Dear shareholder,

2009 was a particularly difficult year for the entire broadcast industry and EVS was no exception. This was all the more significant since 2008 had been an exceptional year for this industry, following several good years supported by considerable economic growth and the approach of the Beijing Olympics.

In figures, this has resulted in a drop in sales of 31% (-26% excluding the rentals relating to the sporting events and at constant exchange rate). The operating margin was 48.7% in 2009, mainly due to the decline in activity and the significant investments made in R&D throughout the year. We ended the year with 276 employees (full-time equivalents), a quarter of whom are in our 13 foreign offices.

The cash flow generated by the activities in 2009, the great financial robustness of EVS and our confidence in the future prospects for the company mean that we are able to optimize the shareholder return once again through the distribution of dividends and/or the buyback of own shares. The Board of Directors will recommend to the Ordinary General Meeting a total gross dividend of EUR 2.48 per share (including the interim dividend of EUR 1.00 distributed in November 2009), in other words a stable total dividend compared with last year, which represents a payout ratio of 126%.

But what we would like to highlight in particular is the continued attention paid to strengthening our organization through the hiring of talented new employees and our desire to develop our product portfolio even further, in both the outside broadcast market and the studio segment. The improvement in the market observed during the second half of the year is an encouraging factor, with customers reconsidering certain investment decisions which had been blocked since the beginning of the year.

We will continue our strategy in 2010: strengthening our position in the outside broadcast market and increasing our presence in the studio segment while continuing to broaden our product range. In a market which remains difficult and uncertain, it will be essential to launch solutions which help our customers to make their production processes even more efficient, thereby helping them to dedicate their resources to creative functions that add value.

The Winter Olympics in Vancouver and the football World Cup in South Africa will be the two major sporting events in 2010. But, beyond these showcase events, it is the studio projects that will also hold our attention. These should become more numerous with the new offers and solutions we bring onto the market and with our desire to win market share in this promising sector for our company.

XDC, the 41.3%-owned subsidiary of EVS, made further progress in 2009. The capital increases carried out in 2009 (with the continued support of SRIW and the arrival of GIMV NV), the support of the European Investment Bank and the acquisition of Film Ton Technik should enable XDC to concentrate fully on the rollout of digital cinema in Europe and to strengthen its leadership position in this market.

It is with confidence in the future of the company that the Board of Directors and the management of EVS are embarking on the path that will prepare our industry for the Summer Olympics in 2012. The efforts made in recent years must be continued and maintained in order to secure us further years of growth. All of this is only possible thanks to those who play an active role in the life of our company: our employees, our customers and our shareholders. We want to thank them for their trust and their encouragement.

Michel DELOYE, representing Cytindus S.A. & Chairman of the Board of Directors and Pierre L’HOEST, Managing Director & CEO