at 110615 2010 2011 annual consolidated results presentation

Full-year results 2010-201115 June 2011

2Full-year results 2010-2011

Contents

Overview and highlights

Full-year consolidated results

Outlook

Appendices


Key distributor of telecom products and services

• Present in 12 European

countries

• Partner of Europe’s

leading telecom

manufacturers and

operators

• Present across multiple

distribution channels

(retail, web, food

superstores, specialist

superstores,

convenience stores)

• 2,600 employees

www.internity.fr

www.avenir-telecom.co.uk

France

UK

Spain

www.internity.es

Portugal

www.ensitel.pt

www.internity.bg

Bulgaria

Romania

www.internity.ro

150

110

83183

66

# Number of shops


Preferred partner of telecom operators and handset

manufacturers

Trend in number of contracts and products / services sold1 (in millions)

Breakdown of revenues by operator

37.3%

21.2%

18.7%

7.5%

6.0%

3.9% 3.0% 2.0% 0.4%

Avenir Telecom, partner of:

0.89

2.49 2.51

2.26

0.66

2.30

2.64 2.67

0,00

0,50

1,00

1,50

2,00

2,50

3,00

Produits

multimédia

Contrats

opérateurs et

autres services

Terminaux

mobiles

Accessoires

Exercice 2009-10 Exercice 2010-11

-26.5%

+5.3% +17.9%-7.8%

1. See glossary

and more….

Multimedia

products

Operator

contracts

and other

services

Mobile

handsets

Accessories

Full year 2009-10 Full year 2010-11


• Promotion of new ranges of accessories,

telephony and multimedia products

• New customer acquisition

• Capture of new customer segments

Avenir Telecom, partner of companies

such as:

45.1%

23.5%

10.0%

19.0%

1.6% 0.8%

Réseau propre Revendeurs

Affiliés Grands comptes

Web BtoB

Breakdown of Group revenues by sales channel

Highly diversified presence across all distribution

channels

Own network

Affiliates

Web

Resellers

Major accounts

BtoB


• Return to profitability in both of our business segments (direct and indirect)

• Stabilisation of revenues due to particularly marked recovery in France in indirect

distribution since the summer of 2010

• Stabilisation of gross margin due to growth in sales of licensed branded and private label

accessories

• Positive effects of restructuring, particularly closure of underperforming sales outlets

• Good control of cash position due to cash flow generation

€ millions FY 2010-2011 FY 2009-2010 Change %

Revenues 564.2 570.9 -1.2%

Gross margin 135.1 135.1 -0.0%

As % of revenues 23.9% 23.7%

Operating income 13.1 -0.5 na

Net income 6.1 (7.3) na

Cash flow 11.9 6.4 x1.9

Shareholders' equity 64.7 62.1 +4.2%

Net financial debt 36.9 33.4 +10.5%

2010-2011 financial year marked by return

to profitability


Development of licence agreement with Energizer,

the global leader in batteries

Key licence agreement:

• Products designed and developed by Avenir Telecom’s R&D department

• Plants qualified for manufacture of products

• Distribution synergies in EMEA region

Essential products for mobile phones and multimedia devices:

• Chargers for all Apple, Samsung, Blackberry, etc. mobile handsets

• Connecting equipment and multimedia cables

• Powerline adapters


Many new product launches:

OXO Platinum, lifestyle products

lifestyle

products


innovative patented

products

from the creator of

Hello Kitty

the HIT in Parisian chic

fashion

Spanish passion

Many new product launches (continued)


Various initiatives to support the growth of the

Group

Strengthening partnerships with telecom operators:

• Remote management for accessory ranges of the largest European operators

Expanding our geographic presence into new territories:

• European partnership with FNAC: France, Italy, Switzerland, Portugal, Spain and

Belgium

• Launching operations in Turkey, Egypt and Tunisia

• Developing operations throughout the Balkans: Greece, Croatia, Serbia, etc.

Optimising our logistics organisation:

• Strengthening sourcing in Asia

• Adapting information system to all distribution channels

20 years of international know-how


Retail: active management of owned store base

63% prime sites

With 592 stores, strong positions among specialist mobile

phone chains

Continued rationalisation of store base:• Opening of 17 new sales outlets

• Closure of 45 unprofitable sales outlets

Asserting our positioning in digital convergence:• As demonstrated by large market share in sales of 3G

dongles

Repositioning in prime sites in shopping malls and city

centres


Contents



Outlook

Appendices


Recovery buoyed by indirect distribution, with

revenue growth in fourth quarter

-14.2%

6.6%

-0.8%

5.2%

-16.1%

-11.5%-10.6%

-4.0%

-12.5%

25.5%

11.8%

16.3%

-20%

-10%

0%

10%

20%

30%

1T11 2T11 3T11 4T11

Quarterly trend in 2010-2011 revenues by business segment

• Strong recovery in indirect

distribution with renewal and

expansion of product portfolio

• Slower rise in direct distribution

due to shift in consumption

towards prepaid offerings and low-

cost plans and the store base effect

1. See glossary

Chiffre d'affaires total

Distribution indirecte1 Distribution directe1Indirect distribution 1

Total revenues

Direct distribution 1

Q111 Q211 Q311 Q411


€ millionsFull year

2010-2011

Full year

2009-2010Change %

France 329.4 300.2 +9.7%

Iberian peninsula 175.1 195.7 -10.5%

Western Europe 1 33.5 33.5 0.0%

Eastern Europe 2 26.3 41.5 -36.8%

Full-year total 564.2 570.9 -1.2%

At constant exchange rate 563.0 570.9 -1.3%

1. United Kingdom, Germany, Italy

2. Romania, Bulgaria, Balkans

Revenues by geographic region boosted

by France

• Strong revenue growth in France due to successful repositioning of indirect distribution

• Recovery in revenues in Iberian peninsula slowed by fall in prices of operator packs in Spain

and lower footfall in shopping malls in Portugal

• Stabilisation of revenues in Western Europe due to growth in partnerships with UK

operators



2010-2011

Full year

2009-2010%

Revenues 564.2 570.9 -1.2%

Cost of products and services sold (429.1) (435.8) -1.5%

Gross margin 135.1 135.1 -0.0%

% gross margin 23.9% 23.7%

Transport and logistics expenses (6.9) (6.5) +6.2%

Costs of direct distribution networks (76.7) (85.2) -10.0%

Commercial expenses (9.2) (9.9) -7.1%

Administrative expenses (28.1) (33.1) -15.1%

Impairment of non-current assets (0.4) (1.9) -78.9%

Other items (0.7) 1.1 na

Operating income 13.1 (0.5) na

Favourable trend in product mix and tight control

of expenses

Spectacular turnaround in profitability


-0.5

13.1

4.4

8.7

-2,0

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

Résultat

opérationnel

2010

Distribution

directe 2011

Distribution

indirecte

2011

Résultat

opérationnel

2011

20.0

1.7

-0.5

13.1

-5

0

5

10

15

20

25

31/03/2008 31/03/2009 31/03/2010 31/03/2011

Rebound in operating income driven by both

business segments

Trend in consolidated operating income (in € millions)

Trend in operating income by business segment (in € millions)

Operating

income

2010

Direct

Distribution

2011

Indirect

distribution

2011

Operating

income

2011



2010-2011

Full year

2009-2010

Revenues 564.2 570.9

Gross margin 135.1 135.1


Operating expenses (122.0) (135.6)

Operating income 13.1 (0.5)

% operating margin 2.3% -0.1%

Net financial expense (2.5) (3.1)

Profit tax (4.5) (4.5)

Net income from continuing operations 6.1 (8.1)

Net income from discontinued operations 0.0 0.8

Net income 6.1 (7.3)

Net income in excess of €6 million

Control of financial expenses


Increase in cash flow

Trend in cash flow (in € millions)

20.8

16.3

6.4

11.9

0

5

10

15

20

25

31/03/2008 31/03/2009 31/03/2010 31/03/2011

Doubling of cash flow provided by continuing operations

X1.9


2.50 2.50

2.141.96

0,0

0,5

1,0

1,5

2,0

2,5

3,0

31/03/2010 31/03/2011

Maximum autorisé Dette financière nette / EBITDA

1.00 1.00

0.540.57

0,0

0,2

0,4

0,6

0,8

1,0

1,2

31/03/2010 31/03/2011

Maximum autorisé Dette financière nette / capitaux propres

22%14%

Debt level under control

Covenant on net debt/EBITDACovenant on net debt/shareholders'

equity

Improved headroom under bank covenants

46% 43%

Authorised

maximum

Net financial debt / EBITDA Authorised

maximum

Net financial debt / shareholders’

equity


Shareholders'

equity

Net financial

debt

Other liabilities

Non-current

assets

Current assets 138.6158.9

36.9

81.4 64.7

Actif Passif

Solid financial position

Simplified balance sheet (in € millions)

Market value of assets exceeds their book value

Assets Liabilities


Contents



Outlook

Appendices


A market on the move

• Resumption of market growth in mid-2010, which should be confirmed in 2011-

2012 and in the longer term should be sustained by equipment upgrades with

the advent of 4G and very high bit-rate uses

• Operators using specialist players for a significant part of their distribution to

reach all customer segments o 30% of their sales are through third-party distribution channels 1

• Strong tendency among major brands to exploit market growth from digital

convergence through brand licences for accessorieso As in other sectors (optical services, perfumery, etc.)

1 Source: Arthur D. Little, 2009

Market driven by digital convergence based on mobile

devices


Strengths on which to base an offensive strategy

Main strengths Development strategy

• Expertise in logistics and leading-edge ERP

tools

• Structured presence in the main European

countries

• Know-how in communication, marketing

and the development of point-of-sale

advertising and promotional tools

• R&D ability in development of products

matching image of brands represented

• Strengthening the Group’s position

among operators and manufacturers

• Developing the Group’s geographic

presence in emerging markets

• Enriching and expanding the portfolio of

licensed or owned brands to take

advantage of the rapid growth of the

market


Contents



Outlook

Appendices


Income statement


2010-2011

Full year

2009-2010

Revenues 564.2 570.9

Gross margin 135.1 135.1


Operating expenses (122.0) (135.6)

Operating income 13.1 (0.5)


Net financial expenses (2.5) (3.1)

Profit tax (4.5) (4.5)

Net income from continuing operations 6.1 (8.1)

Net income from discontinued operations 0.0 0.8

Net income 6.1 (7.3)



2010-2011

Full year

2009-2010%

Revenues 268.0 300.0 -10.7%

Gross margin 103.8 107.7 -3.6%


Operating expenses (99.4) (109.8) -9.5%

Operating income 4.4 (2.1) na


Direct distribution



2010-2011

Full year

2009-2010%

Indirect distribution revenues 296.2 270.8 +9.4%

Gross margin 31.3 27.4 +14.2%


Operating expenses (22.6) (25.8) -12.4%

Operating income 8.7 1.6 +444%

% operating margin 2.9% 0.6%

Indirect distribution


Cash flow statement

€ millions31 March

2011

31 March

2010

Cash flow from continuing operations 11.9 6.4

Change in operating net assets and liabilities before acquisition effects

(working capital requirement)(9.2) 6.1

Cash provided by continuing operations 2.7 12.5

Cash provided by (used in) discontinued operations (0.1) 0.6

Cash flow from operating activities 2.6 13.1

Investment flows before acquisitions/disposals of subsidiaries (1.6) (0.9)

Free cash flow from operating activities 1.0 12.2

Flux de trésorerie liés aux activités d’investissement (1.6) (0.9)

Cash used in investing activities (13.8) (7.9)

Impact of exchange rate fluctuations on cash position (0.0) 0.3

Change in cash position (12.8) 4.5

Opening cash position 39.4 34.9

Closing cash position 26.6 39.4



2011

31 March

2010

Non-current assets 81.4 88.5

Goodwill 13.3 13.3

Net intangible fixed assets 13.9 14.9

Net tangible fixed assets 21.9 26.3

Other non-current assets 5.6 6.2

Non-current assets held for sale 0.2 1.1

Deferred tax 26.5 26.7

Current assets 184.5 175.1

Net stocks 57.0 46.4

Net trade receivables 78.1 75.7

Other current assets 22.8 13.5

Cash and cash-equivalents 26.6 39.4

Net assets of discontinued operations 1.0 1.1

Total assets 267.0 264.7

Simplified balance sheet



2011

31 March

2010

Shareholders' equity 64.7 62.1

Non-current liabilities 24.8 33.7

Financial debts – non-current portion 22.7 30.7

Provisions and other liabilities – non-current portion 0.4 0.4

Derivative financial instruments – non-current portion 0.3 1.5

Deferred tax liabilities 1.4 1.1

Current liabilities 174.9 166.2

Financial debts – current portion 12.3 11.7

Bank overdrafts 28.5 30.5

Provisions – current portion 5.8 8.7

Trade creditors 88.5 68.8

Derivative financial instruments – current portion - 0.0

Tax and social security contributions payable 20.9 24.1

Current tax liability 3.7 6.0

Other current liabilities 15.1 16.5

Liabilities from discontinued operations 2.5 2.7

Total liabilities 267.0 264.7

Simplified balance sheet (continued)


Second quarter 15 Nov 2011

Third quarter 9 Feb 2012

Full-year results 20 June 2012

First quarter 25 Aug 2011

First half 30 Nov 2011

Fourth quarter 15 May 2012

Information for investors

Key dates in 2011-2012 1 Actionnariat au 31 mars 2011

Stock Market Data As at 31 March 2011

Code FR0000066052

Capitalisation (€m) 95

Listing market Euronext Paris

Shares in issue 93,270,895

1.These dates are provided for information purposes and are liable to change if the Company deems it necessary. Press releases will usually

be distributed after the close of the market.

29.9%

20.5%

0.3%

48.4%

0.9% OXO

Managers

Jean-Daniel

Beurnier

Public

Treasury stock

Investors’ contact

Agnès Tixier

+33 (0)4 88 00 63 21

[email protected]


Indirect distribution: professional distribution through customers in mass

distribution (food superstores, specialist superstores), independent specialist

resellers, affiliates and telecom operators.

Direct distribution: distribution to the general public through the Group’s own

store networks and through Internet sites

Signed contracts: contracts signed on behalf of telecom operators which are

partners of the Avenir Telecom Group

Multimedia equipment: products other than mobile phones, smartphones, i.e. IT

equipment, e-books, MP3 players, tablets, printers, etc.

Adaptateur CPL : used to connect electrical equipment (e.g. TV and broadband

router) using only domestic mains electricity wiring

Glossary


Notice

This document contains forward-looking statements. Although the Avenir Telecom Group believes its

expectations are based on reasonable assumptions, these statements are subject to numerous risks and

uncertainties. Important factors that could cause actual results to differ materially from the results

anticipated in the forward-looking statements include, among other things: the effect of competition;

technological developments; the success of the investments of the Avenir Telecom Group in France and

abroad; the effects of the economic situation.

A description of the risks borne by the Avenir Telecom Group appears in the section entitled “Identification

et gestion des principaux facteurs de risque" of the "Document de Référence" of the Avenir Telecom Group

filed with the French financial markets authority (AMF) on 4 June 2010. The forward-looking statements

contained in this document apply only from the date of this document, and the Avenir Telecom Group does

not undertake to update any of these statements to take account of events or circumstances arising after

the date of the said document or to take account of the occurrence of unexpected events.

All the accounting data are presented in audited consolidated form.

at 110615 2010 2011 annual consolidated results presentation

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