Marseilles, 19 June 2014. Avenir Telecom, a key player in the design and
distribution of accessories, connected devices, and mobile phones, held a Board
of Directors meeting on 19 June 2014 during which the annual consolidated
financial statements were approved following the review of the Statutory
The Avenir Telecom Group generated during financial year 2013 - 2014 (period
from 1 April 2013 to 31 March 2014) an operating loss of 9.7 million euros
before restructuring the store base in France and in Spain as well as
depreciation following the disposal of assets in the United Kingdom.
In light of the current changes in the telecoms market in Europe, the Avenir
Telecom Group wanted to accelerate its transition to the new markets of
alternative smartphones, accessories and connected devices. The Board of
Directors as such decided to:
* restructure the store base in Spain and in France by projecting to dispose
of non-profitable points of sale and by modifying the concept of the rest
of the store base in France to make it more compatible with its new
activities. These decisions result in provisions for impairment and
accelerated depreciation for 8.2 million euros;
* dispose of the indirect distribution activity in the United Kingdom which
is no longer part of the Group's strategy in order to focus on the
selective distribution of accessories for which commercial successes have
been recorded. This decision entails taking into account the likely loss
on these disposals for 6.3 million euros, primarily on goodwill.
These items are without any effect on the Group's cash flow.
The operating loss for the period led to the total derecognition, with no effect
on cash flow, of 22.9 million euros in deferred tax assets.
The Group generated a gross margin of 84.5 million euros with a margin rate as a
proportion of revenues up 3 points. This increase can be explained by the
growing share of own-brand or licensed accessories and connected devices in the
Group's revenue. The latter represented 22% of the revenue for products sold by
the Group in 2013 - 2014 compared to 14% a year earlier.
As it was announced, Avenir Telecom Group continued with its cost adjustment
plan with savings of more than 8 million euros over the whole of the financial
period, excluding accelerated depreciation and provisions for closing
non-profitable stores. The cost reductions were primarily with the Internity
store network and with the support and administrative functions. This effort did
not concern commercial and logistical investments that are accompanying the
repositioning of the Group.
The Group recorded a negative cash flow of 3.4 million euros in 2013 - 2014.
Revenues 282.8 412.6
Gross margin 84.5 109.8
% of revenues 29.9% 26.6%
including depreciation on current assets (10.1) (1.2)
Operating income (24.2) 1.1
including amortisation and provisions on the
Internity store network in France and in Spain (8.2) -
including goodwill impairment in the United
Kingdom in 2013-2014 and in Portugal in 2012-2013 (6.3) (5.7)
Net income (49.8) (2.9)
including derecognition of deferred tax assets (22.9) -
Avenir Telecom Group reached an agreement in March 2014 with its financial
partners in order to adapt its financing structure to its new challenges.
The successful renegotiation sets new terms for amortising the current loans,
with deferred repayment for middle-term loans and a prorogation of short-term
loans until January 2016. The company's bank covenants are lifted until 30
September 2015, which allows Avenir Telecom Group to continue its activity in
conditions that are better suited to the change in its business model and to
have the financial resources available for its operational projects of
repositioning in the buoyant markets for smartphones, accessories and connected
As at 31 March 2014, Avenir Telecom Group's net financial debt amounted to 22.3
million euros, and shareholders' equity was 14.6 million euros. Available cash
(cash flow - bank overdrafts) amounted to 8.5 million euros on that date.
In the strategy of recentring its portfolio of activities, Avenir Telecom Group
has just disposed of its British activity of subscription distribution for
telecom operators and the rest of its stores in Portugal. These two operations
improve the Group's available cash flow.
The Avenir Telecom Group will be launching the first alternative Windows phone
in Europe under the YEZZ brand, which will contribute to developing its mobile
telephone distribution network.
It will also continue developing its accessories and connected devices,
especially thanks to the launching of a range of connected comfort solutions for
the home in connected devices (connected LED bulbs, weather stations, on/off
electrical outlets, etc.).
Finally, the Avenir Telecom Group will continue deploying outsourced shelf space
and shop management offerings for telecom operators.
The new ranges of mobile phones as well as the accessories and connected
devices, should contribute to substantial development of the Avenir Telecom
Group's product mix, profitability level and growth profile in the coming
About Avenir Telecom
With turnover of EUR283 million as at 31 March 2014, the Avenir Telecom Group
(ISIN: FR0000066052 / Reuters: AVOM.LN / Bloomberg: AVT:FP) is a key player in
the design and distribution of accessories and connected devices and is one of
the main European distributors of mobile telephony products and services. The
Avenir Telecom Group designs and distributes a comprehensive range of
accessories, connected devices under licensed and own brands. Avenir Telecom
employs nearly 2,000 people, is present in more than 40 countries and generates
more than half of its sales outside of France.
Avenir Telecom is listed on NYSE EURONEXT - compartment C (Euronext Paris). The
Avenir Telecom share is included in the CAC All Shares, CAC Mid & Small, CAC
Small, CAC All-Tradable, CAC T.Hard & Eq. and CAC Technology indices.
Revenues 112.3 216.5
Gross profit (1) 14.3 28.5
% of revenues 12.7% 13.2%
Operating income before goodwill impairment (10.0) 2.8
(1). Taking into account the net change in impairments of current assets and
other non-recurrent items (-EUR5.3 million in 2013-2014 and -EUR0.9 million in
> Upcoming publications(1)
First quarter 2014-2015 revenues 27 August 2014
First half 2014-2015 revenues 13 November 2014
First half 2014-2015 results 27 November 2014
Third quarter 2014-2015 revenues 05 February 2015
Full-year 2014-2015 revenues 13 May 2015
Full-year 2014-2015 results 18 June 2015