports uses EVS SportNet technology as the centre of production for Super Bowl XXXVIII, partly in high definition.

EVS • UNITED STATES • February 2004

Delivery of 6 XT-HD SpotBoxes to ESPN HD for its new high definition production studios serving, in particular, the popular SportsCenter programme.

EVS • BRUSSELS • April 2004

RTL broadcasts the first news report made using the new digital tools of the “CleanEdit®” suite.

EVS • JAPAN • April 2004

The leading Japanese public TV network, NHK, purchases 5 HD LSM XTs to equip two of its high definition production OB vans.

XDC • LUXEMBURG • May 2004

XDC delivers its 100th digital cinema server to the European group UTOPIA, an example for

inde-pendent cinemas and those showing both arthouse and commercial movies.

EVS • PORTUGAL • June 2004

In cooperation with Alfacam, EVS teams take part in the first major HDTV production in Europe: Euro2004 with over 40 networked XT-HD units.

EVS • ATHENS • August 2004

200 EVS hard disk recorders used by 30 television networks in Greece for the production of the Olympic Games. Given the time difference, 40% of the images seen by American TV viewers came live from the XT platform.

EVS • UNITED STATES • September 2004

FOX launches the most popular new sporting season in the USA, the NFL, with the production of 6 matches per weekend in HDTV thanks to 6 new production trucks equipped with 5 to 7 XT-HDs from EVS and the X-File technology, which enables the sending back of several clips to the television network for rapid and efficient operation.

EVS • UNITED KINGDOM • September 2004

Deployment within 3 months of an interactive solution combining XT and CleanEdit® for BSkyB, enabling the transmission of 50 minute summaries of 8 football matches in parallel only 2 hours after the final whistle.

EVS • PARIS • October 2004

Sale of the French subsidiary NETIA, operating in the area of radio network automation, generating a net value added of around 1.9 million EUR.

EVS • AUSTRALIA • October 2004

EVS delivers 5 XT SD servers to Southern Cross Broadcast, the Australian leader in the terrestrial hertzian transmission of video signals, for regional contributions across the vast country.

XDC • LIÈGE • December 2004

Vitalisation and spin-out of EVS digital cinema activities in a 60% subsidiary, raising a sum of 9 million EUR.

EVS • LIÈGE • December 2004

The EVS family celebrates the company’s 10th anniversary at a memorable evening also devoted

to high definition, further enhanced by the presence of numerous sports personalities, ministers and customers.

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MANAGEMENT REPORT 2004

Consolidated fi gures(1), audited, Belgian GAAP

(in million EUR) 2002 2003 2004 %04/03

Operating income 37.3 40.4 50.9 +26%

Turnover 36.4 39.1 49.9 +28%

R&D expenditures -6.2 -5.9 -6.1 +3%

Operating result (EBITA)(2) 7.8 14.2 24.6 +73%

EBITA margin % 21% 35% 49% n.c.

Financial result

(including goodwill amortization)(3) -2.3 -1.8 -0.2 n.c.

Profi t from operations before taxes 5.5 12.4 24.4 +97%

Extraordinary items -0.7 -1.0 4.8 n.c.

Profi t before taxes 4.8 11.4 29.2 +156%

Income taxes 2.8 5.1 7.7 +51%

Net profi t – Belgian GAAP 2.0 6.3 21.5 +241%

Net profi t (group share) 2.0 6.3 21.9 +247%

Net profi t from operations (4) -Belgian GAAP 4.7 9.1 16.8 +85%

Net profi t margin (5) 13% 22% 33% n.c.

IFRS key fi gures (in million EUR) 2003 2004 %04/03 Turnover 39.1 49.9 +28%

Operating result (EBITA) 12.3 24.2 +97%

Net result – IFRS standards (group share) 4.5 21.5 +377% Net profi t from operations – IFRS standards 7.6 16.7 +120%

Per share data (in EUR) 2002 2003 2004 %04/03

Number of shares (as of 31 December) 2 863 952 2 800 000 2 815 000 - Number of shares

excluding own shares 2 727 016 2 707 342 2 739 123 -Net profi t from operations

diluted per share (6) - Belgian GAAP 1.74 3.35 6.14 +83% Net profi t diluted

per share (6) - IFRS standards - 1.68 7.86 +367%

Net profi t from operations diluted

per share (6) - IFRS standards - 2.81 6.10 +117%

We have experienced a fantastic year with the confi rmation of the launch of High Defi nition Television (HDTV) in the United States, and also thanks to the success enjoyed by our various products in Europe and the Asia-Pacifi c region. HD sport is proving to be a content favoured by TV viewers for adopting the new HDTV format. Our teams also achieved three excellent performances at the Olympic Games, Euro2004 and the Super Bowl, where they assisted our customers in setting a new stan-dard for television in the form of HDTV.

Our “Speed to Air” strategy had led to a global solution for live sports production, from external production to the studio envi-ronment in the television networks themselves. Production is becoming more fl exible, faster and more effi cient, making it possible to quickly provide better live images to TV viewers. Products like HD LSM XT are the workhorses of many sports productions, while the SD/HD SpotBox XT is a fl exible and complementary acquisition for numerous studio mixers. The television industry is progressively migrating from analogue to digital technology and the new markets to be explored and developed are numerous. Our recruitment of additional person-nel in the areas of R&D, sales and support enables us to con-tinue our growth and maintain our leading position in our niche markets.

SALES (in million EUR)

93%-TV SYSTEMS 5% - RADIO MANAGEMENT SYSTEMS 2% - DIGITAL CINEMA (XDC) 45%- EUROPE, MIDDLE EAST, AFRICA 40%-AMERICAS 15%-ASIA-PACIFIC

(1) Consolidation scope: EVS S.A., EVS France, EVS Hong Kong, EVS USA, EVS Italy, EVS UK, NETIA (6 months), XDC (3 months).

(2) EBITA means “Earnings Before Interest Taxes and Amortization” and corresponds to the operating result before amortization of the goodwill. The EBITA margin is the EBITA divided by the operating income.

(3) Goodwill amortization for VSE and NETIA was entirely amortized by 31/12/2003. Exceptional amortization amounted 0.9 million EUR in 2003.

(4) The net profi t from operations is the net profi t (group share) excluding goodwill amorti-zation and extraordinary income taking tax items into account.

(5) The net profi t margin is the net profi t from operations divided by the operating income.

(6) Calculated on basis on the number of shares excluding own shares and warrants.

0 10 20 30 40 50 02 03 04 TOTAL TOTAL PRO-FORMA EXCLUDING NETIA

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STRATEGIC PLAN

EVS reorganised its activity portfolio during the business year 2004, refocusing its attention on television products. Conse-quently, the radio automation system subsidiary NETIA was sold to the company’s local management and financial partners last September. In contrast, digital cinema operations have been strengthened through a new subsidiary, XDC SA, in which EVS holds a majority stake of 60.17 % following a 9 million EUR refi-nancing operation with financial partners. Finally, EVS paid out approximately 4 EUR per share or a total of 11 million EUR to its shareholders during the second quarter of 2004.

SALES

The group’s sales reached a record level of 49.9 million EUR over the business year, representing a 28% increase compared with 2003, or +34% at the constant exchange rate. Outside of NETIA, pro-forma EVS sales (television and cinema) rose by 37% over the same period, i.e. by +44% at the constant exchange rate.

Sales (in million EUR) 2002 2003 2004 %04/03

Total published 36.4 39.1 49.9 + 28 %

Total pro-forma excluding NETIA (1) 31.3 34.3 46.9 + 37 %

(1) NETIA was consolidated up to 30 June 2004 and for the needs of this report the pro-forma excludes NETIA for 12 months.

The sales of the EVS group break down into the following product segments, taking account of the fact that the sales of NETIA were consolidated from 1 July 2004:

According to products 2002 2003 2004 %mix %04/03

(in million EUR) 2004

TV systems 30.6 34.6 46.2 (1) 93 % + 34 %

Radio management systems 4.9 4.0 2.8 (1) 5 % n.a. (1)

Digital cinema (XDC) 0.9 0.5 0.9 2 % + 80 %

TOTAL 36.4 39.1 49.9 100 % + 28 %

(1) NETIA was consolidated up to 30 June 2004 and the sales of NETIA are divided in each case between the Radio management systems (mainly) and TV solutions (incidentally).

The sales of the EVS group break down into the following geo-graphical segments, taking account of the fact that the sales of NETIA were realised mainly in Europe during the first quarter.

According to regions 2002 2003 2004 %mix %04/03

(in million EUR) 2004

Europe, Middle East, Africa 21.4 22.6 22.5 45 % - 1 % (excluding NETIA) (16.3) (18.0) (19.6) (+ 9 %)

Americas 6.6 10.6 19.7 40 % + 85 %

(at the constant exchange rate) (22.3) (+ 110 %)

Asia-Pacific 8.4 (1) 5.9 7.7 15 % + 31 %

TOTAL 36.4 39.1 49.9 100 % + 28 %

(1) Including 3,3 million EUR in non-recurring rentals for the 2002 Football World Cup.

TELEVISION SYSTEMS

Expressed in EUR, sales of TV products more than doubled in the USA, while increasing by 31% in the Asia-Pacific region and 9% in Europe. The XT platform is becoming a standard for the majority of live productions, with EVS products benefiting from new operational architectures which do away with magnetic tape. The platform has, for example, been integrated into the new state-of-the-art ESPN HD digital centre in the USA, in par-ticular for the new-look SportCenter show, where the new HD graphics are shown from networked HD SpotBox XT servers and controlled by the production mixer. With regard to the produc-tion of informaproduc-tion, EVS has announced major interoperability initiatives with Sony and Panasonic in relation to the CleanEdit® solution in order to replace the traditional cassette with new digital supports. Sales of EVS television solutions to studios cur-rently account for just 20% of total TV sales. EVS is, however, also gaining market share in the studios of Japanese regional and national television stations.

EVS will start delivering the new generation platform during the second quarter. It will provide customers with much more flexibility, bandwidth, interoperability, power and efficiency. One single XT server will be able to record more cameras, particu-larly in high definition. A number of major television networks (existing and new customers) have already confirmed that they are seriously interested in this new platform.

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DISTRIBUTION OF PERSONNEL BY DEPARTMENT

(as of 31 December 2004)

DIGITAL CINEMA – XDC

XDC (“eXchange Digital Cinema”) offers a complete solution for the logistics and transmission of secure digital movies. Boosted by our technological experience, our expertise in the field of digital servers and our leading position in the emerging digi-tal cinema market, we are committed to providing distributors and operators with the best digital solution in terms of logistics and storage. The launch of XDC has made it possible to bring together a strongly motivated team dedicated exclusively to digital cinema in a single building. Thanks to the financial lever-age of our partners, we are well positioned to develop the first large digital cinema network in Europe. We are also gaining the confidence of major American studios which, furthermore, entrust us with the digital distribution of their new movies. XDC will also launch the 3rd generation of servers during the 2nd

quarter. This new server has been redesigned to better meet the specific needs of the XDC business model.

DATE OF FIRST APPLICATION OF IFRS

As in June and September, the EVS group has published its 2004 pro-forma consolidated accounts in accordance with the IFRS standards. The first time application date (FTAD) of the IFRS standards is 1 January 2004. The 2003 pro-forma IFRS accounts are included in the tables for the purpose of comparison. Like the majority of comparable companies, the profit and loss account items are presented according to their nature. The cost of sales does not solely include the cost of the equipment sold; it also takes account of all direct and indirect production costs, including inventory write-offs. In view of the current transition towards the IFRS standards and the fact that the first complete IFRS report will be that for the business year 2005, this annual report sets out the accounts in accordance with both the Bel-gian and IFRS accounting standards.

RESEARCH & DEVELOPMENT

The group maintained its expenditure on R&D at a level of 6.1 million EUR, representing 12% of sales, compared with 15% in 2003. In accordance with the group’s accounting rules (Belgian and IFRS), this expenditure is not capitalised but, rather, expensed over the financial year. The company presently has more than 55 top engineers working on of the conversion of both television and cinema to all-digital technology: over 40 for TV systems and 14 on digital cinema. The future of the audio-visual sector will be mainly influenced by the changes in digi-tal technologies, which offer viewers greater choice, improved quality and interactivity. Customer satisfaction is at the heart of EVS’ concerns. The group’s strong vertical integration between sales/support activities at a local level and centralised R&D ena-bles rapid adaptation of products. The priority of EVS in terms of R&D is to continue the development of a modular “tape-less” production platform with a broad bandwidth, offering directors even more flexibility and quality for transmitting content to viewers, i.e. “Speed-To-Air“. R&D endeavours have been focused on the 4th generation XT platform and editing tools. The new

staff members are cooperating on the development of new applications for production trucks as well as for studios and work-flows inside the television stations. In conclusion, EVS is migrating from a standalone hard disk recorder (LSM) to an integrated production platform.

Digital cinema activity is continuing, among other things, the development of a new compact and substantially more power-ful server. It will be even better adapted to the specific needs of the XDC initiative. The engineers are also developing an encoding platform and a networked architecture to facilitate exchanges of secure images.

27- GENERAL SERVICES 54- RESEARCH & DEVELOPMENT 36- SALES & MARKETING 26- PRODUCTION & OPERATIONS

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STAFFING

After two years of a weak economic climate and through capi-talising on the group’s growth and the deduction made from the sale of NETIA, EVS appointed 17 personnel during the year under review to primarily intensify the development of new products as well as strengthen the sales teams and technical support. The total payroll cost amounted to 10.1 million EUR (10.5 million EUR according to IFRS standards), representing approximately 50% of the group’s fixed cost base. The group employed 143 people as per 31 December 2004.

Breakdown of personnel according to subsidiary and department in full-time equivalents:

Breakdown General R&D Sales & Production & Total

(as of 31 December 04) Services Marketing Operations

EVS Broadcast (TV) 24 40 32 22 118

XDC Digital Cinema 3 14 4 4 25

TOTAL 27 54 36 26 143

RESULTS AND COST CONTROL

For 2004, the gross margin reached a level of 79% according to IFRS standards, i.e. 9% higher than in the previous year, mainly due to the deconsolidation of NETIA for the final 6 months. Given the hybrid nature of the fixed and variable costs relating to the gross margin, the greater the sales increase, the greater the gross margin percentage itself rises and vice versa.

The group’s stocks were valued at 4.3 EUR million as per 31 December 2004 compared with a figure of 4.7 EUR million on 1 January 2004 (4.9 million and 5.4 million EUR respectively according to IFRS standards). This reduction is partly explained by small lot production and additional write-offs on techno-logically obsolete stock items amounting to around 0.6 million EUR.

Sales and administrative costs rose to 9.3 million EUR, up 0.3 mil-lion EUR on the previous year (9.4 milmil-lion EUR in line with 2003 according to IFRS standards). The reduction in the cost base inherent in the sale of NETIA was partly offset by the costs of the additional staff taken on to strengthen television activities. The group suffered from the negative effects of the weaken-ing US dollar. Only the sales realised in the USA are entered in US dollars, i.e. 40% of the group’s total. Half of this amount was offset by expenditure in US dollars, resulting in a net balance of approximately US dollars 10 million. The group’s hedging policy is to sell forward according to market opportunities, with roughly half of this net balance in US dollars. Thus, at the end of December 2004, the group sold US dollars 5 million against the Euro at an average rate of 1.23 USD/EUR with an average matu-rity date of July 2005.

The operating result (EBITA 2004) amounted to 24.6 million EUR, representing an EBITA margin of 49% of sales compared with 35% in 2003. According to IFRS standards, the operating result was 24.2 million EUR, i.e. an EBITA margin of 48% of sales. The contribution of NETIA to the 2004 EBITA was slightly nega-tive (-0.2 million EUR), while the group invested around 3 mil-lion EUR in the development of digital cinema. The current net result amounts to 16.8 million EUR for 2004, a growth of 84% compared with 2003. According to IFRS standards, the current net result amounted to 16.7 million EUR, an increase of 120% compared with the previous year. The reconciliation between these two figures is detailed on page 47. The net result (group share) totalled 21.9 million EUR (21.5 million EUR according to IFRS standards) and includes the net capital gain realised on the disposal of NETIA (1.9 million EUR) as well as the 3 million EUR dilution profit associated with the XDC spin-out.

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CASH-FLOW, OWN SHARES

AND EMPLOYEE PROFIT-SHARING

Net operational cash-flow rose to 18.7 million EUR over the period under review, excluding the receipt of 2.4 million EUR from the sale of NETIA, the raising of 9 million EUR of funds from XDC (a third of which was released on 31 December 2004) and the distribution of 4 EUR per share (11 million EUR) to share-holders in the second quarter of 2004 (in the form of repay-ment of capital and ordinary dividend). The EVS group had a gross cash flow of 24.4 million EUR at the end of the year and 75 877 own shares. These are recorded in the net equity as pres-cribed by the IFRS standards. Long-term loans vis-à-vis credit institutions amounted to 3.9 million EUR. The deconsolidation of NETIA simplifies the group’s balance sheet structure by redu-cing commercial letters of credit as well as financial debts. During the year under review, 36 700 warrants relating to the capital of EVS Broadcast Equipment S.A. were exercised at an average exercise price of 19.2 EUR per share. 18 300 warrants allocated to employees of NETIA in 1999 and 2000 with an exer-cise price of 14 EUR and which could only be exerexer-cised from the end of 2005 were the object of a repurchase indemnity of 4 EUR per warrant under agreements leading to the sale of the subsid-iary in September 2004. On 28 October, 18 950 warrants were distributed in favour of certain staff members of EVS Broadcast Equipment S.A. on the basis of an exercise price of 61.2 EUR per share with an exercise period between March 2008 and April 2009. There are currently 41 450 warrants allocated to staff at an average exercise price of 35.6 EUR and average maturity date of 14 March 2007. This has a diluting effect of 1.5% on capital and is fully covered by the 75 877 own shares held by the com-pany and acquired at an average price of 35.9 EUR. During the year under review and as dictated by market opportunities, the group acquired 23 715 stocks on the stock exchange and disposed of 40 496, with 21 700 of these to cover the warrants

exercised during the year under review. At the time of the XDC spin-out operation, warrants representing 1.86% of the capital of XDC were distributed to staff at an exercise price equal to the price paid by the financial investors and with an exercise period between March 2008 and April 2009.

On the occasion of the company’s 10th anniversary, the Board of

Directors decided on 16 December 2004 to grant its employees a special reward through the profit-sharing scheme provided for under the law of 22 May 2001. The Extraordinary General Meet-ing of 14 February 2005 approved the distribution of available reserves up to an amount of approximately 0.4 million EUR.

DISPUTES

As per 31 December 2004, 0.2 million EUR of provisions were available to reasonably cover various commercial and social dis-putes before the courts.

INVESTMENTS

EVS business does not require major investments in equip-ment. The total net value of equipment, furniture and vehi-cles was 1.3 million EUR as per 31 December 2004 (1.4 mil-lion EUR according to IFRS standards). The group’s policy is to have its own premises and finance these via long-term loans. As per 31 December 2004, the net value of real estate was 6.6 million EUR for the buildings located in Liège (5.3 million EUR according to IFRS standards). The buildings are financed by way of mortgage loans, with the majority benefiting from regional or European subsidies. Investments in tangible fixed assets amounted to 2.4 million EUR in 2001, 3.0 in 2002, 1.7 in 2003 and 1.3 in 2004, mainly through the construction of new buildings. There are no new buildings planned for 2005, with the result that scheduled investment will be lower than 0.5 mil-lion EUR.

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CAPITAL, NETIA, SUBSIDIARIES

On 15 March 2004, the parent company’s capital was increased by 0.5 million EUR as the result of the exercising of 15 000 war-rants. In May 2004, EVS paid out approximately half the share capital to shareholders, i.e. 8.1 million EUR, bringing it down to 8.3 million EUR.

In September 2004, we sold our French subsidiary NETIA to the company’s management, staff and financial partners. This sale generated a capital gain of 2.0 million EUR. This result takes into account the waiving of a debt of 750 000 EUR and compensa-tion of 73 000 EUR for the 18 300 warrants allocated to NETIA employees. These warrants were the object of a repurchase indemnity of 4 EUR each under the agreements leading to the sale of the subsidiary. Finally, the balance of the loan by EVS Broadcast Equipment S.A. to NETIA (0.75 million EUR) was trans-formed into an equity redeemable bond yielding interest of 5% per annum up to 2009, which partially explains the increase in long-term debts.

EVS had maintained a two-fold legal structure in Hong Kong: a branch and a subsidiary. Given that the activities of the branch of EVS Broadcast Equipment S.A. in Hong Kong were transferred to the subsidiary in 2003 and the activity of the branch was quasi zero during the first 8 months of 2004, the Board of Direc-tors logically decided to close down this branch on 31 August 2004.

PROSPECTS FOR 2005

Ten years after its creation, EVS has built up a strong niche posi-tion in the TV producposi-tion market, both live and via producposi-tion Outside Broadcast (OB) Vans. During this decade, the market has widely adopted EVS technology to the extent that the majo-rity of production trucks associated with sports transmissions and the major television networks use at least one item of EVS equipment. With the substitution of infrastructures strongly based on the magnetic cassette, the market offered by HDTV represents a new opportunity in the history of EVS by virtue of enabling greater penetration of the servers into production methods. Customers appreciate the added value of the integra-ted platform and its standardised modules, i.e. the XT platform. This creates new possibilities for EVS in the fixed studio market, where this equipment supplements external production flows. Ten percent of American homes are already equipped with HDTV screens. Half of these who have subscribed to a service with Premium HDTV content really benefit from HDTV qual-ity, though the HDTV content offered remains very limited. The specialists in the industry expect this to increase with demand, mainly based on major events, as was recently the case with the Super Bowl on Fox. The present situation in Japan is similar to that which prevailed in the US 18 months ago when the televi-sion networks started offering more HDTV content to their view-ers. Major European satellite TV operators have announced their intention to launch HDTV networks at the end of 2005, while external production of the next World Cup in 2006 will be car-ried out in high definition. Depending on the speed of deploy-ment of HDTV in Europe, the group’s performance in 2005 will also vary according to the introduction of the new generation platform onto the market during the second quarter of 2005.

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The current order book as per 1 January 2005 amounted to 4.2 mil-lion EUR and orders worth 5.0 milmil-lion EUR were received between 1 January and the date of statement of annual results on 24 February 2005. Orders invoiceable for 2005 on that date thus increased to 9.2 million EUR compared with 8.4 million EUR on the same date in the previous year (excluding NETIA). Although XDC represents only a small part, more than 120 European cin-emas in 5 different countries had formally expressed their inten-tion by that date to join the XDC digital network.

Taking account of the medium and long-term demands of EVS customers with regard to product development, the EVS Board of Directors is confident in the company’s long-term growth even though visible proof in terms of concrete orders remains relatively limited as usual because of the short delivery times and purchasing cycles peculiar to the TV industry. It will also depend on the general economic climate, geopolitical risks and the rate of the US dollar. EVS is well positioned in its key markets to continue its organic growth.

RECONCILIATION OF THE RESULT WITH IFRS

The date of first application of the IFRS standards for EVS is 1 January 2004. The EVS group is anticipating the obligation of converting its consolidated accounts in accordance with the IFRS/IAS standards by publishing the 2004 reconciliation of the current net result in million EUR as follows:

Reconciliation of the net current result:

2003 2004 Belgian GAAP 9.1 16.8

Repayable loans from

the Walloon Region (taxable) -0.9 -0.4

Capitalisation of direct and indirect production

costs in inventories -0.4 -0.1

Adjustment of currency exchange differences -0.4 0.2

Fixed assets – Depreciation method -0.2 -0.1

Deferred taxes 0.5 0.2

Miscellaneous -0.1 0.1

IFRS 7.6 16.7

The result is in an ‘IFRS’ profit per share of 6.1 EUR based on 2 815 000 shares less 75 877 own shares deducted from the net assets.

RECONCILIATION OF BALANCE SHEET

AND NET EQUITY WITH IFRS:

Based on the same principles, that is the reclassification of own shares into the net equity and the compensation of tangible fixed assets through relevant capital subsidies, the consoli-dated net equity according to IFRS (without third-party inte-rests) amounts to 34.5 million EUR compared with 38.8 million EUR according to the Belgian GAAP. The group’s balance sheet total according to Belgian accounting standards is 53.1 million EUR and 49.8 million EUR applying the IFRS standards. These items are detailed in the annexes to the consolidated annual accounts.

CONFLICT OF INTEREST PROCEDURES

During the year under review, there was no reason to apply the specific procedure provided for under Article 523 of Com-pany Law. The total amount of remuneration and emoluments accorded to members of the Board of Directors by EVS in 2004 amounted to 843 000 EUR compared with 928 000 EUR in 2003.

MISCELLANEOUS

During the past business year, the accountants of the parent company, ERNST & YOUNG, Reviseurs d’Entreprises S.C.C. (B160), represented by Philippe PIRE and the companies with which he has professional links, performed consultancy services total-ling 20 940 EUR for the following services: technical assistance in drawing up the consolidated accounts, tax advice, technical assistance in converting the consolidated accounts to the IFRS standards, taking part in audit committees, special assignment concerning field of activity contribution and various other services. In addition, the remuneration received by ERNST & YOUNG S.C.C. in its function as auditor for the business year 2004 amounted to 26 000 EUR.

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PROPOSALS BY THE BOARD TO THE SHAREHOLDERS

An Extraordinary General Meeting is scheduled for Friday, 22 April 2005 at 11 a.m. with the agenda comprising split of the stock in the proportion of fi ve new shares for one share before division. The share capital, set at 8 342 479 EUR is to then be represented by fourteen million and seventy-fi ve thousand (14 075 000) shares without any designation of nominal value, each representing 1/14 075 000th of the share capital. In

com-pliance with the legal requirements, the effective division of the certifi cates will take place at the end of April 2005.

The Board proposes to redistribute 14 million EUR to share-holders, equivalent to 5 EUR per current share, in the form of a dividend or repurchase of own shares before the end of June, though after division of the certifi cates. Since its establishment 10 years ago, EVS has constantly fi nanced its growth itself and paid a regular dividend equivalent to 30% of its current net result. In 2004, the effective payout relating to the year 2003 was 140%. As per 31 December 2004, the consolidated net equity (Belgian GAAP) before any allocation of a dividend amounted to approximately 39 million EUR, including 8 million EUR in share capital, and the total balance sheet (Belgian GAAP) was in excess of 53 million EUR. The 0.1 ratio of debts to equity capital is relatively small. The Board of Directors meeting prior to the General Meeting does not exclude the distribution of a normal dividend but reserves its decision up to that date.

The group has a policy of repurchasing own shares in order to regularise and support the share price, take advantage of tech-nical weaknesses and improve its liquidity. This also shows that EVS is confi dent about its future. Within the limitations of Article 620, Par. 1, Clauses 3 and 4, Sub-Clauses 1, 2° of Company Law, the Extraordinary General Meeting of 15 May 2001 authorised the Board of Directors to exchange and/or dispose of the com-pany’s own shares on the stock exchange or by any other man-ner with a view to averting serious and imminent harm to the

company. Subsequently and in accordance with the same legal provision, the Extraordinary General Meeting of 20 May 2003 voted to renew the authorisation to repurchase own shares under specifi c conditions regarding time and value, in this case for a period of 18 months. Most of the purchases were carried out under a market promotion agreement concluded with the fi nancial broker Delta Lloyd Securities on 1 February 2003. The Board of Directors will propose to the General Meeting of 17 May 2005 that these two authorisations be renewed for a period of 3 years in the fi rst case and for 18 months in the latter case.

The Board of Directors Liège, 28 April 2005

NET PROFIT FROM OPERATIONS (in million EUR)

OWN SHARES BUY-BACK AND ANNUAL DIVIDEND (in million EUR)

95 97 99 01 03 0 5 10 15 20 0 5 10 15 20 99 00 01 02 03 04 OWN SHARES BUY-BACK DIVIDEND SHARE CAPITAL REIMBURSEMENT

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SHAREHOLDING

as of 31 December, 2004

Situation as it appears from the last official ownership statements received by the company and its own situation as of December 31, 2004:

Shareholders Number in % in % diluted of shares (with 41 450 warrants issued) Linked shares DTV 781 291 27.8 27.4 Michel Counson 809 0.03 0.03 Own shares 75 877 2.7 2.7

SUB-TOTAL linked shares 857 977 30.5 30.1

CYTINDUS S.A. 137 200 4.9 4.8

ING Group 106 859 3.8 3.7

BGL Investment Partners S.A. 150 056 5.4 5.2

Deutsche Bank AG 85 221 3.0 3.0

Public and miscellaneous 1 477 687 52.4 51.7 Granted warrants

(41 450 as of 31 December) 1.5

TOTAL 2 815 000 100.0 100.0

DEVELOPPEMENT TECHNOLOGIQUE VIDEO S.A. (DTV) is a hold-ing company, whose purpose is to manage and finance com-panies in which it holds a stake. It is owned equally by Pierre L’HOEST, Laurent MINGUET and Michel COUNSON. CYTINDUS S.A. and is an investment company essentially owned by Michel DELLOYE and founded in 1997 for the purpose of investing in expanding companies, thus actively contributing to their long-term management. BGL INVESTMENT PARNERS (BIP) is an investment company listed on the Luxembourg Stock Market. It specialises in the development financing of strong growth companies located in the large neighbouring region of Luxem-bourg. DEUTSCHE BANK AG is a large German bank.

On 31 December 2004, there were 634 055 registered shares of which 549 029 are owned by DTV, 85 000 by CYTINDUS S.A. and 26 by eight other shareholders. There are 2 180 945 bearer shares and 275 000 physical bearer shares.

33.3% 33.3% 33.3% 0.03% 4.8% 3.7% 5.2% 3.0% 51.7% 1.5% 2.7%

DTV S.A.

EVS

Broadcast

Equipment

S.A.

27.4% Minguet Family L’Hoest Family Michel Counson Cytindus S.A. ING GROUP BGL INVESTMENT PARTNERS S.A. DEUTSCHE BANK AG

Public & miscellaneous

Granted warrants

Own

shares

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PROFIT ALLOCATION POLICY

DIVIDEND OR REIMBURSEMENT

PER SHARE (EUR) DIVIDEND OR REIMBURSEMENT% OF NET OPERATING PROFIT FROM OPERATIONS

The Board of Directors examines the results of the previous fi nancial year and proposes at its Annual General Meeting to distribute those profi ts in the best interest of the company and its shareholders. Bearing in mind the legal restrictions on profi t distribution, the Board of Directors can propose a dividend policy that will respect the company’s investment and acquisi-tion requirements. In the IPO prospectus of October 1998, EVS announced dividends of around 30% of consolidated net profi t from operations. The healthy fi nancial structure has permitted EVS to comply with its commitment as illustrated by the chart above.

The Extraordinary General Meeting of 22 April 2005 has decided to divide the existing share by fi ve.

Dividends are payable at following fi nancial institutions:

BANQUE FORTIS S.A. Montagne du Parc, 3 1000 Brussels Belgium ING S.A. Cours Saint-Michel, 60 1040 Brussels Belgium

DELTA LLOYD SECURITIES S.A. Kipdorp, 10-12 2000 Antwerp Belgium 0 1 2 3 4 5 98 99 00 01 02 03 04(1) 0 30 60 90 120 150 98 99 00 01 02 03 04(1)

(1) Reimbursement proposal of 14 million EUR to shareholders, i.e. 5 EUR per share, reimbursed as a dividend and/or the buy back of own share.

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STOCK MARKET REPORT

STOCK MARKET AND LISTING

EVS shares (ISIN BE0003738524) are quoted continuously on EURONEXT Brussels. The EVS IPO onto the fi rst Brussels stock market took place in 1998 at a price of 37.2 EUR. Moreover, EVS has been selected to be part of Next150 and BelMid indexes and of the “Next Economy” quality segment, which includes compa-nies such as MOBISTAR, BARCO or TELINDUS. The company must publish its accounts according to IFRS/IAS standards in 2005 at the latest but EVS is already prepared for this adaptation and is publishing its 2004 results according to the IFRS standards.

EVS SHARE AND INDEXES

After the euphoric period of 1998 and 1999 which followed the EVS IPO, the valuation of the company has returned to a more reasonable P/E (Price Earning Ratio): it has in fact moved from 39 (31/12/98) to 27.5 (31/12/99), to 10.7 (31/12/01) then to 13.0 during 2004. Over the 2004 fi nancial year, the mini-mum value achieved by the stock price was 32.00 EUR on 2 January 2004 and the maximum stock value was 82.40 EUR on 9 December 2004. Although it returned to a more reason-able level in 1999, the EVS stock price did not experience the widespread soaring seen by the technology and media com-panies during 2000, but, in contrast, suffered the market fall in September 2001, even though its fundamentals were continu-ally increasing. Over the period between 14 October 1998 and 25 March 2005, the BEL20 fell by 2%, the Dow Jones Euro Stoxx TechnologyTM fell by 36% and gained 2% of their value, while

EVS increased by 167%. EVS is emerging as a small cap with profi table growth.

VELOCITY AND LIQUIDITY PROVISION

Around 70% of the company’s shares were exchanged in the course of 2004. An average of 9 000 shares were traded daily on Euronext, which represents twice the average of 2003. With a free fl oat of 65% at the end of 2004, EVS has a high adjusted velocity of 195% during the fi rst months of 2005, also up on 2003 and 2004.

(in number of shares) Annual Average Standard Adjusted traded daily velocity(1) velocity(2)

volume volume 1999 630 095 2 864 22 % 63 % 2000 552 939 2 513 19 % 55 % 2001 314 982 1 432 11 % 31 % 2002 443 630 2 017 15 % 44 % 2003 1 014 976 4 600 36 % 78% 2004 1 988 364 9 038 71% 128% 2005 895 629(3) 14 216 127% 195%

(1) Standard velocity represents the annual volume traded on the stock market and expressed as a percentage of the total number of the company’s shares (2 863 952 up to 21 May 2003, 2 800 000 up to 15 March 2004 and 2 815 000 beyond). (2) Adjusted velocity represents the annual volume traded on the stock market and

is expressed as a percentage of the unidentifi ed fl oat (around 35 % up to 2002, 46% in 2003, 55% in 2004 and 65% at the beginning of 2005).

(3) During one quarter.

The strong growth in the daily liquidity of the share is explained by the combination of the upturn in the fi nancial markets, the important growth of EVS fundamentals and the extra frame-work acquired by EVS thanks to the success of its products and its active fi nancial communication on international stock mar-kets. The exchanged daily volume of 0.5 million EUR in 2004 reached 1.3 million EUR at the beginning of 2005, with peaks of up to 2.5 to 3.0 million EUR.

STOCK MARKET PRICE EVOLUTION STOCK PRICE EVOLUTION COMPARISON SINCE IPO OF 14 OCTOBER 1998 (base 100)

0 20 40 60 80 100 120 98 99 00 01 02 03 04 05 0 50 100 150 200 250 300 98 99 00 01 02 03 04 05 EVS NASDAQ BEL20 DJ STOXX TECHNO

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In order to further improve the liquidity of the stock and avoid any overly large fl uctuations of the price, a liquidity pro-vider agreement permanently guarantees a maximum spread between the bid price and the offer price of less than 4% and ensures a presence of orders when the market opens. EVS has been collaborating with the broker Delta Lloyd Securities as a new market maker since 1 February 2003 for a renewable one-year period contract. This stockbroker is also responsible for the acquisition and transfer of own shares within the limits fi xed by the General Meeting of 20 May 2003.

FINANCIAL COMMUNICATION

EVS has an active fi nancial communication policy. In addi-tion to an “Investors Area” within the group portal site at www.evs-global.com, the representatives of the company regu-larly participate in roadshows and company presentations to institutional investors or panels of private investors. In 2004, EVS took part in 20 events or roadshows in Brussels, Antwerp, Ams-terdam, Paris, London, Frankfurt, Luxemburg and New York. The “Investor Relations” part of the group website gives access to general information on the company and its products, as well as to the fi nancial information published since the IPO in 1998, the rules of Corporate Governance and the annual reports. One page is also dedicated to the reports and opinions of the fi nan-cial analysts who monitor the stock.

Shareholders’ Calendar

Extraordinary General Meeting of shareholders

for the share split Friday 22 April 2005

Q1’05 results Friday 13 May 2005

Shareholders Ordinary General Meeting

at EVS head offi ce Tuesday 17 May 2005 (11:00)

Q2’05 sales and fi nancial results Thursday 8 September 2005 Q3’05 sales and fi nancial results Thursday 17 November 2005 2005 fi nancial results and analysts meeting mid-February 2006

AVERAGE DAILY VOLUME ON THE STOCK MARKET (in thousands EUR)

All legal documents are available at the company head offi ce or on our website. If you wish to be informed about the events EVS takes part in or to receive e-mail news, please contact:

EVS Broadcast Equipment S.A. Jacques Galloy

CFO & Corporate Communication Liege Science Park

16 rue du Bois Saint-Jean, 4102 Ougrée Belgium e-mail to : corpcom@evs.tv 0 300 600 900 1200 1500 99 00 01 02 03 04 1T05

www.evs-global.com

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PRODUCTS AND MARKETS

EVS designs, manufactures and markets digital equipment and specific software aimed

at cinema and television professionals.

During its first 10 years, the group has experienced significant growth in all its business sectors, particularly in its original busi-ness, the hard disk recorder, which has evolved to become the XT production platform. EVS is tapping new markets, such as tele-vision production studios, as well as the cinema, which is also “on the way to digitisation”. The products designed by EVS are intended for niche markets – they have high added value and are manufactured in small batches. A particularly dynamic and creative R&D department continues to strengthen EVS’ position in the forefront of technology. Since its creation, EVS has estab-lished itself as an indispensable player in the market for the tele-vision broadcasting of sporting events. The Live Slow Motion (LSM) system has revolutionised the broadcasting of sporting events since the beginning of the 1990s and has become a glob-ally recognised professional standard.

BROADCAST / TV

Today, in a strong position due to its experience in this sport market and following the successful launch of the XT technology which allows its LSM systems to be networked, EVS has develo-ped a comprehensive range of products aimed at eliminating the last remaining reasons for using video recorders in the pro-duction of sporting events: EVS offers an integrated propro-duction system which manages the entire work process, from acquiring the video signals from the cameras to distributing these images, including editing them and archiving them. The XT production platform is particularly appropriate for near-live productions. In 2005, EVS will be introducing an even more powerful platform onto the market, i.e. the “XT[2]“, which is 3 to 6 times more power-ful than the previous generation and enables the recording of as many cameras or video sources in High Definition (maximum of 6) as Standard Definition does at present.

EVS occupies a prime position in the mobile production market. Thus, the lift-off of high definition productions in pioneer countries such as the USA, Japan and South Korea offers good prospects for EVS. Compared with the usual TV images in Standard Defini-tion (SD), which have between 350 000 (NTSC – USA, Japan) and 400 000 (PAL – Europe, Australia) pixels per image, the HD images have more pixels per image (e.g. 1 920 x 1 080, namely 2 million pixels). An HD image requires around 6 times more bandwidth than an SD image but significantly increases vision comfort. Currently, 80% of the images captured by the cameras used in sports broadcasts are still recorded on magnetic cassettes. In

DISPLAY RESOLUTIONS & SCAN FORMATS

Worldwide two formats are in use for HDTV : 720P and 1080i. EVS handles both.

Main consumer screens are currently XGA with 768 lines but HDTV will tend towards 1080 lines.

Only XGA and above can be truly con-sidered as providing HD quality. XGA: 1024X768 NTSC (US, JAP) 480P: 720X480 PAL (EU) 576P: 720X576 720P: 1280X720 WXGA: 1366X768 1080P: 1920X1080

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